1st Report, 2008 (Session 3)

Report on an inquiry into the transposition of EU directives

CONTENTS

Remit and membership

Report

Summary of key findings and format of the report

The role of the Scottish Government during the transposition process 5

How Scotland feeds into the process of EU law

Scottish Government engagement with stakeholders

Scottish Government engagement with the Scottish Parliament

The Better Regulation agenda

Conclusion

Annexe A: ORAL AND WRITTEN EVIDENCE

Annexe B: REPORTS OF REGIONAL VISITS

Remit and membership

Remit:

The remit of the European and External Relations Committee is to consider and report on-

(a) proposals for European Communities legislation;

(b) the implementation of European Communities legislation;

(c) any European Communities or European Union issue;

(d) the development and implementation of the Scottish Administration's links with countries and territories outside Scotland, the European Communities (and their institutions) and other international organisations; and

(e) co-ordination of the international activities of the Scottish Administration.

(Standing Orders of the Scottish Parliament, Rule 6.8)

Membership:

Ted Brocklebank
Malcolm Chisolm (Convener)
Alasdair Morgan
Alex Neil (Deputy Convener)
Irene Oldfather
John Park
Gil Paterson
Iain Smith

Committee Clerking Team:

Jim Johnston
Ian Cox
Lucy Scharbert
Kathleen Wallace

Report on an inquiry into the transposition of EU directives

The Committee reports to the Parliament as follows—

1 At its meeting on 30 October 2007 the Committee agreed the remit for its inquiry into the transposition of EU directives, the primary aim of which was to build on the work of the predecessor committee’s inquiry into the scrutiny of European legislation.¹ It was clear from that inquiry that there were some concerns among stakeholders in relation to the effectiveness of the Scottish Government’s procedures for the transposition of EU directives.

2. As a result, the Committee agreed that the new inquiry should focus specifically on the two to three year period between a directive being agreed in Brussels and the requirement for it to be introduced into domestic law. The key issue being the extent and process by which Scottish interests and needs are addressed effectively during the transposition process. In particular, the Committee sought responses to the following questions—

• How effective are the Scottish Government’s transposition procedures?
• How transparent are the Scottish Government’s transposition procedures?
• How effective is the Scottish Government in working closely with the other devolved administrations and the UK Government during the transposition process?
• Is there adequate and timely consultation with stakeholders whose interests on which a new directive will directly impact?
• Are there effective mechanisms to ensure the accountability of the regulators within the transposition process?
• To what extent does the transposition process allow for “differential implementation” and tailor Scottish solutions to Scottish problems?
• How effective is the role of the Scottish Parliament within the transposition process?
• Are there examples of good practice of effective, collaborative and transparent transposition within other EU legislative regions?

3. The Committee was aware that, as a result of the previous committee’s inquiry, the Scottish Government was conducting an internal review of its transposition procedures. In addition, in September 2007 the UK Government published an updated “Transposition guide” on how to implement EU directives effectively.²

4. A Call for Evidence was launched on 2 November 2007 and the Committee agreed to take oral evidence from academics, representatives from the EU institutions, relevant stakeholders including those from the business and environment sectors, regulatory groups and the Scottish Government. A list of all those who provided oral and written evidence can be found at Annexe A and the written evidence is published in full on the Committee’s web pages. The Committee is grateful to everyone who participated in the inquiry.

5. In addition to the written and oral evidence three Reporters undertook fact finding visits to regional governments and parliaments in Germany, Spain and Belgium all of which have legislative competence in relation to EU matters. The reports of these visits can be found at Annexe B.

Summary of key findings and format of the report

6. The primary aim of the new inquiry was to build on the work of the predecessor committee’s inquiry into the scrutiny of European legislation. That inquiry recognised the need for the Scottish Government to ensure that Scottish interests are accounted for “upstream” at both the policy development stage and within the formal European legislative process. The Committee wishes to re-affirm this finding. The importance of “early engagement” and its direct correlation with effective implementation was continually emphasised in both the oral and written evidence received by the Committee and during the Reporters’ visits to other legislative regions. Flowing from this is the clear need to ensure that stakeholders are involved in this process as early as possible.

7. The previous inquiry also identified the need for greater parliamentary scrutiny of the Scottish Government’s role in ensuring that Scottish interests are accounted for in the UK Government’s negotiating position on EU legislation as it relates to devolved matters. Again, the Committee wishes to reaffirm this finding as well as emphasising that there is a clear need for greater transparency of the Scottish Government’s role throughout the EU legislative process including at transposition stage, with specific recognition of the corresponding scrutiny function of the Scottish Parliament.

8. This report makes a number of recommendations which seek to build on the work of the predecessor committee and which aim to ensure that there is a strategic focus on early engagement in key policy areas which have a significant impact on devolved areas. The Committee wishes to emphasise the need for the Scottish Government to develop a co-ordinated approach that allows for effective consultation with key partners at significant stages of the EU policy making process.

9. Given these findings the Committee welcomes the Minister for Europe, External Affairs and Culture’s evidence at its meeting on 11 March 2008. The Minister indicated that the Scottish Government had now completed its review of its internal transposition procedures and had assessed whether they were “fit for purpose”. The Minister reported that she had found that the two main problems were a “lack of clear internal processes and a lack of transparency in our processes.” (O.R. Col 476) The Minister indicated that she intended to rectify both problems by developing new procedures.

10. The Minister indicated that in developing the procedures she would look to the views of internal and external stakeholders and other relevant EU Member States and regions. In addition, the Minister advised that the Scottish Government would “carefully consider the findings of this committee’s inquiry and consider incorporating into our procedures any relevant recommendations that you make. “ (O.R. Col 477)

11. The Minister indicated that the procedures would be set out in a publicly available Scotland-specific guidance booklet and that a first draft of the guidance would form the basis of consultation in the summer.

12. The Minister stated that the procedures would “clarify the Government’s various roles and responsibilities from initial proposal development and negotiations through to implementation of directives and monitoring their effectiveness” and would set out:

• How Scotland feeds into the process of EU law;
• How and at what stages the Scottish Government will engage with stakeholders;
• How and at what stages the Scottish Government will work with the Scottish Parliament;
• The Scottish Government’s contribution towards the better regulation agenda “by emphasising our commitment to reducing the burden of bureaucracy and regulation on business.”

13. In view of the Minister’s evidence, the Committee wishes to welcome the Scottish Government’s commitment to introduce new publicly-available procedures for transposing EU law in Scotland and emphasises that this report is intended to inform the Scottish Government in the development of its new procedures.

14. In order to assist the Scottish Government, the Committee has structured the report to address the specific points that the Minister indicated would be incorporated into the Scottish Government’s new guidance. Therefore, following an initial overview of the current role of the Scottish Government during the transposition process, the report addresses how Scotland feeds into the EU legislative process, Scottish Government engagement with stakeholders, the role of the Scottish Parliament and, finally, transposition and the better regulation agenda.

The role of the Scottish Government during the transposition process

15. The procedures for the transposition and implementation of EU legislation in the UK are currently set out in the Memorandum of Understanding (MoU) and the Concordat on Co-ordination of European Union Policy.³ The MoU provides that it is the responsibility of the lead Whitehall Department formally to notify the devolved administrations at official level of any new EU obligation which concerns devolved matters and which it will be the responsibility of the devolved administrations to implement. It is then for the devolved administrations to consider, in consultation with the lead Whitehall Department, how the obligation should be implemented, including whether the devolved administrations should implement separately, or opt for UK legislation.

16. Section 57(1) of the Scotland Act 1998 enables the UK Government to implement EU obligations in a devolved area on a UK wide basis. As a result, the Scottish Government may decide to pass back responsibility for implementation to the UK Government. Where a devolved administration opts to implement separately, the Concordat provides that the devolved administration will have a responsibility to consult the relevant Whitehall departments on its implementation proposals to ensure that any differences of approach produce consistency of effect and, where appropriate, of timing.

17. Evidence from witnesses suggested that while there are examples of good practice at transposition stage the picture across directives is not consistent. Witnesses pointed to the Water Framework Directive⁴ and the Strategic Environmental Assessment Directive (SEA)⁵ as, generally, positive examples of effective transposition. By contrast, two examples identified by witnesses where transposition had been less successful were the Habitats Directive⁶ and the Nitrates Directive.⁷

18. In its written evidence to the Committee, the Scottish Rural Property and Business Association (SRPBA) emphasised that “Transposition varies greatly depending on the nature of the directive and what part of the Government is responsible for the directive.”

19. During the course of the evidence sessions a number of stakeholders commended the UK Government’s “Transposition Guide”⁸ and indicated that a Scottish version of this guidance would be beneficial. In particular, in its evidence to the Committee the Scottish Environment Protection Agency (SEPA) indicated that it would like to see procedures address three particular scenarios in terms of transposition: 1) situations in which Scotland is part of a UK-wide transposition; 2) situations where Scotland transposes in a different way and 3) situations where Scotland transposes separately but where that legislation is identical or similar to UK legislation. (O.R. Col 390) SEPA also noted that the development of more formal procedures:

“might assist Government in managing expectations of both the process and practical outcome of EU Directives.”

