How To Legally Beat Debt Collectors
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How To Legally Beat Debt Collectors Document Transcript

  • 1. Legal Approaches of Purposes: the Case of Independent Agencies January 2007 Boudewijn de Jonge University of Amsterdam
  • 2. Legal Approaches to Purposes: the Case of Independent Agencies Legal Approaches of Purposes: the Case of Independent Agencies Supervisor: Mr. J.H. Reestman Corrector: Prof. Mr. I.C. van der Vlies Final thesis for the law school of Amsterdam University All rights reserved (2007).
  • 3. Table of Contents Introduction................................................................................................................. 4 Part One ..................................................................................................................... 5 Hobbes and the development of legal personality .................................................. 6 The State as unique source of authority .............................................................. 6 Fragmentation of the State .................................................................................. 7 General functions of purpose provisions ................................................................. 9 Communication function ...................................................................................... 9 Direction function............................................................................................... 10 Correction function ............................................................................................ 11 Private law: the transgression of object theory...................................................... 11 Purpose theory in its purest form....................................................................... 12 Development till date ......................................................................................... 12 Public law: purpose provisions as part of accountability ....................................... 14 Accountability for the existence of an independent agency ............................... 14 New lines of accountability of the independent agencies .................................. 16 Position in international law ............................................................................... 17 Part Two ................................................................................................................... 19 The comparison .................................................................................................... 20 Legislative culture as factor................................................................................... 20 Interpretive spectrum of ‘purpose’......................................................................... 22 Independent agencies in context .......................................................................... 23 Netherlands ....................................................................................................... 23 United Kingdom................................................................................................. 26 United States..................................................................................................... 29 France ............................................................................................................... 32 European Union................................................................................................. 36 Comparative syntheses......................................................................................... 42 Part Three................................................................................................................. 43 Practical effects compared to private law.............................................................. 44 Communication ..................................................................................................... 44 Direction................................................................................................................ 45 Correlation between objectives and tasks ......................................................... 45 Legal Approaches of Purposes: the Case of Independent Agencies Limits to political influence on objectives ........................................................... 46 Correction ............................................................................................................. 47 Establishment .................................................................................................... 48 Parliamentary oversight..................................................................................... 48 Negligence of tasks ........................................................................................... 49 Directors’ liability................................................................................................ 49 Administrative decisions .................................................................................... 50 Civil liability........................................................................................................ 50 Conclusion on practical effects ............................................................................. 51 Bibliography.............................................................................................................. 52 Books .................................................................................................................... 52 Articles .................................................................................................................. 52 Table of Contents Reports / Policy Documents.................................................................................. 53 Caselaw ................................................................................................................ 54 Websites ............................................................................................................... 54 List of independent agencies and their legal acts ................................................. 55 3
  • 4. Introduction The most basic entity of our society, the human being, the natural person, is since long not the sole recognised person in law any more. Advancement of society and increased co-operation between us has resulted in the introduction of the concept of ‘legal personality’ into law. Now, this concept applies only to groups of natural persons, but perhaps more entities will be recognised as players in law in the future – political movements and philosophers are claiming recognition of the animal as a legal subject these days, and some legal theorists foresee that electronic agents will be participants in law one day.1 An ever more complex society has also caused the face of the State to chance. No longer, the contrat social empowers a Sovereign, a natural person, but it is the State as a legal person that receives the general power from the citizens. The State, which does not operate as an indivisible entity anymore, but has subjected its power to external transnational organisations, and has internally brought its power outside the realm of the State with independent agencies, endowed with separate legal personality. The State is in a process of – not to be overstated – decentralisation or fragmentation and internationalisation. At both ends of the contrat social the face of the participating actors is under change; a very fundamental change at the State’s end. In times where the identity and intrinsic uniqueness of human being and State are questioned, scholars are seeking to give direction to this movement. The identity of human beings raises the questions of life: ‘who am I’, ‘why am I here’, etc. The discussion over identity and purpose of the other side in the contrat, the fragmented State and other new public legal personalities, can be put in similar terms. In this thesis, the modern identity of the State, as a participant in the contrat social, will be examined. Not the State itself will be the subject of the inquiry, but the new participants in the contrat social, that have arisen along side the State: the independent agencies, on a national and international level. It will be examined to what extent the legal definitions of their identity and purpose2 can offer practical direction in the search after their position and function in our Legal Approaches of Purposes: the Case of Independent Agencies society. This thesis is divided according to three questions to which a tentative inquiry will be set about: - Part One: why are identity and purpose of these organisations legally defined? - Part Two: what do these legal provisions consist of? - Part Three: how can these provisions be given a practical meaning in reality? 1 Teubner G. Rights of Non-humans? Electronic Agents and Animals as New Actors in Politics and Law, in: Journal of Law & Society 2006(33), and Cliteur P. and Baaij H. Stop discriminatie dieren [trans: Stop Animal Discrimination], in: NRC Handelsblad. Rotterdam: 3 October 2002. Introduction 2 The word ‘purpose’ is used herein – unless specified – with a broad meaning which encompasses words like function, role, objective, duty, aim, goal, etc. For a more detailed overview of the semantic spectrum, see page 22, infra. 4
  • 5. Part One In this part the origin and doctrinal necessity for the definition of identity and purpose of an organisation will be examined. To place this into context, first the genesis of the concept of ‘legal personality’ will be reviewed. Then it will be explained how the definition of identity and purpose is tight up with the concept of legal personality and how this was worked out in private law. Finally, it will be seen what implications this holds for public law legal personalities. Legal Approaches of Purposes: the Case of Independent Agencies 5
  • 6. Hobbes and the development of legal personality In Hobbes view of the contrat social, the State was created as to prevent civil society to collapse, to prevent anarchy brake loose.3 In the state of nature, no associations between human beings took place. But with the contrat, the multitude conferred its rights and powers upon one entity to secure the interests of all. To guarantee the effectiveness of the protection of society and the integrity of the State, no other entities could arise along side the State without the State approving their existence. The State, and the State alone, was the source of any exercise of power over the members of society. No person, no group and no collective could exercise power or create obligations for human beings, unless the State had explicitly vested this authority in the group. The State as unique source of authority The State was the universitas, containing universal power, and was a separate entity from its constituents. This resulted in a strict separation of private and public interests. Clearly, this was an answer to medieval feudalism, in which private persons were endowed with public power, and to the existence of craft guilds that consisted of private individuals pursuing group interests, while possessing great power over large groups of craftsmen.4 In Hobbes Leviathan, no one could exercise such power over others, without the State guarding the general interest. Initially, this strict separation of private and public interest led to strict limitations on individuals co-operating in groups. Such a group was not to be regarded as a separate entity from the individual group members, so to make clear that they pursued their own interests, and could be held individually responsible for any act. Human beings were the only persons that were actors in law, and that had standing vis-à-vis the State. Reality, however, demanded that individuals could act collectively. And therefore practice came into being that the Sovereign, the personification of the State, granted incorporation to a group. In the United Kingdom, for example, a Royal Charter was originally the only way to form an incorporated body.5 When economic developments demanded this, ‘partial associations’ were allowed along side the Royal Chartered groups – but, with a maximum of seven group members. Legal Approaches of Purposes: the Case of Independent Agencies Von Savigny carried on Hobbes’ ideas in this respect in most extreme form, when he concluded that in Roman law each and every group needed explicit concession by the State to come into being. Not just for the attribution of legal personality, but also for the mere existence of a group, State action was required.6 The idea of the State as the sole authorisation of any exercise of power in society, has been under attack several times. Especially in conflicts over the position of the State vis-à-vis other powerful persons, like the Church and the unions, doubts over the special role of the State were voiced.7 English Pluralists held that the State is 3 Hobbes T. De Cive : the English Version. Oxford: Oxford University Press (1983). 4 McLean J. Personality and Public Law Doctrine, in: University of Toronto Law Journal. 1999 (1), p131. 5 Groenewald Th. Doeloverschrijding bij BV en NV. Deventer: 2001, p11. Part One 6 McLean J. Op.cit. n4, p128. 7 Id., pp125-6. 6
  • 7. nothing more than any other association, and that there is therefore no need for explicit or implicit authorisation from the State for their establishment. More moderate pluralists, like Dicey, took the position that the associations do not need the State’s approval for the existence and that individuals are free to associate, but only for the creation of obligations for individuals. Fragmentation of the State That discussion is of importance to the current debate over the identity of the fragmented State.8 Increasingly, the State as a singular entity, as sole attributor of power, solemnly devoted to the general public interest, has changed. On the one hand, the State has shifted parts of its general power to independent public agencies, and on the other hand the State is taken part in power sharing agreements, with other States and with private actors. As a result, the State is now a plurality of legal persons, many of which are to achieve specific ends and serve specific interests. And besides the State, private stakeholders are increasingly present in the processes of rule making. This happens partially through self-regulation, but also through direct influence and sector representation in public bodies. Runciman explained the discussion over the unique character of the legal person(s) of the State, by way of analogy with a theatre play.9 In the play, every actor wears a mask to act a certain role.10 The mask signifies legal personality, which can be attributed or taken by the State. The State also does this to human beings, e.g. by denying legal personality to mentally ill. In the most pure form of the Hobbessian play, the State can be viewed as the director of the play, the distributor of the masks. The State does only give one mask to each actor and there are no masks for group persons. In the modern version of the play, it has turned into an improvised play. The economic reality has caused the State to acknowledge group masks.11 The actors may start and fill in their role autonomously, and may collectively take up a mask as they wish. Whilst the State does not distribute the masks anymore, it does still prescribe the minimum requirements to the masks. If a group of actors wants to use a mask collectively (wants to obtain legal personality for their group), they will have to Legal Approaches of Purposes: the Case of Independent Agencies meet the requirements as set by the State. One of the minimum requirements is a description in the statutes of the role or purposes that the actors envisage for their group. Other than the State and human beings, a group is only allowed to engage in activities for the defined statutory purposes. The group will be free to interpret that role of the character freely, but once the outer burdens of the role are overstepped the mask is not recognised as such anymore, and the individual actors act in their own personal capacity. 8 Lindseth P. Agents without Principles? Delegation in an Age of Diffuse and Fragmented Governance. Hartford: February 2004, p7. 9 Runciman D. Pluralism and the personality of the state. Cambridge: 1997, p223 and further. 10 The Latin word persona comes from the Etruscan word phersu, which means ‘mask’. The mask became the word used to refer to the actor, thereby symbolising how the mask identifies the person. 11 That this development is still ongoing can be seen in the movement towards recognition of group and corporate criminal liability by Western countries. Recently, e.g., Portugal, Slovakia and Romania Part One introduced corporate criminal liability in their legal systems. See: Eurojust. Eurojust & Human Trafficking. The Hague: 2005, p26. 7
  • 8. The current dogmatic problems over independent agencies can be put in this perspective as well. The independent agencies possess independent legal personality, and therefore have a mask to act on their own in the play. It is unclear who is behind the mask, whether that are individual human beings, or whether it is the State acting with different masks. In any case, it is clear that these entities are established for specified purposes, with a particular role to play. The State must define their role in the play, because power is exercised by a separated legal person in the play. That power may, other than with the State itself, only be exercised for a defined end. By the same token, where the State gives power to legal persons that comprise of private and public actors collectively or subjects its power to an international legal person, the purpose of that legal person should be defined. This is because of the underlying premise of the Hobbesian system: where power is exercised in society by an actor other than the State, this can only be done for an end to which the State has consented. It has been asserted that the present confusion over the identity of the State, now that it also operates through separate legal entities, and authorises self-regulation more and more, is a bit of a return to medieval feudalism.12 In particular, the independent market regulators, which operate with special representative organs of producers, are regarded as the re-emergence of craftsman associations.13 As in medieval times, the State is now sharing its sovereignty with other entities: interest organisations (unions, NGO’s, etc) and transnational organisations. Private persons are endowed with public authority, while operating outside the direct democratic realm.14 The most extreme example of shifting public power is the case in which EU law requires a legally independent market regulator to be established, distinct from the State, because the State itself participates in the market as a shareholder of a public utility company, so to ensure that the State is not acting contrary to the public interest (the free market principles).15 12 McLean J. Op.cit. n4, p131, and Ankersmit, F. Privatisering bedreiging voor democratie, in: NRC Legal Approaches of Purposes: the Case of Independent Agencies Handelsblad. Rotterdam: 20 October 2005. 13 See for example the ENISA ‘Stakeholders Group’. In the Netherlands, the Kohnstamm Commission wrote: The [agencies] concentrate on the exercise of their tasks and relations with the concerned stakeholders. This does not fit with the general principles of democracy and law. The [agencies] experience political discussion and parliamentary questions as irrelevant and an expression of distrust. Translation by author. Werkgroep Verzelfstandigde Overheidsorganisaties op Rijksniveau [Kohnstamm Commission]. Een herkenbare overheid: investeren in de overheid, Interdepartementaal Beleidsonderzoek 2003-2004 nr. 1. Available at: www.andereoverheid.nl. Compare: Freeman J. The Private Role in Public Governance, in: New York Law Review 75(3), p543 and Metzger G.E. Privatization as Delegation, in: Columbia Law Review 103(6), p1501. Both follow to a certain extent the school of Critical Legal Studies in posing that there is no more fundamental difference between public and private actors acting in public interest. 14 That private individual personify the independent agencies as such, is not only the case in the U.S.; also in the recent discussion in the Netherlands over the Equal Treatment Commission, discussion arose over the personal qualifications and background of the individuals in that commission: Cliteur quoted in: Algemeen Dagblad. Rotterdam: 18 October 2006. 15 See on the dichotomy of the State as market participant and regulator, and the consequences for independent market regulators: Lassere B. L'Autorité de régulation des télécommunications (ART), in: Part One L'Actualité juridique - Droit administratif 3 (1997). Available at: www.lex-electronica.org/articles/v4- 1/lasserre.html. 8
