Regulation in the public interest may take many forms. Public authorities can take regulatory action by setting standards, by levying taxes and charges, by financing specific actions and groups, or by providing information and advice.
Choosing the right form of European Union intervention is important. Legislation is one of the options offered by the Treaties. Yet, alternative mechanisms, such as self- and co-regulation, may be more suitable in some cases. These kinds of instruments fit well in EU efforts to improve and simplify regulation that has an impact on business and citizens.
Much of European law are directives which basically set out a result to be achieved but leave national authorities the choice of methods. In most cases, Member States transpose the directives into their national law taking into account their particular circumstances.
Now and then, they tend to go beyond what is required by EU legislation, adding obligations and procedures. This 'gold-plating' affects implementation of EU law as well as the quality of the regulatory environment in the EU.
The European Parliament and the Council may also pass legislation through regulations which are directly applicable in all Member States. As these regulations require no transposition, there is no problem of gold-plating. Therefore, replacing directives with regulations can under certain circumstances be conducive to simplification. Regulations also guarantee that all actors are subject to the same rules.
European legislation contains obsolete acts that no longer have real effect, but which remain in force because they have not been expressly repealed. As a means to prevent obsolescence of legislation, the Commission often introduces review, revision or sunset clauses in its legislative proposals, especially in policy areas of rapid technological development.
In its strategy for Growth and Jobs (2005), the Commission stressed the need to pay more attention to the use of self- and co-regulation.
Private parties can make rules that benefit society. If for instance producers in a specific sector agree among themselves on a code of conduct to submit their products to extensive tests by approved laboratories, and label their products accordingly, they have created a form of self-regulation. Self-regulation is often developed between members of a specific profession (e.g. medical doctors, architects) but also between operators and their clients/consumers.
Co-regulation occurs when EU authorities entrust the attainment of objectives to private parties recognised in the field, such as economic operators, the social partners, non governmental organisations or associations.
In case these alternative instruments do not work, EU authorities may take other steps, such as putting in place 'classical' legislation.
The European Parliament, the Council and the Commission have recognised the usefulness of self- and co-regulation under given conditions. In the Inter-Institutional Agreement on Better Lawmaking they agreed on common definitions of EU self/co-regulation and conditions for their use in the EU context.
Monitoring and evaluating self-regulation practices and co-regulation mechanisms are essential to their credibility. The Commission and the European Economic and Social Committee (EESC) therefore have set up an internet EU self- and co-regulationdatabase. In addition to listing EU wide self- and co-regulation cases, the database also facilitates exchange of information and identification of best practices. This will in turn encourage and support private parties keen to set up or improve self-regulatory schemes, as well as regulators responsible for designing co-regulation. The database is hosted at EESC and the launch is scheduled for early 2007.
Legislation in the form of directives and regulations is not the
only way to regulate. Economic operators, social partners, NGOs or
associations may themselves establish rules in the context of
alternative mechanisms, such as self- and co-regulation.