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Better Regulation: from Theory to Practice

, By: Malte Lohan, Head of Corporate Affairs Europe
Better Regulation: from Theory to Practice

Last week’s ‘Better Regulation package’ is, rightly, the talk of the town. Given EU citizens’ alarming levels of scepticism, even cynicism, towards the EU, it is high time for the Commission to consider how it can make EU law-making more accountable to citizens and ensure it is seen to add value.

Moreover, the perception that corporate lobbying may distort EU law-making has certainly contributed to the sense of distance between citizens and the EU. Although the Commission did not put it this bluntly, the Better Regulation agenda’s steps to make the EU more transparent and accountable, and to introduce new checks and balances, should help banish that perception for good.

What the package is missing

That said, we see two big gaps in the Better Regulation package as it was presented.

First, while the announcement paid lip service to helping businesses (particularly SMEs) avoid burdensome red tape, much of the conversation seems to have centred on the inter-institutional machinations and methods of working.

That is regrettable. EU policy makers should not lose sight of the bigger picture: a central objective of delivering smarter policies must be to create a business environment that is more conducive to regaining competitiveness and to catalysing growth and job creation. This is not about prioritising businesses over citizens. It is about recognising that well-intended EU laws often end up imposing more red tape than needed to achieve their objectives. These costs are real, and they too are part of the reason people are sceptical about the EU. A more explicit focus on this would significantly strengthen the Better Regulation agenda.

Second, smarter and more efficient regulation on its own is not sufficient to bring law-making into the 21st century. Many of the major challenges facing society today – from climate change to chronic diseases to privacy in the digital age – are too complex and too fast-moving to be tackled by 20th century regulation alone. There is a growing body of evidence, including from the OECD and the EU’s ‘Community of Practice for better self and co-regulation, that Better Regulation should mean embracing ‘hard’ and ‘soft’ law.

The point is to frame how the benefits of soft law can be maximised, as the OECD and the CoP are doing, so that it can effectively bridge the gaps between societal challenges and the limitations of regulation. Done right, this will be a benefit for all. Yet only half a sentence in the Better Regulation package is dedicated to this. 

How businesses help make regulation better

Consider what we think is a good recent example: the debate about requirements for ingredient and nutrition Information to consumers for alcohol products. Despite calls for action from the European Parliament, consumer groups and European brewers, the EU has yet to move forward with legislation.

So we decided, together with The Brewers of Europe, to voluntarily provide this information.

We think this matters for the Better Regulation agenda for two reasons. First, to state the obvious, businesses are filling a gap that law-makers have so far proven unwilling or unable to fill. And second, our initiative will serve as a test case for making consumer information effective in the 21st century.

Instead of the EU spending time and money on impact studies to figure out the best approach, we will go ahead and demonstrate how to make it work in the real world. As the EU considers whether and how to legislate, it will be able to draw on the concrete experience we are developing – and to avoid unnecessary costs or red tape from the outset.

That, surely, is a major step forward for Better Regulation.

Malte Lohan

Malte Lohan

Head of Corporate Affairs Europe

I am convinced a genuine dialogue between policy makers, civil society and businesses leads to better policy outcomes. That dialogue is not always straightforward. My role at AB InBev is to provide a touch point to build trust and advance shared objectives: bringing the views and expertise of the world’s leading brewer to the policy table, while helping the company listen to society and stakeholders so that we can make better business decisions.