Electronic copy available at: http://ssrn.com/abstract=1297170Electronic copy available at: http://ssrn.com/abstract=1297170

Forthcoming in European Law Journal 2008

The Better Regulation Initiative at the Judicial Gate:

A Trojan Horse within the Commission’s Walls or the Way Forward?

Alberto Alemanno1

Abstract: While most academic attention is currently being paid to the goals and to the merits of the Better Regulation initiative (BR), this article examines the most immediate legal implications stemming from reliance on the main tools of BR (such as systematic impact analysis and consultation procedures on proposed legislation) within the European legal order. Since the BR package boils down into a set of regulatory requirements, enforcement issues are likely to arise. For instance, what if the Commission omits to undertake (or badly performs) an impact assessment (IA) of a legislative proposal? Who is currently in charge of ensuring the Commission's compliance with these requirements? After illustrating the existing administrative oversight mechanisms designed to ensure effective compliance with BR requirements, by focusing notably on the recently-established Impact Assessment Board, the article examines to what extent the European courts may be called upon to review the respect paid to the requirements of BR by the Commission services. To prevent the BR initiative from turning into a Trojan Horse within its own walls, the Commission is likely to comply with these regulatory requirements, thereby paving the way for the initiative's success. Introduction

The European Union has become increasingly conscious of the need for better rule-making. As a result, a wave of regulatory reform measures known as 'Better Regulation' (BR) have swept across Europe during the last few years. The EU Better Regulation strategy is a centrepiece of the renewed 'Lisbon Strategy', which aims at turning Europe into the most competitive and dynamic knowledge-based economy in the world by 20102. The speed and commitment with which the EU is implementing its strategy finds its raison d'être in the current European struggle to achieve greater international competitiveness at a time of truly unprecedented changes to patterns of trade and production. Moreover, behind the Lisbon mandate lies a series of criticisms about the quality of existing legislation and dissatisfaction with previous efforts to improve the Community's regulatory system3.

1 Legal Secretary, European Court of Justice. I am grateful, for their comments on an earlier version of this article, to participants at the 6th International Workshop for Young Scholars (WISH), held at the University College Dublin, School of Law in November 2007, and the participants of the 1st Advanced Colloquium on Better Regulation held at the Centre for Regulatory Governance at the University of Exeter in January 2007. I owe particular gratitude to Professor Francis Snyder for feedback and suggestions. I also would like to thank Professors Claudio Radaelli and John Usher for some initial comments on the very first draft of this work. A special thanks goes to Catherine Howdle for reviewing the text. Any errors remain my own. Comments are welcome at alemanno@post.harvard.edu 2 See European Commission’s ‘Partnership for Growth and Jobs’ - the renewed 'Lisbon Strategy'

launched in Spring 2005. 3 Report of the Working Group on Better Regulation (Group 2c), May 2001, 21.

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Electronic copy available at: http://ssrn.com/abstract=1297170Electronic copy available at: http://ssrn.com/abstract=1297170

The expectations are high: BR is designed to cut red tape, simplify the regulatory environment and help to strike the right balance between the costs and benefits of regulation so that productivity, growth and employment can be boosted significantly throughout the EU.

To achieve these goals, this initiative promotes the use of several regulatory tools, such as:

- Impact Assessment (IA) of proposed legislation;

- Simplification of existent legislation (through codification, recasting and repeal)4;

- Consultation procedures on drafting proposals5;

- Screening and Withdrawal of pending proposals6;

- Monitoring and reducing administrative burdens7.

While much of the current academic debate has focused on the goals pursued by the BR initiative and on the merits of each of the above-mentioned regulatory tools and techniques, this article explores the possible legal implications stemming from the increasing levels of reliance on the BR tools, by focusing in particular on the following two: impact assessment of regulatory proposals and minimum standards for consulting interested parties. Because these requirements dictate a more informed and more inclusive method of decision-making, they inevitably influence public expectations, thus encouraging stakeholders to act in order to ensure their implementation by the Commission. Thus, for instance, what if the Commission should omit to undertake (or badly perform) an IA of a legislative proposal? Or what if the Commission should depart from the minimum standards for consultation during the preparation of one its proposals? Who is currently in charge of ensuring the Commission's compliance with these requirements? Would it be possible to challenge the final legislative act for violating the IA procedures or for an alleged lack of consultation of interested parties? These questions are neither ad hoc, nor futile. Indeed, there are already signs which show that private parties are willing to try to challenge the Commission's compliance with the requirements of BR. Although it may seem odd to look for a legal dimension with regard to BR at a time when this initiative has been dismissed by some lawyers as being mere ‘soft law’, it will be shown that Better Regulation may produce - and is already generating - legal effects within the European legal order.

4 Beslier and Lavaggi, 'Les procédures de codification et de refonte en droit communautaire: une

contribution à l’effort de simplification de l’environnement réglementaire', (2006) 2 Revue du droit de l’Union européenne, 313-324.

5 Commission communication ‘General principles and minimum standards for consultation of interested parties by the Commission’ COM(2002) 704 (hereinafter "minimum standards"). See, on this initiative, Obradovic and Alonso Vizcaino, `Good Governance Requirements concerning the Participation of Interest Groups in EU Consultation`, (2006) 43 Common Market Law Review, 1049-1085 and E. Moavero Milanesi, 'L'azione della Commissione europea per migliorare il processo legislativo dell'Unione europea', in F. Basilica (ed), La qualità della regolazione, (Maggioli, 2006), 84, 86.

6 For an insightful analysis on this initiative, see Allio, 'Impact Assessment in the European Commission. An Evaluation', unpublished paper prepared for the European Policy Centre, Brussels, 8-9.

7 See Commission Communication ‘Action programme for reducing administrative burdens in the EU’ COM(2007) 23 final.

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Before tackling the issue of administrative and judicial supervision of the BR requirements, it is crucial to introduce the EU impact assessment system and the minimum standards for the consultation of interested parties. I. The Commission's Impact Assessment system (2002-2007) The Genesis Since 2002, the European Commission has relied on an ambitious Integrated Impact Assessment model as a tool for improving the quality and coherence of its policy development process8. Following the White Paper on Governance9 (which highlighted the need to bring an end to the increasingly fragmented framework for EU impact assessments) and the report of the Mandelkern Group on Better Regulation in 200110 (which recommended the development of a more rounded tool for assessing the social, economic and environmental impact of proposed regulations), the Commission announced the Better Regulation Action Plan in June 200211. This gave rise to the first guidelines on impact assessment in order “to integrate, reinforce, streamline and replace all existing separate impact assessment mechanisms for Commission proposals”12. The main declared goal of IA is to “improve the quality and coherence of the policy development process by focusing on all major policy initiatives presented in the Annual policy strategy or in the work programme of the Commission”13. IA has been defined as “the process of systematic analysis of the likely impacts of intervention by public authorities”14 and “involves building on and developing the practices that already accompany the process of policy development by deepening the analysis and formalising the results in an autonomous report”15. Contrary to possible appearances, IA is “an aid to decision-making, not a substitute for political judgement”16 and runs in parallel with and feeds the development of Commission proposals. Although this is clearly one of the goals originally pursued by the EU IA system, the Commission has never stated precisely “in what way this should be expected to occur”17. One of the few constant features is the Commission’s insistence on the application of an integrated approach covering the economic, social and environmental dimensions comprehensively18.