20. The Law Society of Scotland suggested that any such guidance should not just be for the use of civil servants and the Government: “but for MSPs, members of the public and members of the professions.” (O.R. Col 209)

21. The Committee therefore welcomes the commitment from the Minister to introduce publicly available guidance that will address the role of the Scottish Government “from initial proposal development and negotiations through to implementation of directives and monitoring their effectiveness” and notes that such guidance is likely to bring greater consistency and transparency during the transposition process. The Committee wishes to emphasise that the guidance should explicitly recognise the corresponding scrutiny function of the Scottish Parliament throughout the EU legislative process.

How Scotland feeds into the process of EU law

22. The Committee notes that the Minister indicated that the new procedures will address how Scotland “feeds into the process of EU law.” A key theme to emerge from the previous committee’s inquiry was that any attempt to influence the European legislative process requires engagement at a very early stage. While the focus of the new inquiry was on the transposition stage, the importance of “getting in early” and influencing EU policy development was continually reaffirmed by witnesses. In particular, the clear message that emerged was that it was impossible to consider the transposition process in isolation and that success at an early stage of the EU policy development process was more likely to produce effective implementation. This is a theme explicitly recognised in the UK Government’s new Transposition Guide which states:

“It is vital to start considering implementation issues early on in the policy formulation process, preferably while the European Commission is still working on its proposal, or, at the latest, while it is being negotiated in the Council of Ministers and the European Parliament.”⁹

23. Likewise, in its written evidence to the Committee, the Law Society of Scotland noted:

“..in considering the effectiveness of post-adoption procedures, it is impossible to ignore the effect of pre-adoption scrutiny and consultation. These two parts of the legislative process cannot be entirely separated and effective engagement by government and Parliament during the EU policy formulation and legislative stage make it more likely that potential difficulties will have been identified, the effects in Scotland considered and affected bodies or individuals will have a higher knowledge of the Directive’s provisions.”

24. This view was echoed by other witnesses while emphasising that Scotland could play a greater role at the EU policy development stage. For example, Scottish Natural Heritage (SNH) stated:

“Once European legislation is finalised, options for implementation are likely to be considerably constrained. There is a need to develop better channels to ensure that any Scottish dimension or Scottish concerns are adequately exposed to those responsible for bringing forward EU legislation.”

25. SEPA supported this view and stated in its evidence to the Committee:

“[I] agree that the development of the directives themselves is much more significant than what we can achieve at the transposition stage. The transposition stage is still important, but much more can be achieved by getting the directive right in the first place. There is certainly scope for Scotland to play a bigger role in that area.” (O.R. Col 410)

26. In this regard, SEPA pointed to the benefits of secondments to the European Commission. The integrated pollution control directive¹⁰ is currently being reviewed by the European Commission and the secondment of one of its technical experts means that SEPA “have a direct line into the development of the review.” (O.R. Col 410)

27. It was also notable that the regional governments and parliaments in Germany, Belgium and Spain with whom the Reporters met were less exercised by the transposition of EU directives and focussed their resources on influencing EU policy development. For example, the Bavarian Parliament worked with representatives from the European Commission, the European Parliament and key stakeholder organisations to influence an early draft of the Services Directive¹¹ which would have involved amendment of 30 to 40 Bavarian State laws. In addition, the Parliament in Flanders has appointed two officials whose role is to promote and stimulate debate on European issues among the parliamentary committees. The focus of their activities is clearly at the pre-adoption stage and they have held inquiries on EU proposals relating to nutrition, sport, cultural matters and transport.

28. Likewise, a key message from the meetings with the German Länder was that the possibility to influence EU proposals is significantly reduced once a directive has been agreed even in cases where there is scope for local measures. The Bavarian Länder emphasised that getting in early might involve trying to influence a proposal before it has even been published by the Commission. The Committee learnt that the Brussels offices of the regional governments in Baden-Württemberg and Bavaria work directly with the EU institutions and relevant stakeholders to try to influence the content of draft EU proposals and legislation. The success of these informal methods was exemplified by Commission proposals for legislation curbing car emissions. Having secured an early copy of this proposal, the Bavarian Government worked with key stakeholders such as BMW and Volkswagen to achieve a common Bavarian position which was then fed in directly to the Commission and the Federal Government.

29. The European Institutions clearly recognise the value of receiving information on the regional dimension. Arlene McCarthy MEP stated in her evidence to the Committee that:

“We have come to the key conclusion—which is important from the Commission’s engagement—that we need to work closely with stakeholders. That must include the member states but must also include, for example, the devolved administrations such as the Scottish Executive—and, in Germany, the länder. As members will know, the länder have a strong record in influencing EU legislation and are often active in raising issues with us in the Internal Market and Consumer Protection Committee.” (O.R. Col 148)

30. As in the previous inquiry, the European Commission reaffirmed its openness to receive views:

“it is very rare for the Commission to say no to a contact being made or to an occasion to engage informally in discussion or exchange views in a particular sector.” (O.R. Col 166)

31. For its own part, the Scottish Parliament has put in place mechanisms for early engagement. For example, part of the committee’s work has become consideration of the European Commission’s Legislative and Work Programme (LWP) which is published annually in October. The Committee consults with subject committees and stakeholders with a view to identifying those EU policy initiatives within devolved areas which will potentially have a significant impact on Scotland. The consultation responses are then used to form the basis of the workload of the Scottish Parliament’s European Officer who provides regular “intelligence” on these issues from Brussels and warns of upcoming issues in a timely fashion.

32. Since September 2007, the European Officer has been producing the “Brussels Bulletin” a fortnightly publication that provides an update on the Parliament’s EU priorities and is distributed to all subject committees and made publicly available on the Committee’s website.

33. As part of its “upstream” work, the Committee is also keen to continue to build its relations with the Scottish MEPs, through regular video conference evidence sessions and to build on its links with the European Commission.

34. The Committee wishes to emphasise the clear relationship between early engagement and effective transposition and considers that this should be explicitly recognised in the Scottish Government’s new transposition procedures. At the same time, the Committee wishes to underline the need to develop formal processes to enable the Scottish Parliament to scrutinise the way in which the Scottish Government engages early in the EU policy development process.

Recommendations
35. The Committee recommends that the Scottish Government’s transposition guidance should explicitly recognise the importance of early engagement and the direct connection with effective implementation.

36. The Committee recommends that the Scottish Government should continue to develop the presentation of its EU priorities to the Parliament to include a detailed summary of the early engagement it has undertaken in relation to its EU priorities and political objectives.

37. The Committee recommends that the Scottish Government considers the use of secondments to the EU institutions as one method for promoting Scottish interests at EU policy development stage.

Scottish Government engagement with stakeholders

38. In her evidence to the Committee the Minister indicated that the new guidance would also address how and at what stages the Scottish Government would engage with stakeholders. In common with the previous committee’s inquiry the benefits of early and effective consultation with stakeholders were continually emphasised by witnesses. In its written evidence to the Committee the Scottish Trades Union Congress (STUC) confirmed that early engagement with stakeholders can “generally lead to improved outcomes” and, in particular, emphasised that “early and robust consultation can provide opportunities for innovative solutions.”

39. Witnesses pointed to the Water Framework Directive¹² as an example of good, collaborative and timely engagement with stakeholders. As Scottish Water explained:

“For the Water Framework Directive, SEPA and the Scottish Government set up a National Stakeholders Forum with representatives from industry sectors to debate and inform the regulation making process.”

40. The Convention of Scottish Local Authorities (COSLA) further highlighted the transposition of the Directive on drinking water quality¹³ in which it had, along with others in local government:

“..worked on a collective basis to secure significant improvements in the legislation—improvements that were over and above the basic improvements in the EC Directive.“ (O.R. Col 335)

41. Scottish Environment LINK also emphasised its positive experience in respect of the Water Framework Directive “..in which transposition by primary legislation generated a climate for all-embracing stakeholder engagement.” (O.R. Col 272) However, it also noted that:

“This has not been seen in cases of transposition by secondary legislation or other forms of regulation.” (O.R. Col 272)

42. This evidence tended to support the views of the East of Scotland European Consortium (ESEC) which indicated that “while there are instances of good engagement, it is not consistent” and pointed to the transposition of the EC Landfill Directive¹⁴ which “did not see sustained dialogue.” Further, SEPA pointed out that even changes in personnel could impact on the transposition process and lead to “significant shifts in either position or understanding.” (O.R. Col 402)

43. The need for formal processes in respect of stakeholder engagement has been recognised in other jurisdictions. During the visit to Belgium the Committee learnt that the Flemish Government has recently established Strategic Advisory Bodies in each particular policy area, which should involve “civil society”. These bodies have a formal role in the transposition process and their opinion will be sought on each relevant draft implementing instrument.

Timely engagement
44. An overarching theme emphasised by witnesses in terms of effective stakeholder engagement was the importance of early consultation. In particular, the Faculty of Advocates noted:

“Obviously the earlier the consultation, the better, and the more time given in which to formulate a response, the better.”

45. Nonetheless, Scottish Environment LINK indicated that there was a tendency to leave some Directives to the “last minute” and cited the Nitrates Directive and the Environmental Liability Directive¹⁵ as examples of late engagement. SEPA echoed this in its written evidence stating:

“There are, however, occasions when involvement is invited late in the consultation process. This may occur when a decision as to the identity of the regulatory body is delayed or where Scottish Government is waiting for English legislation to be laid. In any case late engagement generate ”knock-on” effects in terms of obtaining meaningful or comprehensive input due to other priorities and demands on staff time.”