  • 9. These new constructions of government, sometimes referred to as ‘governance’, may not be problematic at all. But the transferral of power from the State to independent agencies and (transnational) networks needs to be conditional, and a clear definition of their role – including its purposes – should be part of that framework of conditions. That approach guarantees that ultimately the fundamental premise of Hobbes still applies: no power is exercised in society without consent of the State. General functions of purpose provisions The character or identity of an organisation is greatly determined by its purpose, besides its physical make-up and financial position, e.g. It should be born in mind that the creation of agencies is part of a development within public administration towards functional decentralisation. The chosen term for this development already signals that the description of the function of an agency is a key element of the concept. The mirror concept of functional decentralisation is functional centralisation, which takes place towards transnational agencies and networks. Again, the purpose is the criterion which brings together agencies from different jurisdictions or is the raison d’être for a new transnational agency. Clarity over this part of the character of an organisation has at least, conceptually, three functions, which work in two dimensions. The functions are communication, direction and correction, and the dimensions are related to the forum and the moment in time. Communication function The clarity over the purpose has a communication function, since it gives certainty and a common framework of expectations for all relevant stakeholders. Internally to employees, managers and shareholders, and externally to the State, third parties, the public, etc. Internally, the purpose is important, because organisations are group persons: a collective undertaking. To refer again to the model of society as a theatre play: the actors behind the mask must understand which role they have, in order to be able to act collectively. Noteworthy is that, with hardly any exception, all organisations included in the Legal Approaches of Purposes: the Case of Independent Agencies survey, have a section on their website where its overall objective and mission is stated. And in most of the cases, the words for these sections are simply taken from the legal description in the constituent documents. Especially for ‘first contact’ with an organisation the description of the purpose enables the counter party to understand the basics of the identity of the organisation. In commercial life, for example, the register of the Chambers of Commerce provides all basic characteristics, including the purpose. Clear communication of the (limited) purpose of a public organisation can prevent the public to have unrealistic high expectations. For example, the EU agencies often operate with a limited mandate. Subtle but precise communication over the purpose of the organisation can be read in either the name (‘European Monitoring Centre on Racism and Xenophobia’, which communicates its relatively passive role) or the catchphrase (Eurojust: ‘European Judicial Cooperation Unit’, which reflect that the participating authorities remain autonomous). Part One 9
  • 10. Notorious examples of mislead expectations over purposes of organisations can be found in the realm of international law. The problem occurs for humanitarian missions in particular, which function as temporary organisations, on the basis of the founding act of the sponsoring international organisation and their Status of Mission or Status of Forces Agreements. Miscommunication or misunderstanding over the complicated legal mandates which limit the actions of such missions often causes local populations to be disappointed in the foreign assistance. Direction function The direction and correction function have a stronger legal connotation than the communication function. Internally, the direction function increases in importance for organisations with narrow mandates: international organisations and their missions, charities, and independent public organisations, are established for very specific ends. The definition of the purpose for an organisation determines which role it is going to play. During the start- up phase, more concrete defined tasks can be derived from the purpose of the organisation, and the required assets and processes can be defined. Most private law corporate bodies operate under very wide purpose provisions that will not give much guidance internally. The function of direction is of particular importance for the public organisations. Because of the legality principle, public organisations cannot take up any role, without a proper legal basis. Not only the substance of a decision needs a proper legal basis, also the path leading towards that decision must have a statutory basis. This is described as organisational-functional legitimacy.16 Any concrete activity of or purpose given to an organisation can therefore not exceed the original legal basis. An illustrative case in this respect was the ENISA-case for the European Court of Justice (ECJ). The European Network and Information Security Agency (ENISA) is established on the basis of Article 95 TEC, which offers a basis for the harmonisation of national laws. ENISA is charged with activities related to network and information security, like risk analysis, awareness raising, and issuing recommendations. The question to be answered by the Court was whether the establishment of ENISA was Legal Approaches of Purposes: the Case of Independent Agencies indeed an act that harmonised the laws of the Member States. In order to answer that question the Court examined whether the objectives and tasks of the organisation were closely enough related to actual process of harmonisation. The ECJ confirmed that European agencies are a means to an end (harmonisation i.c.), and not an aim in itself, when it ruled the following: The establishment of ENISA cannot be separated from its tasks, but it is a means to the end. The ENISA Regulation thus pursues only a single aim, which is to be derived above all from the provisions on the tasks of ENISA.17 The judgment pinpoints the entire existence of the organisation on the purpose of harmonisation. Harmonisation is the single aim of the organisation to which all its tasks and competences are subordinate. This judgment emphasises once again for 16 The term Organisatorisch-funktionelle Legitimation was introduced by Waechter; quoted in: Schroten K. De overheidsstichting op het niveau van de centrale overheid. Deventer: Tjeenk Willink 2000, p61. Part One 17 ECJ. ENISA-case: UK vs. Parliament and Council. Judgment of 2 May 2006. C-217/04 ECR 2006 I- 03771, para21. 10
  • 11. all EU agencies that their actions shall be directed by the purposes mentioned in their legal basis, which is ultimately to be found in the EU treaty. The positive side of the coin is that the management of public organisations itself can therefore go back to their statutory basis to reconsider its mission or the fulfilment thereof: the purpose provision functions as a tool for analysing its performance. Whereas the purpose of an organisation may play an important role at the start-up phase, the definition of purpose may also cause an organisation to wind up or down size its activities. Especially where a clear end state or measurable targets are defined as part of the purpose, a moment is defined where the raison d’être of the organisation will seize to exist. If the organisation chooses to change its focus of activities, to avert its own redundancy, for example, there may be a need to change the purpose as defined in its basic document. An example of this is the Dutch Central Organ for the reception of Asylum seekers (COA). Since the numbers of asylum seekers sharply dropped, the organisation is actively seeking new ‘markets’ to offer its reception and housing services. However, its statutory purpose is explicitly restricted to asylum seeker-related activities.18 Externally, clarity over the purpose of an organisation serves processes of co- operation. Although the field of activities may be similar between two organisations, the purposes may be very different. Correction function Finally, the definition of the purposes of an organisation functions as a correction mechanism. The definition of the purpose of an organisation protects the stakeholders who confer assets (shareholders, creditors), power (the State) and time (employees) on the organisation. All these stakeholders are equipped with an enforceable right that their assets, power or time will not be exerted for another purpose than what they placed it for with the organisation. In fact, the purpose functions here as a protection of the interests of stakeholders. To a varying degree each organisation is purpose bound: limited in its activities by its purpose. Legal Approaches of Purposes: the Case of Independent Agencies In the start-up phase, the State may refuse legal personality to an organisation if it deems its purposes illegal. When an organisation goes bankrupt, in most Western legal systems, the executor can render any previous act by the organisation void if the act was contrary to the purpose of the organisation. But also personal liability of directors, or financial consequences in case of public independent bodies may be attached to transgression of the object. Private law: the transgression of object theory Within private law two major categories of legal personalities can be distinguished, in relation to purpose descriptions in the articles of association. On the one hand there are the business corporations in corporate law, and on the other, there is the diverse mix of non-profit organisations19. For both categories holds that in all Western legal 18 Based on conversation with COA employees in November 2006. Part One 19 The word ‘non-profit’ refers herein to non-commercial organisations that are not established with the principle aim to pay (parts of their) profits to shareholders, or similar constructions. 11
  • 12. systems legal persons are registered, and upon registration a purpose must have been determined in its founding documents. Purpose theory in its purest form In corporate law, the description of the purpose had originally an important role in the creation of legal persons by groups of individuals. In its ultimate form, the corporation was seen as nothing more than Zweckvermögen: the belongings of the corporation belonged to the purpose, not to private individuals.20 Both in civil law and common law countries, transgression of the object of a company fell under the ultra vires doctrine, which has a purely corrective function. Any act by a corporation beyond the defined purpose of the corporation was void or voidable. Especially in the United States this doctrine was applied strictly, until the beginning of the 20th century. The doctrine had an internal dimension (the management could be sanctioned on grounds of default) and an external dimension (contractual obligations with third parties could be affected by voidness). On top of that, the executor could ex post declare any act void, if this act was performed ultra vires. The external dimension in particular shows the weight that is given to the restrictive effect of purpose provisions: contracts with third parties may be declared void if they do not fit the purpose of the corporation.21 Development till date However, in the course of time, and for both practical reasons and reasons of principle, the doctrine lost its much of its relevance. When with time the restrictions upon the creation of incorporated bodies relaxed, the main function of the purpose description became the protection of the interests of shareholders and creditors. Protection of good faith with third parties and an ever wider definition of the aims of corporations, made that from the side of courts as well as from the side from the corporations (shareholders) itself, the restricting effects of the doctrine were limited. The interest of certainty in business transactions prevails nowadays over the interest of pinpointing a company to its original purpose. US Company law has abolished its external effect entirely, but also in most European countries the external effect is limited to cases in which the counter party was not acting in good faith. Legal Approaches of Purposes: the Case of Independent Agencies While the external effect of ultra vires was abolished in many countries, the first two EEC Directives concerning corporate law recognised that the concept of the purpose for a corporation is not completely meaningless for practice. These directives still demand that upon establishment of a corporation a purpose is defined. The directives left the possibility open for the Member States to uphold an ultra vires doctrine with external effect.22 In the Netherlands, for example, the purpose provisions can still be used by several stakeholders. The circle of stakeholders that may invoke ultra vires is large: 20 Machen A.W. Corporate Personality. 24 Harvard Law Review 4 (1911), p256. 21 See: Blanco Fernandez J.M. Doeloverschrijding bij BV en NV [Book review], in: RM Themis 2003(1), p42. He refers to the importance of the possibility to have the purpose of the organisation taken into account where contractual obligations were obviously disadvantageous to the organisation. Part One 22 The First Council Directive 68/151/EEC of 9 March 1968 on corporate law, article 9.1, and the Second Council Directive 77/91/EEC of 13 December 1976 on corporate law, article 2(b). 12
  • 13. contractors, shareholders and employees may invoke ultra vires in inquiry (‘enquête’) procedures, liability of management can be invoked on grounds of transgression of object, and executors may invalidate previous acts on such grounds. However, it must be said that only in the bankruptcy procedures the legal concept appears from time to time. The external effect is limited to cases in which the other party was not acting in good faith.23 Two developments limited the practical meaning of purpose provisions. On the one hand, courts have changed the concept into a ‘benefit test’: whether the contested act was in the ‘general interest’ of the corporation, more than whether the actual dealing fits the purpose provision.24 On the other hand, the wordings of purposes are chosen as wide as possible, so to prevent any uncertainty over the authority to act of a corporation. Whereas the meaning of the concept of purpose for private parties is reduced, the State has shown an increasing interest in the corrective function of purpose recently. EU States have agreed to pay more attention to the use of legal personalities for illegal purposes upon the moment of registration. This renewed attention also covers the purpose of the corporation, and aims to filter out organisations that are established to support racketeering, terrorism or debt avoidance practices.25 In the context of purposes of legal persons, the previous category of corporations can be distinguished from a second category of non-profit organisations. The difference in purpose with the first category is one that may not always be directly obvious from the statutory purpose. Sociologically seen, the purpose of a commercial enterprise is profit maximisation, while non-profit organisations is to support or strive for an issue of public concern. Yet, in the bye-laws of both types similar wordings can be found, because both types sometimes only mention their prospected activities or area of activities. However, the legal classification (as private corporation or charity) creates a theoretical watershed between the different purposes, mainly through the explicit exclusion of profit pay out in the case of charities. While for the commercial corporations in principle the purpose – what to achieve – is clear (disagreements are mostly concerned with how to achieve profit maximisation), the purposes of non-profit organisations are of a different and immense diverse Legal Approaches of Purposes: the Case of Independent Agencies nature. Generally spoken, the purpose provisions have their corrective effect through a similar system as with the corporations (i.e. responsibility of management, voidance of legal acts and annulment in bankruptcy procedures). But the character of the non- profit organisation as a goal organisation appears from, for example, the legal burdens on the change of the purpose of the organisation. In the Netherlands a foundation is only allowed to change its purpose, if the deed of foundation explicitly provides for this.26 23 A good example can be found in: Rechtbank Rotterdam. Judgment of 24 February 2000. Jurisprudentie Ondernemingsrecht 2000/76, paras 6.3.1.-6.4.1. 24 E.g. the Playland judgment of the Dutch High Court. NJ 1997/149, para3.4. For an analysis of this case law, see : Belder J.C. Concernfinanciering en doeloverschrijding, in: Vennootschap & Onderneming 2003(4), p42. 25 See e.g.: Ministerie van Justitie. Beleidsregels preventief toezicht op vennootschappen 2005 [trans: Policy regulation preventative control on corporations 2005], p10. See also the case law mentioned Part One herein, n27, infra. 26 Schroten K. Op.cit. n16, p26. 13
  • 14. Another important difference with commercial corporations is that the State has more rights to intervene. For example, the Dutch State may, through a court order, replace the board of a foundation in case of transgression of the statutory purposes (2:298.1(a) Dutch Civil Code). That the State has a stronger position with regards to non-profit organisations in scrutinising the pursue of the purpose, is not surprising in the light of the historical discussion whether such organisations compete with the State as sources of authority (see p6). The practice of forbidding non-profit organisations that undermine the authority of the State is still alive in Western democracies. A recent example can be found in the prohibition of a Muslim organisation that run their own courts and had its own government as part of an underground Caliphate state in Germany and other countries.27 Public law: purpose provisions as part of accountability In the discussion over the position, function and personality of independent agencies and networks, often a key role is played by the concept of ‘accountability’. Accountability can be described as a system comprised of four factors:28 - an actor (who is held accountable), - a forum (which calls the actor to account), - an act (over which the actor gives account), and - an obligation (by which the conduct of the actor is measured). Weber introduced the strict functional approach of organisations, as purely a means for achieving an aim. In his theory all public organisations, as part of the bureaucracy, were strictly subordinate to parliament, in the purest form of a principle- agent system: the Parliament as principle of the Minister and the Minister as principle of the bureaucracy.29 Accountability for the existence of an independent agency Delegation of policy and executive authority to independent entities, and subjecting authority to transnational networks, has caused that the number of acts over which the State (strictu sensu) can be held accountable has been limited. Whether the reason for placing (the executive) power at arm’s length is either independence, increased expertise or efficiency, in all cases, the result is that the scope of Legal Approaches of Purposes: the Case of Independent Agencies democratic accountability is restrained. For example, the Minister cannot be held accountable anymore for advisory opinions by an equality board, or the actual distribution of grants by an arts council. However, the act that the Minister can still be held accountable for, is the primary act or decision to place the execution of power at arm’s length: the decision to establish the independent organisation and delegate powers to it. This also includes, as a mirror, the power to end the delegation, and to wind up an independent agency. 27 The Hizb ut-Tahrir movements, which pursue the establishment of a pan-Islamic caliphate, operates in most Western countries through plain legal persons. For example, in Germany, the foundations related to this movement were forbidden. However, in the Netherlands, the government – being aware of its purposes – decided not to forbid the Dutch branch ‘Stichting Dienaar aan Islam’. See: Bundesverfassungsgericht, judgment of 2 October 2003, 1 BvR 536/03, and: [Netherlands] Official Reports of the Lower House Annex 2001/2002, no. 603, p1271. 28 Bovens M. Analysing and Assessing Public Accountability. A Conceptual Approach. January 2006. Available at: www.connex-network.org/eurogov/. 29 Strikwerda J. Organisatie & Verandering, deel 1. 2002. p3. Notice that the neither the US style Part One presidential system, nor the Dutch style parliamentary system can be summarised in such simple terms. 14
