Accountability is fundamental because of the complexity of the regulatory process and the range of participants involved. The concept of a regulatory chain is often used to describe the regulatory process and it is critically important that the links in that chain - from originator to regulated party - are clearly defined.

Regulatory accountability means having clarity and certainty about the roles of: those originating regulation; those who must enforce or otherwise achieve compliance; the regulated parties; those charged with adjudicating on appeals; and those reviewing and evaluating. Integrating the tiers of accountability while regulations are being designed is critically important. However, given the complexity and evolving nature of regulatory institutions and roles, changes in one regulatory area or to the responsibilities of one agency may have knock-on effects in other areas or for other agencies.

Of particular importance is the question of fair, open, efficient and effective appeals procedures. Increasingly, this aspect of accountability has informed developments within the public service, for example, through initiatives to improve customer service and through the work of the Ombudsman. There is a need to ensure that this concept is replicated and expanded within the regulatory framework, including sectoral regulatory areas.

Is it clear under the regulation precisely who is responsible to whom and for what?

We will strengthen accountability in the regulatory process

The regulatory framework is constantly evolving and it is necessary to ensure that proper lines of accountability are maintained. At the heart of accountability are the questions, "accountable to whom and accountable for what?"

Due in part to the complexities of the industries in question, the accountability of independent regulators will be subject to development and institutional change in years to come. In the meantime, accountability is served through good information flows, with full disclosure of the details of the decision-making process and of all submissions and representations made to the regulator. This is, in fact, the practice largely followed by sectoral regulators in Ireland. It has contributed significantly to a better understanding of the problems faced and the reasons behind the decisions taken. Such information disclosure also makes it more likely that the regulatory decisions will be accepted by those most affected by them.

As part of ongoing accountability arrangements for Government Departments and Offices, their annual reports will include material on aspects of regulatory management, including consultation processes used, simplification or consolidation of legislation, and conduct of RIAs throughout the year. Such reports will also contain commentary on oversight of regulatory bodies under their aegis and on any sectoral regulatory reviews undertaken.

Regulators and regulated bodies alike have indicated that they are conscious that the question of 'who regulates the regulator?' is not always adequately addressed by the existing systems in place. In devising legislative frameworks for sectoral regulators, the Government will ensure that a systematic approach is being taken to the overview of sectoral regulators by Government Departments and Oireachtas Committees.

The resources of the Oireachtas and its Committees for reviewing sectoral regulatory structures must be commensurate with their monitoring and accountability functions. In addition, there is a need for greater clarity and consistency when regulatory bodies are being established, as to how they relate to the Oireachtas, balancing autonomy in making regulatory decisions and their political accountability.

Accountability can also be strengthened through greater involvement of the consumer. The consultative processes in which the regulators engage would be strengthened by informed and well-researched submission and comment from sectoral consumer councils, user groups, and business interests, as well as households, communities and disadvantaged groups. Where existing industry levies are collected, consideration will be given to using resources generated by these levies to support consumer councils and user groups.

To sum up: In terms of improving accountability in the regulatory process, the Government will:

Develop a systematic approach to the overview of sectoral regulators by Government Departments and Oireachtas Committees [Actions 4.1.1, 3.2.1];
Develop new measures to strengthen the role of the consumer [Actions 3.3.2];
Ensure more comprehensive accountability by Government Departments in respect of regulatory management [Action 5.3.2];
Supplement existing accountability arrangements with a series of sectoral regulatory reviews [Actions 3.1.1-3.1.3].

Is there an effective appeals process?

We will improve appeals procedures

In many areas, the State has moved from the role of service provider, transferring regulatory decision-making functions to specific sectoral regulators. As a result of placing greater autonomy with the sectoral regulators, and growing competition among a greater number of players, decisions made by sectoral regulators have been challenged - in some cases lasting a very long time. Although there are a variety of sector-specific appeals mechanisms, in some instances the only route for the questioning of regulatory decisions has been to undertake a judicial review - even though recourse to judicial review often proves to be a time-consuming and resource-intensive process.