46. The importance of early consultation was supported by both Scottish Water and the STUC and in its oral evidence in connection with the public sector procurement directive¹⁶ the STUC indicated that:

“I would not claim that the process was not transparent, given that it included a number of public consultations, but the main problem was the timing of the engagement of stakeholders, which came far too late in the process.” (O.R. Col 241)

Development of durable social partnerships
47. Witnesses emphasised that engagement with stakeholders should ideally commence during the policy development stage. In particular, the STUC pointed to experiences in Ireland and Denmark both of which have highly developed durable social partnership mechanisms that “allow stakeholders to contribute across the range of public policy early in the policy-making process.” (O.R. Col 244)

48. The importance of early and ongoing engagement was echoed by Confederation of British Industry Scotland (CBI Scotland) which emphasised the need for stakeholder involvement at all stages of the process, “from Europe to the United Kingdom to Scotland” in order that stakeholders could ”help to formulate legislation from the beginning right through to the end of the process.” (O.R. Col 244)

49. In its evidence to the Committee, the STUC further suggested that the first stage in the transposition process should be consideration by the Government on how a directive could be used to achieve its aims within Scotland (O.R. Col 248) (a view supported by subsequent witnesses) and emphasised the need to avoid “jumping in” directly to legislation:

“The fact that the UK Government behaves in that way is related to the lack of developed and durable social partnerships such as exist in other European states.” (O.R. Col 244)

50. Scottish Environment LINK also supported consideration of the purpose of the directive and stated:

“Europe is not another place that tells us what to do; we are part of the process that leads to a directive and we agree a directive’s purpose. We can take a step back, think about a directive’s purpose—what are we trying to achieve—and find a Scottish way of achieving that purpose, rather than being pedantic about the detail of transposition.” (O.R. Col 277)

Single point of contact
51. Finally, there was a perception among several witnesses that stakeholder engagement could be further enhanced if there was a single point of contact at the Scottish Government. Scottish Water pointed out that, while transposition procedures were transparent for each directive:

“..across all subject areas, directives are handled by a number of different departments within the Scottish Government and there is no single point of contact (or point of information) where an interested party may ascertain which forthcoming directives will be implemented and the timetable for transposition.”

52. The Committee wishes to emphasise the importance of establishing clear procedures for stakeholder consultation throughout the EU legislative process. In particular, the Committee considers that the Scottish Government has a key role in co-ordinating the activities of stakeholders in promoting Scottish interests during the EU policy development stage.

Recommendations
53. The Committee recommends that the Scottish Government’s transposition guidance should explicitly recognise the importance of early stakeholder engagement and emphasise that this engagement should start during the EU policy development stage.

54. The Committee recommends that the Scottish Government procedures recognise the clear role for the Government in co-ordinating the activities of stakeholder groups in promoting Scottish interests during EU policy development stage.

55. The Committee recommends that the guidance should emphasise consideration of the purpose of the directive and what could be achieved for Scotland, preferably in close liaison with relevant stakeholders.

56. The Committee recommends that the Scottish Government should consider the development of durable social partnerships in order to facilitate stakeholder engagement throughout the EU legislative process.

57. The Committee recommends that the Scottish Government should consider the creation of Strategic Advisory Bodies involving “civil society” as developed by the Flemish Government to assist during the EU legislative process.

58. The Committee recommends that the Scottish Government should consider providing a single point of contact that could supply information on forthcoming directives and the likely timetable for transposition.

Scottish Government engagement with the Scottish Parliament

59. A key theme to emerge from the previous committee’s inquiry was the need for greater transparency during the transposition process, including parliamentary scrutiny. The Committee therefore welcomes the Minister’s commitment that the new guidance will address how and at what stage the Scottish Government wishes to work with the Scottish Parliament.

60. Witnesses’ views on the transparency of the current transposition process in relation to parliamentary scrutiny varied from one directive to another. Witnesses pointed to both the implementation of the Water Framework Directive and the SEA Directive¹⁷ as involving elements of transparent transposition. In particular, Scottish Natural Heritage noted that in respect of the SEA legislation:

“..scrutiny was wide-ranging and included due examination and consideration of the burdens which would be imposed on those authorities charged with undertaking SEA.”

61. Notably both directives involved implementation by the Scottish Government by way of both primary and secondary legislation. Indeed Scottish Environment LINK emphasised that the most effective and transparent method was by way of primary legislation. This view was supported by the Law Society of Scotland which pointed out that while implementation by primary legislation was rare, it involved, in principle, detailed consideration of legislation, evidence from the Minister and other parties.

62. On the other hand, Scottish Environment LINK indicated that while the Scottish Parliament effectively scrutinised directives transposed by primary legislation, it believed that “the Scottish Parliament could be more effective at scrutinising transposition if and when this is done by secondary legislation”. Likewise, the Law Society of Scotland emphasised that where legislation was implemented by way of secondary legislation “there is normally only an extremely limited opportunity for parliamentary scrutiny under very tight timescales once regulations have been laid.”

63. The Law Society of Scotland emphasised the importance of the Scottish Parliament’s role by stating:

“The scrutiny of government action is one of the central roles of Parliament and it is probably not unreasonable to contend that the procedural and time limitations connected with subordinate legislation’s passage through Parliament can in cases compromise that process of scrutiny unless carefully managed. Enhancement of the “downstream” element of EU law-making would also be the natural corollary of the steps which the Parliament has taken to improved scrutiny of “upstream” processes and to do one without the other would risk leaving reforms incomplete.”

64. SEPA also considered that, overall, the Scottish Parliament could develop its scrutiny role by stating:

“The profile of the Scottish Parliament during the transposition process has, to date, been relatively low but SEPA welcomes the signal that this is increasing.”

65. There is currently no obligation on the Scottish Government formally to inform the Scottish Parliament of any new EU obligation which concerns devolved matters and which it will be the responsibility of the devolved administrations to implement.Nor is it required formally to consult the Scottish Parliament if it elects to use section 57(1) of the Scotland Act 1998 and allow the UK Government to implement a directive on its behalf. However, the Committee is notified retrospectively of the use of section 57(1) through the Scottish Government’s six monthly update on transposition.

66. Where the Scottish Government decides to implement separately it can do this through primary or secondary legislation. In the latter case, the draft statutory instrument will be supplied to both the relevant subject committee(s) and the Subordinate Legislation Committee simultaneously by the Scottish Government.

67. Currently, therefore, the scrutiny role of the parliament is limited to the stage at which the Scottish Government lays legislation before the parliament and the scope for parliamentary scrutiny at that point will largely depend on whether it takes the form of primary or secondary legislation.

68. As such, a key decision for the Scottish Government, that is, whether to legislate itself or whether to pass back responsibility for implementation to the UK Government, is currently taken in the absence of any parliamentary scrutiny. The importance of this decision was emphasised by Dr Carter from the University of Edinburgh in her evidence to the Committee:

“Devolution is therefore tested every time a directive is implemented, because in each case a jurisdictional choice is posed. Is it Scotland or the UK?” (O.R. Col 179)

69. As a result, a key issue for the Committee in terms of parliamentary scrutiny became the decision-making process involved in the use of section 57(1).

Use of section 57(1) of the Scotland Act
70. The extent and processes through which section 57(1) has been used by the Scottish Government since devolution is unclear. Evidence from the University of Dundee confirmed that:

“The process which determines whether transposition of a Community environmental directive should be an obligation for Scotland or for the UK is not publicly known nor is the process which determines the legislative form.”

71. The University of Dundee referred to research it had undertaken into the effects of legislative choices on the devolution settlements and, in this regard, had studied the transposition of EU environmental legislation. The research had found that during the period 1 March 1999 to 31 December 2006 12 out of 31 directives relating to environmental directives had been transposed in Scotland by way of UK wide legislation.

72. The research emphasised that there might have been valid reasons as to why UK wide legislation had been used in these cases. In general, this view was echoed by other witnesses who accepted that there might be advantages in using UK-wide legislation in specific instances while emphasising that this decision should not be taken lightly. As Dr Carter stated in her evidence to the Committee:

“It is a mistake to assume that the option to use a UK instrument is somehow a failure of devolution. It might well be that, after great consultation and consideration, that is the best way of protecting Scottish interests.” (O.R. Col 190)

73. Likewise, the Law Society of Scotland emphasised that:

“..there may be situations in which it is more appropriate for the implementation of a directive that affects an area of devolved competence in Scotland to be legislated for at Westminster. However, that would have to be done only after careful consideration.” (O.R. Col 202)

74. For other witnesses the key issue was not whether Scotland or the UK Government transposed the legislation but rather which method would produce the best outcome. As Scottish Environment LINK commented:

“Our line on section 57(1) is that we have no view. We question the purpose of a directive from a strictly environmental point of view. We do not mind who implements it, whether the UK Government, a local authority, or any other tier of government.” (O.R Col. 280)

75. Likewise, the decision to “go alone” might not produce a substantially different solution for Scotland and the research from the University of Dundee pointed to 12 instances where Scotland had introduced its own regulations but which had only inconsequential or historic institutional differences from that produced in the UK.