  • 15. A legal act of establishing or winding up an independent agency and delegating powers to it, is not fundamentally different from any other act. Organisations are seen as a means to achieve a certain economic or social goals, and thereby the same framework of accountability applies to such a decision. The act of establishment of an independent agency is benchmarked by the purpose it was given. Likewise in private law, foundations are wound up once the purpose is achieved, or it appears to be impossible to achieve the purpose. A similar line of thought applies to the participation in transnational networks. Whenever it is decided to participate in a transnational network, the Minister can be held responsible for the initial act of participation, and the use of the power to pull out of it. If an independent agency participates in a network, the statutory purpose and activities of the network in practice can be tested against the statutory purpose of the agency itself. By way of analogy: in private law, members of an association, may demand management to pull out of a federative association if the purpose of that association does not fit the purposes of the primary association anymore. 30 At the time of writing, in many EU Member States parliaments question their government over the set up of a new EU agency on fundamental rights, which would be the focal point in a network of national agencies.31 Allegedly, the function of the new agency would have too much resemblance with the Council of Europe, and serve no valuable purposes, and not withstand the subsidiarity test. It should be noticed, however, that little attention is paid to the establishment of and participation in more informal networks. This irregardless of numerous academic analyses that conclude that these transnational networks of agencies fulfil very real functions in practice. For example, the European network in which equality bodies co-operate – Equinet (formerly: Euroneb) – is operating very much in the margin of attention. There is no constituent document available for this network, let alone any formal statement of their intended purposes.32 By way of the very informal structure, and, as a consequence of that, the lack of a clearly expressed purpose and role for this network, it seems to evade political and public scrutiny.33 It may be argued that no legitimacy issues will arise as long as no binding powers are attributed (in terms of decisions in individual cases, or rule-setting), since all participating agencies bear responsibility for activities of the network. Notwithstanding that, it remains arguable that a legal basis is necessary since the Legal Approaches of Purposes: the Case of Independent Agencies networks are presented as separate entities, there are public assets involved, and their work – of whatever nature – possesses a certain public authority. 30 Similar issues as to the participation in federative associations, can be seen in the context of private law: see, for example, on the statutory limits in the deed of foundation to such co-operation: Sangers G.J.H. Bestuurlijke controle van federatieve verbanden, in: Galle R.C.J. (ed). Handboek bestuur en management van de grote vereniging. Den Haag: Elsevier (2002), chap27, p3. For example: Rechtbank Utrecht. MGT Alkmaar vs. Jongeren Federatie MGT. Judgment of 19 april 2006. Jurisprudentie Ondernemingsrecht 2006(177), with annotation of Blanco Fernandez J.M. 31 Proposal for the new EU Agency on Fundamental Rights: COM(2005) 280. For the discussion in the Dutch parliament, and an overview of the debate in parliaments of the other Member States, see: fiche 4.3.87 on http://europapoort.eerstekamer.nl [mainly in Dutch]. 32 Answer of Mrs. Palmer of the secretariat of Equinet on 28 November 2006. 33 Bigmani argues strongly in favour of giving a legal basis for these informal networks, so to give them a face to the public and strengthen the basis of their accountability: Bigmani F. Transgovernmental Part One Networks vs. Democracy: The Case of the European Information Privacy Network, in: Michigan Journal of 26 International Law, p860. 15
  • 16. Whenever an independent legal person is established and delegation takes place to it or power is subjected to a transnational network, there arises a need to define the purpose of this ‘sub-actor’. The purpose of the ‘sub-actor’ forms part of the framework of obligations, which rules the delegation by the actor. Hereby an obligation for the establishing authority, being it a minister, Parliament or European Commission, is created to give account vis-à-vis the forum regarding the implementation of the purpose. The question whether the independent organisation does life up to its purpose and whether the choice of instrument – establishing the organisation – is the (still) appropriate choice to reach the defined political objectives. The defined purpose is a point of reference for the exercise of the power to wind up an independent organisation. For example, the US Congress decided to discontinue the activities of the Atomic Energy Commission in 1974, because allegedly its regulatory functions were influenced too much by its nuclear promotion function. In a similar case of contradicting purposes, it has been argued that the Federal Aviation Authority wrongly got its purpose of aviation promotion on top of aviation safety.34 In this case, it was not decided to wind up or split the Authority, but to insert a provision in its statutory document that air safety is its highest priority over any other purpose.35 To elaborate the earlier example with the equality board or arts council, if they do not fulfil their purpose well anymore, the Minister can be held accountable not only for the (not) winding up these organisations, but also for (not) adjusting their statutory purpose. In summation, where the accountability of the State is limited because its power is transferred to a newly established third ‘sub-actor’ or network, a check on the purposes of the ‘sub-actor’ forms part of the obligations on behalf of the State. Therefore, in the case of independent agencies, the purpose description has not only an internal corrective dimension, but this corrective dimension also applies externally, to the establishing authority. The State is under an obligation to ensure a clear purpose of the agency, so that the initial decision and a decision to wind up the agency can be benchmarked. New lines of accountability of the independent agencies Legal Approaches of Purposes: the Case of Independent Agencies Apart from the form of accountability in which the State figures as the ‘actor’, the agency or network itself is the ‘actor’ as well in several types of accountability. New lines of accountability will come into existence between the original principle (e.g. the Parliament, or shareholders) and the newly established and empowered agency.36 Here, only a few examples will be mentioned in which the given purposes of the organisation are a primary element in the particular ‘obligation’. More examples will follow in Part Three. 34 Melzer F.W. Report on Aviation Safety Commission on Aeronautics. 64 Journal of Air Law and Commerce 3, pp812-5. 35 49 USC 40101(d)(1). [All Articles from the United States Code refer to the 2006 edition available on 1 December 2006 on Westlaw]. 36 See for new accountability lines in relation to transnational networks: Considine M. The End of the Part One Line? Accountable Governance in the Age of Networks, Partnerships, and Joined-Up Services, in: Governance 15(1). 16
  • 17. Personal accountability is at the core of the system of independent agencies as found in the UK and US. Parliament in the UK, and Congress in the US, may call the Director of the Agency before them to give account of its operations in so-called oversight hearings. The defined purposes in the constituent documents are explicitly the core benchmarks to which the operations are tested. Likewise in private law, management may be held personal responsible if the purpose of a corporation is deliberately transgressed. Another way in which the purpose of an organisation may influence the obligations on its behalf is through financial accountability. For example, the Netherlands Court of Audit is tasked by law to review performance and legitimacy of the Dutch independent legal persons created by the State.37 As part hereof, the Court examines whether the expenditures of the organisations were in accordance with its legal tasks. An exceptional case, in which the administrative and financial accountability lines are combined, is the case of the foreign EU missions under the second pillar. The Heads of Mission are personally given control over the budget, and are in person held accountable for appropriate expenditure.38 These missions operate under very detailed mandates. Therefore it is defined with a high degree of accuracy for which purposes the funds may be used. Six months after the end of a mission, the Council will discharge the Head of Mission, when the funds were found to be used appropriate and solely for the fulfilment of the mandate. Lastly, the earlier mentioned transnational networks of independent agencies, can be regarded as a new line of accountability in itself, in relation to the statutory objectives of the agencies. These networks can be very effective where the co-operating agencies share common objectives and purposes, and it appears that a kind of ‘peer review’ has come into existence between directors of similar national agencies. The However, it should be kept in mind, that the purposes of such networks may differ from the statutory objects of the national agencies. At least in theory the risk exists that the participating agencies commit themselves more to the internationally defined aims than the aims as laid down in their bye-laws, when they feel more accountable to ‘peer’ agencies.39 Legal Approaches of Purposes: the Case of Independent Agencies Position in international law The questions as to the purposes of independent agencies and accountability are a result of the plurality of the State, and the fact it operates through multiple personalities. The person(s) behind the ‘mask’ assigned to an independent public agency, will often not be a Minister or otherwise directly politically accountable 37 See: www.rekenkamer.nl/toezicht/; its tasks with regards to legal persons, separate from the State, are defined in 91.1(d) Comptabiliteitswet [Government Accounts Act]. 38 Speech by Bart D’Hooge, former Head of Mission of the EU Police Mission PROXIMA to FYRO Macedonia, delivered at EAIT in Granada, 25 October 2006. 39 See on the scope and effects of inter-agency peer review in European context: Everson M., Majone G., Metcalfe L. and Schout G. The Role of Specialised Agencies in Decentralising EU Governance. (2001), pp59 and 213. Available at: http://ec.europa.eu/governance/governance_eu/decentral_en.htm. Majone describes elsewhere the psychology behind the international peer-review for agency directors: the feeling of being part of an international effort working for the same ends appeals more than being part of a vast government bureaucracy with countless objectives. OECD. Designing Independent and Part One Accountable Regulatory Authorities for High Quality Regulation [Expert Meeting 10 January 2005, London], p143. 17
  • 18. person. Nevertheless the internal organisation of the State and national distribution of political and legal responsibilities, this does not affect international responsibility. Placing an agency at ‘arm’s length’ of government, irregardless the degree of independence, does not diminish international state responsibility in any way. In this respect, it is comparable with position of the independent judiciary and geographically decentralised government: the central government remains responsible for their actions under both international State responsibility law and European (human rights) law. The ILC Articles on State Responsibility prescribe in Article 4 State responsibility for all its organs, irregardless their function of position. Subsequently, Article 5 spells out that the State is also responsible for any entity that is not an organ of the State, ‘but which is empowered by the law of that State to exercise elements of the governmental authority’.40 Other than the ILC Articles, the European Court of Human Rights defined also substantive criteria to designate an organisation as a state organ (‘public institution’). One these criteria is that the organisation ‘pursues an aim which is in the general interest’, for example the protection of health.41 Legal Approaches of Purposes: the Case of Independent Agencies 40 Draft Articles on the Responsibility of States for Internationally Wrongful Acts, Report of the ILC on the Work of its Fifty-third Session. UNGA, 56th Session (2001). UN Doc A/56/10. Supp. no.10. And: ILC. Commentaries. pp91-95. Both available at: untreaty.un.org/ilc/texts/texts.htm. 41 The other criteria are: being founded by the State, State appointed management, integrated in State structures. ECHR. Case of Le Compte, van Leuven and de Meyere vs. Belgium. Judgment of 23 June Part One 1981. A-43, para64. See also: Lawson R.A. and Schermers H.G. Leading Cases of the European Court of Human Rights. Ars Aequi Libri (Nijmegen, 2nd ed, 1999), pp545-6. 18
  • 19. Part Two In Part Two, the practice in relation to the drafting of purpose provisions will be addressed. Independent public agencies of four different states, plus the EU, will be compared as regards their statutory purposes. Legal Approaches of Purposes: the Case of Independent Agencies 19
  • 20. The comparison Four states are chosen to compare agencies from, two common law states and two civil law states. The US has a long-standing experience with independent agencies, while in the UK the ‘quango-debate’ started long before the issue attracted attention on the continent.42 The US has about 140 independent federal agencies and commissions, while in the UK 199 so-called ‘executive Non-Departmental Public Bodies’ exist.43 The two continental countries, France and the Netherlands, differ in the number of independent agencies that exist: in France 39 ‘autorités administrative indépendantes’ and in the Netherlands 150 ‘zelfstandige bestuursorganen’.44 The choice for the agencies arises from the intention to compare agencies from different countries with identical functions. Seven areas of government activities were chosen, namely: promotion of arts, financial market regulation, communication market regulation, aviation, transportation safety, environment protection, and promotion of equal treatment. However, the existence of an independent agency for each activity area strongly varies per country. In particular, the French number of agencies is limited, and therefore only three agencies from that country are included in the comparison. For each country, first the relevant historical and legislative factors that influence the presence and shape of purpose provisions will be set out. Then an account will follow of the specific characteristics of purpose provisions, using the spectrum described herein below. Legislative culture as factor Framing the legal purpose of an independent public organisation must be seen in the light of general legislative technique. As stated already above, the act of establishing an independent agency is not fundamentally different from any other enactment by a State or international body as the EU. Whether the purposes of the organisation are determined, will largely depend on the general legislative culture and requirements in a specific legal order. Legal Approaches of Purposes: the Case of Independent Agencies The consequences of specific characteristics of a legal culture are best illustrated by the two common law states that are included in the comparison: the US and the UK. From the historical limited function of legislation in those two legal orders, as mere corrections on case law, it followed that statutes were interpreted restrictively, without regards to intention of the legislator and objectives of the enactment.45 The British statutes are greatly detailed to prevent any triviality. The great exactitude of British law is certainly reflected in the provisions on purposes of organisations as well, as will be shown infra. In the US, a noteworthy consequence of the political system is 42 Counseil d’Etat. Rapport Public 2001 Les autorités administratives indépendantes. Document no. 52. Paris: 2001, p365. 43 The US government publishes a list of agencies on: www.whitehouse.gov/government/independent- agencies.html, while in the UK, the Cabinet Office publishes annually the Public Bodies report (see p ii for the overall figures, multiple body systems are counted as one). 44 These numbers are based on the report of the Counseil d’Etat, n42, supra, and the Dutch register of independent agencies (as with the UK: so-called ‘clusters’ are calculated here as one agency), Part Two available at www.zboregister.nl. 45 Zweigert K. and Kötz H. An Introduction to Comparative Law. Oxford: 1977, pp265-7. 20
  • 21. that Congress sometimes includes declarations of purpose and provisions on policy in the binding body of the legal instrument. In EU law, the preambles often contain similar statements on the intentions of the EU legislator, but without the binding force as in the US. In relation to purpose provisions, the acts of the European Communities establishing European agencies need to answer to specific requirements. All the EC legislation, including establishments of new agencies, must pass the subsidiarity and proportionality tests.46 Under point (4) of the Subsidiarity Protocol to the Treaty of Amsterdam, is it explicitly stated that each piece of EC legislation will state: ‘the reasons on which it is based […] with a view to justifying its compliance with the principles of subsidiarity and proportionality.’47 As a result, it will be shown below that the instruments related to EU agencies contain detailed provisions. Also, the length of experience with agencies and constitutional requirements are also relevant elements of the legislative context. As said, the UK and US are often mentioned as having the most experience with independent agencies. In the US, a special framework was already introduced in 1946 with the Administrative Procedure Act (APA)48, which sets a procedural framework for the regulatory powers of agencies. Whereas worries over the constitutional distribution of powers were the thriving force behind the introduction of APA in the US, the lack of a written constitution and constitutional review by courts is part of the reason why the United Kingdom has no such framework. However, unwritten constitutional principles have developed into a non-statutory framework for the British public agencies. Finally, another aspect to be taken into account when analysing the purpose provisions is the context in which was decided to establish the organisation. Most of the national market regulators were created, or their statutory basis were re-defined, to meet new EU standards. European instruments may contain minimum requirements which have the effect of harmonising the statutory purposes and objectives of such agencies. This is of relevance, at least, to agencies in the communication and energy sector49, but also the equality bodies. For example, Directive 2002/21 requires the national regulatory agencies in the communication sector to be: […] legally distinct from and functionally independent of Legal Approaches of Purposes: the Case of Independent Agencies all organisations providing electronic communications networks […]. In practice, this resulted in independent agencies, because most Member States are in some active on the communication market. The Directive species in Article 8 in great detail all the ‘policy objectives’, interests to serve and principles to apply. 46 Raad van State [Council of State]. Voorlichting overeenkomstig artikel 18, tweede lid, van de Wet op de Raad van State inzake Europese regelgevende agentschappen. (no.W02.05.0429/II/A). Den Haag: 21 February 2006. available in the Official Reports of the Upper House 2005/2006, 22 112 V. An English translation of this report of the Council of State will be ready in spring 2007. 47 Protocol on the Application of the Principles of Subsidiarity and Proportionality of 10 October 1997. OJ 1997 C340. 48 Now: 5 USC 500 and further. 49 Napolitano G. The regulation of utilities in Italy and its progressive Europeanisation, in: Della Cananea G. (ed). European Regulatory Agencies. Paris: Editions Rive Droit (2005), p111. And Part Two Framework Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services of 7 March 2002. 21
