Building a Europe of excellence: Turning knowledge into growth

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Workshop 11 Best practices for better regulation
Signhild Arnegård Hansen Swedish
Enterprise Svenska LantChips
Philip Lambrecht FEB
Lars G. Josefsson Vattenfall
Alexander Italianer European Commission
Bernard Wientjes Netherlands Industry
and Employers
Janicke Schultz- Petersen MJK Automation Danish I
ndustries
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Workshop 11 Best practices for better regulation
Moderator

• Philip Lambrecht
• Secretary General
• Federation of
• Enterprises in Belgium

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Workshop 11 Best practices for better regulation

• Lars G. Josefsson
• President and CEO
• Vattenfall AB

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Workshop 11 Best practices for better regulation

Better Regulationon the Electricity Market
A Twofold Task
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Two Sides of Regulation
Workshop 11 Best practices for better regulation

• Regulation of electricity grids
• Natural monopolies which cannot be subject to
  competition
• Regulation can create competition vs. benchmark
• Regulation of liberalised markets
• Market design in order to facilitate competition

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Balancing objectives in grid regulation
Workshop 11 Best practices for better regulation
Incentives for grid operators
Fair pricing for consumers

• Today different methods and results in all
  member states
• Room for improvement through coordination
  between regulators
• In the long run, a reasonable return for grid
  operators is also in the interest of consumers

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Regulation of liberalised market
Workshop 11 Best practices for better regulation

• Need for regulator with same scope as the desired
  market
• Example ERGEG (the sum of national regulators)-
  Each has only a national scope- ERGEG has
  problems agreeing, e.g. the Inter-TSO
  compensation mechanism
• Need for a European/regional regulation with
  sufficient powers

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Key to regional market development
Workshop 11 Best practices for better regulation

• Ownership unbundling does not address the risk of
  putting national interests first- Example
  Nordic market where unbundled national TSOs
  still at times transfer internal bottlenecks to
  national border
• We should create regional ISOs
• ISOs should lead market development- Trading
  rules, bottleneck management, balancing, etc.
• Regulatory support from European/regional
  regulatory function

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Workshop 11 Best practices for better regulation
A European regulatory function does not need
to be controversial

• It will handle issues not handled today- E.g.
  cross-border
• It will support the market- Better competition-
  Stronger trust

If such a function is in the interest of both
customers and the industry,why shouldnt
national governments support it?
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Workshop 11 Best practices for better regulation
Signhild Arnegård Hansen Vice President Confederat
ion of Swedish Enterprise CEO Svenska LantChips
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Workshop 11 Best practices for better regulation

Best practices for better regulation
The Swedish case
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New or changed Regulations Adm burden on
Business in Sweden/EU based
Workshop 11 Best practices for better regulation
Source
Increased Reduced Unchanged
EU-based
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The Total Costs of Regulations to Business, one
company Kemibolaget
Workshop 11 Best practices for better regulation
Costs per employee 33.111 euro per year
Source
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The Total Costs of Regulations to Business, one
company Stjernsunds Farm
Workshop 11 Best practices for better regulation
Costs per employee SEK 365 000 per year
Source
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Good practice in Sweden for Better Regulation
Workshop 11 Best practices for better regulation

• Transparent legislative process
• Involvement of and consultation with stakeholders
  in different stages of the process
• Royal Commission (acts and ordinances) consists
  of stakeholders from business and public
  officials
• A broad consultation process when the proposals
  are presented
• Informal consultations whith stakeholders
• Improvement and measures
• More time for consultation
• Better Impact Analysis are required
• Impact Assessments Board are missing

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Measures to improve the quality of RIAs
Simplification, in the EU
Workshop 11 Best practices for better regulation

• Always make sure that all the costs for Business
  are presented in the RIA
• Measure all the EU-legislation with the SCM
• Develop a model for measuring the Total
  Regulatory Costs for Business in the existing
  EU-regulations

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Workshop 11 Best practices for better regulation
Janicke Schultz- Petersen Managing Director MJK
Automation Member Executive Committee Member
Permanent Committee SMEs Confed. of Danish
Industries
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Workshop 11 Best practices for better regulation
The Danish Experience

• Objective to reduce administrative burdens with
  25 per cent by end of 2010.
• Standard Cost Model was put in use in August 2004
• End of 2006 administrative burdens are reduced
  with approximately 6 per cent.
• 45 per cent of all administrative burdens in
  Denmark stems from EU legislation.
• Crucial that the EU institutions speed up the
  work with better regulation.

