”The biggest challenge is to unwind the knot of these obligations and to make legislation simpler again”

”The biggest challenge is to unwind the knot of these obligations and to make legislation simpler again”

När Näringslivets Regelnämnd besökte Nederländerna på studieresa tidigare besökte man bland annat Adviescollege toetsing regeldruk (ATR), den nederländska motsvarigheten till Regelrådet. Regelbloggen har intervjuat ATRs kanslichef Dr Rudy van Zijp om deras arbete och om regelsituationen i Nederländerna.

Could you tell us a little about ATR?

ATR is an independent scrutiny board. It provides opinions and advice to the central government of The Netherlands. Its main focus is regulatory burden of proposed (primary and secondary) legislation.

ATR thereby uses a scrutiny framework that basically consists of four questions:
(1) Is it clear what problem in society has to be solved with the proposed legislation and to what extent this problem will be solved?
(2) Are there any alternative measures that may solve the problem and that are less burdensome for firms and citizens that have to comply to the proposed legislation?
(3) Does the proposed legislation tie in with the way in which firms have organised their business and citizens have organised their lives? (i.e. will the proposed legislation work in daily practice?); and
(4) how large are the regulatory burden costs (in euros) for firms and citizens?

What are your responsibilities and mandate?

ATR provides some 100-150 formal opinions per year. By way of summary of our findings, we give each opinion a “dictum.” There are four possible dictums, namely:
(1) Submit the proposal (to Parliament).
(2) Submit after some minor changes have been made to the proposed legislation.
(3) Do not submit unless some major changes have been made.
(4) Do not submit.
Dictum four is usually reserved for those instances in which it is not clear what (or to what extent) societal problem is to be solved or when a less burdensome alternative is available.

ATR provides its opinions in a very early phase of the legislative process. At this stage, the ministry that is responsible for the proposal has not made compromises with other stakeholders yet, so it still can change its proposals. That is why some 75-80% of our advice are followed up in some way or another. The remaining 20-25% are not, usually because they stem from the Government Agreement (that each government sets up before it comes into office, and which contains the major issues on which the parties that together form the coalition government have reached an agreement).

What is, in your opinion, the biggest challenge in the rule improvement Better Regulation area in the Netherlands today?

The biggest challenge is the complexity of the legal system. Firms (but also citizens) face an increasingly complex system of obligations to which they must comply. These obligations are sometimes inconsistent. Or they are so difficult that firms have to hire external expertise. The biggest challenge is to unwind the knot of these obligations and to make legislation simpler again.

You work with the concept of “workability” – what does that mean?

Workability is a concept that has been introduced to make clear that legal obligations may in practice be impossible to comply to. If the legislation does not take into account how firms have organised their business, that it may be practically impossible for these firms to comply to the legal obligations, even if they want to. Therefore, it is very important for the legislator to enter a dialogue with firms (and citizens) on how to come up with legislation that will actually work in practice. In The Netherlands, ministries are obliged to consult their proposals in so-called SME tests. The proposed legislation is then put before some sort of SME test panel that consists of entrepreneurs who will have to deal with the obligations in practice and who can assess whether the obligations are ‘workable.’

The Netherlands have moved away from quantitative goals towards a more quality goal-based approach, what does that mean and why did you make that change?

For some years, The Netherlands have focused more on the qualitative aspects of regulatory burden, such as ‘perceived regulatory burden’ and ‘workability.’ It has never abandoned the quantitative approach though, in the sense that regulatory burden should always be calculated in euros as well. However, after many years of quantitative reduction targets, the governments found it very difficult to come up with other burden reduction measures. Over time, though, ATR has shown that regulatory burden for firms has increased again, so the business community now asks for a new burden reduction target.

We understand that Parliament recently filed (and adopted) a motion that calls for a 25% reduction target for reg burden (admin burden and substantive compliance costs). What implications may that have for a new government and on ATR’s work?

If the government carries out the motion, then it will have to come up with reduction proposals and it will have to formulate compensating measures for those increases in regulatory burden that will undoubtedly take place (e.g. because of the policy measures that the government has to take in the light of its climate policy). The problem with a 25% reduction target is that we do not have a zero-base measurement of regulatory burden in The Netherlands. And previous efforts showed that especially a zero-base measurement of substantive compliance costs is very costly. So, in practice it may be better to have an absolute reduction target (of X billion euros).

The burden reduction target will not have a significant effect on ATR. In any case ATR must scrutinize all proposed legislation, whether there is a reduction target or not. But I can imagine that the target will lead us to pay more attention to the quality of the calculations of the regulatory burden effects of the proposed legislation.

Also, what would you like to see from a new Government in terms of Better Regulation?

European legislation is one of the major sources for regulatory burden in The Netherlands. As such, this is not a bad thing. After all, it is beneficial for firms when they only have to deal with one set of regulations instead of twenty-seven. However, Dutch Parliament often has to form an opinion about proposals of the European Commission without knowing what the specific effects of those proposals are for Dutch society. We encourage the governments to pay much more attention to the regulatory burden effects at an earlier stage of the European policy process. And it should not only look at the costs in euros but also whether the proposals of the EC are workable for firms (especially SME’s) in everyday practice.