76. Witnesses made a number of suggestions for improving parliamentary scrutiny of the transposition process. In her evidence to the Committee, Dr Carter proposed two different types of scrutiny that could be undertaken by the Scottish Parliament: policy scrutiny and jurisdictional scrutiny. Under the former process the scrutiny would predominantly be undertaken by the subject committees, the aim of which “would be to identify Scottish public policy interests in relation to specific pieces of legislation, and to monitor the representation of those interests throughout the policy cycle, including the transposition phase.” (O.R. Col 179) Under the latter process, the primary committee would be the EERC and its role would be to consider and report on the Scottish Government’s jurisdictional choices, including section 57(1), and cross-cutting issues such as stakeholder engagement and the issue of resources.

77. Witnesses considered the desirability of establishing criteria which would determine the types of cases where it might be appropriate for the Scottish Government to rely on section 57(1). At a broader level, the Law Society of Scotland referred to “regular reports to the committee by the Scottish Government on European obligations to be transposed with information on timescales, the transposition process and lead departments.” The Faculty of Advocates wondered whether “the availability of procedures akin to Sewel motions for regulations implementing directives..might save funds and increase access to justice, in cases where there are no specifically Scottish problems.”

78. One proposal considered by witnesses that appeared to combine all of these elements was the introduction of a memorandum on transposition or a transposition plan by which the Scottish Government would formally notify the Scottish Parliament on how it intended to transpose each directive relating to devolved matters. It was recognised that such a plan could also include an indication of whether the Scottish Government was considering relying on section 57(1) and why; the likely timetable for transposition; the intention to rely on primary or secondary legislation; and the Scottish Government’s plans for consultation with stakeholders.

79. The Committee notes that in her evidence to the Committee on 11 March 2008 the Minister responded to questions about the use of section 57(1) and indicated that “we hope to address it in a section of the guidance so that people are clear about what section 57(1) means. Perhaps we will give examples of where it is best used.” (O.R. Col 484)

Scottish Government involvement in UK-wide transposition
80. On a related matter, several witnesses raised concerns about the subsequent role of the Scottish Government in cases where it elects to rely on section 57(1) and allows the UK Government to transpose on a UK wide basis or simply where transposition is UK Government driven.

81. In its evidence to the Committee, SEPA cited the example of the transposition of the Emissions Trading Directive¹⁸ which was applied as a national model throughout the UK. Once the decision had been taken to apply a national regime, SEPA advised that the Scottish Government input had become more limited and SEPA found itself “having to undertake much of the liaison and other development work that might reasonably have been expected to be a government role.”

82. SEPA also pointed to the Mining Waste Directive¹⁹ the transposition of which has been “driven by Westminster.” SEPA indicated that the transposition “appears to take very little account of Scottish options or interests.”

83. In a similar vein, COSLA described its experience of the transposition of the WEEE Directive²⁰ and advised that most discussions took place in London at UK level. COSLA commented that while there had been regular consultation at Scottish Executive level through formal written consultation, informal discussions and stakeholder groups, there were:

“issues to do with the Executive role at the UK forum meetings, which were driven and chaired by the then Department of Trade and Industry. Some local views were perhaps not strongly represented at UK level by the Scottish Government. There was reliance on individual stakeholders, including COSLA, to articulate their views.” (O.R. Col 334-5)

84. As a result of its experience, COSLA suggested that there should be a Scottish forum that collates and articulates the Scottish view at UK level. (O.R. Col 337)

85. The Committee considers that it would be helpful to highlight these concerns in order that this issue can be specifically addressed in the new Scottish Government transposition procedures.

Provision of transposition notes and guidance
86. Finally, several witnesses expressed concerns about the inaccessibility of European legislation and considered that transparency could be further enhanced by clearer drafting and accompanying guidance to the implementing instruments. For example, in its evidence to the Committee, the Faculty of Advocates indicated that: “Our experience is that EU law is one of the most inaccessible and complex areas encountered in legal practice” and suggested that: “Each implementing measure should be accompanied by a guidance note which refers to any relevant EU, UK and Scottish legislation and guidance.”

87. This view was echoed by SNH which stated that:

“Many Directives are “difficult” in the sense that grasping the impact of implementing legislation, and what it will mean on a day-to-day basis for a business or organisation is often quite complex. It is therefore important that during the final consultation stage, draft guidance is also available relating to key parts of the legislation, so as to make clear to stakeholders in practical terms what is required by the legislation.”

88. SNH further emphasised that such guidance should be prompt indicating that “the guidance for the strategic environmental assessment directive did not appear until several months after its implementation”. (O.R. Col 287)

89. The previous committee’s inquiry had recommended the provision of transposition notes in the implementation of EU directives. The Scottish Government responded that it:

“…is committed to transparent law making and we believe that the provision of transposition notes when transposing EU directives (except where the effort would be disproportionate, having regard to the benefit of the reader) into Scots law is an important practice.“²¹

90. In this regard the Committee notes that the UK Transposition Guide contains an Annex setting out detailed guidance on the provision of Transposition Notes and their content.²²

91. The Faculty of Advocates also called for clearer drafting in the implementing instruments and pointed out that:

“implementation is sometimes carried out simply by copying out in regulations the terms of the directive. Although such an approach minimises the risk of accusations that a directive has not been implemented properly, it might…make the resulting legislation impenetrable.” (O.R. Col 194)

92. The Committee considers that the above evidence illustrates again the need for greater transparency of the role of the Scottish Government within the EU legislative process and more effective parliamentary scrutiny in this area.

Recommendations
93. The Committee recommends that the Scottish Government guidance should set out explicitly how it intends to engage with the Scottish Parliament throughout the EU legislative process, including at transposition stage.

94. The Committee recommends that the Scottish Government, on being notified of each obligation to implement EU legislation, should formally notify the Scottish Parliament through the submission of a transposition plan which should include:

• A summary of any specific Scottish interests to be addressed during the transposition process;
• The Scottish Government’s plans for consultation with stakeholders during the transposition process;
• The Scottish Government’s plans for engagement with the parliament during the transposition process;
• An indication of whether the Scottish Government intends to use section 57(1) and the reasons why;
• Whether primary or secondary legislation will be used for transposition;
• The likely timetable for transposition.

95. The Committee recommends that the Scottish Government guidance should incorporate criteria by which the Scottish Government will decide in each case whether to transpose alone or whether to elect to rely on section 57(1).

96. The Committee recommends that the guidance should set out clearly the role of the Scottish Government in those cases where transposition takes place on a UK-wide basis and how it intends to ensure that Scottish interests are still effectively represented.

97. The Committee recommends that the Scottish Government guidance should provide detailed guidance on the provision of transposition notes.

Consultation with Subordinate Legislation Committee
98. The Committee agreed to consult with the Subordinate Legislation Committee on the provision of transposition notes; in particular:

• The extent to which transposition notes are provided;
• Whether they are consistent in content in terms of detail; and
• Whether they provide clear guidance on the meaning of directives.

The Better Regulation agenda

99. In her evidence to the Committee on 11 March 2008 the Minister indicated that the revised transposition procedures would also contribute to the better regulation agenda “by emphasising our commitment to reducing the burden of bureaucracy and regulation on business.” (O.R. Col 476)

100. Witnesses held differing views on the extent of “gold plating” in respect of UK-wide and Scottish regulation. On the one hand, the National Farmers Union Scotland (NFUS) expressed the concerns of its members that “a great deal of regulation goes beyond what is necessary and resulting benefits, if they exist, are largely invisible to those regulated”. On the other hand, the Equality and Human Rights Commission considered that there was evidence of “under-plating” and stated:

“On the implementation of directives at UK level, our experience is perhaps the opposite. The pressure not to gold plate has resulted in the Westminster Government’s not going as far as has been necessary.” (O.R. Col 268)

101. Likewise the STUC pointed to the Public Sector²³ and Utilities Procurement Directives²⁴ which it felt had “been implemented in a minimalist fashion.” For its part, the STUC did not accept that business in Scotland and the UK were “over-burdened” with regulation and pointed to evidence that the UK is ranked 6th out 175 countries in the World Bank’s Ease of Doing Business rankings²⁵ and that the OECD had recently constructed a composite policy indicator of flexibility which ranked the UK the highest among all OECD economies. ²⁶

102. Despite these differences, there appeared to be consensus on the benefits of early stakeholder involvement. The STUC considered that early engagement with stakeholders could “specifically address any legitimate concerns about “gold-plating”” while emphasising that there were resource considerations. While CBI Scotland stated “as long as we know that we are gold-plating something, why we are doing it and whether it will give benefit, at least we can discuss it.” (O.R. Col 250)

103. On a related matter, the SRPBA pointed to the importance of Regulatory Impact Assessments (RIAs) and felt that, on the whole, RIAs should be a standard part of the consultation process. Both the SRPBA and Scottish Water emphasised that RIAs should include an economic assessment of the impact of the new regulatory regimes in Scotland. On the other hand, while the NFUS considered that the RIA process was “laudable”, it held the view that it had not “delivered the transparency or accountability required of regulation.” The NFUS considered that early engagement with stakeholders was “critical” and that the process should find answers to some fundamental questions before any regulatory decisions were reached such as “what is the regulation trying to achieve?” and “what non-regulatory options have been considered and why are they deemed insufficient?”

