C.H. Montin, 20/1/2014 1

New RIA in France:

Specific traits of a national model

Charles-Henri Montin (France)*www.smartregulation.net

charles-henri.montin@finances.gouv.fr

* These slides are for academic information and discussion and do not present an official French position. They cannot validly be interpreted without complements given at delivery.

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Contents

Key facts about the French RIA scheme:• Extracts from the (MoF) French training course on

RIA on purpose and setting• The quality control by PM’s office

How to make use of the French example:• Lessons from the scrutiny of published RIAs• Two international assessments of French RIA

Points for discussion

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What is RIA ? (quote from manual)

« Document aiming to assess the consequences, economic, financial, social, environmental .., of a bill or draft décret (executive order) to be attached to the draft text.”

Document visant à évaluer les conséquences économiques, financières, sociales, environnementales .., d’un projet de loi ou de texte règlementaire et devant être joint à ce projet de texte.

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Why a RIA ? (quote from manual)

Legal reasons : • A RIA is compulsory for bills presented to Parliament, under Article 39

of the Constitution (revision 2008) and Organic Law 15 April 2009• for projects of regulatory texts following the Prime Minister's circular of

17 February 2011 on the simplification of regulation on business and local authorities.

Objective : maîtriser l’inflation normative (control/curb normative inflation)  defined as « longer, more numerous texts caused by societal demand and international and European commitments »

RIA is at the centre of the anti-normative inflation policy, linked to simplification, a key element of regulatory policy

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RIA in the French simplification policy

From the mission of the senior official in charge:• “Drive the moratorium on new regulation on local

authorities (since July 2010)• Make sure RIAs are conducted on new regulation

affecting local authorities and businesses• Assist ministries in quantifying the impact of new

regulations• Apply common commencement dates (January 1st

or July 1st) on regulation concerning business• Make sure a delay of two months is given between

enacting and enforcing new legislation.”

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Key text: circular dated 17/02/2011 « on simplifying norms concerning business and local government »

Objectives of Parliament and Government :• Better control of normative inflation.• Preserve the competitiveness of businesses by

simplifying and stabilizing the legal framework.• Reduce public spending by controlling the cost imposed

by the regulations.

Implementing the policy :• Identify measures to reduce burdens on companies and

local authorities• Avoid gold plating of EU directives or national laws (for

implementing decrees).

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Methodology: see annexes to the circular

Annex I Prior evaluation of measures concerning businesses and local authorities

Annex II Local authority impact fiche

Annex III Business impact fiche (contents) - Overview of the text and its anticipated effects - Description and quantification of impacts

- Other assessment criteria: 1 / legal framework of reform2 / analysis of possible options3 / transitional and accompanying measures4 / method of assessment of costs and savings

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Impact on business fiche: general presentation of the new norm

1 / Title, objectives and main expected effects

2 / date of the last amendment of the regulations

3 / general description of the business impact (cost / benefit)

4 / implementation details

5 / insertion into the legal environment (legal basis and list of texts needing amendment)

6 / description of the measures by coherent subsets

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Recent developments

CIMAP (Interministerial Committee on administrative reform) of December 18, 2012 (Decision 15):

- Extension of RIA to all regulatory texts- Develop and open online consultation

CIMAP of April 2, 2013Decision 16: “One-in, one out” to curb normative

inflationDecision 17: Apply regulatory best practice:

- avoid gold plating of EU directives- apply the principle of proportionality/ boost legal security- involve local services in drafting implementing instructions

Decision 18: Strengthening RIA- closer scrutiny of burden on local government and services- better scrutiny of impact of EU texts- better implementation of proportionality

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Calculating the net cost of a new text (1)

Step 1 : estimating the implementation cost• Identifying the non-repetitive actions that the companies

involved will have to do in order to implement the text (decree or by-law)

• If possible, estimating the cost of each action for a company (A)• If necessary, breaking down each action into elementary tasks• Estimating the time that is necessary for each elementary task• Estimating the cost of these elementary tasks (for each task, cost = time x guaranteed minimum wage [or

any other relevant reference] to be paid by the company, the employer’s social contributions being included) (B)

• Estimating the implementation cost for a company : A + B

Step 2 : estimating the recurrent costs (for one year) • Identifying the repetitive actions…(same method)

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Calculating the net cost of a new text (2)

• The total costs for a company for the year N = the estimated implementation costs, the compliance costs being included,

+ the sum of the recurrent costs for a company for the year N

• The total costs generated for business for the year N = the total costs for one company x the estimated number the companies involved

• Estimating of the savings : same method

• The estimated net savings/costs generated by the text = total savings (for N) - total costs (for N)

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Part 2Quality control of RIAs in PMO (interview)

Main concern of RIA-quality unit: sound information of Parliament preventing repeal of voted bill by Constitutional Court application of advice to regulators contained in the Guide de

Légistique

RIA unit checks that :- the draft is necessary, that a new instrument is required- the impacts on end users have been thoroughly assessed- the draft will be helpful during the parliamentary phase

The PMO can refuse to table the draft on the agenda of the Council of Ministers if the RIA is not robust enough.

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International assessmentsEU Parliament comparative 2011 study

• RIA was introduced in France in 1995 but was rarely used until 2009 when it became a constitutional requirement

• The objective of RIA is primarily to reduce « legislative inflation »

• The methodology is based on broadly the same analytical steps as in other systems, although in-depth IA appears to be limited to the selected policy option

• RIA is scrutinised by a number of bodies, but it is not clear to what extent that scrutiny focuses on the quality of the RIA

• RIAs in France appear to be a tool for communicating policy decisions to main stakeholders

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OECD « Better Regulation France 2010»

• Stringent constitutional requirement; first months are encouraging

• The system does not clearly incorporate public consultation procedures and does not sufficiently draw attention to the option of maintaining the status quo.

• The right balance must be struck when determining the system's scope and the proportionality of the effort devoted to impact assessment.

• Integrate economists into the teams in charge of impact assessment. Regularly update method. Set up a common training programme for ministries to promote culture change.

• Evaluate the implementation of impact assessment in a regular and detailed way. Publish these evaluations.

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Scrutiny of selected RIAs

Points to watch• Listing and study of options?• Reporting and follow-up on consultation?• Breadth of impacts listed and measured• Presence of estimates of different options?• Simplification potential?• Inclusion of administrative burden measurement and

reduction?

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Good practices and limits to the French model

• Sound legal basis (from constitution) creating a duty to draft RIAs and a judicial check on quality

• Wide scope defined in legal rather than economic terms, with recent extensions to busines related issues

• Quality control function implemented at COG, hence good insertion into decision-making process

• Detailed methodology circulated and used for training of dafting officials; network of contact points for specific impact measurement;

• Publication of RIAs effective• No high profile use as yet

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Further study

This presentation is online with hyperlinks: http://smartregulation.net/p/publications.html

Documents quoted• OECD Better Regulation in Europe 2010: France• European Parliament study on comparative RIA• RIAs published on Légifrance

Other sources• Report from Conseil d’Etat 2006• Guide de Légistique• RIA methodology on intranet