One of the interesting chapters in the bill for the annual economic plan, which is now on the Knesset table, concerns regulation – and its updated Hebrew name: Asdra. It is proposed to enact a precedent-setting law that will address the way in which regulation is done in Israel, that is: how are laws enacted here?
The bill seeks to subject the generators of the regulation to basic principles that will promote quality regulation. “Regulation” refers to the set of enforcing government directives, which are intended to regulate economic or social activity in the economy. These are the variety of laws, regulations, orders, guidelines, procedures, circulars and disclosures – all the same recognized sources of law that impose on corporations, businesses, organizations and citizens, different requirements regarding their conduct in the economy, such as the need for a business license, requirements for enterprises in relation to emissions Toxic substances, storage of hazardous substances, labeling of products, conditions regarding import of food or appliances.
These are legitimate civil actions that are permissible in nature, but as usual – we are required to obtain from the authorities various permits so that we can carry them out. The reason for government intervention lies in the fact that many of the actions create consequences that harm the individual or the environment, such as air and water pollution, concern for public safety or health. In general, regulation in a modern and industrialized country is intended to enable extensive economic activity while minimizing the risks involved. The name of the game is balance of interests: a balance between freedom of occupation, entrepreneurship and innovation, and equally important social interests concerning public protection.
The public is unaware
It is assumed that the general public will not be able to protect itself from hidden risks, such as invisible harmful radiation from an electronic product or hiding harmful substances in cosmetics; This is for the simple reason: the public does not know enough and also does not always have the ability to choose. In such situations, the free market fails to achieve the desired result, and regulatory intervention is required.
The bill recognizes this, and seeks to institutionalize general principles that will form the normative infrastructure for creating quality regulation. Thus, the regulator will be required to declare the social value it seeks to promote, for example if it is clean air, fitness club safety or beach cleanliness. It must examine whether governmental intervention is necessary, or whether information or voluntary standardization can be sufficient. He will also be required to adopt a broad economic vision and examine cost versus benefit, including the costs involved in a compliance spoon and enforcement actions.
The regulation must be based on a relevant database, be made in connection with international models accepted in developed countries, be adapted to other rules existing in the law book, and act in order to promote competition and reduce the cost of living. On the formal side, no less important, the laws should be written in a clear and understandable way to the ordinary dealer, be accessible to the citizen, and as far as possible a digital application should be allowed (e.g. online inquiries to the authority).
These are all important principles for improving the process of enacting laws. They will oblige most government ministries and public authorities. There is something refreshing and courageous about the idea of subjecting legislative procedures to a structured process, which includes a balance of cost-versus-benefit across the economy, as opposed to legislation that seeks to advance a particular agenda without seeing the full social picture.
However, the bill is not limited to establishing process principles, but adds and instructs the establishment of a new authority! This is the regulation authority. The PA plenum will consist of a chairman appointed by the government and representatives of the Prime Minister’s Office, the Ministry of Finance, the Ministry of Justice and the public. What are the PA’s functions? The authority will be able to “re-evaluate” the quality of the regulation and advise on the software, that is, the regulatory authority will be a kind of super-regulator that re-examines the laws of the state.
What will the public say
Although the authority of the authority is only advisory, what will the public be required to obey this or that rule, if the regulatory authority has expressed an opinion that the rule is not proper? If, for example, the Ministry of Communications wants to impose obligations on telephony companies to protect the consumer, the regulatory authority will be entitled to say that these are onerous rules; If the Ministry of the Environment requests that factories be required to obtain a specific permit to discharge polluting sewage into rivers, the Authority will be able to recommend if necessary at all; And if the Ministry of Transportation proposes a law that would require the practice of installing a facility in the vehicle to prevent forgetting of minors – who will not die of heat and suffocation – the regulatory authority could propose that there be an excess regulatory burden.
There is nothing wrong with informed processes for assessing the implications of regulation on the individual and the public. The question is just who should consider them. Those who need to consider regulatory considerations are the regulators themselves. They are the ones who set the rules and they have the public and legal responsibility to set balanced and proper rules.
Similar to their duty to consider budgetary considerations, to examine an impact on fundamental rights, to reconcile rules that will not contradict each other, so regulators must weigh considerations of cost versus benefit. An orderly authority sitting as a kind of supreme authority is expected to weaken the power of the ordinances entrusted with the public good.
What’s more: This is an authority that builds an additional floor of regulators on top of existing regulators. The information she will seek to gather, the studies she will conduct, the reports she will compile, and the consultants she will appoint to formulate her opinion – all of these are likely to produce a long and costly bureaucratic process. Instead of promoting efficient legislative processes, which provide a quick and appropriate response to a dynamically evolving reality, the bill seeks to create a pyramidal structure of regulators, and unnecessary bureaucratic awkwardness.
The author is a retired judge and head of the Hat Center for the Study of Competition and Regulation Academic Track College of Management