104. There also appeared to be some consensus among witnesses that targets to reduce regulation were generally unhelpful. In its written evidence to the Committee the STUC argued that:

“Arbitrary targets (Percentage reductions or other proposed measures such as one in one out) such as the EU Commission’s target of 25% reduction by 2012 are illogical, likely to involve a scandalous waste of a scarce resource.”

105. The NFUS expressed similar reservations:

“NFUS believes a “one in, one out” approach to regulation is over-simplistic, and, at worst, can simply result in burdensome regulations replacing less burdensome ones.”

106. Ultimately, Scottish Environment LINK emphasised that:

“Ministers and Parliament should be at liberty to transpose EU directives in a way which is fit for purpose without being accused of “gold-plating”. In some cases this might mean minimum transposition. In other cases, this may mean going beyond minimum transposition to ensure the Directive is transposed in a way which is consistent with existing legislation, or to deliver a national policy agenda.”

Differential implementation

107. Related to the better regulation agenda is the issue of differential implementation of EU directives and the scope for tailoring “Scottish solutions to Scottish problems.” In some cases, such an approach may result in Scotland “going further” than the rest of the UK at transposition stage. Witnesses highlighted positive examples of cases where Scotland had “gone its own way” and produced significantly better implementing instruments than those applicable in the rest of the UK. For example, SEPA pointed to the positive experience of the Environmental Noise Directive²⁷ which had been successfully implemented in Scotland ahead of the rest of the UK. In a similar vein, the University of Dundee affirmed that:

“when the Scottish Government takes the opportunity to act for itself, its transposition procedures often produce clear legislation which fully implements the obligation, avoids duplication, overlap and imprecision.”

108. The University of Dundee research highlighted the examples of the Strategic Environmental Assessment Directive and the Water Framework Directive where the Scottish institutions chose to follow a distinct path from the rest of the UK relying on primary legislation and commented: “These Acts differ substantively and significantly from the minimalist approaches to transposition evident in the English and Welsh regulations.”

109. Further, concerns about creating an uneven playing field for business were not necessarily shared by other European regions; in Belgium both governments and parliaments emphasised that differential implementation is a standard feature of the Belgian federal system and occurs both in domestic law and in the transposition of EU directives.

110. Other witnesses pointed to the potential disadvantages of differential implementation. For example, in its written evidence the Law Society of Scotland pointed to the possibility of “Forum Shopping” as a downside to differential implementation. Likewise, in his evidence to the Committee, Professor Jeffery from the University of Edinburgh referred to the situation in Germany where regional governments have exclusive competence in relation to certain EU issues:

“.in most places, the aspiration is for uniform implementation throughout the national territory to maintain a level economic playing field and/or equality of services to citizens.” (O.R. Col 187)

111. For his part, Professor Scott considered the objective was “uniform effect”. (O.R. Col 188)

112. Further, the Faculty of Advocates pointed to considerations of expense and access to justice when deciding whether to implement differentially. They cited the case of ABNA v Scottish Minister 2004 SLT 176 in which animal feed manufacturers operating throughout the UK had to seek remedies in all different UK jurisdictions “although there seemed no pressing need for differentiation”.

113. A key issue for all witnesses was that there should be full and transparent discussion about the reasons for implementing differentially or not in any given case. Scottish Water emphasised that:

“..it is important for Scottish Water to understand where the differences will arise during the transposition process, and that it is clear what these are and the potential additional costs and benefits that would arise from a different solution being adopted in Scotland.”

114. Likewise, the Law Society of Scotland stated:

“Clearly, a differentiated approach to implementation will be appropriate in many cases…Even where it is decided that implementation should be uniform across the UK, or have uniform policy objectives, that decision should only be taken after proper examination of the political, legal and regulatory context in Scotland.”

115. The Faculty of Advocates proposed early consideration of the scope a directive has “for flexibility and differential implementation”. In the case of a particular directive, can anything different be done or is it so tightly drafted that this is not an issue?” (O.R. Col 194)

116. It was further recognised that promoting Scottish interests during the transposition stage might not always lead to a different solution in Scotland. As SEPA pointed out in relation to the End of Life Vehicles Directive:²⁸

“where a Directive is to be wholly or partially implemented consistently across the UK, differential implementation may not always result in a different regime in Scotland as such but it may drive negotiations for a national system that takes Scottish interests into account.”

117. This view was echoed by the Food Standards Agency Scotland (FSA Scotland) which referred to its experience of the European directive on ceramics²⁹ in which consultation with Scottish stakeholders had led to further clarification from the European Commission resulting in an improved implementing instrument across the UK. The FSA Scotland commented that the “Scottish flavour of the consultation on the directive added value to the final UK decision.” (O.R. Col 398) It indicated:

“That is an example of a different approach being taken in Scotland, although we ended up with separate instruments that said the same thing for the purposes of that regulation. Despite the fact that we are a UK organisation, we almost de facto have Scottish instruments.” (O.R. Col 399)

Section 57(2) of the Scotland Act
118. A number of witnesses raised concerns about the implications of section 57(2) of the Scotland Act 1998 and the perception that it places a greater burden on Scotland than on the rest of the UK. Section 57(2) states that the Scottish Government has no power to make any subordinate legislation that is incompatible with any of the Convention rights or with Community law. A similar provision does not exist in respect of the UK.

119. In its written evidence to the Committee the Faculty of Advocates indicated that: “English regulations could in theory be contrary to EU law, and still have force until declared unlawful; Scottish regulations would be of no legal effect from the outset”. The extent to which this impacted on the drafting of the implementing instruments was raised by witnesses.

120. In its evidence to the Committee CBI Scotland indicated that the Scottish Government’s Regulatory Review Group were of the view that section 57(2) places a greater burden on Scotland in respect of the transposition of European legislation and stated “I am led to believe that civil servants feel that we have in a number of cases had to do things more stringently than would have been the case if they had been left alone.” (O.R. Col 243)

121. Both in its written and oral evidence to the Committee the NUFS affirmed its view that section 57(2) places a stricter burden on the Scottish Government at transposition stage:

“As I understand it, the official advice from lawyers in the Scottish Government is that the Scotland Act 1998 says—I think the relevant section is 57(2)—that there is no discretion and that the Scottish Government must implement EU legislation in full without deviation from its wording.” (O.R. Col 269)

122. On the other hand, SEPA indicated that it had been unable to find any examples where environmental legislation had been more strictly interpreted in Scotland as a result of section 57(2). (O.R. Col 391)

123. The Committee raised this specific matter with the Minister when she gave evidence to the Committee at its meeting on 11 March 2008. In response, the Scottish Government indicated:

“The short answer is that we are not at a disadvantage in comparison with the UK Government. Our obligation is to implement EU obligations on time and in full, which is precisely the same obligation that UK Ministers have. All that section 57(2) of the Scotland Act 1998 says is that we cannot do anything that is incompatible with Community law—but neither can the UK Government.” (O.R. Col 483)

Accountability of regulators
124. Finally, the Committee recognises that a key aspect of the better regulation agenda is to establish robust processes to ensure the accountability of regulators. SNH suggested that review and evaluation of transposing legislation after its implementation would be helpful:

“by considering on the basis of early experience whether the legislation is as effective as it might be, whether there are particular amendments which would be helpful, or whether further guidance is needed to ensure a consistent approach.”

125. SNH indicated that such an exercise was planned for the implementation of the SEA Directive by the three Scottish consultation bodies (SNH, SEPA and Historic Scotland).

126. Post-implementation review was supported by the NFUS which stated that “once implemented, regulation is rarely revisited in order to assess its effectiveness.”

127. The Committee welcomes the Scottish Government’s commitment to contribute to the better regulation agenda in the provision of its new guidance.

Recommendations
128. The Committee recommends that the guidance should explicitly recognise that early stakeholder engagement can address legitimate concerns about “gold plating” and “under plating”.

129. The Committee recommends that the guidance should address specifically those cases where the Scottish Government considers that the directive provides scope for a “Scottish solution” and the process that will be followed by the Scottish Government in such cases.

130. The Committee recommends that the guidance should provide for regular review and evaluation of transposing legislation, including the role of regulators.

Conclusion

131. The primary aim of the new inquiry was to build on the work of the predecessor committee’s inquiry into the scrutiny of European legislation. That inquiry recognised the need for the Scottish Government to ensure that Scottish interests are accounted for “upstream” at both the policy development stage and within the formal European legislative process. The Committee wishes to re-affirm this finding. The importance of “early engagement” and its direct correlation with effective implementation was continually emphasised in both the oral and written evidence received by the Committee and during the Reporters’ visits to other legislative regions. Flowing from this is the clear need to ensure that stakeholders are involved in this process as early as possible.