Therefore, although IA may amplify the information available to a decision-maker, it never becomes a substitute for the decision itself. As has already been stated, IA “stops short of the

8 Communication from the Commission on Impact Assessment, COM(2002) 276 final (hereinafter "IA

2002"). For an overall evaluation of the Better Regulation initiative from a US perspective, see Wiener, Better regulation in Europe, (2006) 56 Current Legal Problems, 447-518.

9 White Paper on European Governance, COM(2001) 428 final. 10 The final Mandelkern report on Better Regulation was finalised in February 2001 and published on 13

November 2001. 11 Commission Communication, Action plan ‘Simplifying and improving the regulatory environment’,

COM(2002) 278 final 12 IA 2002, n 8 above, 3. 13 Ibid. 14 Ibid. 15 Communication from the Commission ‘Better Regulation for Growth and Jobs in the European Union’,

COM(2005) 97, 4 (hereinafter "IA 2005"). 16 Ibid, 3. 17 G.C. Rowe, 'Tools for the control of political and administrative agents: impact assessment and

administrative governance in the European Union', in H. Hoffman and A. Turk (eds), EU Administrative Governance (Edward Elgar, 2005), 452.

18 This is the case since the issuance of IA 2002, n 8 above, 2.

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decision and aims to provide usable information; the evaluative step contributes to the usability”19. IA Guidelines and their scope After the publication of the Communication entitled “Better Regulation for Growth and Jobs in the European Union” by the Barroso Commission20, the IA guidelines were revised in 200521 and updated again in 200622. As “it is not possible or necessary to write a formal IA report in all cases”, today a formal IA is only required for items on the Commission's Legislative Work Programme (CLWP)23. However, the Commission may, on a case-by-case basis, decide to carry out an impact assessment of a proposal which does not appear on the CLWP24. Under the Commission guidelines (which are addressed to the Commission staff in charge of preparing policy proposals), IAs are carried out by the relevant Directorates-General (DG) which, under the current guidelines, rely on dedicated units (‘IA support units’). Under the current guidelines, IA is structured upon the following six key steps: identification of the problem, identification of the objectives, identification of the policy options, identification of the likely economic, social and environmental impacts, comparison of the different options in the light of their respective impact and future monitoring and evaluation25. As clearly emerges from this list, the EU IA model presents a complex exercise, aimed at predicting all possible consequences which may ensue from the enactment of a new regulation "whose complexity goes probably beyond that of any other impact assessment model implemented worldwide"26. The findings which emerge from the work undertaken for the impact assessment are presented in the form of an IA report. The report must specify which analytical method has been used to assess and compare the impacts (e.g. cost-benefit analysis, multi-criteria analysis, or another method). An IA report must be made available before a formal inter-service consultation (ISC) may be launched and the same report will accompany the proposal when the latter is transmitted to the College of Commissioners for its final adoption. The report is then sent, after the adoption of the proposal, to the other institutions along with that proposal and is finally made available on the Europa website. To date, the Commission services have carried out more than 300 IAs27.

19 Rowe, n 17 above, 461. 20 IA 2005, n 15 above. 21 Ibid. 22 European Commission, Impact Assessment Guidelines, SEC(2005) 791, with 15 March 2006 update

(hereinafter “IA 2006”). 23 Under the Commission's rules of procedure (Art 2), the Commission defines annual priorities and

adopts a work programme for each year. This programme sets out major political priorities and identifies legislative initiatives, executive and other acts that the Commission intends to adopt for the realisation of these priorities. The President presents the Commission work programme to the Parliament and the Council.

24 IA 2006, n 22 above, 6. 25 IA 2006, n 22 above, 16. 26 Renda, Impact Assessment in the EU: The State of the Art and the Art of the State (CEPS Paperbacks,

2006), 55. 27 For a list of IAs completed and planned, see http://ec.europa.eu/governance/impact/practice_en.htm.

Several scholars have undertaken tentative assessments of the first IAs carried out by the Commission,

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II. General principles and minimum standards for consulting interested parties Although the Commission has a long tradition of consulting civil society when formulating its policy proposals, a Commission-wide approach on how to undertake such a consultation has never emerged28. In an attempt to formalise civil society involvement in the creation of EU policy, the Commission – following the publication of the White Paper on European Governance29 – has decided to elaborate a set of general principles governing the process of consultation with interested parties and a set of minimum standards for these consultation processes. This document, which was published at the end of 2002 and became applicable in January 2003, carries the title: Towards a reinforced culture of consultation and dialogue – General principles and minimum standards for consultation of interested parties by the Commission30. The overall rationale of this document is to ensure that all relevant parties are properly consulted, and in order to achieve this result, it sets out a number of strategic objectives. First, the rationalisation of the existing consultation procedures by building a framework for consultation that is coherent, yet flexible enough to accommodate the specific requirements of all the various interests. Second, the promotion of a more transparent consultation process and, third, the enhancement of the Commission's accountability by making public, in as far as possible, the results of the consultations. The formalisation of civil society's involvement in shaping Commission's policies must be contextualised within the framework established by the new modes of governance introduced by the EU in order to improve its efficiency and legitimacy31. According to the vision sketched out by the Commission's White Paper on Governance, instead of merely seeking to influence executive decision-making, private groups are directly called upon to play a role within the decision-making process. As it has been stated, "the Commission's task is to act as policy entrepreneur, collecting views and recommending policies for action, and then to act as a watchdog of the EU interest to see those policies implemented"32. Such consultation enables the Commission to gather the opinions of interested parties and to take into account different views when it starts to draw up legislative initiatives. In particular, it is expected that this will help the Commission to arbitrate between competing claims and interests and to ensure that its final legislative proposal is sound. Similarly to the IA requirement, public consultation can be regarded only as an aid to the legislator. Indeed, according to the White Paper on Governance, "consultation of interested parties […] can only ever supplement and never replace the procedures and decisions of legislative bodies which possess democratic legitimacy; only the Council and the Parliament, as co-legislators, can take responsible decisions on the context of legislative procedures …"33.

see, inter alia, the very recent Cecot, Hahn, Renda, 'A Statistical Analysis of the Quality of Impact Assessment in the European Union', (AEI-Brookings Joint Center), May 2007.