Regulatory appeals have also placed a considerable burden on the courts system. In a number of cases, judges have been asked by complainants to substitute their opinion for the decision of the regulator, even though this is beyond the scope of a judicial review.

If accountability is to be fully established, an innovative approach to regulatory appeals should be adopted to facilitate expedient, efficient and informed review of regulatory decisions. Ideally the parties undertaking the review would have expertise in relevant areas, e.g. competition law, economics and sector-specific issues, or direct access to such expertise. However, we must seek to get the correct balance between the right to appeal a regulatory decision and undue delay in decision-making and implementation. There are, therefore, a number of complex issues involved in establishing an efficient appeals procedure. The Government is committed to reviewing the options available, in consultation with interested parties, and developing proposals for an improved approach.

A small number of judges have been appointed to deal with competition cases in accordance with the Competition Act 2002. Judges have either presided over previous competition cases or have a specific interest in the area. However, there is a need to consider whether further specialisation should be supported, for example relating to regulatory matters, due to the growing complexity of the issues involved.

It may also be possible to improve processes through better case management, including allocation of cases, limitation of opportunities for submissions and presentations on points of law. In other words, more efficient administration of cases may have the desired effect.

To sum up: In terms of improving regulatory appeals procedures, the Government will:

Develop proposals for an improved approach to appeals of sectoral regulators' decisions [Action 4.3.1];
Develop further the approach whereby there are expert judges in particular commercial areas, to deal with specific competition and/or sectoral regulation cases [Action 5.6.1];
The Courts Service will continue to improve and streamline case management practices in cases relating to sectoral regulation in order to expedite the process [Action 5.6.1].

ACCOUNTABILITY OF REGULATORS

Independent sectoral regulators are accountable to citizens for the pursuance of their remit, overall performance and plans for future work. This accountability is provided through a number of mechanisms and, for sectoral regulators established in recent years, such mechanisms are often set out in law.

Firstly, regulators are accountable to Government through being:

appointed by Ministers (after an independent selection process);
obliged to have their finances audited by the Comptroller and Auditor General; and
required to work within a policy framework set by the Minister and to report to the Minister on their strategy and work.

Secondly, they are accountable to the Oireachtas through:

presenting annual reports; and
being obliged to appear before relevant Oireachtas Committees.

Thirdly, regulators are also accountable through the courts by being subject to judicial review of their decision processes, and they are sometimes subject to other appeals or review mechanisms in relation to their decisions.

Fourthly, regulators give account directly to regulated industries and to citizens generally through the publication of information about their decisions and their work.

In practice, the accountability of regulators needs to be balanced against their independence. Regulators have been established as independent entities in order to ensure that regulatory decisions are taken in an objective manner. Accountability mechanisms must be designed so that regulators give full account for the discharge of their duties, and that their regulatory independence is not compromised in the process.

REGULATORY APPEALS

In the case of utilities regulators, one possibility might be to establish a single regulatory appeals body. Such an appeals body could call on a number of expert panellists with relevant knowledge and experience of sector specific issues and/or competition law and policy, and/or economics, to adjudicate appeals. The regulatory appeals panel might facilitate a more expedient and cost effective alternative to judicial review. Access to further court appeals would remain an option, but only on points of law.

Powers of the single regulatory appeals body might include:

Confirming or setting aside all or part of the regulator's decision;
Imposing, revoking or varying the amount of any penalty;
Granting or cancelling an individual exemption or varying any condition or obligation which relates to that exemption;
Giving such directions, or taking such other steps as the sectoral regulator could have given or taken; and
Making any other decision which the sectoral regulator could have made.

There are, of course, challenges associated with establishing a regulatory appeals body. Firstly, the right of appeal to the courts will still remain - as the courts can always review any administrative decision. Thus, the only effect of having a formalised appeals procedure may be to delay the final decision further. Secondly, the appeals procedures themselves may be used intentionally to delay a final decision, to protect the benefits accruing to the incumbent or dominant producer in the sector.

<< back

next >>