132. The previous inquiry also identified the need for greater parliamentary scrutiny of the Scottish Government’s role in ensuring that Scottish interests are accounted for in the UK Government’s negotiating position on EU legislation as it relates to devolved matters. Again, the Committee wishes to reaffirm this finding as well as emphasising that there is a clear need for greater transparency of the Scottish Government’s role throughout the EU legislative process including at transposition stage, with specific recognition of the corresponding scrutiny function of the Scottish Parliament

133. This report makes a number of recommendations, set out in the body of the text, which seek to build on the work of the predecessor committee and which aim to ensure that there is a strategic focus on early engagement in key policy areas which have a significant impact on devolved areas. The Committee wishes to emphasise the need for the Scottish Government to develop a co-ordinated approach that allows for effective consultation with key partners at significant stages of the EU policy making process.

134. The Committee looks forward to ongoing dialogue with the Scottish Government on its proposals for ensuring that Scottish interests are effectively represented throughout the EU legislative process.

Annexe A: ORAL AND WRITTEN EVIDENCE

13 November 2007

Oral evidence
Arlene McCarthy MEP, North West England
Jonathon Stoodley, Head, Application of Community Law Unit, Secretariat General, European Commission

27 November 2007

Oral evidence
Drew Scott, Professor of European Union Studies, University of Edinburgh
Charlie Jeffery, Professor of Politics, University of Edinburgh
Dr Caitriona Carter, Senior Lecturer in Law, University of Edinburgh
Michael Clancy, Director of Law Reform, Law Society of Scotland
Sarah Fleming, Head of International Relations, Law Society of Scotland
David Johnston, QC, Faculty of Advocates
Anna Poole, Advocate, Faculty of Advocates

11 December 2007

Oral evidence
Professor Russel Griggs, CBI Scotland’s adviser on regulation
Stephen Boyd, Assistant Secretary, STUC

8 January 2008

Oral evidence
Lloyd Austin, Head of Conservation Policy, RSPB, Scottish Environment LINK
Jonathan Hughes, Head of Policy, Scottish Wildlife Trust, Scottish Environment LINK
Andy Robertson, Chief Executive, National Farmers Union Scotland
Muriel Robison, Head of Legal, Equality and Human Rights Commission
John Thomson, Director of Strategy & Communications, Scottish Natural Heritage
Bill Band, Strategy Communities Manager, Scottish Natural Heritage
Tom Axford, Corporate Secretary and Head of Legal and Estates, Scottish Water
Jim Conlin, Environmental Regulation Manager, Scottish Water

22 January 2008

Oral evidence
Councillor Corrie McChord, Vice president, COSLA
John Paterson, Head of Operations, Environmental Services, Renfrewshire Council on behalf of COSLA
Sandy Taylor, Chief Protective Services Officer, Protective Services, Argyll and Bute Council on behalf of COSLA.

19 February 2008

Oral evidence
Calum MacDonald, Director of Environmental and Organisational Strategy, SEPA Rob Morris, Better Regulation Manager, SEPA
Bill Adamson, Branch Head, Strategic Policy & Consumer Engagement, Food Standards Agency, Scotland

11 March 2008

Oral evidence
Linda Fabiani MSP, Minister for Europe, External Affairs and Culture
Lynne Vallance, Europe Division, Scottish Government
Patrick Layden, Deputy Solicitor, Scottish Government Legal Directorate

Written evidence
Faculty of Advocates
The Law Society of Scotland
Scottish Water
Scottish Trades Union Congress (STUC)
National Farmers’ Union Scotland (NFUS)
The East of Scotland European Consortium (ESEC)
Scottish Natural Heritage (SNH)
The Scottish Rural Property and Business Association (SRPBA)
Food Standards Agency
Scottish Environment LINK
Scottish Environment Protection Agency (SEPA)
Jonathan Stoodley, Head of Unit in the Secretariat General for the Application of Community Law, European Commission
A. Ross, H. Nash, C.T. Reid, School Of Law, University Of Dundee

Annexe B: REPORTS OF REGIONAL VISITS

Report of a visit to Germany 11 to 13 February 2008

1. This is the report of my visit to Germany from 11 to 13 February 2008. In order to obtain a comparison two adjacent regions were visited; Bavaria and Baden-Württemberg. Both regions have legislative powers and have exclusive legal competence in the areas of police, media, culture and education. During my visit I had meetings with the respective governments and parliaments in each of these regions. A number of key themes emerged from these meetings and these are set out below.

Formal versus informal influence

2. The relevant provisions concerning EU matters are set out in Article 23 of the German Basic Law (set out below). The regional governments’ involvement in EU matters is primarily as a result of their membership of the Bundesrat (the Second Chamber of the Federal Parliament). In matters relating to regional competence the Federal Government is obliged to accept the position of the Bundesrat. In terms of parliamentary involvement, all draft EU proposals should be supplied to the regional parliaments in advance of consideration by the Bundesrat. However, the regional government is not obliged to accept the view of its respective parliament or represent this view in the Bundesrat.

3. A key theme that emerged from our discussions was that while the German Basic Law provides for formal engagement by the regional governments in the EU legislative process it was clear that both governments and parliaments consider these formal procedures to be insufficient to ensure that regional interests are effectively represented at EU level.

4. As a result, both the regional governments and parliaments have developed informal methods for influencing the content of EU legislation. Both regional governments have established offices in Brussels with a minimum of 30 to 40 members of staff. The offices work directly with the EU institutions and relevant stakeholders to try to influence the content of draft EU proposals and legislation. The success of these informal methods was exemplified by Commission proposals for legislation curbing car emissions. The Bavarian Government was alerted to this idea when they met with representatives of the Commission and were able to secure an early copy of the draft directive which it sent back to Munich. In Munich the Bavarian Government circulated the draft amongst key stakeholders (such as BMW and Volkswagen) with the aim of achieving a common Bavarian position. The Bavarian Government then submitted its views to the European Commission through its office in Brussels and to the Federal Government in Berlin.

5. The parliaments also consider that the formal processes do not allow for sufficiently early parliamentary engagement. As a result, members use their party links to influence the content of EU proposals. For example, the CSU members of the Bavarian Parliament have a “jour fixe” every two months with CSU members of the Bavarian Government to discuss EU matters. They will also work with CSU MEPs to learn about new EU developments. Further, both parliaments highlighted the role of the Committee of Regions particularly in relation to its subsidiarity network.

The role of the Government and the parliament

6. Under the German constitution the regional governments are in an unusual position of having both an executive role, at a regional level, and a legislative role as members of the second Chamber of the Federal Parliament (the Bundesrat). Constitutionally, therefore, the Bundesrat has a key role in ensuring that regional interests are effectively represented both at an EU and at a federal level. The role of the regional parliaments in relation to EU matters is less clear, both in terms of “upstream” and “downstream” activity. At a substantive level, the scrutiny function of the parliaments appears to be exercised predominantly by individual members through their party contacts, while the focus of the respective European Committees is on ensuring that subsidiarity has been respected by the Federal Government and the EU institutions.

Moving forward

7. It was apparent from our meetings with both governments and parliaments that they are continually seeking new ways to improve their scrutiny of EU developments and thereby influence the content of draft proposals and legislation affecting their regional interests. In the last few years, the Baden-Württemberg Government has increased its staff in Brussels to 30 to 40 while the Bavarian already has 50 members of staff. The Baden-Württemberg Government is also working with second chambers in other legislative regions such as Austria, Catalonia and Italy to develop its subsidiarity scrutiny function in relation to the Lisbon Treaty.

8. The Baden-Württemberg Parliament has recently appointed an officer in Brussels to keep the Parliament informed of relevant developments. Further, out the outset of our discussions, the Bavarian Parliament indicated that it wanted to improve its engagement in both “upstream” and “downstream” activities in relation to EU matters and cited the example of the Services Directive (see below) as a positive example of parliamentary intervention. Both parliaments see the Lisbon Treaty as providing an increased role for regional parliaments and are looking to develop internal protocols to carry out this scrutiny function effectively.

Early engagement

9. An overriding theme to emerge from our meetings was that both governments and regional parliaments place great emphasis on early engagement in the EU legislative process. While the regions will have responsibility for transposing directives falling within their respective competences, they are of the view that it is too late at transposition stage to try to affect content. For the regional governments, early engagement means attempting to influence the content of a proposal before it is even published by the Commission, as demonstrated in the example of the directive on curbing car emissions. To this end, the Brussels offices will contact directly the EU institutions, hold regular networking events and work with the relevant stakeholders to achieve a common regional position.

10. For the regional parliaments, this means early identification of relevant draft proposals (through party contacts and in the case of Baden-Württemberg, the Brussels Officer) and holding inquiries with relevant stakeholders with a view to influencing their content. A key example of success was in relation to the Services Directive the draft proposal of which would have involved amendment of 30 to 40 Bavarian State laws. The European Committee worked with other relevant Parliamentary Committees and held three hearings with representatives from the European Commission, the European Parliament and key stakeholder organisations. As a result of this collaboration the Parliament was able to influence the content of the draft directive.

