Symposium on Good GovernanceParliamentary Exchange & Dialogue

Participation, Accountability, Transparency and Effectiveness in Good Governance on the example of the work of the Nationaler Normenkontrollrat

Wolf-Michael Catenhusen Vice Chair of the Nationaler Normenkontrollrat

Berlin, 29 April 2013

Quality through

Transparency

Berlin, 29 April 2013 2

Task and Composition of NKR

Established by a formal federal law (August 2006)

Independent advisory body

Appointment of 10 members for a term of office of 5 years

Start of second term:20 September 2011

NKR Task

Model: The Netherlands Support and Advice to the

Federal Government in the

reduction of bureaucracy and better regulation

I.Avoid the creation

of new administrative

burdens

II.

Perceivable reduction of

existing administrative

burdens

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Structure of the NKR:

10 honorary MembersChairman: Dr. Johannes Ludewig

Deputy Chairman: Wolf-Michael Catenhusen

Secretariat Head: Dr. Dominik Böllhoff

11 staff members (9 legal advisors, 2 assistants)

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Bureaucracy reduction and better regulation in Germany – relevant developments since 2005

2005 2006 2007 2008 2009 2010 2011 2012

SCM

• First SCM studies in Germany on Länder level

• Involvement NKR in Ex ante-procedures (information obligations)

• SCM baseline measurement• Reduction target 25%

Ex post - projects

• Cross-level ex post projects (e.g. BAföG, Optimising entry procedures)

• Revision of NKRG, examination of compliance costs

Compliance costs

• Development of a systematic ex post evaluation procedureEvaluation

Benefits • Intensified discussion on assessment of benefits

1.

2.

3.

4.

5.

6.

7.

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Bureaucracy Reduction 2006-2011 – Reduction target regarding the business sector

1,60Mrd. €

1,45Mrd. €

6,34Mrd. €

12,33Mrd. €

25%-Ziel:Abbauvolumen

Stand 16. LP Stand 31.12.2011 Stand 30.09.2012

- 5,99 Mrd. €(12,3%)

- 10,88 Mrd. €(22,1%)

- 10,73 Mrd. €(21,7%)

- Basis Standard Cost Model

- Baseline Measurement: Identification of about 9.500 information obligations

- Result: 50 billion €

- Target: (net) reduction of 25% by December 2011

- Success so far: 22% (11 billion €)

- Index of bureaucracy costs: further pursuit of net target

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Revision of the NKR Act – more transparency:Taking compliance costs (cc) into account

Costs deriving from substantive obligations, e.g. installation of a partical filter

Costs deriving from information obligations, e.g. documentation of the installation of the filter

What is part of cc?Cabinet decision of 27 January 2010:

“… the government‘s programme of 25 April 2006 is to be further developed and expanded to take into account the total compliance cost federal legislation places on citizens, businesses and public authorities.“

Since then:

1. Expansion of the ex-ante-procedure to include compliance costs

2. Enforcement of the mandate of the NKR

3. No baseline measurement but reduction of the costs in eight priority areas via multi-level-projects across different fields of law, e.g. planning and building law for infrastructure projects, tax declarations, …

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Proclamation

Intention of the Ministry to Regulate or to Change an Existing Law

Enforcement/ Existing Law

Draft Text of the Law

Transmission to Parliament (Bundesrat and Bundestag)

Adoption by Parliament

Cabinet Decision

Deliberations in Parliament

Interministerial Coordination, Involvement of the Länder, Consultation of Stakeholder NKR-Opinion

NKR assesses the calculations done by the ministries in every new proposal as part of the impact assessment (cover sheet and explanatory memorandum)

Description of the impact assessment (including compliance costs) in the cover sheet and the explanatory memorandum of the draft bill

Drafting of the New Bill

Ex-ante procedure

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Avoid unnecessary burden through cost transparency

Objective of the law

- More transparency regarding pricing at gas stations in order to effectively combat antitrust offences

NKR – Examination compliance costs and alternatives

- No cost estimate in the draft law

- In its opinion NKR requested subsequent quantification

Cost estimate – better basis for decisions

- Compliance costs petrol stations: 85 million €

- Cost driver: requested data on the quantity of sold fuel (85%)

BT-Committee + Consultation – Reduction of the costs

- Waiving of the data on quantity of sold fuel

- Thus: Unnecessary costs were avoided (70 million €)

Example Law to Establish a Market Transparency Office

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Burden reduction – Opportunities for lower costs

Simplification of Electronic Invoicing

Appreciable relief by…

• Abolition of the demand to have electronic invoices signed with a qualified electronic signature

• Total relief for more than 500.000 businesses: 4 bn. €

Exemption of micro-enterprises from accounting obligations

• Relief: 36 mio. € for 500.000 micro-enterprises

Reduction in retention periods

• Reduction potential: 2,5 bn. €

• Step-by-step reduction in retention periods under commercial and tax law from 10 to 7 years

• Bundesrat has not yet approved legislative proposal

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NKR examined a total of 278 regulatory initiatives since 1 July 2012*

* As of 26 April 2013

(13%)

Regulatory initiatives imposing a burden = 122 (44 %)

Regulatory initiatives involving a relief = 31 (11 %)

Regulatory initiatives with no or just minor impact = 125

(45 %)

On average the NKR examines 330 regulatory initiatives per year.

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Effective burden reduction requires a holistic approach

Transparency on follow-up costs

- since 2011 presentation of all compliance costs of businesses, citizens and public authorities

Independent scrutiny by the NKR

Involvement Länder und municipalities

Index of bureaucracy costs

- Reduction target 25%

- Keep the costs low in a sustainable manner

Systematic ex post evaluation

Systematic inclusion of EU regulation

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Future Challenges

Admin Burden– Control that admin burdens stay low (index of

bureaucracy costs)

– Internationally accepted methodology (OECD guidance)

Comp. Costs

– Systematic ex post - evaluationControl of Comp. Costs

– Ensure that legislation in Brussels is drafted in the least burdensome way (National interventions and strengthening the European IA system)

EU

Benefits – Discussion on if and how benefits should be assessed in regulatory initiatives

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ContactNationaler NormenkontrollratWilly-Brandt-Straße 110 557 Berlin

Internet: http://www.normenkontrollrat.bund.deE-Mail: nkr@bk.bund.de