  • 22. The minimum requirements to the equality bodies are of a more limited nature. Directive 2000/43 demands equality bodies to be established, and mentions three tasks that should be carry out by them at the least.50 Interpretive spectrum of ‘purpose’ Up till this point, the word ‘purpose’ was used for a very heterogeneous concept.51 A ‘purpose’ of an organisation can be defined in varies ways. For a comparison between different legal systems, it is useful to be aware of the broad spectrum of meanings that the concept has. Herein, three different categories are distinguished: objectives, functions and tasks. At one side of the spectrum, the purpose can be defined as the political intention behind the legal instrument. Here, the purpose represents the aggregate of an envisaged change in society and the outcome of the balance of involved interests. Purposes are formulated as very broad objectives or goals, of an open nature. In some instruments, this is made more explicit by enumerating the particular (group) interests the organisation is supposed to serve (‘protection of consumers’). Often, the desired societal situation to which the organisation is to strive, or maintain, is formulated in subjective terms (‘safe, quick and orderly flow of air traffic’). On the one hand, these are the criteria to which the effectiveness of the organisation can be judged. On the other hand, the open nature of such terms makes them not directly objectively measurable. Of a more neutral and comprehensive nature becomes the purpose when it is defined as the ‘function’ which the organisation is to fulfil.52 This can be stated as an overall tag for the activities which the organisation is to perform (‘render aviation services’), or summarise the constitutional position or role of the organisation (‘implement policies related to…’ or ‘participate in the drafting of regulations and enforce the application thereof’). Part of the description of the role vis-á-vis other institutions is also the labelling of the organisation as independent (‘not to be regarded as agent or servant of the Crown’), classifying it (‘body of the Community’), and attributing legal personality. Especially with regards to independence, one might expect this to be written down explicitly, since it is one of the most common reasons for the process of placing power at ‘arm’s length’ of government. Legal Approaches of Purposes: the Case of Independent Agencies General objectives can be worked out into more focussed tasks. These can be formulated as concrete activities, or descriptions of the desired products. Often a provision is included that other laws may attribute new tasks. In many cases, the legislators chose to not define any substantial tasks of an organisation in the organic 50 Council Directive 2000/43/EC implementing the principle of equal treatment between persons irrespective of racial or ethnic origin of 29 June 2000. 51 Whereas it is impossible to give absolute definitions of words, the origin of a word may help to understand the nuances, American Heritage Dictionary (1992): objective – obicere [Latin]: to put before, ob: before, toward + iacere: to throw purpose – purposer [Anglo-Norman]: intend – pur/pro [Latin]: for + posen [Middle English]: place function – fungi [Latin]: to perform, execute, discharge duty – dueté [Anglo-French]: indebtness, obligation – deu [Old French]: due, owe – debere [Latin]: to owe. task – taske [Middle English]: imposed work, tax – taxare [Latin]: touch, reproach 52 In the words of S. Cassese: The activity seen in its ´macro´ aspects, in its global normative order, while the activity seen in its ‘micro’ terms consists of procedures and acts. Quoted in: Chiti E. The Part Two Emergence of a Community Administration: the Case of European Agencies, in: 37 Common Market Law Review 2 (2000), p312. 22
  • 23. law, but in regulate that topic in a separate law. This practice can be found in particular with the agencies established as private law persons, which are established by deed of foundation, but derive their tasks from statute law (e.g. the Dutch AFM, Mondriaan Stichting and the British Arts Council).53 Finally, and as most detailed elaboration of the concept of purposes, there are the attributed competences to an organisation. Even though the legality principle also applies to the earlier mentioned broader concepts of purpose (see page 10, supra), in practice most attention goes out to the concrete exercise of competences. These are the exact antonyms of the open and endorsing provisions on purpose, in the sense that they are closed and of a limiting nature. The provisions related to competences contain restrictions to the direct exercise of public powers in individual cases. These restrictions may consist of more detailed purposes for which the powers are to be exercised. For reasons of space and time, no further attention will be given to the functions of purpose provisions on the level of competences. Interesting is the mutual relation between the two sides of the spectrum. On the one hand, tasks may be derived from the general objectives and functions on the basis of ‘functional necessity’ or ‘implied powers’. These principles may be laid down in law54 or in case law.55 In the other direction, when no general objectives are formulated, the agency will develop its own policy objectives for the employment of the tasks and competences. This issue will be dealt with in greater detail infra. Independent agencies in context Netherlands Legislative context Public law legal persons need to be established by or pursuant to statute law under Dutch law (Article 2:1 Civil Code). All Dutch independent public agencies have an explicit statutory basis. However, two of the six analysed agencies are private law entities. Both the OPTA (communication) and the Mondriaan Stichting (art) are private law foundations, founded by a notarial deed containing its constituent articles. Also in these two instances, the establishment of the foundations is explicitly Legal Approaches of Purposes: the Case of Independent Agencies endorsed by statutory law. This is a difference with the use of charities in the UK as independent agencies. There, the Arts Council and British Council – both charities – are not stipulated by law. Curious is that the status of independent public agency in the Netherlands not per se relates to legal personality. The equal treatment commission (CGB) does not have legal personality. In a way, this is the same situation as with most agencies in France. It remains somewhat curious, because the attribution of legal personality is so strongly related to the raison d’être of independent agencies: being a separate entity with an own mask, as Runciman would say. It is even more curious, when the 53 See for an in-depth research into the use of private law foundations and associations by the Dutch State: Schroten K. Op.cit. n17, pp93-4 and 145. 54 For example: 47 USC 154(i) regulates for the FCC (communication market): ‘The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent Part Two with this chapter, as may be necessary in the execution of its functions.’ 55 For example: ECJ. ERTA. Judgment of 31 March 1971. C-22/70, paras14-23. 23
  • 24. right to initiate legal proceedings is taken into account, which is almost as good as recognising the CGB as an actor in law.56 Statute law in the Netherlands is characterised by its brevity and simplicity. Neither reasons, nor policy considerations of the legislator are normally included in the law. The government issues ‘Instructions for Regulation’ directed at all government officials, which reflect – at least in part – general principles applicable to law-making. The Instructions mention simplicity (Instruction 10) and brevity (Instruction 52) explicitly. The Instructions make clear that intentions and objectives of the legislator should be placed in the official explanatory memorandum to the act (Instruction 212). Clarity over the purpose of an act is seen as part of the general principles of good legislation. They are appreciated as of ‘tremendous importance’.57 Naturally, the legislative history does not form part of the legally binding text. However, in practice the explanatory memorandum and other records from the legislation process do have a large influence on the interpretation of the act, because of the use of teleological interpretation in courts. Clear visible differences that flow from the choice for simplicity are that Dutch statutes do not contain article headings and the preambles can hardly be said to give any explanation on possible intentions of the legislator. In relation to tasks, there are specific Instructions on the definition of tasks in case of the creation of an independent public agency. The explanation of Instruction 124g states: ‘Independent public agencies have a closed house holding. They exercise no tasks, irregardless whether these are main tasks or of an ancillary nature, without attribution by or pursuant to statutory law, and therefore they may not decide autonomously to pick up new tasks.’58 Nevertheless the framework of applicable legislative principles and internal administrative instructions, the Dutch situation has been criticised often on grounds for the great deal of confusion that exists over the tasks of the agencies. It is unclear to which extent the agencies may take up new tasks that do not qualify as ‘public tasks’ (according to the so-called ‘Silicose case law’).59 Competences are too easily deducted from tasks.60 There is confusion over the concurrent exercise of Legal Approaches of Purposes: the Case of Independent Agencies commercial and public activities. Tasks and competences are obscurely distributed. And the political field does not comprehend to what extend the agencies are autonomous and if/how they may steer on their objectives.61 56 See, supra, p7. The difference is that such proceedings would now be initiated in the name of the Dutch State. Similar theoretical difficulties arise with regards to the French agencies. 57 Vlies van der I.C. Handboek Wetgeving. Zwolle: Tjeenk Willink (2nd ed, 1991), p150. 58 Translation by author. ‘Zelfstandige bestuursorganen hebben een gesloten huishouding. Zij verrichten als bestuursorgaan geen taken, ongeacht of dit nu hoofd- of neventaken zijn, die niet bij of krachtens de wet aan hen zijn opgedragen en kunnen derhalve niet zelf bepalen of zij nieuwe bestuurstaken gaan verrichten.’ 59 Boxum J.L. Algemene wetgeving voor zelfstandige bestuurslichamen. Deventer: Kluwer (1997), p286. 60 Zwart T. and Verhey L. (eds.), Agencies in European and Comparative Law. Antwerp: Intersentia Part Two (2003), p95. 61 Kohnstamm Commission. Op.cit. n13, supra, pp25-7. 24
  • 25. In response to this, and other, criticism, a new law is enacted that sets a framework for the independent public agencies.62 This new framework law contains organisational and procedural arrangements that apply to independent agencies that are endowed with ‘public authority’. It does not set any requirements in relation to the adoption, content or form of the provisions on function, purpose and task of independent agencies. Indirectly, the ‘public authority’ criterion encompasses some what of a standard in relation to the description of ‘tasks’. In case law the concept of ‘public authority’ was explained as the attribution of a certain public task and the necessary competences. However, contrary to the specificity requirement that was laid down in the Instructions, the ‘public authority’ criterion does not require that ‘public tasks’ have an explicit statutory basis.63 This is the Dutch version of the ‘implied powers’ doctrine. In a lawsuit against the communication authority OPTA, the issue of the statutory basis of their activities was touched upon. The OPTA had released information to the public, in which it was claimed that competitors of plaintiff were up to €100 cheaper. Such public information activities were not explicitly described in the founding statute of OPTA. The court ruled simply that the activity was not ‘forbidden’, thereby implicitly following the ‘implied powers’ doctrine and ignoring the above-mentioned Instruction 124g.64 Clearly, the internal administrative nature of the Instructions prevented here their invocation before courts of law. In line with the current Instructions, the new framework law will introduce the requirement to include a ‘negligence of task’ provision in organic acts (Article 23). Currently, only one of the compared agencies, the safety investigation board (OvV), has such a provision. It empowers the Minister to take necessary measures if the agency severely neglects its task. However, the law does not specify on which level the dysfunctioning of the agency should be measured: by its overall function, or by each particular task. The former seems more logical since it concerns here a far- reaching and ultimate exception to the independence of the agency. The criteria for concluding to overall dysfunctioning might be problematic, since functions are often described neutrally without qualifying terms or mentioning interests. Content of purpose provisions The founding documents of Dutch agencies contain sometimes a description of the Legal Approaches of Purposes: the Case of Independent Agencies function that the agency is to fulfil by stating briefly its main activity. The LNVL (aviation) is established for ‘air traffic services’, the OvV (safety) is to ‘investigate and establish the causes of incidents, and if necessary to make recommendations’, the AFM (financial market) is to ‘supervise conduct on the financial markets and decide on admission’. For the equal treatment commission, no similar general description of its function is provided by law. Independence is in most cases not separately affirmed in so many words. ‘OPTA’ is an abbreviation of Independent Post and Telecommunications Authority. For the OvV 62 Kaderwet Zelfstandige Bestuursorganen [Framework Law Independent Adminstrative Agencies], Official Report of the Lower House 2001/2002, 27 426, no. 276. 63 Simon H.J. Aantekening 1 bij artikel 1:1 lid 1 AWB, in: Koeman N.S.J. Handboek Algemene Wet Bestuursrecht. Deventer: Kluwer (1997). ABRS. Stichting Silicose Oud-Mijnwerkers. Judgment of 30 November 1995. Jurisprudentie Bestuursrecht 1995/337. Part Two 64 Court of Appeals of the Hague. KPN vs. OPTA. Judgment of 14 april 2005. Jurisprudentie Aansprakelijkheid 2005/46, para18. 25
  • 26. (safety), its independence is made explicit in the preamble. In the founding acts of the two agencies, this independence is only made tangible where it is provided that the members of the boards vote without mandate or instructions. For the AFM (financial markets) and LVNL (aviation) similar provisions exist, but without using the word ‘independent’ anywhere in their founding act. Purposes in terms of objectives of the legislator are mentioned, most times with one or two subjective criteria. The LNVL is supposed to strive for ‘safe, quick and orderly flow of air traffic’, the OvV has the ‘exclusive aim of preventing future incidents or limiting the consequences thereof’, the AFM is aimed at ‘orderly and transparent market processes [etc]’. Again, for the equal treatment commission no objectives of that nature are formulated. Remarkable is that in several instruments, the words ‘aim’ and ‘task’ are used as if they have an identical meaning. For example, if the deed of foundation of the AFM (financial markets), its function is described as its ‘purpose and task’. Subsequently, the next subsection describes its purpose under ‘aimed at’. The private law entities have a dual basis in respect of their purposes: the statute, which foresees its establishment and arranges its administrative powers, and the deed of foundation, which is legally required to describe its purposes. For example, the Minister of Culture is authorised by the Cultural Policy Act (Article 9) to establish foundations for purpose of ‘improving the maintenance, development, widening of expressions of art’. Subsequently, the articles of the Mondriaan Stichting (arts) prescribe the aim of ‘improving visual arts en design and advancement of the quality of museum functions and activities.’ The regulation of concrete activities is rather diverse in the Netherlands. For the LVNL is a shortlist provided of the actual activities that the agency is to undertake. The list defines services and products that the LVNL is to make available. On the contrary, the law on the CGB (equality) has a very generic description, only mentioning that it will issue ‘opinions’. The public education and consultation on draft legislation activities are not regulated by law. The law that establishes OPTA does not contain any substantial indication of its activities, other than enumerating the laws that regulate its tasks and powers. This resembles the legislative approach taken in the UK for OFCOM (communication market), which tasks are also entirely regulated Legal Approaches of Purposes: the Case of Independent Agencies in a separate statute. United Kingdom Legislative context The historical need for exactitude in UK legislation was already mentioned (see page 20 supra). Courts are not bound by and interested in the intentions of the legislation, and (may) disregard the legislative history. The political intentions are not a primary concern when statute law is interpreted. Governments try to influence the interpretation of law by the issue of interpretary letters. This practice may be proper and legal, but ‘there is no reason why a government should expect particular deference to be paid to its observations and entreaties.’65 Drafting is therefore done with extreme care and precise in all regards. This changed slowly in the last Part Two 65 Zander M. The Law-making Process. Cambridge: Cambridge University Press (6th ed, 2004), p8. 26