28 For an account of consultation processes before their institutionalisation, see Obradovic, 'Civil and social dialogue in European Governance', 24 YEL (2005), 261-327.

29 This document did not only call for "wide participation through the policy chain – from conception to implementation", but it also promised "to reach out to citizens and involve civil society, construct and consult better networks, and establish procedures and timetables for consultation". See Governance White Paper, n 9 above, 10.

30 On this communication, see Obradovic and Alonso Vizcaino, n 5 above. 31 The promotion of civil society's participation in EU governance is part of the EU institutions' search for

sources of increased legitimacy. See Armstrong, 'Rediscovering civil society: the European Union and the white paper on governance', (2007) 8 European Law Journal 1, 102-132.

32 Obradovic and Alonso, n 5 above. 33 EP Resolution on the White Paper on Governance, A5-0399/2001, 4.

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In other words, the guiding principle for the Commission in the implementation of its consultation practice is to give interested parties a voice, but not a vote. In its Communication, the Commission identifies five general principles which are applicable to the consultation process: participation, openness, accountability, effectiveness and coherence. Although the Commission does not offer a well-articulated explanation of the content of these principles, it nonetheless attempts to convert them into five minimum standards: a) clear content of the consultation process; b) consultation of target groups; c) publication; d) time limits for participation; e) acknowledgement and feedback. In the Commission's view, these minimum standards will enable the legislator to be sure of the quality of the received inputs and should systematically be applied to all major policy initiatives. The application of the minimum standards is limited to the pre-drafting stage of Commission proposals. In particular, the minimum standards apply only to those consultations which take place outside the institutionalised fora laid down by the Treaty or by EC secondary law34. Since the minimum standards aim to improve the overall representation of the organisations which may be found in a civil society, these standards do not apply an accreditation system analogous to that which exists within the Council of Europe or the United Nations, but rather rely on a very inclusive notion of civil society organisations35. This deliberate choice by the Commission was made in order to avoid the situation where policy-makers only listen to certain groups which have privileged access36. III. Administrative Regulatory Oversight of the BR requirements There are currently at least two sets of tools for ensuring the Commission's compliance with the BR regulatory requirements. First, insofar as any case where the Commission does not comply with the BR requirements may be considered a case of maladministration, any departure from either the minimum standards for consultation or the IA guidelines may be brought before the European Ombudsman37. Second, with regard to IA, the current operational structure of the Commission contains a complex and articulated administrative quality control system. This scrutinises the quality of IAs conducted by the Commission services and is generally labelled "the Commission quality control system of draft IAs". While the former tool intervenes ex post facto, the latter may be triggered only ex ante. The Ombudsman: an ex post facto administrative review

34 Minimum standards, n 5 above, 15 35 Minimum standards, n 5 above, 6. 36 Obradovic and Alonso, n 5 above, 1058. 37 The European Ombudsman, Decision 948/2004/OV of 4 May 2005. Available at www.euro-

ombudsman.europa.eu

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Under Article 195 EC, the Ombudsman may investigate complaints from EU citizens in instances of maladministration, "with the exception of the Court of Justice and the Court of First Instance acting in their judicial role". Therefore, as previously mentioned, should the Commission's non-compliance with either the minimum standards for consultation or the IA guidelines be considered to be a case of maladministration, any departure from these procedural requirements may be brought before the Ombudsman. Thus, for instance, following a complaint by the European Citizen Action Service concerning the alleged failure of the Commission to inform and consult NGOs on the future of Structural Funds, the Ombudsman held that it "[…] would […] regard failure to comply with procedures and principles set out in the Communication on minimum standards for consultation as maladministration"38. Therefore, although the Ombudsman found no instance of maladministration in that particular case39, the Ombudsman's office unequivocally asserted its competence over any departure from the minimum standards for consultation. Moreover, since the complainant also questioned whether these standards were sufficiently clear, the Ombudsman pointed out that, without excluding the possibility that these could be expressly more clearly, the review which he carried out demonstrated that they may applied without difficulty to verify whether the Commission has complied with them40. Although there are no cases, at least to our knowledge, in which a departure from the IA guidelines has been brought to the Ombudsman as a possible instance of maladministration, I believe that this allegation would hardly fall outside the competence of the Ombudsman. It seems that, so far, the only complaints founded upon alleged violations of the IA guidelines have instead been brought to the attention of the Commission's Secretariat-General. The quality control system: an ex ante administrative review Since the launch of the IA procedure in 2002, there has been an articulated regulatory review system within the Commission, aimed at supervising the quality of IAs performed on the initiative of the Commission services. This consists of a decentralised oversight system based on a three-level structure. First, within each Commission department, there are central IA units which control the operational units when they prepare draft IAs. Second, the Secretariat-General of the Commission provides guidance and quality control on draft IAs prepared by the relevant units ('up-stream' quality control). Third, all DGs control draft IAs through the Inter-Service Steering Group (ISSG), which accompanies most IAs41, and also through Inter-Service Consultations (ISC) before the underlying initiatives reach the political level ('down-stream' quality control)42. After having passed through all these stages of review, the final IA report, which has the status of a Commission Staff Working Document, is transmitted, together with the draft proposal, to the College of Commissioners. However, should the IA report not to be found satisfactory, the Secretariat-General or any other DG may issue a

38 Ibid, para 3.8. 39 It stated that "on the basis of the available information […] the Commission appears to have organised

a genuine consultation process with regard to its cohesion policy". See Ombudsman decision, n 37 above, para 3.9.

40 Ombudsman Decision, n 37 above, para 3.16-17. 41 Under the 2005 Guidelines, an ISSG is compulsory for all proposals of a cross-cutting nature, provides

specialised inputs and brings a wider perspective to the IA process. It requires the participation of the Secretary-General, notably of its Strategic Planning and Programming Unit and excludes any input from outside of the Commission's services.