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Example of the web of reports
Workshop 11 Best practices for better regulation

• 12 x VAT and other duty
• 12 x Intrastat
• 12 x Order- and revenue statistic
• 12 x Labour report (eg. income tax)
• 4 x VIES (VAT Information Exchange System)
• 4 x Statistic on goods for industry
• 2 x Corporation tax
• 1 x Account statistics
• x Corporation tax return
• 60 reports in a year to just two agencies!

National statistical institute
Tax agency
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Workshop 11 Best practices for better regulation
Better Regulation in Europe

• Listen to the advice of the business sector
• Establish an independent body to supervise the
  work
• Pick the "lower hanging fruits"

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Reform Intrastat
Workshop 11 Best practices for better regulation

Country A
A smarter solution
Exporting Company
Statistics
Exporting Company
Importing Company
Statistics
Country B
Exporting Company
Exporting Company
Statistics
Statistics
Importing Company
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Workshop 11 Best practices for better regulation
Bernard Wientjes President Confederation of
Netherlands Industry and Employers VNO-NCW
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Workshop 11 Best practices for better regulation

Best practices for better regulation
the Dutch experience
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Succes factors
Workshop 11 Best practices for better regulation

• High political priority, nr 1 priority for
  entrepreneurs.
• Objective 25 net reduction target
• Independent watchdog advisory board ACTAL
• Measured via Standard cost model
• Business involvement

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Partial success so next phase has to be more
fundamental
Workshop 11 Best practices for better regulation

• Towards a high trust society less ex-ante, more
  ex-post
• Means less permits, more enforcement
• New 25 net target
• Including compliance costs
• At every government level, also locally

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Conclusion my job is safe
Workshop 11 Best practices for better regulation

• Much missionary work to be done at national and
  European level
• Basically positive about Commission Strategy, but
  room for improvement
• Importance of business involvement
• 25 target at EU and member state level
• Also responsibilities for business

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Workshop 11 Best practices for better regulation
Alexander Italianer Deputy Secretary
General European Commission
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Workshop 11 Best practices for better regulation

Better Regulation Agenda for the EU
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Upstream Impact Assessment
Workshop 11 Best practices for better regulation

• 2005 Guidelines recognised reference framework
• 2003-2006 195 assessments
• 2007 100 (planned)
• Common approach among institutions
• Quality control Impact Assessment Board
• 2007 External evaluation
• Challenges coverage, proportionate application,
  other institutions

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Downstream (1) Simplification
Workshop 11 Best practices for better regulation

• 2005-2008 Rolling Programme 100 initiatives
  (1200 legal acts)
• Commission tabled 46 initiatives
• Adopted by co-legislator 5 acts
• 2006 update 44 new initiatives
• Codification 500 acts by 2008 (85 tabled)
• Screening pending proposals 78 withdrawn

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Workshop 11 Best practices for better regulation

Downstream (2) Reduce administrative burden

• Action Programme endorsed by European Council
• Joint effort EU Member States
• EU legislation 25 reduction for business by
  2012
• Member States comparable ambition
• 10 first measures tabled before mid 2007(
  transport, company law and food hygiene, etc.) .
  Estimated cut 1.3bn
• Concentrate on priority sectors, accounting for
  majority of burdens
• Business input and feedback on results will be
  important

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Better Regulation National level
Workshop 11 Best practices for better regulation

• Integrate into national reform programmes
  impact assessment, consultation and
  simplification
• Administrative burden on business
• majority from national legislation
• national reduction programmes
• assistance methodology, identification,
  measurement
• Applying EU law transposition, enforcement 4500
  ongoing infringements and complaints)

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Better Regulation Stakeholders and expertise
Workshop 11 Best practices for better regulation

• 2002 Minimum Standards for consultation review
  in the context of the European Transparency
  Initiative
• Guidelines collection and use of expertise,
  public registers
• Consultation mandatory for impact assessment
• Stakeholder input essential to identify potential
  for simplification and reduction of
  administrative burden
• Stakeholder input also throughout the legislative
  process

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Workshop 11 Best practices for better regulation
Signhild Arnegård Hansen Swedish
Enterprise Svenska LantChips
Philip Lambrecht FEB
Lars G. Josefsson Vattenfall
Alexander Italianer European Commission
Bernard Wientjes Netherlands Industry
and Employers
Janicke Schultz- Petersen MJK Automation Danish I
ndustries