  • 27. decades, a more ‘liberal’ point of view on statutes is taken now and a more purposive approach develops.66 The desire to be exhaustive and regulate in detail, made British statutes long and inaccessible. Criticism as to the quality of legislation has been voiced for a long time in the UK. In 1975 the Renton report was published on how to bring legislation on a higher level. The report made a strong plea for spelling out the intention of the legislator, while not scarifying certainty for simplicity.67 Some writers say that a brief and clear statement on the purpose and object of the act is desirable, while others argue that no middle way exists between a mere political statement and a meaningful description of the purpose of an act.68 In fact, the debate is still ongoing. Besides the criticism on the length and accessibility, it has also been argued that the level of detail pinpoints agencies to particular interests too much. Agencies are focussed too much on sectional interests, more than the general public interest.69 This practice is in line with the idea that only the actor ‘State’, in a narrow sense, may pursue general interests, and that all actor legal persons in society have specific purposes (see page 7, supra). There exist no written constitutional requirements or general framework law on (executive) Non-Departmental Public Bodies (NDPB). However, the unwritten constitutional principles that apply to these public agencies are explained in guidance documents, issued by the Cabinet Office.70 According to these documents, a basis in statute law is not a condition sine qua non for the establishment on a NDBP. If the body spends more than £1.5 mln. per year, if departmental functions are to be exercised by the body, or if the body may regulate charges/render judgments, then a parliamentary act is required as basis. This does, apparently, not apply to the charities with NDBP-status that were established by the Queen. An example of this is the Arts Council, which spends over £600 mln. annually, but has no basis in statute law. The guidance documents state that the basic instruments ‘should define clearly the Public Body’s functions’ and ‘define the functions, aims and objectives’.71 It is stressed that the balance between independence and the ability of the Minister to fulfil its responsibilities to Parliament depends on the functions to be carried out. However, no further guidance is given on the level of detail on which functions, Legal Approaches of Purposes: the Case of Independent Agencies purposes and tasks need to be defined. Recently, the problem of the quality of regulation has become the subject of debate once more, with special attention to the NDPB’s. The Hampton Report, part of the initiative ‘Better Regulation’, identified causes of unnecessary administrative burdens. Prominent causes are the overlap of authority, unclarity over mandates and 66 Id., p195. 67 Greenberg D. The Nature of Legislative Intention and Its Implications for Legislative Drafting, in: 27 Statute Law Review 15, p26. 68 Zander M. Op.cit. n65, p126: Zander seems to be in favour of including an opening statement of object or purpose, but he cites Turnball and the Hansard Society as well (pp192-4) who are radically opposed to the inclusion of subjective purposes in the law. 69 Zwart T. and Verhey L. (eds.). Op.cit. n60, p30. 70 UK Cabinet Office. Public Bodies: A Guide for Departments (2006). Available at: Part Two www.civilservice.gov.uk. 71 Id., chap3, p8 and chap4, p2. 27
  • 28. regulatory creep.72 The reports calls for stricter adherence to the legal objectives of the agencies. At the same time, these legal objectives should be better formulated, because currently there is too much room for interpretation by the agencies, which leads to mission creep.73 Content of purpose provisions Related to the longer standing use of independent agencies, many of the current agencies had predecessors, or received new tasks in government reorganisations. The provisions on the functions of the agencies bear the marks of those institutional modifications: in many cases the provisions on the function of the organisation, are collections of directions to other pieces of legislation. Every newly assigned function to the agency is added to the list. This is the case for the OFCOM (communications market) and the Environment Agency. The functions of the Environment Agency are constructed as the aggregate of the functions of three former organisations (the National Rivers Authority and the waste regulation authorities), three inspectorates and several functions of the Secretary of State. OFCOM took over the functions of five predecessors, but has a comprehensive list of new functions as well. The remarkable thing about OFCOM is that its main functions are placed in another statute than its founding statute. The organisation was established one year before it got its main functions, which are placed in the statute which contains market regulations. The main functions of the CAA (aviation) are also defined in other statutes. The FSA (financial markets) had only one predecessor, which was a limited company. Therefore its founding statute does not contain such a composite of functions and can be seen as a relative ‘clean slate’. It describes the functions in terms of ‘making rules’, ‘issuing codes’, ‘giving general guidance’ and ‘determining a general policy and principles’. For the CEHR (equality) no general provision of its function is adopted, as in the case for the charity Arts Council. However, its functions are specified for each attention area separately. E.g. for ‘Equality and diversity’ the CEHR is ‘promotes understanding’, ‘enforces equality enactments’ and encourages good practice’. In the list of functions in the area of ‘Human Rights’ enforcement is not included. Legal Approaches of Purposes: the Case of Independent Agencies Legal personality is attributed to all independent agencies expressly, by way of designating them as body corporate. As is prescribed by the Cabinet Office, it is made explicit in the founding statutes of the agencies that they do not enjoy Crown status.74 The minimum standard clause is that they are ‘(a) not to be regarded as the servant or agent of the Crown, or (b) enjoy any status, immunity or privilege of the Crown.’ This practice designates all the compared agencies as formally independent and subject to regular court jurisdiction. For all of the compared independent agencies purposes are defined extensively in their founding statute, regardless of whether these statutes contain any a detailed description of the functions. The purposes go under the heading of ‘general objectives’ (CAA and FSA), ‘primary aim’ (Environment Agency) or ‘general duties’ 72 Hampton Ph. Reducing administrative burdens: effective inspection and enforcement. London: HM Treasury (2005), chap 4.15-4.18. Available at: www.dti.gov.uk. 73 Id. pp11 and 36. ‘Mission creep’ happens whenever any kind of organisation performs activities that Part Two go beyond its mandate. 74 UK Cabinet Office. Op.cit. n70, chap3 para2.7.1. 28
  • 29. (CEHR and OFCOM). In great detail and with the use of many subjective adjectives the provisions describe the desired changes in society. Specific groups are mentioned to which attention should go out. To mention a few of sweeping purposes: the CEHR shall encourage and promote a society in which ‘people’s ability to achieve their potential is not limited by prejudice or discrimination’. The OFCOM is ‘required to secure […] the optimal use of telegraphy’ and ‘the availability of a wide range of radio services’. The CAA is to ‘secure that British airlines satisfy all categories of public demand at the lowest charges consistent with a high standard of safety’. The CEHR and FSA have for each provision of one their functions, a specification of the purposes that should be pursued. The Environment Agency has the least extensive provision on its purposes. In fact, only one ‘primary aim’ is mentioned, ‘sustainable development’. The reason for this seems to be to give leeway to guidance from the Ministers; they ‘shall from time to time give guidance to the Agency on its objectives’. Subsequent paragraphs define in detail how this guidance will be given, and how it will be implemented. None of the founding documents contains a shortlist of activities that the independent agencies are to undertake. If concrete tasks are mentioned, this is either done per function (FSA and OFCOM), or per attention area (CEHR). Noteworthy is the use of the words ‘in particular’, indicating that the tasks to be carried out for the fulfilment of a certain function are not listed exhaustively. For example, for the purpose of public awareness, the tasks of FSA include ‘in particular promoting awareness of benefits and risks of investments’, without mentioning any other tasks. United States Legislative context The era of the New Deal in the 1930’s, can be regarded as the time in which the development of independent agencies in the US got into a rush. Agencies like the SEC (financial markets) and FAA (aviation) have their roots in that period of time. 75 The era of the New Deal was during the heydays of legal realism in the US. Legal realism promotes an instrumental view on law, law is used in pragmatic way for social engineering. It does not have any goals in itself, and is not supposed to contain any intrinsic values or objectives.76 However, since law is regarded as strictly Legal Approaches of Purposes: the Case of Independent Agencies subordinate to politics, the goals are formulated there. In the context of laws that establish agencies, this approach results in a continuous dialogue about the goals between the independent agencies and the political field. Over time, a detailed framework of legislation has arisen which defines the checks and balances- mechanisms in place between the independent agencies and political field. Even though the formation of independent agencies is a very pragmatic solution to complicated problems in society, the legislative framework balances between this pragmatism and the essential postulate of legal realism: the subordination of the agencies to politics. The Acts of Congress which establish agencies contain only few provisions on their purposes, and tasks and functions are hardly determined. The agency itself elaborates its purposes in a further description of its functions, plans, and rules. Part Two 75 Zwart T. and Verhey L. (eds.). Op.cit. n60, p6. 76 Taekema S. Understanding Dutch Law. The Hague: Boom (2004), p122. 29
  • 30. Congress, more than the President, is involved at many stages in this process of elaboration of the general purposes into plans and rules: - According to the Administrative Procedure Act, the agencies must publish in the Federal Code of Regulations their rules and statements of ‘general course’ and policy.77 For some agencies, no provisions on purposes and functions is included in the founding Act of Congress at all; this is left to the agencies themselves, which publish these after approval in the Federal Code of Regulations.78 - Due to the Congressional Review Act, independent agencies are required to put every proposed rule before Congress.79 - In accordance with the Government Performance and Results Act, the agencies submit 3-year working programs to the President and Congress, which are under annual evaluation.80 On the basis of that last Results Act, Congress holds regular oversight hearings. Agency directors are invited to give testimony over their programs, or even the general functioning of their agency. For practical reasons, it is the case that oversight exercised by Congress focuses more on the specific programs, than on the general fulfilment of the statutory mandate.81 Moreover, the agencies possess genuine discretion with regards to their statutory purposes: they determine their own functions. The agencies are left the prerogative to interpret their mandate as they deem right and is reasonable.82 Having the legislative prerogative, Congress has the ultimate power to intervene in the operations of the independent agencies by changing their mandate. Congress may limit or work out in greater detail the statutory mandate. This is what happened is the case of the earlier-mentioned Atomic Energy Commission. Congress was not pleased by the way this independent agency had its promotional activities influence its regulatory purposes, and it decided to split up the agency. In a similar situation, Congress changed the statutory purposes of the Federal Aviation Authority (see page 16, supra). If Congress or President disagrees with the purposes, or the execution of the plans, they may – in co-operation with each other – cut the budget of the independent agency. Legal Approaches of Purposes: the Case of Independent Agencies Apart from management through budget, the President has also the right to appoint the agency directors. But, agency directors may not be removed because of the agency’s policy. Again, the interpretation of the statutory purposes is left to the discretion of the agency. The independence of the agency directors is protected by a limitative list of grounds of removal from office.83 77 5 USC 552 (a)(1)(a) A and D. 78 For example, the NTSB (safety) 49 CFR 800.3 and the EPA (environment) 40 CFR 1.1. 79 5 USC 801. 80 The 3-year plans are called ‘strategic plans’ (5 USC 306) and (31 USC 1115) the annual working plans are called ‘performance plans’ (31 USC 1115). 81 See for two good example of congressional oversight hearings on agencies as such: on the FCC (communication market): www.senate.gov/~commerce/hearings/0526pow.pdf, or on the Commission for Civil Rights: http://judiciary.house.gov/Oversight.aspx?ID=115. 82 Supreme Court. Chevron vs. Natural Resources Defence Council. Judgment of 25 June 1984, 467 US 837. Mensbrugghe van der F. The danger of excessive delegations to independent agencies: the Part Two example of the U.SA. in: Cananea (ed.) Op.cit. n49, p130-2. 83 Supreme Court. Humphrey’s Executor. Judgment of 27 May 1935. 295 US 602. 30
  • 31. Somewhat comparable to the right of Congress to change the statutory basis of the agencies, the President may submit Reorganisation Plans to Congress.84 The power to propose Reorganization Plans is at variance with the principle that Congress is the sole legislator. Provision was made for the Reorganization Plans to give the President more influence on the structure of government, being the head of the executive. It is a relatively flexible instrument to adapt the objectives and performance of the agencies, which is frequently used by presidents. The President may reorganise the distribution of functions within the federal administration, including the independent agencies, through these plans.85 It can be concluded from the foregoing that the US agency system is characterised by a focus on procedures that facilitate a continuous dialogue with the politics on the purposes. This creates a direct and constant involvement in the strategic determination of purposes of the agencies. The statutory provisions on the purposes of the agencies as such are less important. The agencies are free to fill in how the purposes are met and which functions they will fulfil, but this freedom is compensated by detailed oversight mechanisms focused on programs and output.86 While this causes the purposes and programs of the agencies to be very dynamic and under political influence, the final determination of functions and role is left to the agencies to a higher degree than in the other studied jurisdictions. This different approach to functional independence of independent agencies has been set as an example for EU reforms by several authors.87 The prevalent attention to programs and purposes, more than to functions and tasks of independent agencies, both in terms of legislation and political involvement, is understandable in the light of the New Public Management movement. This movement asserts operating discretion for managers, results-based accountability and as few organisational requirements for agencies as possible.88 Content of purpose provisions As was already mentioned, supra, functions are only scarcely defined in the founding acts of congress. For none of the agencies, but the EOCC (equality), functions are defined in the founding act in general terms. However, detailed provisions on the functions are drafted by the agencies in the secondary legislation in the Code of Regulations. Legal Approaches of Purposes: the Case of Independent Agencies For the NTSB (transportation safety), no provisions on function or even purposes are given in the act of Congress, only in the Code of Federal Regulations it is stipulated that: ‘The Board is responsible for the investigation, determination of facts, conditions, and circumstances and the cause or probable cause or causes of […]’. 84 The right of the President to submit Reorganization Plans is laid down in 5 USC 901 et seq. (chap9). 85 See, for example, Reorganization Plan 3 of 1970, which changed the functions of the EPA (environment) dramatically. 42 USC 4321. 86 Majone described this as part of the difference between procedural and substantive legitimacy, and sets it as an example for the European Union. Majone G. Europe’s ‘Democratic Deficit’: The Question of Standards, in: 4 European Law of Law 1 (1998), pp18-22. 87 Geradin D. The Development of European Regulatory Agencies: What the EU Should Learn from American Experience, in: 11 Columbia Journal of European Law 1 (2004). p43. Also: Majone G. Op.cit. n86 and Lindseth P. Democratic Legitimacy and the Administrative Character of Supranationalism: The Example of the European Community, in: 99 Columbia Law Review (1999), p628-738. 88 OECD Distributed Public Governance: Agencies Authorities and Other Autonomous Bodies, Part Two Preliminary Draft. (2001). pp32, 185 and 196-7. 31
  • 32. The EOCC is to ‘enforce’ civil rights in federal employment situations, and ‘evaluate federal programs’ in this area. In congressional acts, use is often made of so-called ‘statements of purpose’ or ‘legislative findings’. These are part of the binding body of the act, other than preambles. In the case of the EPA (environment), SEC (financial markets) and FCC (communication), the aims for the organisations is defined in open and general terms in these statements. For example, the EPA is ‘to declare a national policy which will encourage productive and enjoyable harmony between man and his environment [etc].’ The SEC has no statutory functions or tasks, but its purpose is defined extensively, and includes ‘protection of interstate commerce’, ‘make more effective the national banking system’, ‘perfect the mechanisms of the national market system for securities’. The National Foundation on the Arts and Humanities is regulated in a chapter of the United Codes Code which has a separate ‘declaration of findings and purposes’. In twelve sweeping statements, Congress expresses its desires for society. The National Foundation is required to pursue these purposes. Remarkable is the fact that the NTSB and EOCC have no general purposes defined at all in their founding acts. France Legislative context France has since long had an array of separate legal persons attached to the State. These public establishments (‘établissements publics administratifs’) deliver public services and implement government policies. Schools, universities, hospitals, electricity and public transport services are delivered through these independent organisations. These legal persons were established primarily for reasons of efficiency. The experience with autonomous agencies, established for reasons of independence from government on the contrary, is of more recent date.89 While the creation of the public establishments was envisaged in the Constitution (Article 34), this is not the case for the independent agencies. It has been proposed in parliament to adopt a constitutional amendment to give a constitutional basis to the creation of independent agencies.90 Legal Approaches of Purposes: the Case of Independent Agencies The independent administrative agencies create policy and exercise public authority. However, until recently none of these agencies possessed legal personality, and all were part of the legal entity ‘the State’. Whereas the Minister cannot be held accountable for the acts of the agencies (since they are not subordinated), his responsibility mainly concerns contesting decisions of the agencies in individual cases. This results in the awkward situation that a Minister needs the judiciary to steer within its own department. 89 Id. p45. 90 Gélard M.P. / Office Parlementaire d’Évaluation de la Législation. Rapport sur les autorités administratives indépendantes. Tome I : Rapport. Doc. Parlementaire no. 3166, 15 June 2005. Recommendation no. 4: Affirmer dans la Constitution, ou dans une loi organique complétant Part Two l'article 34 de la Constitution, la compétence du législateur pour fixer les règles concernant la création et l'organisation des autorités administratives et publiques indépendantes. 32