42 See IA 2006, n 22 above, 15.

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suspended or unfavourable opinion at the ISC stage43. Ultimately, it is only if the Commission services which take part in the ISC issue a favourable opinion that the proposal will be transmitted to the College of Commissioners for a final decision44. This shows how the exercise of such an embryonic regulatory oversight function has been performed so far by a multitude of institutional actors and takes place, in accordance with the Community guidelines, both at up-stream and down-stream levels of the process of drafting IA reports. In the past, the Secretariat-General, when providing its final quality control on draft IA reports, has in some circumstances exercised its powers by delaying or blocking some initiatives. However, lacking clear quality standards in the IA Guidelines, the Secretariat-General has failed to systematically assess IA reports according to uniform quality standards and norms. At the same time, the significant divergence in the level of expertise shown by the different DGs has not contributed to the success of the pre-existing regulatory oversight system. As a result, the pre-existing quality control mechanisms have performed a "quite uncoordinated and unsupervised assessment exercise"45.

To tackle these flaws in the review process, the Commission President announced in December 2006, within the Strategic Review of Better Regulation in the EU46, the creation of an ad hoc body, the Impact Assessment Board (IAB), who may offer advice and support in developing "a culture of impact assessment inside the Commission"47. The IAB is composed of five high-level officials, in particular, the Deputy Secretary-General of the Commission, and four Directors coming from DG Enterprise and Industry, DG Environment, DG Employment, Social Affairs and Equal Opportunities, DG Economic and Financial Affairs48. Its main task consists of scrutinising individual drafts of impact assessments conducted by the relevant DG before these are formalised as IA reports at the ISC stage49. The ISC aims to give an adequate interdepartmental review of draft rules, to enable the relevant DG to coordinate their initiatives with other DGs in order to avoid inconsistent, incompatible, or duplicative policies. It is therefore important that the IAB has the power to improve the quality of IAs before the related initiatives become the subjects of a debate within the ISC. It is clear from the mandate of the IAB that its establishment does not replace the EU multi-level regulatory oversight system but rather adds a further layer to that system.

43 Ibid. 44 Ibid. 45 Renda, n 26 above, 124. 46 Communication from the Commission to the Council, the European Parliament, the European

Economic and Social Committee and the Committee of the Regions, ‘A Strategic Review of Better Regulation in the EU’, COM (2006) 690 final.

47 Ibid. 48 To know more on the IAB, see Alemanno, 'Quis Custodet Custodes dans le cadre de l'initiative Mieux

Légiférer? Une analyse des mécanismes de surveillance règlementaire au sein de la Commission et la création du Comité d'évaluation des études d'impact', (2008) Revue du droit de l'Union européenne 1, 43-86. See also the Commission Staff Working Paper ‘Impact Assessment Board – Report for the year 2007’ COM(2008)32final.

49 See IAB Mandate, at section 2, Tasks.

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The Board seems, at least prima facie, to present itself as the EU version of the US Office of Information and Regulatory Affairs (OIRA) which reviews the draft rules of Federal agencies on the other side of the Atlantic50. This office is established within the Office of Management and Budget (OMB), which in turn operates under the authority of the US President51. However, unlike OIRA, which may address ‘return letters’ to the Federal agencies52, the IAB has not been entrusted with the power of a veto over IAs carried out by the departments of the Commission. This choice has been perceived as weakening the effectiveness of the regulatory review performed by the IAB, which in turn cannot be considered to be the Commission's final regulatory 'watchdog'. Yet, although regrettable, this choice seems to be an inevitability, given that it has been made within the framework of the present European institutional architecture. This is because conferring upon the IAB a ‘return letter’ power might run against the principle of collegiality, which governs the functioning and the operation of the Commission53. Indeed, this principle not only requires "the equal participation of the Commissioners in the adoption of decisions", but it also implies that these "decisions should be the subject of collective deliberation"54. The rationale behind this principle is that all the members of the College of Commissioners should ultimately bear collective responsibility at the political level for the Commission’s decisions55. Despite these limitations, IAB opinions may produce some relevant, though indirect, effects on the outcome of the quality control process. For instance, the Secretariat-General, in taking a position within the context of the formal ISC, may block an initiative if the IAB's opinion has not been taken into account by the DG which authored the IA. As seen above, this may occur to the extent the Secretariat-General (unlike the IAB) may hold and exercise its power of veto56. Notwithstanding the potential positive effects of the IAB's exercising its oversight function within the pre-existing quality control mechanisms, no ex ante scrutiny external to the Commission has been envisaged so far. Such an external control has already been called for by some members of the Commission57 and is likely to be required by the European

50 See point (c) of Executive Order 12866 available at the Federal Registrar. 51 OIRA is a Federal office established by the US Congress in the 1980 Paperwork Reduction Act. To

know more about the OIRA Process, see Gellhorn and Byse's Administrative Law, Cases and Comments, Revised 10th Edition, by Strauss, Rakoff, and Farina (University Casebook Series), 611-705 and Graham, 'The Evolving Role of the U.S. Office of Management and Budget in Regulatory Policy', AEI-Brookings Joint Centre for Regulatory Studies, Working Paper 07-04, February 2007.

52 Executive Order 12866 issued by President Clinton on September 30, 1993. 53 Although this principle was originally laid down in the first paragraph of Article 163 of the EC Treaty

(now, after amendment, the second paragraph of Article 219 EC) and is foreseen in Article 1 of the Commission Rules of Procedure (OJ 1993 L 230, p. 15), it has been fully developed by the case law of the Court of Justice. See, e.g., Case C-191/95 Commission v Germany [1998] ECR I-5449, paras 48 to 50. For an overview of the principle of collegiality, see Mistò, ‘La collégialité de la Commission européenne’, (2003) Revue du Droit de l'Union européenne, 189 ss.

54 Case C-198/97, Commission v Federal Republic of Germany, [1999] ECR 3257, para 19. 55 Ibid. 56 If the IA report subject to review should not reach a satisfactory level of quality, the Secretariat-

General may issue a suspended or unfavourable opinion. See IA 2006, n 22 above, 15. 57 Keynote Speech by Commissioner G. Verheugen, 'Better Legislation in the EU', delivered at the

European Conference on Subsidiarity during the Austrian Presidency, 19 April 2006 (“what we need is the independent validation of impact assessment”).