Alex Neil MSP

Meetings were had with the following:

Officials from the European and International Affairs Department of the Bavarian Staatskanzlei (Bavarian Government)

Dr Martin Runge, Convener of the Committee for Federal and European Affairs, Bavarian Parliament
Professor Urusla Männle, Deputy Convener of the Committee for Federal and European Affairs, Bavarian Parliament
Officials from the Bavarian Parliament

Frau Christa Vossschulte, Deputy President of the Baden-Württemberg Parliament and member of the European Committee
Officials from the Baden-Württemberg Parliament

Officials from the Division for European Politics, Baden-Württemberg Government

Constitutional arrangements in relation to EU matters

1. Article 23 of the German Basic Law (Grundgesetz) sets at the position of the federal and regional governments in respect of EU issues. Under Article 23(2) the Bundestag (the first Chamber of the Federal Parliament) and, through the Bundesrat (the Second Chamber of the Federal Parliament made up of representatives from the State Governments), the Länder (State Governments) participate in EU matters. The Federal Government is obliged to keep the Bundestag and the Bundesrat informed, comprehensively and, at the earliest possible time.

2. Under Article 23(3) the Federal Government must provide an opportunity for the Bundestag to state its position before participating in EU legislative acts. The Federal Government should take the position of the Bundestag into account during negotiations.

3. Under Article 23(4) the Bundesrat should participate in the decision making process insofar as it would be competent to do so in a comparable domestic matter or insofar as the subject falls within the competence of the German Länder.

4. Even where the matter is within the exclusive competence of the Federal Government, the position of the Bundesrat should be taken into account where Länder interests would be affected (Article 23(5)).

5. Where the matter relates primarily to an area of Länder competence the exercise of the rights of the German Federation as a Member of the EU should be delegated to a representative of the Länder designated by the Bundesrat (Article 23(6)), with the participation and concurrence of the Federal Government.

Report of a visit to Belgium 25 to 26 February 2008

Background

1. This is the report of my visit to Belgium from 25 to 26 February 2008. In order to obtain a comparison I met with representatives from both the government and the parliament in all three of the legislative regions of Belgium; Wallonia, Brussels Capital Region and Flanders. All three regions have exclusive legislative competence in the following areas: regional economy, employment, agriculture, water policy, housing, public works, energy, transport (except reserved federal level), the environment, town and country planning, nature conservation, credit, and foreign trade. Federal and regional law have equal status.

2. Under the principle of in foro interno, in foro externo, the competences of the federal and regional governments remain the same for both internal and external affairs.

3. This report sets out the key findings of my visit.

Representation in the Council of Ministers

4. Although my visit primarily focussed on the transposition process, there was some discussion on the general position of Belgium in respect of the EU legislative process. Under the Co-operation agreement of 1994 regarding the representation of Belgium in the Council of Ministers, Belgium will be represented by a regional minister where the matter falls within a regional competence. In those areas where competence is “mixed” (i.e relates to both a federal and regional competence) the “lead” Minister will be accompanied by an adviser from the federal or regional minister (as appropriate).

The transposition process: the role of the regional government

5. The transposition of an EU directive in Belgium follows the standard process used for ordinary domestic legislation. Both the Flemish and Wallonian Governments have internal guidelines for the transposition process while the Brussels Capital Region Government is planning to draw up similar guidance in the near future.

6. In 2005 the Brussels Capital Region Government appointed a dedicated officer responsible for co-ordinating the transposition of directives. The officer works closely in each case with the relevant ministers and administration(s). The officer’s primary role is to act as a facilitator. The Government is hoping to appoint an additional person (a lawyer) who will assist with the technical and legal aspects of the transposition process.

7. One of the first issues to determine is which government is responsible for transposition of the directive. While no competences are shared between the federal and regional governments, competences can be “mixed”. An example of this is “waste management” which is the responsibility of the regional government; waste transportation, however, is the responsibility of the Federal Government. The position is not always clear cut and in some cases it is necessary to seek the opinion of the Administrative Court to determine competence. Decisions over competence can significantly delay a directive’s transposition.

8. All three governments are currently considering the transposition of the Services Directive which impacts on both regional and federal competences and there have been meetings with the Federal Government to divide up responsibilities for transposition. For its part, the Flemish Government has set up a steering group to co-ordinate transposition with representatives of each relevant department. The President of the Steering Group is also a member of the Federal Steering Group.

9. A further decision for the regional government is whether the draft legislation should take the form of a decree or an arreté. In the latter case, the legislation is not subject to the approval by the parliament. Only where the government has the existing legal basis can an arreté be used.

10. Once the legislation has been drafted by the relevant administration it will be the subject of three separate readings by the Minister. After the first reading, the draft legislation may be considered by relevant stakeholders and experts or, in the case of the Flemish Government, strategic advisory bodies. The nature of this consultation will depend on the region, the type of legislation and the area in which it falls. For example, there appears to be an established consultation procedure for environmental matters. The strategic advisory bodies are a new development within the Flemish regime and should involve “civil society”. The strategic bodies will provide an opinion the length and nature of which will depend on the timescale allow. In general, however, external stakeholder involvement appears to be ad hoc.

11. Following a second reading by the Minister, it is compulsory to seek the view of the Administrative Court who may disagree with the legislative instrument that the Government is planning to use.

12. Discussions among the regional governments on transposition takes place on an ad hoc basis and will depend on the nature and type of legislation.

13. Likewise, engagement between the federal and regional governments will depend on the subject matter of the directive and whether it relates to a mix of regional and federal competences or a “mixed” competence such as energy. We heard that late transposition has been a problem for Belgium and, as a result, the Federal Government appears to be taking closer oversight of the transposition of directives falling within the competence of the regional governments. On the day of our visit, the Federal Government indicated that, for the first time, it would transpose legislation in areas of regional competence where the regional government had failed to transpose on time.

14. All of the governments emphasised that differential implementation is a common feature of the Belgian federal system and occurs both in domestic law and in the transposition of EU directives. The Wallonian Government considered that the scope for differential implementation would, in any event, be less likely in the future given the increasingly prescriptive nature of directives.

15. We received differing responses from the governments in respect of “transposition notes” and correlation tables. The Wallonian Government indicated that these were not normally provided, as did the Flemish Government which pointed out that in many cases correlation tables would contain blanks where the responsibility for transposition was “shared” with the federal government. Only in the Brussels Capital Region did the Government indicate that it produced a table showing how each relevant Article in the directive had been transposed.

Parliamentary engagement in the EU legislative process

16. The draft legislation is first considered by parliamentary committee and then by the plenary. As stated above, the parliamentary procedure for transposing directives is, apparently, the same as that for domestic legislation. One parliament indicated that in many cases members would be unaware that legislation had originally derived from EU legislation.

17. Our discussions on parliamentary engagement in EU matters tended to focus on three key themes: 1) the provision of EU documentation 2) Government reports to the Parliament and 3) engagement in the development of EU proposals.

18. In terms of information provision, the Institutional Reform Special Act requires both the Federal Government and the regional governments to supply the legislative proposals issued by the European Commission to their Parliament as soon as they are forwarded to the Council of Ministers and it further provides explicitly that the parliaments can submit opinions on these legislative proposals to their government.

19. Further, at the time of the signing of the European Constitution, Belgium made a unilateral declaration in which it stated that in the Belgian institutional context the Federal legislative chambers as well as the Community and Regional Parliaments must be regarded as chambers of the “national” Parliament. This declaration was also attached to the Lisbon Treaty.

20. In December 2005 the seven legislative assemblies in Belgium signed a cooperation agreement for implementation of the Subsidiarity Protocol. The inter-parliamentary cooperation agreement is based on two pillars 1) the flow of parliamentary information from and to the EU institutions 2) parliamentary scrutiny of subsidiarity. The agreement states that the parliaments of the regions, just like the Federal Parliament, are entitled to receive all preparatory documents and legislative proposals directly from the relevant EU institutions.

21. In terms of reporting to the parliament on EU issues, including late transposition, the Flemish Government indicated that it reported on these matters to the parliament on a regular basis. In the Brussels Capital Region the Government presents an annual report to the Brussels Parliament about European affairs on the following issues: 1) implementation of EU treaties 2) the evolution of EU proposals 3) EU acts that have to be implemented in the next twelve months and 4) EU acts for which the transposition is late.

22. However, the extent to which the regional parliaments monitor and attempt to influence the content of draft legislation is less clear. Only the Flemish Parliament has a European Committee. For example, the Brussels Capital Region Parliament indicated that for the first time its Environment Committee had considered a draft directive and undertaken a subsidiarity check on behalf of the regional parliament. The President of the Wallonian Parliament, as a former MEP, has great personal interest in EU developments.

23. For its part, the Flemish Parliament has made attempts to increase its engagement during the development of EU proposals. In 2005 the Parliament appointed two “euro-promoters”. We understand that the purpose of these two officials is to promote engagement by the parliamentary committees on EU issues falling within their respective remits and to stimulate debate. As a result, a number of committees have organised hearings with representatives from the Commission, MEPs and relevant stakeholders on EU proposals relating to nutrition, sport, cultural mattters and transport.

24. The officials will approach the president of the relevant Committee with their proposals for a hearing and/or inquiry on a specific EU issue.

