First years of systematic regulatory impact assessment in Estonia – lessons learnt 18.09.2014, Tallinn Helena Braun Advisor of Regulatory Impact Assessment Ministry of Justice

Presentation 1. Overview of the Estonian regulatory impact assessment system regarding primary legislation. 2. Achievements and drawbacks identified by the Legislative Quality Division of the Ministry of Justice.

Road to systematic RIA in Estonia Detailed RIA rules since 2012 Why new rules? Various analysis showed that: In most cases RIA was missing or done partially; RIA was made after drafting the law; RIA was only limited to the areas of competency of the ministry drafting the law. Negative results because: No RIA tradition; No quality control mechanism; No clear legal framework; Not enough analytical capacity and competency. Issues that have mainly been dealt with

Road to systematic RIA in Estonia (2) 2007 – Better Regulation Programme with partial funding from the European Social Fund; 2009 – RIA concept paper by a special working group; 2011 – Parliament authorised RIA concept; 2012 – Renewed law drafting Regulation „Rules for good legislative practice and legislative drafting“ comes into force (transitional period until 2014 – fully in force as of 01.01.2014); December 2012 – Methodology of RIA adopted by the Government – practical guidance for implementing RIA requirements.

Quality control mechanism – RIA organisation Legislative Quality Division of the Ministry of Justice – RIA quality control of primary legislation Coordination – guidelines, trainings, seminars, data collection, representation in international fora (OECD, EU Better Regulation formations); - Quality control – checking and commenting the RIA-s of all the ministries in the official inter-ministerial coordination round.  All other ministries must do the same regarding their field of competence.

Legal framework of RIA

Categories of impacts According to the „Rules of good legislative practice and legislative drafting“ six categories of impacts have to be considered: Environmental impact; Economic impact; Impact on regional development; Impact on state and local government organisation; Impact on state security and International relations; Social, including demographic impacts.  The list is not exhaustive

Steps of RIA EX-ANTE RIA – before and during the development of Regulation Preliminary RIA of all regulatory changes; In-depth RIA of regulatory changes with significant impacts EX-POST RIA – after Regulation has had effect

Steps of RIA in legislative process PREPARATION OF LEGISLATIVE INTENT PROBLEM  OBJECTIVE PRELIMINARY IMPACT ASSESSMENT -IMPACTS AND THEIR SIGNIFICANCE STAKEHOLDER ENGAGEMENT min 4 WEEKS OF CONSULTATION ALL MINISTRIES MUST CHECK IMPACTS IN THEIR FIELD OF COMPETENCE MINISTRY OF JUSTICE CHECKS THE OVERALL QUALITY OF RIA CONSULTATION AND COORDINATION OF LEGISLATIVE INTENT PREPARATION OF LEGISLATIVE DRAFT RESULTS OF IN-DEPTH IMPACT ASSESSMENT OF SIGNIFICANT IMPACTS STAKEHOLDER ENGAGEMENT PLAN OF EX-POST RIA CONSULTATION min 4 WEEKS OF CONSULTATION FEEDBACK TO CONSULTATION

Steps of RIA in legislative process ALL MINISTRIES MUST CHECK IMPACTS IN THEIR FIELD OF COMPETENCE MINISTRY OF JUSTICE CHECKS THE OVERALL QUALITY OF RIA INTER-MINISTERIAL COORDINATION GOVERNMENT ENDORSES PARLIAMENT RIIGIKOGU DECIDES EX-POST RIA PRESENTED TO THE PARLIAMENT, THE STAKEHOLDERS AND THE MINISTRY OF JUSTICE WHAT NEXT?

EX-ANTE RIA - preliminary RIA – legislative intent The aim is to think of all the impacts that the planned policy changes would have and identify significant impacts that require further analysis 1. What will change substantially? 2. Which categories does the change impact (6 categories)? 3. Which target groups are influenced by the change? 4. How exactly does the change impact the target group? 5. Is it possible to show causality between the change and the objective? 6. Does the change impact any target group significantly ? – if so, in-depth RIA is required.