  • 33. ‘L´exercise de ce recours est particulierèment remarquable en ce qu´il est le seul moyen pour les ministres concernés d’obtenir l‘annulation des décisions en cause.’91 The reluctance in the creation of autonomous agencies outside the State, with regulatory, semi-judicial or advisory powers, must be seen in the light of the French constitution. Delegation in general is a peculiar item under the French constitution. The constitutional provisions of the separation of powers are protected by the Conseil Constitutionnel in a strict manner. The French parliament, for example, has been very restrictive in giving away its legislative powers to the government. Whereas delegation of rule-making powers from the Assembly to the Government has already been an old issue of debate in France92, subsequent delegation of rule-making powers from the Government to autonomous organisations has only been accepted by the Conseil Constitutionnel under strict conditions of specificity as regards the content and field of application.93 Article 20 of the Constitution prevents the delegation of policy initiative to organisations outside the central government. It reads: ‘Le Gouvernement détermine et conduit la politique de la Nation. Il dispose de l'administration […]’. The Conseil Constitutionnel accepted the existence of independent organisations within the Government, under the implicit condition of preserved responsibility of the Ministers for the actions of the organisations.94 It seems that there are fewer constitutional problems with independent agencies, when these are created in direct implementation of EU legislation. Under Title XV, the French parliament transferred the necessary powers to establish a European economic union. This includes the possibility that EC legislation deviates from other provisions of the French constitution – including the national distribution of powers. ARCEP (communication) is an example of an agency created on the basis of EC requirements, in contradiction with the traditional constitutional distribution of powers.95 Only very recently, a change in the approach to the personality of the agencies can be distinguished. The first agency to have received legal personality was the AMF (financial markets). Now, there are four independent agencies that have personnalité morale.96 This shift towards formal independence signifies awareness of the untenable position to attribute all acts of the independent agencies to the State. Legal Approaches of Purposes: the Case of Independent Agencies However, according to Parliament, legal personality should only be attributed if strictly necessary for co-operation with other entities or the imposition of financial obligations on private parties.97 91 R. Chapus, quoted in: Zwart T. and Verhey L. (eds.). Op.cit. n60, p49. 92 Lindseth P. The Paradox of Parliamentary Supremacy: Delegation, Democracy, and Dictatorship in Germany and France, 1920s-1950s, in: 113 Yale Law Journal 1341 (2004), p1372-82. 93 Counseil d’Etat. Op.cit. n42, p295. 94 Conseil Constitutionnel. Loi relative au statut de la Banque de France et à l'activité et au contrôle des établissements de crédit. Decision 93-324 DC of 3 August 1993. Recueil p208. 95 See p21, supra. 96 Besides the AMF: the HAS (health), the AFLD (anti-doping) and the ACAM (insurance). These agencies are designated as autorité publique indépendante, while the other independent agencies are classified as autorité (administrative) indépendante. 97 Gélard M.P. / Office Parlementaire d’Évaluation de la Législation. Op.cit. n90. Recommendation 5: ‘Limiter le développement des autorités publiques indépendantes dotées de la personnalité morale Part Two aux seules instances dont l'activité se prête à la perception de taxes ou de droits et soumettre l'adoption de ce statut à une évaluation approfondie de ses avantages et inconvénients.’ 33
  • 34. The hesitancy over the presence and content of the concept of ‘independent authority’ is certainly sustained by the absence of general legislation referring to these organisations. Since the lion’s share of the independent agencies is still part of the State, all the independent agencies are subject to general public law legislation, no special legislation on financial relations or competences of the independent agencies exists. Recently, a radical new financial framework has been implemented, called after the organic law ‘LOLF’, with the dual aim of budget reform and State modernisation.98 The core of this new framework is that budgeting is based now on ‘missions’, defined horizontally throughout the government, irregardless of the involved departments and agencies. These broad ‘missions’ are elaborated into programmes and actual activities, on the basis of which the budget allocation takes place. Evaluation of the performance of the government and its agencies will also take place on the basis of these ‘missions’. Since 2006 is the first year in which this new system is implemented, it remains unclear how these government-wide missions will affect the goal-setting of the agencies. It has been proposed to create one ‘mission’ for all the independent agencies together, under the heading of Regulation and protection of liberties, which would comprise of two programmes: Economic regulation and Defence and protection of liberties. This proposal follows the general functional categorisation of the French independent agencies, namely economic regulators and protectors of fundamental rights and freedoms. The agencies with separate legal personality, do not fall under the LOLF regime.99 As mentioned before, there exists no general framework for the independent agencies in France, and only a few constitutional principles, pronounced by the Conseil d’Etat and Conseil Constitutionnel. The recent study of Parliament into the independent agencies recommends a framework law to be drafted.100 This might give a legal basis to, for example, the practice to call the présidents of the agencies before parliamentary commissions, a practice similar to the oversight hearings with agency directors that take place in the UK and US. In respect of the inclusion of the intentions of the legislator in enactments, it suffices Legal Approaches of Purposes: the Case of Independent Agencies to notice the following. With the acceptance of limited rule-making power of the Government, by Parliament, legislation is now embedded in a context of legislative history and ministerial answers or interpretary letters. In the process of statutory interpretation, courts and administration can take the purposes of legislation into account in a similar vein as in the Netherlands.101 This, combined with the legislative postulates of clarity and brevity, inherited from Napoleon, makes that French law has similar characteristics as Dutch law: relatively few subjective terms, no substantive information in preambles and limited descriptions of purposes. See on the relevance of legal personality of the French independent agencies for private parties: Frison-Roche M.A. in: Dam van C.C. Aansprakelijkheid van Toezichthouders Deel II Achtergrondstudies. British Institute of International and Comparative Law/WODC (2006), p274. Available at: http://www.biicl.org/liability_of_regulators/. 98 Constitutional Bylaw (LOLF) No. 2001-692 of 1 August 2001 on budget acts. Article 7. See: www.minefi.gouv.fr/lolf/ for information and the law [in English]. 99 Id. Article 34. 100 Gélard M.P. / Office Parlementaire d’Évaluation de la Législation. Op.cit. n90. Part Two 101 Plavinet J.P. Introduction Generale au Droit. (2005) Available at: www.inapg.fr/spip/IMG/pdf/cours- droit.pdf. 34
  • 35. Content of purpose provisions Function descriptions are included for the AMF (financial market) and the ARCEP (communication). The AMF is the common successor for several pre-existing agencies. Where in the UK the re-location of functions in one new agency led to composite provisions, listing all the functions of the previous agencies102, here on the contrary, is opted for an autonomous description of the function. Where the wordings of the function provision of the AMF are rather ambiguous of nature, the provision for ARCEP offers more clarity. For HALDE (equal treatment), no function provision is included. The AMF ‘deals with the protection of savings invested in financial instruments’, ‘the information provided to investors, and the proper functioning of the financial instruments markets.’ ARCEP ‘shall participate in the drafting of enactments and regulations governing the telecommunications sector and shall enforce the application thereof.’ The sanctioning competences that are attached to ARCEP’s enforcement function were contested before the Conseil Constitutionnel, on grounds of an alleged contradiction with the constitutional distribution of functions. However, the Conseil circumvented this argument by stating that the sanctions were merely administrative of nature, and not punitive.103 In fact, the enforcement function is not independently executed at all, but shared by the Government.104 On the one hand, the decision shows the close relation between the general function and the competences: had the Conseil denied the competences, then this function would be an empty box. On the other hand, the provision provides an example of the limited value of function descriptions, when the function is in fact not performed independently at all: perhaps its actual function would be reflected more precisely if the words participate in were included. The lack of a provision that summarises the constitutional role of HALDE seems a genuine omission, in particular after the mandate of HALDE was extended on essential points. Previously, HALDE only assisted victims of discrimination in different proceedings and offered advise to the State and prosecution authorities. Now, the agency also possess competences to take cases to court and arrange out- of-court settlements. The identity of the agency has changed in its essence by the attribution of these competences, and a function provision could communicate the envisaged role more clearly. Legal Approaches of Purposes: the Case of Independent Agencies For the HALDE and AMF no purposes are described. Only the law establishing ARCEP contains general purposes. These purposes are not only simply the overall objectives to which ARCEP should strive, but they condense the shared objectives of both the Minister and ARCEP. The shared description of objectives stresses the shared responsibility, which seems unsurprising in the light of the lacking legal independence of ARCEP and the close government involvement in some of its tasks. It reflects that ARCEP is in fact part of the government, albeit with a special status. For example, together and ‘according to their respective competences’ the Minister and ARCEP are responsible for ‘effective and fair competition’ and ‘job development, enhanced performance and innovation in the telecommunications sector’. 102 Compare the function provisions of the British agencies CAA, CEHR and Environment Agency. 103 Conseil Constitutionnel. Loi de réglementation des télécommunications. Decision 96-378 DC of 23 Part Two July 1996. Recueil p99. 104 Lassere, B. Op.cit. n15, under ‘Competences’. 35
  • 36. No general lists of tasks are included for any of the independent agencies. Nor any provisions on regular evaluation can be found in the laws establishing these three agencies. It may be concluded tentatively that French legislation is even more compact in terms of the provisions on purposes than Dutch law. Whereas the phenomenon of independent agencies is still very much in development, perhaps more attention will be given to this topic for newly established agencies. In that respect, it is significant that for ARCEP (established in 2005) a rather detailed statement of purposes is included. However, as long as the ties between the independent agencies and the political field are still very strong, the need for such provisions may perhaps be less strong. In support of that assumption, it must be said that neither in the earlier- mentioned report of the Conseil d’Etat, nor in the parliamentary report much dissatisfaction is reported in relation to the (interpretation of) the legal functions of the agencies. Some attention is given to overlapping mandates.105 But, for example, in the discussion on hearings with agency directors no call is made for more clear legal definitions of functions, objectives or tasks. 106 Apparently, the legal part of functions and purposes of the organisations is perfectly clear. Nonetheless and perhaps in contradiction with the foregoing, parliament did call for more concrete and specified performance objectives and measurable indicators, set by the agencies themselves.107 European Union Legislative context Delegation and decentralisation are amongst the more essential elements that shape the structure of the European Union (EU). Formerly, delegation took place mainly towards the Member States. However, from the early days, it was already clear that the establishment of agencies of some kind on the European level was a probable development.108 For the establishment of the European independent agencies are three concepts of relevance, which – together – make that the founding acts of agencies are relatively detailed on purposes, in comparison with the four studied countries. The concepts Legal Approaches of Purposes: the Case of Independent Agencies are subsidiarity, proportionality, implied powers, and delegation. The founding treaties do not provide an explicit basis for the establishment of independent agencies. Most often, the general enabling clause of 308 TEC has been used as a legal basis. There exists no general power to legislate, not even if the 105 Counseil d’Etat. Op.cit. n42, p341. 106 Gélard M.P. / Office Parlementaire d’Évaluation de la Législation. Op.cit. n90. Recommendation no. 6: Réaliser régulièrement, au sein des commissions compétentes, l'évaluation des AAI existantes afin d'envisager, le cas échéant, leur réorganisation. 107 Op.cit. n90. Recommendation no. 30: Inciter les AAI à définir des objectifs de performance et des indicateurs de résultat afin de permettre au Parlement de mieux contrôler leur activité. 108 Friedrich C.J. The New French Constitution. 72 Harvard Law Review 5 (1959), p832. ‘The question as to whether the Community will develop administrative agencies of its own or rely upon existing and Part Two future offices in the member states is left open: presumably the Swiss (and German) practice of delegated administration will be followed to some extent.’ 36
  • 37. purposes of the Treaty are served thereby.109 Article 308 TEC gives a general residual competence to legislate, but only if necessary so for the objectives of the Community. Those objectives are spelled out in Article 2 TEU. Therefore, in drafting a founding act of an agency based on 308 TEC, the drafters will ensure that purposes of the agency fall within the purposes given in Article 2 TEU. Due to the rules on principles of subsidiarity and proportionality, not only the above- mentioned legal basis must be made explicit in the founding act, in fact, all reasons for the establishment of European agencies must be mentioned. The EC Treaty itself prescribes in Article 253 that the instruments ‘shall state the reasons on which they are based’. According to the Protocol, annexed to the Treaty of Amsterdam, it must be clarified why the establishment of an agency is necessary (subsidiarity) and that the agency is no more powerful than necessary (see page 21 supra). For example, in the case of the Environment Agency, Article 1 refers explicitly to the objectives of the European Communities, as mentioned in its Treaty basis. Competence to establish agencies does not solely flow from the overall objectives of the Union through 308 TEC, also more specific objectives or tasks may be taken as a legal basis. The Court accepted (e.g.) Articles 80, 95, 175, 284 TEC as legal basis for agencies. The sort of reasoning that enables these general task-setting provisions for the EU to be used for the creation of agencies, is one of the previously mentioned ‘functional necessity’ or ‘implied powers’. This doctrine was accepted by the ECJ in the ERTA-case, and later the court summarised it as follows: ‘Where an article of the EEC Treaty […] confers a specific task upon the Commission, it must be accepted, if that provision is not to be rendered wholly ineffective, that it confers on the Commission necessarily and per se the powers which are indispensable to carry out that task.’110 However, if an agency is based on such an ‘implied power’, the act should clarify why the assigned tasks of agency are necessary for the achievement of the objectives of the Treaty. Apparently, this was not clear in the ENISA-regulation, which led to the earlier-mentioned ECJ judgment. The UK contested the creation of the agency, because the regulation did not establish clearly why the agency was necessary for the fulfilment of the chosen Treaty objective: harmonisation of national laws.111 Presumably, future acts that establish agencies, will be more explicit on the relation between the purpose of the agency and the Treaty basis. Legal Approaches of Purposes: the Case of Independent Agencies The last concept that endorses the adoption of provisions on purposes is the concept of delegation of competences. In theory, the ECJ judgment in the Meroni-case still sets the requirements to delegation to independent agencies. In that case the ECJ ruled, inter alia: ‘The consequences resulting from a delegation of powers are very different depending on whether it involves clearly defined executive powers the exercise of which can, therefore, be subject to strict review in the light of objective criteria determined by the delegating authority, or whether it involves a discretionary power, implying a wide margin of discretion which may, according to the use which is made of it, make possible the execution of actual 109 ECJ. ENISA-case: UK vs. Parliament and Council. Opinion of Advocate-General Kokott of 22 September 2005. C-217/04 ECR 2006 I-03771, para39-41. And: ECJ. Tobacco-case: Germany vs. Parliament and Council. Judgment of 5 October 2000. C-376/98 ECR 2000 I-8419, para83. 110 ECJ. Germany et.al. vs. Commission. Judgment of 9 July 1987, C-281/85, para28. Part Two 111 ECJ. ENISA-case. Op.cit. n109, see in particular footnote 30 in the Opinion of the Advocate- General. Also herein, p10. 37
  • 38. economic policy. […] a delegation of the second kind, since it replaces the choice of the delegator by the choices of the delegate, brings about an actual transfer of responsability. […] the delegation of powers granted to the Brussels agencies by Decision no 14/55 gives those agencies a degree of latitude which implies a wide margin of discretion and cannot be considered as compatible with the requirements of the Treaty.’112 It follows from this judgment that founding acts of agencies must clearly state which interests the organisation is to serve. A wide margin of discretion is not allowed under this ruling, which brings about the inclusion of a clear framework of functions and purposes in the founding act of an agency. Interesting is that a strict reading of Meroni would prevent the attribution of any tasks in which interests must be balanced. This appears not to be the case. Be it the case that where decisions must be taken in individual cases, the agencies operate indeed within a strict framework and hardly any balance of interests need to be made (e.g. OHIM). However, where it concerns regulatory and advisory powers on the contrary, several agencies are active in fields of potentially conflicting interests. For example, EMSA (maritime) is to take environmental and safety considerations into account, ERA (railways) serves interoperability and safety and EASA (aviation) serves both competition and safety.113 It is telling that Commission chairman Barroso complimented the agency directors for their role in the ‘better regulation initiative’: the agencies fulfil a substantive role not only in the implementation of legislation, but also in the development of policies and legislation.114 Obviously, the scope of Meroni is limited to decision-making powers in individual cases nowadays; the judgment hardly limits the involvement of agencies in regulatory or advisory functions anymore.115 Apart from the mentioned legal concepts that influence the pronunciation of purposes of agencies in the founding acts, the underlying reasons for establishment may stimulate clear purposes as well. Other than independence or expertise, the fact that an assigned tasks is given a higher profile, is an argument in itself for establishment of an agency.116 Some agencies were established in direct response to emergencies. In such cases, the founding act will have a strong bearing on the intentions of the legislator. For example, the EMSA (maritime safety) was established in response to the disaster with the oil tanker Erika.117 Obviously, the purpose of the organisation is Legal Approaches of Purposes: the Case of Independent Agencies strongly influenced by that event: it is to ensure ‘a high, uniform and effective level of maritime safety and prevention of pollution by ships.’ 112 ECJ. Meroni & Co. vs. High Authority. Judgment of 13 June 1958. C-9/56 ECR 1958 11, pp152-4. Italics by author. 113 Gerard L. An example of regulatory agency: Air and Maritime Transport, in: Cananea (ed.). Op.cit. n49, pp98-9. 114 Speech by M. Barroso, delivered 23 February 2006 in Brussels at a meeting with all EU agency directors. 115 Geradin, however, rightly points at the need to lift the Meroni regime for the agencies, so that their regulatory functions get a more transparent and firm basis. Geradin D. Op.cit. n87, p51-2. Interestingly, in the jurisdiction with the most extensive use of agencies, the US, the Surpreme Court upheld a non-delegation doctrine in respect of agencies that reminds of Meroni. The doctrine was departed from in late 1930’s. Noah L. Interpreting Enabling Acts: Misplaced metaphors in administrative law, in: 41 William and Mary Law Review 5 (2000), p1489. 116 http://europa.eu/agencies/community_agencies/history/index_en.htm. 117 Flinders M. Distributed Public Governance in the European Union. 11 Journal of European Public Part Two Policy 3 (2004), p523. He also mentions the BSE-crisis, leading to the establishment of EFSA (food safety). See also: http://europa.eu/scadplus/leg/en/lvb/l24230.htm. 38