Iain Smith MSP

List of meeting undertaken:

Officials from International Relations and the Transposition of EU Law, Wallonian Government

Jose Happart, President of the Parliament of Wallonia

Official from the Parliament of Wallonia

Eric Tomas, President of the Parliament of the Brussels Capital Region
Officials from the Brussels Capital Region Parliament
Official from the Brussels Capital Region Government

Official from the Flemish Government

Officials from the Flemish Parliament

Constitutional Framework

1. At Federal level the government retains control over justice, defence, federal police, social security, monetary policy, the public finances and public debt, nuclear energy and state-owned companies such as the Belgian postal service and the Belgian rail network. The Federal government is also responsible for the obligations of Belgium and its federal institutions towards the EU and NATO. It also controls substantial parts of the public health system, home affairs and foreign affairs.

2. Below the federal level the country is divided into three legislative ‘Regions’ (Flanders, Wallonia and Brussels Capital Region); three cultural ‘Communities’ (Flemish Dutch-speaking; French-speaking; German-speaking) and four official linguistic zones (Dutch; French; German and the bilingual Brussels Capital Region).

3. The three Regions (Flanders, Wallonia and Brussels Capital Region) are geographical states with their own legislative and executive branches. The legislative powers of the Regions, which are set out in the Belgian constitution, are the regional economy, employment, agriculture, water policy, housing, public works, energy, transport (except reserved federal level), the environment, town and country planning, nature conservation, credit, and foreign trade. They also supervise the provinces, municipalities and utility companies of their Region.

Report of a visit to Catalonia on 26 February 2008

Background

1. This is the report of my meetings with the Catalan Government and the Catalan Government on 26 February 2008.

The Spanish Federal System

2. Spain is divided into 17 autonomous communities, all with self-government. Catalonia, the Basque Country, Galicia and Andalusia have greater powers than the other 13 regions.

3. The way in which Catalonian self government operates is regulated by its Statute of Autonomy, this was signed in June 2006. For the first time this Statute included a Chapter on the European Union (this is set below).

Central Coordination

4. There is no central coordination for addressing pan Spanish issues, but there are sectoral conferences for different policy areas which bring together the appropriate representatives of the 17 regional governments and the Spanish Government. The sectoral conference for European issues is known as the Conference for Affairs Related to the European Communities.

The Issue of Confidentiality

5. The Catalan and Spanish Governments have an agreement on confidentiality with regard to negotiations at European Union level. The Spanish Government also has a “last say” clause which allows for flexibility during European Council negotiations.

Representation of Autonomous Communities in the European Council

6. The Conference for Affairs Related to the European Communities adopted an agreement in December 2004 which permitted regional Ministers to attend European Councils and represent the Spanish view in the following areas;

• Employment, Social Policy, Health and Consumer Affairs
• Agriculture and Fisheries
• Environmental Issues
• Education, Youth and Culture

7. These Council formations are those for which the autonomous communities have exclusive competence. It is the responsibility of the different sectoral conferences relating to each policy area to agree a unified regional position to be represented in the Spanish position in the European Council.

8. Two civil servants from the autonomous communities are also permitted to serve in the Spanish Permanent Representation in Brussels and to represent the views of the autonomous communities.

Formal Influencing Mechanisms

9. The Catalan Government said it participated in European Commission consultations, for instance they responded to Green Papers on Maritime policy and Researchers Mobility.

10. They went on to describe how they try to interact with the European Union legislative process:

• Important to catch what the European Commission is planning at an early stage.
• From this, select what is important to Catalan interests.
• Find out what the Spanish Government is doing on the issue and engage with them.
• Follow the Council Working Group discussions on the issue.
• Engage with Catalan MEPs.
• Effectively use all available channels to engage with the European Commission and promote the Catalan viewpoint.

11. They were keen to point out that it was important to engage with the process (both formally and informally) at an early stage.

Informal Mechanisms

12. In addition to the formal mechanisms, the Catalan Government also highlighted informal ways in which it seeks to influence the European Union. This included use of the Catalan Representation in Brussels (which is staffed by 17 people), through the Committee of the Regions and through contact with Catalan MEPs.

Subsidiarity

13. The issue of subsidiarity is one currently being considered by both the Catalan Government and Parliament. The Government made the point that they saw subsidiarity as a tool for participation and not as an end in itself.

Development and Application of European Union Law

14. Article 188 of the Statute makes the Catalan Government and Parliament responsible for developing and applying European Union law in areas within its competence. If there is a different viewpoint in different autonomous communities it does not matter because each community is free to do its own things as long as it complies with European and Spanish law. This can result in differential implementation.

The Role of the Parliament

15. The Catalan Parliament is currently looking at ways in which it can maximise its engagement with European Union issues in the wake of agreement of the Lisbon Treaty. The Committee is keen to widen its engagement from that which it currently undertakes. For instance, they pointed out that Article 187 of the Statute of Autonomy gives the Catalan Parliament the right to establish relations with the European Parliament in areas of common interest.

16. The Parliament’s European Committee has regular evidence sessions with the Catalonian Europe Minister. It also regularly takes evidence from Catalonia’s MEPs.

17. The European Committee believes that the first and second protocols on subsidiarity provide new powers for regional parliaments.

Irene Oldfather MSP

List of Meetings Undertaken

Meeting with Anna Repullo, Coordinator of the Secretariat for the European Union and Guillem Rovira, Director of EU Institutional Affairs

Meeting with the Committee of Acció Exterior (Committee of External Affairs) of the Parliament of Catalonia

Constitutional arrangements

Chapter II. Relations of the Generalitat with the European Union

ARTICLE 184. GENERAL PROVISION

1. The Generalitat participates, under the terms established by this Estatut and the legislation of the State, in affairs related to the European Union that affect the powers or interests of Catalonia.

ARTICLE 185. PARTICIPATION IN THE TREATIES OF THE EUROPEAN UNION

2. The Generalitat shall be informed by the State Government of initiatives for review of European Union treaties and of subsequent signing and ratification processes. The Government of the Generalitat and Parliament shall address, to the State Government and to the Cortes Generales, the observations that it deems pertinent to this effect.

3. The State Government may include representatives of the Generalitat in Spanish delegations taking part in processes for review and negotiation of original treaties and those for adoption of new treaties, in matters affecting the exclusive powers of the Generalitat.

ARTICLE 186. PARTICIPATION IN THE FORMATION OF THE STATE POSITION

4. The Generalitat participates in the formation of State positions before the European Union, especially before the Council of Ministers, in matters concerning the powers or interests of Catalonia, under the terms established by this Estatut and the legislation on these matters.

5. The Generalitat shall participate bilaterally in forming the State positions in those European affairs which affect it exclusively. In other cases, participation shall be in the framework of multilateral procedures to be established.

6. The position expressed by the Generalitat is decisive for the formation of the State position if it affects its exclusive powers and if the European proposal or initiative could lead to especially important financial or administrative consequences for Catalonia. In other cases, this position shall be heard by the State.

7. The State shall provide the Generalitat with complete and up-to-date information about the initiatives and proposals presented to the European Union. The Government of the Generalitat and the Parliament of Catalonia shall address to the State Government and the Cortes Generales, as the case may be, the observations and proposals deemed pertinent to these initiatives and proposals.

ARTICLE 187. PARTICIPATION IN EUROPEAN INSTITUTIONS AND BODIES

8. The Generalitat participates in Spanish delegations to the European Union that deal with affairs within the legislative power of the Generalitat, and especially to the Council of Ministers and the consultative and drafting bodies of the Council and the Commission.

9. In areas falling within the exclusive powers of the Generalitat, the participation established in Section 1, permits the Generalitat, by means of preliminary agreement, to represent and chair these bodies, in accordance with the applicable regulations.

10. The Generalitat, in accordance with the State, participates in designation of representatives in the framework of the permanent State representation in the European Union.

11. Parliament may establish relations with the European Parliament in areas of common interest.

ARTICLE 188. PARTICIPATION IN OVERSEEING THE PRINCIPLES OF SUBSIDIARITY AND OF PROPORTIONALITY

12. Parliament participates in the processes to oversee the principles of subsidiarity and proportionality established by European Union Law in relation to European legislative proposals if these proposals affect powers of the Generalitat.

ARTICLE 189. DEVELOPMENT AND APPLICATION OF EUROPEAN UNION LAW

13. The Generalitat applies and implements the law of the European Union within its jurisdiction. The existence of a European regulation does not modify the internal distribution of powers established by the Constitution and this Estatut.

14. If implementation of European Union law requires the adoption of internal measures that extend beyond Catalan territory which the competent autonomous communities are unable to adopt by means of collaboration or coordination mechanisms, the State shall consult the Generalitat on these circumstances prior to adopting the measures. The Generalitat shall participate in the bodies that adopt these measures or, should this participation be not possible, shall issue a preliminary report.

15. In the event that the European Union establishes legislation replacing the basic State regulations, the Generalitat may adopt the development legislation based on the European rules.

ARTICLE 190. MANAGEMENT OF EUROPEAN FUNDS

17. The Generalitat is responsible for the management of European funds in matters within its jurisdiction, in the terms established by Articles 114 and 210.

ARTICLE 191. ACTIONS BEFORE THE COURT OF JUSTICE

17. The Generalitat has access to the Court of Justice of the European Union within the terms established by European regulations.

18. The Government of the Generalitat may demand that the State Government bring actions before the Court of Justice of the European Union in defence of the legitimate interests and powers of the Generalitat. The Generalitat shall collaborate in the legal defence.

19. The refusal of the State Governmen