Exceptions from legislative intent – but not from preliminary RIA Urgent need to introduce legislation; Transposition of EU law; International agreements; State budget; Impacts are negligible (technical changes). NB! In case the legislative intent is not presented, the RIA criteria of the intent have to be respected and reflected in the explanatory letter of the legislative draft.

EX-ANTE RIA – in-depth RIA - Significance of an impact is established using 4 criteria: Size of target group Scope of impact to the target group Frequence of impact to the target group Risk of unintended impacts - No very concrete rules for in-depth RIA – has to be inclusive, analytical, evidence-based, show alternative solutions to the problem and their positive and negative impacts to target group(s).

EX-POST RIA Ex-post RIA is mandatory where such assessment was considered necessary during the preparation of the act. No practical examples yet. Problematic that since 2012 no ex-post RIAs planned.

Main changes introduced to RIA system in 2012 Legislative intent is obligatory (some exceptions); Stakeholder consultations are obligatory in the phase of legislative intent; Not doing ex-post RIA must be explained; Ministry of Justice is officially the coordinating body for RIA with regard to primary law; In-depth analysis for significant impacts is obligatory and must be reported. DETAILED LEGAL FRAMEWORK AND QUALITY CONTROL MECHANISM

„In an ideal world, the selection of one regulatory option over others would be based on a comparison of the costs, benefits and potential side effects of various discrete options. However, impact assessment systems are not situated in an ideal world, and the history of RIA is littered with disappointment concerning the effects of RIAs on actual policy choices and contestation concerning the design and operation of RIA regimes.” Kai Wegrich, Handbook on the Politics of Regulation

RIA system in practice – achievements and drawbacks

Achievements Transparency Formulation of problems and objectives has improved; RIA part of explanatory letters makes drafts easier to comprehend; RIA part of explanatory letters shows how much evidence and analysis backs the proposed policy change.

Achievements Legislative intent has helped to retrench resources and has enabled to solve substantial problems in an early phase of decision-making.

Achievements RIA awareness has increased – mindset of „every link in the chain of policy making process“ is very important for effective and efficient functioning of RIA.

Drawbacks RIA is not yet the basis for decision-making – still after, not before the draft. We need to work hard to go from „here is the conclusion – what facts can we find to support it“ to „here are the facts – what conclusion can we draw from that?“ „We use evidence the same way as a drunken man uses a lamp post – more for support than for enlightenment“ Better Regulation community inspired by A. Lang

Drawbacks Speedy law making and very few legislative intents: 324 laws out of 398 laws that were in force in 1st September 2013 have already been amended, many of them more than once; In 2014 only in 19% of the cases a legislative draft was preceded by a legislative intent. Important changes that seem to have significant impacts are approved in urgent procedure whereas with regard to smaller changes correct procedure is followed – problematic.

Drawbacks All ministries do not have enough analytical capacity to properly follow the renewed RIA rules.

Drawbacks Lack of will and habit to research, analyse. Used to doing what is told.

Drawbacks Even if all the information is provided, pros and cons brought out, the initial idea seems too dear to let go of it.

Way forward

Current activities Updates to legal RIA framework; Seminars, training courses, capacity building; Establishment of RIA contact points in all ministries; International best practice collection.

Some questions for the future Quality control: - is quality control in one of the ministries the best choice? - is it enough that quality control is done once legislative intent and/or legislative draft are ready or would assistance be needed from the beginning of the process? Would Estonia need a Better Regulation Unit where RIA, public consultation, administrative burden reduction and other aspects of Better Regulation would be dealt with systematically together?

Thank you for your attention! Helena Braun Advisor of Regulatory Impact Assessment Legislative Quality Division, Legislative Policy Department Estonian Ministry of Justice helena.braun@just.ee