  • 39. Apart from the Treaty and Protocol provisions on subsidiarity and proportionality, there are no written requirements in relation to the adoption or content of purposes of European agencies. There exist a ‘Joint Practical Guide’ containing guidelines for drafting EU legislation, similar to the ones in the UK and the Netherlands. As is common ground in the Netherlands and France, this guide advises to keep the acts as simple as possible. ‘Legislative acts should go straight to the point. Binding acts should lay down rules, […]. Anything else is superfluous: desires, intentions and declarations do not belong in the enacting terms of a binding act. There is a contradiction between ‘desirable’ and ‘binding’.’118 So, while on the one hand several legal concepts and the circumstances under which an agency is created, stimulate the enumeration of purposes in the founding act, on the other hand, there is a desire to keep the acts simple and clear. This dichotomy causes that extensive use is made of preambles, which contain the lion’s share of considerations related to functions and objectives. The length and content of the preambles are therefore of a fundamentally different nature than in the studied countries: they are necessary to meet legal and political requirements, inter alia related to the purposes. At the time of writing, a proposal for an inter-institutional agreement on independent agencies is pending.119 The Draft Agreement will only apply to independent agencies created after adoption of the Agreement. For the executive agencies (which are subordinate to the European Commission) such a framework is already in place.120 The Draft Agreement contains a limitative list of the functions that agencies may be entrusted with. This list includes the application of Community standards in individual cases, rendering assistance to the Commission, and the creation of networks of national authorities. Interesting is that every agency will have the function of collection, analysis and distribution of information in its area of activity, as must be made more specific in the founding act (Section 4). The generic function description of agencies and the attribution of one typical function to each and every agency have no equivalent in the framework laws in the Netherlands or US. The Draft Agreement takes the attribution of legal personality to the agencies as starting point, to ensure their autonomy in terms of effectiveness and credibility (Section 6). This is already common practice for all EU agencies, and differs in that Legal Approaches of Purposes: the Case of Independent Agencies respect from the approach in France and the Netherlands, where legal personality is not seen as precondition for an independent agency. Moreover, the Draft Agreement contains a provision on periodic evaluation, which shall be based inter alia on the ‘objectives, mandate and tasks’ of the agency (Section 27.2). Overall, the Draft Agreement seems to be in line with current practice on purpose provisions and will sustain the practice of adopting purpose provisions. On the points 118 Office for Official Publications of the European Communities. Joint Practical Guide of the European Parliament, the Council and the Commission for persons involved in the drafting of legislation with the European institutions. Luxemburg (2003), p38. Available at: http://europa.eu.int/eur- lex/lex/en/techleg/index.htm. 119 European Commission. Draft Interinstitutional Agreement on the operating framework for the European regulatory agencies. COM(2005) 59 final. Best accessible through PreLex. 120 There are three types of agencies on EU level: agencies with a separate treaty basis (e.g. Europol), independent agencies (which are studied herein), and executive agencies (which are placed outside the core organisation of the Commission, but remain fully under its control). Part Two Council Regulation 58/2003/EC of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes. 39
  • 40. analysed herein, and compared to the four studied countries, it takes a consistent, innovative and straight-forward approach to the agencies, which will help to understand their role. Some authors view certain institutions that have an explicit basis in the founding treaties of the EU, or related treaties, also as independent agencies of the EU.121 The European Central Bank, the European Investment Bank, European University Institute and Europol can be mentioned in this context. These types of European agencies, with a fundamentally different legal basis, will be ignored further herein. Content of purpose provisions The founding acts of the European agencies follow a consistent pattern. The regular structure is as follows: first an article with the establishment clause, which summarises the purposes of the organisation as well, subsequently the functions in relation to the Member States and the other EU bodies are summed up briefly. Then in the next article a list of tasks follows, which are elaborated in following articles. The last relevant article that is most times included, is included in the chapter on internal structure, and deals with the attribution of legal personality. The provisions on the function consist of a general labelling of the activities, together with the field of activities and sometimes a general description of the desired end- products. One element that comes back in every description is to ‘provide assistance to the Commission and the Member States’, in order to help them to fulfil their own function. Typical in that respect is one of the functions of the EMSA (maritime safety): ‘provide the Member States and the Commission with the technical and scientific assistance […], in order to help them to apply the Community legislation properly in the field of maritime safety […].’ The most common functions are provision of information, advise, expertise or statistics and rendering opinions. Deviations are the functions of ‘inspection and investigation’ of the EASA (aviation), ‘stimulate cooperation between public and private actors’ and assistance in the preparation of legislation (ENISA, communications). The functions of EASA are partially defined by simply directing to the rest of the instrument (‘take necessary measures within the powers conferred on it by this Regulation’) and the functions ascribed to the Member States by ‘applicable Legal Approaches of Purposes: the Case of Independent Agencies Conventions’ [sic]. In fact, amongst the other functions assigned to EASA are certification and rule-making. The way the objectives of the agencies are mentioned varies from one an other. For the EMSA and EASA regulations the underlying interests to be served are summarised in a few subjective terms. EMSA is to ensure inter alia ‘a high, uniform and effective level of maritime safety’ and ‘prevention of pollution’. EASA is to ensure ‘a high uniform level of civil aviation safety’, with as secondary topics inter alia ´a high level of environmental protection´ and ‘cost-efficiency in the regulatory process’. The founding act of the EEA (environment) and ENISA refers to the objectives of their legal basis in the Treaty. For the EEA this is done by plainly referring to the 121 Flinders M. Op.cit. n117, pp522 and 524. For an opposed view on this issue and a comparison between the agencies and treaty-based organisations, see: Zilioli C. and Selmayr M. The European Part Two Central Bank: An independent specialised organisation of community law. 37 Common Market Law Review 3 (2000), p608-12. 40
  • 41. Treaty: ‘environmental protection and improvement laid down by the Treaty’. The objective of ENISA had to be brought within the scope of harmonisation of the internal market, which delivers the following construction: It is established ‘for the purpose of ensuring a high and effective level of network and information security within the Community and in order to develop a culture of network and information security for the benefit of the citizens, consumers, enterprises and public sector organisations of the European Union, thus contributing to the smooth functioning of the internal market,’ For the EUMC no objectives with a bearing on society are formulated in the legally binding text. As stated above, in all cases legal personality is explicitly attributed. It must be assumed that only legal personality in terms of private law is meant here (the capacity to enter into contracts and be held liable in private law disputes). International legal personality (treaty capacity) is an unclear issue in respect of the agencies.122 Only in case of the EUMC this seems to be excluded, where the founding document arranges in Article 7.3 that agreements on behalf of the centre will be concluded by the Community. The issue is even more ambiguous for the two agencies Eurojust and the European Reconstruction Agency (for Kosovo). A recent evaluation of ERA reported it has international legal personality, entering into agreements with third states and international organisations.123 And Eurojust concludes co-operation agreements in its own name with third states, albeit only after approval of the Council. Apparently, all European agencies possess some characteristics of international legal personality, since each one of them has signed its own headquarters agreement.124 In three instances (ENISA, EASA and EMSA), the independent role of the agency is stressed by explicitly stating the independence of the (Executive) Director: ‘[He] shall be completely independent in the performance of his/her duties, […]’. One remarkable feature of the legislation on the European agencies, in comparison to the studied countries, is that they all hold a list of the tasks that the agency is to perform. In some cases the tasks in the list are further elaborated upon in subsequent articles, or further details follow on working methods, in other cases the Legal Approaches of Purposes: the Case of Independent Agencies list suffices (e.g. ENISA). Amendments in the objectives or functions of the agencies, always bring changes in the list of tasks as well, so that this remains up-to-date.125 122 See for an analysis of the international legal personality of the European Investment Bank (widely recognised) and the European Central Bank: Zilioli C. and Selmayr M. Op.cit. n121, pp625 and 640. Unclear is whether the reasoning of the ECJ applies to the European agencies as well, ECJ. Opinion of 26 April 1977. O-1/76 ECR 1977, 741: ‘[…] whenever Community law has created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective, the Community has authority to enter into the international commitments necessary for the attainment of that objective even in the absence of an express provision in that connexion.’ [Italics by author]. 123 Development Researcher’s Network Consortium. Evaluation of the Implementation of Council Regulation 2667/2000 on the European Agency for Reconstruction Synthesis Report Volume II. (2004), p47. Available at: ec.europa.eu/comm/europeaid/evaluation/reports/cards/951652_vol2.pdf. 124 For example, the headquarters agreement of EMSA: http://emsa.europa.eu/Docs/legis/protocol%20pt%20government%20and%20emsa.pdf. 125 See, for example, the addition of pollution response and port security to the EMSA regulation, containing both an amendment of the functions, and the task list. Council Regulation 724/2004/EC of Part Two 31 March 2004, amending Regulation (EC) No 1406/2002 establishing a European Maritime Safety Agency. 41
  • 42. The use of such lists is basically unknown to the studied countries. Frequently, the tasks of the national independent agencies is to be found in several separate instruments, and almost never a comprehensive list of duties figures in the founding statutes. Comparative syntheses After the brief comparison of the different jurisdictions some conclusions may be drawn on the topic of the adoption of purpose provisions in agency founding acts. With regards to the general function that the agency is to fulfil, inter alia vis-á-vis other institutions, there is roughly a distinction between the continent plus EU and the common law states. In the Netherlands, France and EU such provisions on functions are generally adopted, stating in a few words or sections the (constitutional) role the agency is to play. In the US and UK such provisions are either non-existent (US) or composed of references to numerous other instruments (UK). Objectives in terms of a desired improvement of society or interests to serve, are extensively recited in the founding acts of agencies in the common law states. Dutch and EU legislation touch only shortly upon it, while in France no objectives are mentioned at all (with the notable exception of the founding act of ARCEP). Legal personality is provided for each agency in the UK and EU. In the Netherlands and France this is not always the case. US legislation is silent on this point, even though all US agencies possess legal personality. The feature that the agency fulfils its role independently from government is made explicit only in the UK and for some of the EU agencies (ENISA, EASA and EMSA). In the US and France the agencies are linked to the government either through the system of checks and balances (US), or simply because they are still part of regular departments (France).126 Of course, in most cases tasks are formulated in the founding act of the agency. Exceptions can be found in cases where the founding act provides mere organic provisions on the (internal) structure of the organisation (e.g. NTSB, OPTA, OFCOM). The adoption of an article that lists the tasks of the agency comprehensively can only be found in EU context (and one Dutch exception: LVNL). Somewhat similar to that approach is the practice in the UK to group the tasks per attention area or function. Legal Approaches of Purposes: the Case of Independent Agencies Overall, it seems that the legislation in EU and the UK can be characterised as easily accessible and comprehensible, which makes the respective role of the independent agencies easy to understand. In both jurisdictions, legislation provides a clear framework of objectives which may help strong performance and effective oversight. US legislation is incomparable in that respect, due to the detailed and tailored structure of checks and balances and political influence. While the Dutch approach is consistently clear and brief, it tends to be somewhat non-descript in some cases (especially the act on the CGB, which mentions no objectives, hardly any functions, it lacks legal personality, and its constitutional position is unclear). Finally, the French legislator appears to be the least willing to fix the purposes of the agencies in law, although legal history may compensate this. 126 For a good overview and analytical model of the independence of agencies, see: Gilardi F. Policy credibility and delegation to independent regulatory agencies: a comparative empirical analysis, in: 9 Part Two Journal of European Public Policy 6 (2002), pp873–893. 42
  • 43. Part Three Now that the historical background from which purpose provisions stem has been clarified, and they have been put in comparative perspective, some consideration must be given to the issue of their practical effect. Originally, purpose provisions were part of the anchors of private law corporations, describing their role. The question occurs if renewed attention to purpose provisions in public law is a useful tool in clarifying the much-debated role of independent agencies as well. In Part One, three main functions were discerned that purpose provisions might fulfil: communication, direction and correction. Since the direction and correction function Legal Approaches of Purposes: the Case of Independent Agencies have a greater legal connotation than the communication function, the emphasis will be with those two functions. 43
  • 44. Practical effects compared to private law In Part One, the comparison was made between the background of purpose provisions in private law and in public law. Noteworthy is the analogy between many of the legal concepts in which purpose provisions figure in private law and concepts in public law. For example, in Dutch civil law, several stakeholders have the right to ask a court for an inquiry into the policy of a corporation if there are indications of mismanagement. Likewise, parliaments may start special investigations into the operations of independent agencies, if misadministration is suspected. Moreover, purposes of corporations have long been subject to very extensive interpretation methods, rendering them galactic coverage. Similarly, the ‘implied powers’ is currently stretching the interpretation of founding acts of independent agencies. Interesting is that some authors have plead to use the old, restrictive, way of interpreting corporate bylaws for the interpretation of agency founding acts.127 A last example of analogy can be found in the liability of directors vis-à-vis shareholders. This is common ground in private law, but now the concept of directors’ liability occurs sporadically in national law too, and sporadically in EU law, as will be shown below. However, it can hardly be contended that these similarities are more than coincidental, or indicative of a more fundamental similarity. Nevertheless, it confirms that private law concepts may provide new ideas on how to organise accountability of the independent agencies. In particular, the personal accountability of agency directors and a standard mechanism of inquiry into mismanagement (comparable to the right of inquiry for shareholders) might be legal transplants worth further exploration. Communication Internal communication of the purpose of the independent agency is important in the light of the starting point that – like any organisation – it is a means to an end. New tasks are not to be undertaken if there is no link with the legal purposes. Where co- operation is undertaken with partner institutions, the primary focus must be on its own responsibility – and not on targets formulated by the collective. In relation to the external communication, it seems appropriate to recall briefly that Legal Approaches of Purposes: the Case of Independent Agencies legislation targets not only professional lawyers, and its intentions must be understandable to any citizen: ‘So who are our readers? While in one sense, Parliament is our primary client and the courts are our 'ultimate' client, in another sense we should consider the citizen--the professional or lay individual who may have to consult our statute daily for years--not only as our principal client but also as, ideally, the ultimate client.’128 It suffices here to reiterate that many websites of the compared independent agencies literally quote the purposes from their legal basis, if the founding act contained such a provision. The mere creation of agencies may be used to give a higher profile to a certain task, especially when the creation takes place in response to a disaster (e.g. Erika or the Part Three 127 Noah L. Op.cit. n115, p1468-71. 128 Greenberg D. Op.cit. n67, p26. 44