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Parliament in a pending motion58. It may be predicted that such calls could soon be amplified, should the EC courts show their readiness to judicially review the compliance of the EC Institutions with the BR procedures. In the light of the above, it is time to analyse to what extent the European courts may indeed be called upon to scrutinise the Commission's adherence to the requirements of BR. IV. Towards a Judicial Review of the BR requirements? Before examining whether it would actually be possible to judicially review Community compliance with the BR requirements, it is crucial to determine whether the BR initiative may produce legally enforceable rights effects vis-à-vis the EC Institutions. Against this backdrop, the next few sections will attempt to answer the following questions: what is the legal status of the BR requirements? To what extent may private parties derive legally enforceable rights from the BR communications and guidelines? What, if any, are the legal consequences which flow from a departure from these rules? V. The legal status of the BR requirements To determine the legal status of the BR requirements it is essential to verify the juridical nature of the acts that introduced them into the Community legal order. In doing so, one must bear in mind that, according to established case-law, "to have legal effects does not necessarily mean to be legally binding erga omnes"59. Until now, their introduction and implementation into the Community legal order has rested entirely on 'atypical acts' (legal sources other than those provided for by the Treaty), such as communications and guidelines, which – at least in principle – produce no legally binding effects. However, these acts fall within the broader category of 'soft law' acts, which have been defined, in tempore non suspecto, as "rules of conduct which, in principle, have no legally binding force but nevertheless may have practical effects"60. Although these instruments are not contemplated by the Treaties, they have long been used in the EC61 and they tend to be contrasted with 'hard law' instruments, a category which defines those acts which have legally binding character. By insisting on their 'soft law' status, the documents which introduced the BR regulatory requirements expressly denied that either the IA system, or that followed by the civil dialogue, aimed to establish procedural rights, the respect for which could be subject to judicial scrutiny. For instance, the Commission, after highlighting that "a clear dividing line must be drawn between consultations launched on the Commission's own initiative prior to the adoption of a proposal, and the subsequent formalised and compulsory decision-making

58 Report on Better Regulation in the European Union prepared by the Committee on Legal Affairs of the

European Parliament (Rapporteur: Katalin Levai, 2007/2095(INI)) as a motion for a EP Resolution. See A6-0273/2007, para 6.

59 On this distinction, see Snyder, 'Interinstitutional agreements: forms and constitutional limits', in Winter (ed), Sources and categories of European Union Law, (Nomos, 1996), 461-3.

60 Snyder, New Directions in European Community Law, (Weidenfeld and Nicolson, 1990). 61 For an overview on Community soft law, see the classic work by F. Snyder, 'Soft law and the

institutional practice in the European Community', in S. Martin (ed), The Construction of Europe, Essays in Honour of Emile Noël (Kluwer, 1994), 197-225 and Lefevre, 'Interpretative communications and the implementation of Community law at national level', (2004) European Law Review, 29, 808-822.

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process according to the Treaty", denies that the former could be subject to any kind of scrutiny. In particular, the Commission clearly rules out the possibility that minimum standards may lead to a situation in which a Commission proposal could be challenged on the grounds of an alleged lack of consultation of interested parties. In the Commission's view, such an "over-legalistic approach would be incompatible with the need for timely delivery of policy, and with the expectations of citizens that the European Institutions should deliver on substance rather than concentrating on procedures"62. Consequently, a group that considers that it has not been given the chance to have a say during the consultation process, or has not received feedback on its input, would not seem to be entitled to challenge the consultation procedure before the European courts. Likewise, an individual or an EC institution which may be unhappy with the way in which an IA has been conducted by the Commission services would not seem to be entitled to apply for judicial review regarding the relevant final Community action. Though prima facie surprising, the introduction of the BR requirements through administrative guidelines instead of legislative acts is not unusual when compared to other experiences of regulatory reform63. Indeed, in most OECD countries, impact assessment and consultation duties, despite also emanating from a high executive level, have occurred through the adoption of soft law documents. For instance, environmental impact assessments (EIA), before becoming a Community-wide legal duty by virtue of a 1985 directive, were first introduced in several countries through soft law documents64. The 'soft law' nature of the BR requirements: lack of legally binding character but producing legal effects In any event, the fact that IA procedures and minimum standards for consultation have been introduced within the Community legal order through guidelines and communications, which are atypical instruments not even mentioned in Article 249 EC, does not necessarily mean that cannot be judicially reviewed. Indeed, the case law of the European courts shows that not only recommendations65 but also other 'soft law' instruments may produce legal effects. With this in mind, one might wonder to what extent the communications introducing the BR requirements into the EC legal order may produce legal effects which are directly enforceable before the Community courts. A look at the case-law shows that the question of the application and enforcement of self-imposed rules has arisen firstly in the area of staff cases, in relation to internal rules sketched out by the institutions. It is in this area that a self-binding effect for self-imposed rules has been recognised, on the basis not solely of the principles of equal treatment and legal certainty but also on the basis of other principles of law, such as patere legem quam ipse fecisti, legitimate expectations and essential procedural requirements. In relation to this very last principle, there are a couple of judgments which recognise that self-imposed rules may have a self-binding effect upon the Commission. In Ragusa v Commission66, the plaintiff complained that the promotion procedure was in breach of a memorandum from the Director-General

62 Minimum standards, n 5 above. 63 Rowe, n 17 above, 475. 64 Directive 85/337/EEC, OJ L 37, 37 [1985]. 65 Case C-322/88, Grimaldi [1989] ECR 4407. 66 Case 282/81, Ragusa v Commission [1983] ECR 1245.

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which introduced a different procedure. Although the Commission insisted that such a procedure could not have any legal validity as it was not established by the Staff Regulations, the court disagreed. It held that when, by way of an internal decision, the appointing authority voluntarily institutes a compulsory consultative procedure, it is obliged to abide by such a procedure, notwithstanding that is not prescribed by the Staff Regulations67. A very similar ruling can be found in Turner v Commission68, where the procedure which led to a Staff report was vitiated to the extent that it departed from an essential procedural requirement contained in the Guide to Staff Reports. These principles, which may be grouped under the label of good governance, seem to have been extended, beyond the area of staff law, into other fields. In particular, the principle of equal treatment has been increasingly used to establish a finding that there is a self-binding effect. One the first examples of this trend is Thyssen v Commission, in the ECSC area, where the court implicitly acknowledged that the administration may be bound by its own practices on the basis of the principle of equality (although in this case the court went on to hold that the situations before it were incomparable)69. A more illustrative example of such a spill-over into other areas of law is the Hüls v Commission case, in which the Court of First Instance concluded that when the Commission imposes procedural rules on itself - in this case a procedure for providing access to the files in competition cases contained in the 12th Report on Competition Policy - it "may not depart from rules which it has thus imposed itself".70 The court in this case seems to have reached this conclusion by relying on the principle of equal treatment, rather than on that of a breach of an essential procedural requirement. It should also be noted that the recognition of such self-binding effects depends on the nature of the rules at issue: the more absolute and clear their formulation, the more scope there is for a finding that these rules have a self-binding effect71. Thus, the court has held that:

"[T]he Community institutions may lay down for themselves guidelines for the exercise of their discretionary powers by way of measures not provided for in Article 249 EC, in particular by communications, provided that they contain directions on the approach to be followed by the Community institutions and do not depart from the Treaty rules. In such circumstances, the Community judicature ascertains, applying the principle of equal treatment, whether the disputed measure is consistent with the guidelines that the institutions have laid down for themselves by adopting and publishing such communications"72.

