EU Better Regulation

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GLOSSARY OF TERMS

Better Regulation: There are different interpretations of this term. The explicit aim of Better Regulation is to “strengthen the effectiveness, efficiency, coherence, accountability and transparency of EU policies, whilst ensuring greater engagement of stakeholders and citizens in their development". [1]

Risk Assessment: In terms of policy, risk assessment early in the policy process aims to facilitate the decision about whether legislation is required to manage a particular hazard.

Impact Assessment: According to the European Commission, Impact Assessment assesses the potential economic, social and environmental consequences of new policy proposals.[2]

Stakeholder Consultation: Consultation with all those with an interest in a particular issue.

Better Regulation (BR) principles have been promoted by the European Commission as a means of improving the way in which public policies are made.[3] Better Regulation has been interpreted in a number of ways, but it is most commonly thought of as a way of simplifying regulation, where the emphasis is on ‘self-regulation’ rather than formal intervention. This commitment has been formalised by the European Union (EU) goal to reduce regulatory costs to business by 25%.[3]


It is widely acknowledged that the Better Regulation framework favours business so that business-friendly policy proposals are more likely to succeed than, say, social or environmental policies. However, what is not commonly known is that corporations – including tobacco companies – have played a significant part in shaping the Better Regulation agenda.[3] Some argue BR is controversial because businesses led by British American Tobacco (BAT) shaped Better Regulation principles to favour business outcomes over social and environmental outcomes.


There are three core themes of Better Regulation - risk assessment, impact assessment and stakeholder consultation - which all feed into the overall aim of reducing the regulatory burden to businesses. The tobacco industry has tried to influence them all.


Three Core Themes of Better Regulation

Risk Assessment

To justify the enactment of a new policy proposal to address any given hazard and ensure that legislation is absolutely necessary, it appears sensible to assess the potential risks of this hazard. However, tobacco companies have successfully manipulated risk assessment criteria to their advantage. In the USA, for example, Philip Morris managed to redefine risk assessment so that it could challenge the knowledge that second-hand smoke was detrimental to health.[4] BAT has attempted to mimic this success in the EU.

Research has revealed that as far back as the mid-nineties, BAT believed that risk assessment could be used in its favour. The tobacco company believed it could make it harder for policy makers to justify regulatory policies that protect public health (with policymakers having to produce conclusive evidence that legislation is required and that this legislation will be effective), thereby protecting its profits. BAT’s specific intention was to prevent the passage of Smokefree Legislation, which would lead to the prohibition of smoking in indoor public places.[3]

Impact Assessment

In 2002, the European Commission established a new ‘integrated’ system of impact assessment during the policy making process, bringing together three preceding forms of impact assessment; Business Impact Assessment, Health Impact Assessment, and Environmental Impact Assessment.

In theory, the new impact assessment implemented as part of the principles of Better Regulation still included each of the aforementioned impact assessment types, Business, Social (which includes health) and environment. However, when assessing potential impacts of proposed policies, policymakers are encouraged to assign a monetary value to each predicted impact. This cost-benefit analysis process automatically favours business impact assessment. Thus health and environmental factors take a back seat to economic factors. In a review of all impact assessments carried out by the European Commission in 2005 and 2006 more than half of the assessments did not even mention the word "health".[5] Analysis of previously private tobacco industry documents revealed that BAT was instrumental in achieving an economic cost-benefit style of impact assessment to preclude all policy decisions.

Stakeholder Consultation

Image 1. The tobacco industry pioneered tactics such as denying the health impacts of its products

Transparency has been an ongoing topic of debate in the European Commission since the 1990s. In 1996, the international law firm Covington and Burling advised BAT that they could use the desire for greater transparency to their advantage and use this as a foundation to argue that there is a need for policymakers to consult with stakeholders (i.e BAT) early in the policy process (See Image 1).[6]

Ironically, BAT and other stakeholders worked in a non-transparent way (obfuscating their involvement in the promotion of Better Regulation by enlisting the help of third-parties) to promote stakeholder consultation as a means to improve transparency in the EU.

On 1st January 2003 the Commission implemented minimum standards for consultation. The minimum standards outlined the need for early consultation with stakeholders. According to the Smokefree Partnership this has been interpreted by Commission staff and officials more widely than these minimum standards meant, such that it was believed it was required of them to meet with the tobacco industry when the policy under consideration related to that particular industry.[3]


British American Tobacco and Better Regulation

Tobacco company internal documents, made public as a result of litigation in the 1990s, reveal that BAT and other large business lobby organisations have also played a leading role in promoting regulatory reform in the EU.

BAT’s motivation lay in their desire to shape Better Regulation to favour corporate interests over social and environmental concerns. BAT was so successful in obfuscating their involvement that European Commission staff had no awareness that the tobacco industry was involved in the reforms even after they came into effect:[4]

"I would be absolutely astonished and would find it very difficult to believe if there was any information available which tended to indicate that the European Policy Centre was advocating on behalf of the tobacco industry – that would be shocking." David Byrne, Commissioner for Health and Consumer Protection 1999-2004 (Interview 27 August 2008) [4]


BAT’s influence occurred in three stages:

1. The tobacco company recruited allies and created front groups
BAT approached the European Policy Centre (EPC) to lobby for regulatory reform and recruit other corporations subject to regulation (i.e. those part of the pharmaceutical, chemical and petroleum industries). Using the EPC as a third party successfully concealed BAT’s involvement in the campaign for regulatory change. Meanwhile the number of organisations involved in the campaign gave the impression to EU member states that there was great and diverse pressure for regulatory reform in the EU.
2. Secured changes to the Treaty of Amsterdam
Working with the EPC and other business lobby groups such as the Union of Industrial and Employers’ Confederations of Europe, UNICE (now Businesseurope), and the Confederation of British Industry, BAT established an 18 month lobbying campaign which led to changes to the Treaty of Amsterdam. These important changes meant the European Commission was obligated to consult widely in all future policy proposals and to reduce the burden of policy changes on "economic operators" i.e. businesses.[7][3]
3. Nurtured a supportive policy network
BAT also collaborated with the EPC to recruit more companies and create the European Policy Centre Risk Assessment Forum. In turn, this created another business pressure group called the Fair Regulation Campaign.[3] Both groups successfully targeted policymakers promoting Business Impact Assessment and Risk Assessment. They even got the UK Presidency of the EU to sanction a conference paid for by BAT (it is not clear whether attendant policy makers were aware that BAT funded the event).


The Precautionary Principle

Following Better Regulation, BAT and the other recruited companies and organisations who had collaborated with the EPC’s Risk Assessment Forum established a new group called the European Risk Forum (ERF).[4] The ERF refers to itself as an “expert-led, not-for-profit think tank”.[8]

One aim of the Forum was to restrict the use of the Precautionary Principle. The Principle states that policy makers should intervene even in the absence of scientific consensus about the potential outcomes or comprehensive impact assessment when there are reasonable grounds to believe that a particular hazard would have an irrevocable impact on public health or the environment.[3][9]

There is evidence to suggest that the ERF has had some success in influencing policy makers’ perceptions of risk assessment and limiting the use of the Precautionary Principle in both the EU and the UK.[10][11]

In 2010, the Smokefree Partnership warned:

"The [lobbying] campaign appears to be ongoing and is currently focusing on influencing policy perceptions of, and responses to, risk, which was the original driver for BAT’s campaign. This raises the possibility that large corporations which profit from the manufacture and sale of some of the most toxic products in Europe could further influence the rules governing how the associated risks are handled."[3]


Better Regulation Used to Argue Against Tobacco Control

Attempts to Undermine the Framework Convention on Tobacco Control Article 5.3[12]

Tobacco companies and the organisations working in collaboration with them lobbied extensively against the World Health Organization’s Framework Convention on Tobacco Control (FCTC), which among other proposals, proposed to limit tobacco company influence on health policies.

Article 5.3 specifically states that those signatories who have ratified that FCTC should not engage with the tobacco industry:

"in setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law."[13]

The tobacco industry used the Better Regulation principles, created by the industry for exactly this purpose (to block and delay regulation damaging to their profits), as a basis for their arguments against the FCTC.

BAT’s response to the UK public Consultation on the Future of Tobacco Control, in September 2008 was that the draft Guidelines outlined in Article 5.3 of the FCTC “could result in less than full and proper consultation with the tobacco industry. Such a proposal would be inconsistent, not only with UK Government policy but with the European Commission’s commitment to open consultation.”

Businesseurope also sent a letter to European Commission President José-Manuel Barroso, in August 2008 arguing that “proper consultation of all affected stakeholders carried out in accordance with the Commission’s general principles and minimum standards is crucial for getting an idea about the cost-effectiveness of legislation.”

Plain Packaging

In their submissions to the 2012 UK public consultation on plain (standardised) packaging for tobacco products, each of the big four tobacco companies in the UK argued that policy makers and the public health community were acting in a way that contravened the principles of Better Regulation.


TobaccoTactics Resources

Notes

  1. ↑ Institute for European Environmental Policy, Governance: Our Work, accessed June 2013
  2. ↑ European Commission, Impact Assessment, Accessed June 2013
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 Smokefree Partnership, The Origin of EU Better Regulation – The Disturbing Truth. 2010
  4. ↑ 4.0 4.1 4.2 4.3 K. E. Smith, G. Fooks, J. Collin, H. Weishaar, S. Mandal, A. Gilmore, "Working the system"- British American Tobacco's influence on the European Union Treaty and its implications for policy: an analysis of internal tobacco industry documents", PLoS Medicine, 2010, 7(1), e1000202
  5. ↑ R. Salay, P. Lincoln. The European Union and Health Impact Assessments. Are they an unrecognised statutory obligation? London: National Heart Forum
  6. ↑ Covington & Burling, EC risk assessment proposal, Bates No: 800103063-800103065, Accessed June 2013
  7. ↑ European Communities,Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and Certain Related Acts. Brussels: Office for Official Publications of the European Communities and Europa, accessed June 2013
  8. ↑ European Risk Forum, Homepage, accessed June 2013
  9. ↑ European Risk Forum, Policy Brief 04: Judicial review and risk management at EU-level, 2008
  10. ↑ R. E. Löfstedt, The swing of the regulatory pendulum in Europe: From precautionary principle to (regulatory) impact analysis. The Journal of Risk and Uncertainty, 2004, 28(3), 237-60
  11. ↑ A. Dodds, The core executive’s approach to regulation: From ‘Better Regulation’ to ‘Risk-Tolerant Deregulation’. Social Policy & Administration, 2006, 40(5), 526-42
  12. ↑ K.E.Smith, A. Gilmore, G. Fooks, J. Collin, H. Weishaar. Tobacco industry attempts to undermine Article 5.3 and the “good governance” trap. Tobacco Control, 2009, 18; 509-11
  13. ↑ World Health Organization, Framework Convention on Tobacco Control, 2003, accessed June 2013
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