To summarise, the EC courts seem increasingly willing to consider the Commission to be under a duty to act in a consistent and non-arbitrary manner, which entails a duty to apply the rules that it has established for itself. However, as our analysis has shown, while it is true that a self-binding effect for self-imposed rules seems to have gradually found its way within the Community legal order, it remains to be seen to what extent, and on which basis, this case-law may be extended to the BR soft law documents. On this point, it might be observed that, unlike most of the self-imposed rules which were at issue in the abovementioned judgments (a

67 Ibid, para 18. 68 Case 263/83, Turner v Commission [1985] ECR 893. 69 Case 188/82, Thyssen v Commission [1983] ECR 3721. 70 Case T-9/89 Hüls v Commission [1992] ECR II-499. 71 Case C-156/98 Germany v Commission [2000] ECR I-6857. 72 See Case T-13/99 Pfizer Animal Health v. Council, [2002] ECR II-3305, para 119. See also, to that

effect, Case T-7/89 Hercules Chemicals v Commission [1991] ECR II-1711, para 53; Case T-149/95 Ducros v Commission [1997] ECR II-2031, para 61; and Case T-214/95 Vlaams Gewest v Commission [1998] ECR II-717, paras 79 and 89.

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memorandum from the Director-General, an internal guide, etc), the BR documents appear to enjoy a greater institutional and political weight. Both the IA guidelines and the minimum standards for consultation find their origins in resolutions and policy statements of the European Council and contribute to the implementation of express Commission policies73. Moreover, as shown above, the implementation of BR by the Commission services is susceptible, at least for the IA procedures, to be administratively enforced within the Commission hierarchy.

In the light of the above, what seems most likely is that review of compliance with the BR procedures by Community courts will be triggered by the recognition of the BR tools, such IA and consultation tools, as "essential procedural requirements"74. Indeed, although neither the results of IAs nor the outcome of consultations bind the Commission, they provide it with part of the evidence which is necessary to determine, “in full knowledge of fact”, the appropriate measure. Therefore, whenever the IA or consultation procedures are not followed correctly, this irregularity will be reflected within the subsequent decision which should – in principle – be subject to judicial supervision.

Thus, for instance, with regard to the scientific opinions given by the EMEA’s Committee for Proprietary Medicinal Products (CPMB), it was established that they are:

“[n]onetheless extremely important so that any unlawfulness of that opinion must be regarded as a breach of essential procedural requirement rendering the Commission’s decision unlawful”75.

Likewise, should the court follow this path, the infringement of a BR requirement could be recognised as a ground for annulment, capable of rendering the final act unlawful. While the juridical status of the BR requirements represents the first step towards triggering their enforceability before the Community courts, it is equally crucial to verify to what extent the BR requirements consist of objective and examinable standards. VI. The reviewability of the BR requirements When looking at the BR requirements as a potential parameter of legitimacy, to be used by the Community courts in order to assess correct implementation, it is necessary to evaluate their ability to serve this purpose. As our previous analysis has shown, the BR tools and procedures (as laid down in their basic documents) do not seem entirely objective and easily applicable for the purposes of verifying whether the Commission services have applied them correctly. Against this backdrop, it may be argued that, even though the Community courts could recognise a self-binding effect for the BR requirements, they would still struggle to review whether the Commission services have correctly applied the relevant procedures. How could the courts check whether the IA performed conforms to the principle of proportionate

73 Resolutions of Göteborg and Laeken European Councils; the Better Regulation Action Plan

COM(2002) 278 and the Action plan to improve communicating Europe by the Commission, SEC(2005)985.

74 The ECJ has already recognised as an "essential procedural requirement" the need to have a formal proposal from the Commission before the Council adopts an act. See Case C-280/93, Germany v Council [1994] ECR I-4973.

75 Joined Cases T-144/00, T-76/00, T-83/00, T-84/00, T-85/00, T-132/00 and T-141/00 Artegodan a.o. v. Commission [2002] ECR II-4945, para 197.

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analysis?76 How could the court verify whether proper feed-back has been provided to the relevant stakeholders? However, as mentioned above, the most likely situation de iure condito is that Community courts could merely recognise the BR tools as "essential procedural requirements", thereby limiting their review to the existence (or otherwise) of an IA or consultation process, without engaging in a detailed assessment of the way in which these procedures have effectively been undertaken. VII. The Enforceability of the BR requirements before EC courts When considering the issue of the enforceability of the BR requirements before the EC courts, one must wonder in abstracto how this might occur within the existing Community legal order and within the current system of legal remedies. Judicial review of the BR requirements may be envisaged in the following three scenarios. The first scenario: challenging the outcome of the BR analysis A first scenario may occur should a party challenge the legality of an IA report, or the outcome of a consultation procedure, by claiming that these documents are vitiated by a breach of the relevant guidelines and procedures. This situation is quite unlikely to occur. Being mere 'preliminary acts', neither an IA report nor the outcome of a consultation procedure are liable to produce legal effects and, as a result, they would be considered by the courts as non-reviewable acts77. Moreover, regardless of their nature, the courts would struggle in any event to review the correctness of these documents in the light of the BR tools and techniques, to the extent that (as shown above) the latter are not readily usable benchmarks. Therefore any direct action against an IA or the report of a consultation would be likely to be declared inadmissible by the courts. The second scenario: challenging the validity of the final act The second situation may occur when an EC court, called upon to review the legality of a Community act within the context of an Article 230 EC or 234 EC procedures, has to examine an alleged violation of a BR requirement. For instance, a Member state, an institution, or even an individual (provided that that individual satisfies the locus standi conditions in the case of a direct action) could raise the issue of the Commission's compliance with the BR requirements before the courts78. A plaintiff may claim before courts that the Community act being challenged has been adopted in breach of EC law to the extent it has not been previously subjected to an IA. 76 This principle has been introduced by the 2005 IA Guidelines, n 15 above, 8, and must not be mistaken

for the general principle of proportionality. Its application requires that depending on the significance of the Community action some aspects of the analysis be more or less developed. In other words, the more significant an action is likely to be, the greater the effort of quantification and monetisation that will generally be expected.

77 On this category of acts, see Schermers and Waelbroeck, Judicial Protection in the European Union, (Kluwer, 2003), 348-355.

78 On this point, one has to note that, although the case-law of the European courts is particularly restrictive in the interpretation of the locus standi requirements for private parties, a ‘participation exception’ has been recognised, whereby a person enjoys standing before a EC court when he/she enjoys "specific procedural guarantees conferring upon [it] a right to participate in the political process". According to J. Scott and S. Sturm, “in a new governance setting, it would seem appropriate to acknowledge standing even when a party’s entitlement to participate is not legally mandate”. See by these authors, 'Courts as Catalysts: Rethinking the Judicial Role in New Governance', Columbia Journal of European Law, Vol. 13, No. 3 (2007) 15-16.

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To be successful, the plaintiff will have to prove that the IA represents a binding step in the EC decision-making process, whose omission, or incorrect application, might affect the legality of the final act. As argued above, the introduction of the BR requirements into the European legal order through 'soft law' acts renders this a particularly difficult task. However, by relying on the case-law which has recognised the legal effects of self-imposed rules, it cannot be totally excluded that the courts could holding that the BR tools and techniques are "essential procedural requirements" by which the Commission must abide during the drafting stage of its initiatives. Although this did not happen in IATA79, this case was an attempt by one party, within the context of a preliminary reference, to challenge the legality of a Community act by relying upon the breach of a BR requirement. In this case, the Court of Justice (ECJ) was asked to rule upon the validity of Commission Regulation 261/2004 which came into force on February 18, 2005. This regulation entitles air passengers to compensation when a flight that they intend to travel on is delayed or cancelled, or when they are denied boarding to such a flight due to overbooking, or when the airline is unable to accommodate them in the class they had booked. The IATA and the European Low Fares Airline Association challenging the regulation raised inter alia a violation by the Commission of the IA Guidelines, arguing that the IA as performed by the Commission on the original legislative proposal was incomplete, having failed to explore all the available policy options. Although the court did not address this argument, it cannot be excluded that the court did not glance at it when considering the proportionality of the indemnities as provided for by the Regulation. The third scenario: BR requirements as an aid to courts The third may take place when courts, called upon to review the lawfulness of a Community act, either within the context of an Article 230 EC or 234 EC procedure, look at whether the BR requirements have been complied with during the drafting of that act in order to ascertain whether an argument based on one of the following allegations is well-founded:

- breach of the principle of conferral; - breach of the subsidiarity principle; - breach of the proportionality principle.

In other words, since the Commission is expected at the drafting stage of a proposal, notably when conducting the IA, to verify whether the relevant initiative conforms to the abovementioned principles, the European courts, when called upon to review the validity of the final act, may rely on these previous analyses in order to determine whether the challenged act complies with these principles. Although the court has been able to assess – at least until now – such compliance without necessitating any such analysis at the drafting stage, the current practice of carrying out an IA for all major Commission initiatives may lead the court to refer back to such previous evaluations before reaching their conclusions. For instance, when assessing whether a final measure falls within the competence of the Community, the court might look at how this question has previously been assessed by the Commission services at the drafting stage of the proposal. Indeed, the IA guidelines clearly state that "having identified the problem and its underlying causes, you still need to verify if the EU has the right to act on it (principle of conferral) and whether it is better placed than the

79 Case C-344/04, The Queen on the application of IATA and ELFA v Department for Transport [2006]

ECR I-403. For a review of this judgment, see Alemanno, ‘Protection des consommateurs – Arrêt IATA’, (2005) Revue de droit de l’Union européenne 4, 839.

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Member States to tackle the problem (subsidiarity principle)"80. Likewise, as the IA guidelines require the Commission to establish "which policy options and delivery mechanism are the most likely to achieve" the objectives pursued by the underlying initiative, the court may take this previous evaluation into consideration when determining whether the final measure complies with the principle of proportionality. Should the court be willing to have regard to an IA to determine whether a challenged Community act is in breach of the principles of conferral or that of proportionality, one may wonder what kind of role these previous evaluations may play within such a final judicial determination. Could IA offer a useful aid to the court in carrying out judicial review? What if the Commission has not performed these preliminary analyses? May the court consider that in the absence of these preliminary assessments it is not possible to determine whether the challenged regulation conforms to the abovementioned principles? Would the court be entitled to verify whether there exists a rational relationship between the final ruling on an act and previous examinations, such as an IA? Some of these questions have been raised by the recent judgment in Spain v Council, where the ECJ, after highlighting the lack of an IA by the Community legislature, found a breach of the general principle of proportionality and annulled the regulation contested by Spain81. By an action under Article 230 EC, Spain challenged the new Community support system for cotton as enshrined in Council Regulation No 864/2003 by claiming that this new system, contrary to its declared purpose, was likely to encourage farmers to abandon cotton production in favour of competing crops, with serious consequences for cotton-dependent agricultural regions. In particular, Spain contended inter alia that fixing the amount of the specific aid for cotton at 35% of the total existing aid under the previous support scheme would not suffice to attain that objective, namely to ensure the profitability and hence the continuation of that crop. How and on what bases did the Commission services reach the conclusion that if set at 35% of the total existing aid in the previous support scheme that amount would suffice for attaining that objective? According to the Spanish government, the comparative study (cotton contrasted with other crops) of the foreseeable profitability of cotton growing, which was prepared by the Commission and used by the Council in order to determine the amount of the specific aid for cotton was incorrect, as its figures did not include labour costs. The inclusion of these costs would have entailed an increase in the production costs of cotton, such that adequate profitability of that crop under the new support scheme could not be ensured, so that that crop, contrary to the regulation's objective, would have been liable to have been abandoned. Facing this claim, the court developed the following chain of reasoning. Building upon the opinion of Advocate General Sharpston82, the court recalled the scope for judicial review of the principle of proportionality, in the context of the CAP. It therefore pointed out that, as the Community legislature enjoys considerable discretion in this field, the court's powers of review must be limited to verifying whether the challenged measure is not vitiated by any manifest error or misuse of powers, and that the authority concerned has not manifestly

80 IA 2006, n 22 above, 18. 81 Case C-310/04 Spain v. Council [2006] ECR I-7285. For a review of this judgment, Groussot,

Judgment C-310/04, (2007) Common Market Law Review, 761-785. 82 Opinion delivered by Advocate-General Sharpston on 16 March 2006, in Case C-310/04 Spain v.

Council, notably paras 82-96.

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exceeded the limits of its powers. By referring to Jippes83, the court emphasised that "the lawfulness of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate in terms of the objective which the competent institution is seeking to pursue"84. As a result, what must be ascertained is therefore not whether the measure adopted "was the only one or the best one possible but whether it was manifestly inappropriate"85. Up to here the reasoning of the ECJ seems to be in line with its well-established case-law. But then the court adds:

"However, even though such judicial review is of limited scope, it requires that the Community institutions which have adopted the act in question must be able to show before the Court that in adopting the act they actually exercised their discretion, which presupposes the taking into consideration of all the relevant factors and circumstances of the situation the act was intended to regulate". (para 122) "It follows that the institutions must at the very least be able to produce and set out clearly and unequivocally the basic facts which had to be taken into account as the basis of the contested measures of the act and on which the exercise of their discretion depended". (para 123)

As has been observed, "this is new to the jurisprudence of the ECJ"86. To my mind, this seems to be true for at least two reasons. First of all, this assertion shows in an unprecedented way a clear shift towards greater judicial review of basic facts by the Community courts. Even if this trend was initiated by a line of well-known judgments, these have been judgments in the areas of merger control87 and risk regulation88, and not in the area of the CAP. Second, although it would be unreasonable to interpret this judgment as imposing a general obligation on the Community legislature to perform an IA, the court is nonetheless pointing out that, when engaging in a (more intensive) judicial scrutiny of the basic facts which underlie an EC act, as triggered by a claim of a breach of the principle of proportionality, it might turn out to be useful have an IA at one's disposal. Indeed, what if an IA had been carried out by the Commission service in that case? According to the a contrario reasoning of the judgment, it seems that this would have enabled the court to assess whether the Community institutions "had exceeded the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation into question"89. In other words, an IA would have facilitated the court's task of determining whether the challenged measure "was manifestly appropriate"90. What better way for the Community legislature to prove "the taking into consideration of all the relevant factors and circumstances of the situation the act was intended to regulate" than by producing an IA before the ECJ?

83 Case C-189/01, Jippes and Others [2001] ECR I-5689, para 89 and the case law cited. 84 Spain v. Council, para 98. 85 Ibid, para 99. 86 Groussot, n 81 above, 778. 87 See, e.g., T-342/99, Airtours v. Commission, [2002] ECR II-2585, Case T-5/02 Tetra Laval v

Commission [2002] ECR II-4381 and Case C-12/03 P, Commission v Tetra Laval [2005] ECR I-113. See Sibony and Barbier de la Serre, ‘Charge de la preuve et théorie du contrôle en droit communautaire de la concurrence : pour un changement de perspective’, (2007) 43 RTD Eur., 205

88 See, e.g., T-13/99 Pfizer Animal Health v. Council, [2002] ECR II-3305. For an analysis of the standard of judicial review as applied to EC risk regulation acts, see A. Alemanno, Trade in Food – Regulatory and Judicial Approaches in the EC and the WTO, (Cameron May, 2007), 319-330.

89 Spain v. Council, n 81 above, para 97 and the case law cited. 90 Ibid, para 99.

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This seems especially true if one considers that the Court itself has clearly recognised in Pfizer that “a cost/benefit analysis is a particular expression of the principle of proportionality”91. It is argued that an IA could be recognised to provide 'analytical support' within the examination of other general principles, such as subsidiarity and conferral, to the extent that IAs too are expected to devote some attention to the respect of these principles. What remains to be seen however – as in this case there was no previous IA of the challenged act – is the exact role that this analytical tool may be called upon to play within the process of judicial review. Would such an "aid to the legislator" be susceptible to becoming an aid to the court too? Although it might be tempting for the court to increasingly rely on these previous evaluations in order to support its judicial conclusions as to the lawfulness of the final act, IA as performed by the Commission services may not always be adequate to satisfy this task. This is because, as illustrated at the beginning of this article, IA is currently carried out on the draft initiative put forward by the Commission and is not always performed upon the amendments subsequently proposed by the Council and the Parliament later in the decision-making process. Conclusion After introducing the reader to the BR initiative and its main regulatory requirements, this article has attempted to explore the possible legal implications which may arise from the Community institutions' increasing reliance on the BR requirements within the Community legal order. In particular, it showed that as the BR tools and procedures require the Commission to carry out a set of rather detailed activities, this inevitably raises the issue of compliance. Against this backdrop, it offered an analysis of the existing administrative regulatory oversight mechanisms aimed at ensuring, both ex ante and ex post facto, the effective performance of the BR procedures by the Commission services. Although the establishment of the IAB (by creating an extra layer of quality review which might be relied upon in order to contest the final IA report accompanying a legislative proposal) seems to show that the Commission is finally taking the BR agenda more seriously, this innovative body lacks the power to return a flawed IA draft back to the DG that authored it. Therefore, lacking an effective regulatory watchdog, it is foreseeable that this issue will invest the EU judiciary sooner or later by turning into a Trojan horse within the Commission's wall. Indeed, despite the Commission's efforts to dismiss any attempt aimed at legalizing the BR requirements, these requirements, by dictating a more informed and more inclusive method of decision-making, are expected to influence public expectations, thus encouraging stakeholders to act in order to ensure their implementation by the Commission. As this article has shown, there are already signs that not only are private parties willing to challenge the correctness of IAs carried out by the Commission services but also that the ECJ is ready to rely on IAs in order to determine a possible breach of a general principle of law, such as the principle of proportionality. As both these situations are likely to occur in the near future, this should alert the Commission that it should start taking more seriously the legal implications of the BR initiative. The possibility that pre-draft activities, such as IA and

91 Pfizer Animal Health v. Council, n 88 above , para 410.

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consultation procedures, might be fall under judicial supervision could thereby generate an incentive for the Commission to adequately perform its BR duties. As a result, it is a matter of urgency for the Commission, in order to prevent the BR agenda from turning into a Trojan horse within its own walls, to develop a more effective and independent regulatory oversight mechanism aimed at ensuring the Community's compliance with the BR requirements. The establishment of such a mechanism would not only improve the overall quality of these analyses but would also diminish the threat of subsequent judicial scrutiny over the way in which these requirements have been complied with by the Community institutions. In doing so, the Trojan horse effect will be avoided and the BR initiative will be offered the chance to succeed.

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