  • 45. BSE-crisis).129 The purpose provision in itself is then the message to the public that a problem is taken serious. It was already concluded supra that the way purposes are described in EU and UK founding acts appears to be most clear and accessible. The layered structure of US legislation, and the irregular and extremely limited descriptions in French and Dutch legislation may have a negative impact on the communication function. Direction The legally binding purpose provisions in the founding act of an independent agency are intended to give the organisation guidance on how to fulfil its role. Since the agency does this largely ‘independently’ there will be a high level of discretion in the interpretation of its role under the statutes. Here, two examples will be given on how the level of detail and the quality of purpose provisions have an impact on the discretion of independent agencies in interpreting their role. Correlation between objectives and tasks An independent agency may face two challenges in interpretation of its mandate: which social objectives are to be served by the execution of certain prescribed tasks, and: which tasks/competences must be read into the prescribed objectives. Whenever tasks or competences are attributed, but the objectives are not sufficiently circumscribed, the agency will have to draw up a vision on its role by itself to give direction to its operations. It is noteworthy that in some jurisdictions there exists a tendency to accept such guidelines, created by the agency itself, as binding upon the agency, and thereby as a limitation on its discretion.130 For example, the Dutch Mondriaan Foundation issues policy rules on how it intends to use its subsidy powers. These policy rules start by setting out the objectives that the Foundation pursues in the execution of those powers.131 This practice comes close the US practice, according to which the independent agencies are left the discretion to set their own objectives, under the condition of Congressional approval and publication in the CFR. It may be assumed that the more specific the founding act is on the intentions of the legislator, the more closely will subsequent elaboration into policies by the agency, match with legislative intentions. The sporadic ‘statements of purpose’ Legal Approaches of Purposes: the Case of Independent Agencies that can be found in US legislation, give a very distinct basis for subsequent policies.132 The mirror concept of the practice to adopt binding policy rules to specify the objectives of tasks, is the concept of deriving specific tasks from general objectives. This concept of ‘implied powers’ or ‘functional necessity’ has been touched upon several times already. The concept is concerned with the interpretation of the founding act of the agencies. It concerns the question after the intentions of the legislator. To paraphrase the US Supreme Court: in an increasingly complex society, replete with ever changing and more technical problems, the legislator simply cannot do its job absent an ability to delegate under broad general directives.133 129 See p38 supra. 130 In Dutch law, this requirement was laid down in Article 4:84 AWB [General Administrative Law Act]. 131 Collectieregeling, as amended on 21 July 2005. Stcrt. 2005, 139 . Article 1. 132 Part Three See p32, supra. 133 Supreme Court. Judgment of 18 January 1989. Mistretta vs. US. 488 US p372. Cited in: Noah L. Op.cit. n115, p1491. 45
  • 46. It will be easily accepted that an agency takes up new tasks related to the objectives, not enumerated in its founding act, as long as these tasks are non-invasive, and non- binding of nature. It concerns here tasks in the field of public education, co-operation and information exchange with related entities, collection and analysis of relevant data, and so forth. However, even in that field of non-juristic activities conflicts may arise, as the Dutch OPTA-case showed (OPTA started a public information campaign while it had no explicit task in that field). Any publication of statistics or controversial reports may have a great political impact likewise. A step further is reading new competences (‘powers’) in objectives. This happens on EU level, and is accepted by the ECJ in the ERTA-case – albeit that cases involving independent agencies are yet unknown. In the US this is common ground for the agencies. However, not always without protest, as was shown when the FDA (food and drug safety) put itself in control over human cloning experiments.134 Similarly, the Dutch OvV (safety) can be criticised for its decision to start a broad investigation into Youth Care services, after the sad death of a child. The creative interpretation of its objective – in omission of a concrete task in this area – , thereby bringing the general functioning of government services under the authority of the OvV, has attracted credible criticism.135 The agency interprets its founding act, negligent of legal history of it. It must be said that both for the elaboration of objectives into tasks, or the application of an ‘implied powers’ doctrine, detailed purpose provisions are not a prerequisite. In the Dutch and French system, the legislative history can be used by an agency to draft policy rules, and fill in their role. (Which the OvV ignored.) In the American system, the close working relation with Congress provides legitimacy to how an agency gives substance to its role. Limits to political influence on objectives One of the raisons d’être of independent agencies is their relative independence in operational and substantive matters. Clearly, independence does not depend on the predication in so many words, it is shaped by all the provisions on the relations with responsible Ministers, or other political actors. A common system in France and the Netherlands is that the responsible Minister is empowered to give general instructions to the agency on how to perform its task, or on how to struck balances of Legal Approaches of Purposes: the Case of Independent Agencies interests. Any of the instruments available to political actors to influence the operations of agencies, should be used in accordance with the purpose provisions of the agency. The founding act of the agency does not only bind the agency, but also a Minister making use of the competence to give instructions. For example, the power to instruct to agency on balances of interests, cannot overstep priority interests defined by the legislator in the founding act. A budget cut, due to parliamentary dissatisfaction with the development of certain activities, seems impropriate if the operation of the agency is fully consistent with its purpose; after all, the autonomous responsibility is a consequence accepted by the legislator, implied by the placing ‘at arm’s length’. 134 See for a thorough overview of history and debate of the application of ‘implied powers doctrine’ to Part Three US independent agencies: Noah L. Interpreting enabling acts: Misplaced metaphors in administrative law, in: 41 William and Mary Law Review 5 (2000), pp1463-530. 135 Forum [Editorial], in: Volkskrant. 22 December 2006. p11. 46
  • 47. Thereby, the purpose provisions do not only have their restricting effect on the agency, but also on the instruments available to political actors. If the agency actions and conclusions are fully permitted under its purpose, its independence should be respected. Political discontent should in that case be followed up by entering into discussion with the agency, or by amendment of the founding act. In the US, where the purposes of the agencies are not per se laid down in the Congressional act, purpose provisions do not have a similar safeguard effect on their independency. The greater autonomy of the agencies in formulating purposes for the agency and its programs, is compensated by the close working relation between Congress and agency, and not by setting a restrictive framework of purposes that applies to Congress as well. The above described restricting effect on political influence, through the purpose given to an agency under its statute, has another important dimension. Some of the agencies are given adjudicative functions. In the classical separation of powers of Montesquieu, criticism to the judiciary – let alone influencing the judiciary – by the administration or legislator is a sensitive issue. The creation of agencies brought new functions with it – other than the classical adjudication, administration and legislation. It remains unclear to what extent the advisory or adjudicative functions of independent agencies should also lead to a similar exemptive position like the judiciary has. Several of the national market regulators have judicial powers, or may impose ‘administrative’ penalties. Advisory bodies in the fields of equal treatment, or safety investigations may evoke large political commotion with their non-binding reports. Both HALDE and the CGB have powers to bring cases to court, and HALDE has power to impose penalties.136 For neither of these two agencies, the founding act makes an attempt to define their constitutional position. Likewise, an issue arises around Eurojust, the EU agency in which prosecutors co- operate. In some countries the prosecution service is completely independent, in others, Ministers may give instructions in actual cases. The question is whether it is proper for a Minister to render voting instructions to a national representative in majority matters – now this results in an indirect instruction to a foreign prosecution service that functions independently in its own jurisdiction. Not the independence of Eurojust is at stake, but the independence of a foreign prosecution service would be. Legal Approaches of Purposes: the Case of Independent Agencies Clarity over the role of the agency between the primary State institutions, demands that the functions of the agencies is described in unambiguous terms, and that the instruments for politicians to influence their operations are defined. Correction The correction function of purpose provisions is generally concerned with ex post assessment of legality and performance of the actions of an agency. Other examples of mechanisms of supervision over statutory purposes than those described below are financial regulations137, international supervision138 and ombudsmen in individual cases. 136 It has been proposed to make the ‘opinions’ of the Dutch CGB binding, and give it penalising Part Three powers, which would make it a semi-judicial body. See: Groenlinks. Verkiezingsprogramma – Voorstellen bij ‘Een vrijzinnig land’. (2006). 137 See on the French LOLF: p34, supra. 47
  • 48. Establishment While correction can be regarded as an ex post mechanism primarily, in one case, purpose provisions already play a part before the agency comes into existence. In jurisdictions where constitutional review is available, the legislative act establishing the agency may be found unconstitutional. In a national context, this will primarily be the case if certain tasks or functions are reserved for government or parliament. This issue seems to play in particular in France139, while in the US the President is partially decapitated as ‘head of the executive’ contra legem. In EU context, the act that establishes an agency must be based on explicit powers granted under the respective treaties, and must otherwise serve the objectives as set out in Article 2 TEU. The ENISA-case is the leading example of testing the purpose of a prospected agency against the legal basis in the treaty. In that case, it appeared that the ECJ takes a rather lenient approach to bringing the purposes of the agency under the treaty objectives. Parliamentary oversight Oversight mechanisms can be placed under both direction and correction. Through oversight mechanisms the parliament is able to perform a regular check upon the pursuit and fulfilment of the original purpose that was given to an independent agency. Oversight mechanisms are understood here as the channels through which the agency gives account of its operations to parliament. Because oversight pertains to the intentions of the legislator in creating an agency, it is chiefly concerned with the objectives of an agency: the desired impact on society. The legally binding objectives are the principle source of those objectives, and it seems therefore desirable that these comprise of subjective standards as well, describing what exactly the agency is to strive for. In most cases, oversight will consist of at least the sending of an annual report to parliament. In some jurisdictions, the formal or informal practice exists to (regularly) organise hearings with agency representatives. Other oversight mechanism are special parliamentary inquiries, or studies into the agencies. In all jurisdictions, except the US, this oversight may also take place indirectly, through a responsible Minister.140 The legally assigned purposes to the agency might not be on the foreground in so many words. However, the US and UK system shows that the mechanisms enable Legal Approaches of Purposes: the Case of Independent Agencies parliament to conduct a continuous dialogue over the pursuit of the purpose of the organisation. Again, founding acts of independent agencies are normal pieces of legislation and a means to an end, but exceptionally, the Minister cannot be addressed fully on concerns related to the implementation of this type of legislation. Therefore, it has been regarded appropriate in some systems to enable the legislator to be in direct contact with the agency. In the Netherlands, France and the EU, parliamentary oversight is limited to the annual reports, and occasional special hearings. The The Dutch Government Accounting Act prescribes regular reporting by independent agencies on their ‘prospected and rendered achievements’ (Article 44a, ‘te leveren and geleverde prestaties’) and open the possibility for the Court of Auditors to start an investigation into ‘effective and efficient’ spending (Article 85, ‘doeltreffendheid en doelmatigheid’). 138 In particular regarding the implementation of EU law related to the establishment of independent agencies, see p21, supra. 139 Part Three See p33, supra. 140 In the UK, this line has been strengthened recently by adding each NPDB to portfolio of one Minister. In the Netherlands and France this was already the case. 48
  • 49. occasional parliamentary investigations that figure in each jurisdiction, are somewhat comparable to the right of inquiry for certain stakeholders of corporations.141 If, in this process of oversight, dissatisfaction arises over the implementation of the purpose, and directions of parliament are not followed up, the responsible Minister may be addressed on the use of the residual powers left with him. Eventually, an amendment of the founding act might an appropriate step, adapting the purposes of the agency. Negligence of tasks Only in the Netherlands, explicit provision was made in some founding acts of the agencies for the case in which the agency does not perform its ‘tasks’ anymore. In fact, the framework law that entered into force recently, includes a negligence of tasks provision for all agencies (Article 23). It is the Minister who determines the negligence of tasks by the agency. In most cases, the ‘tasks’ are defined as all tasks conferred upon the agency. For instance, the negligence provision of the OPTA (communications) refers to ‘tasks’ in general. An exception is the OvV (safety), for which the negligence of tasks only sees upon the obligatory tasks – for example, excluding the current discretionary investigation into Youth Care (see supra). Clearly, the inclusion of such a provision demands that tasks are defined. However, the standard to which the execution of the tasks should be benchmarked is not necessarily defined. This assessment falls within the discretion of the respective Minister. It must be assumed that possible objectives, mentioned in the founding act of the agency, are to be primary considerations. The principles of reasonableness that limit discretion, will tie a Minister to the legal objectives of the agency. So, whereas the negligence provisions focus upon dysfunctioning in terms of ‘tasks’, the objectives do play a part as well. The objectives are mandatory part of the balance of interest that a Minister is to struck in the application of a negligence provision. Directors’ liability In private law, directors’ liability is a well-integrated phenomenon. Under Article 2:248 of the Dutch Civil Code, for example, a director may be held liable for a bankruptcy, if he did not fulfil his task properly and this behaviour contributed to the bankruptcy. In the ‘masks theory’ of Runciman, the concept of directors’ liability can be explained Legal Approaches of Purposes: the Case of Independent Agencies as the transgression of the role as is ascribed to the mask. If the actor does not stick to that role, the mask is no longer valid, and the actor will be acting in its own capacity. Although the concept is not so common in public service, it does exist in fact. In case of negligence by Dutch civil servants, normally the State will be liable. However, personal liability is not excluded. Personal liability may follow if the wrongful act was not performed in execution of an assigned task or in extreme excess thereof, and the civil servant is personally imputable for the wrongful act.142 Recently, a claim for damages was brought against several directors of a Dutch independent agency, by the Minister, on the basis on mismanagement.143 In EU context, the example of the foreign missions was already mentioned above (page 17 141 See p13, supra. Article 2:344 Dutch Civil Code. 142 Part Three Hoge Raad. Judgment of 11 October 1992. Administratiefrechtelijke Beslissingen 1992, 62. 143 Ministry of Health, Welfare and Sports. Ross stelt bestuurders verpleeghuis aansprakelijk voor wanbeheer [Press release]. 17 August 2005. 49
  • 50. supra). There, the Head of Missions remains responsible in private capacity for the full budget of the mission, until granted discharge by the Council. Interesting is that, because the directors of agencies might operate under quite specific task provisions, the initiation of tasks outside that framework may lead more easily to liability. Accepting that a task is allowed under the statutory provisions by way of implication, is therefore not entirely without risk. Notorious are the examples of directors of public bodies that engage in hazardous investments. Interpretation of the statutory tasks will be necessary in those cases to see if the activities were permissible under the applicable purpose provisions. Administrative decisions Whenever independent agencies take administrative decisions, there will be an opportunity for individuals to contest the decision on grounds of legality and specificity in a court of law. The extent and nature of the assessment that will be made in court to test the legality and specificity will differ per jurisdiction. However, it is to be expected that in every jurisdiction, purpose provisions may play a part in proofing the attribution of a competence to an independent agency and in proofing the mandatory interests to be taken into account in the execution of that competence. Due to considerations of space and fundamental differences in legal systems, the mechanism of administrative appeal will not be dealt with in any detail here. Civil liability Whereas the all others means to correct agency actions ultra vires are reserved for political actors, individuals may pursue liability actions against the legally independent agencies. In particular, the regulatory agencies may face lawsuits, if in despite of their (market) supervision, individuals suffer loss in their field of supervision. In liability cases, purpose provisions may play a part. In relation to market regulators, three forms of liability cases were distinguished: on grounds of quashed decisions of the agency, on grounds of wrongful public information144 or on grounds of insufficient supervision.145 In all cases, the exact formulation of the supervision tasks will have determine the policy discretion that the agency had. Whether that policy discretion was violated, will subsequently determine the negligence on behalf of the agency. Op top of that, at least according to Dutch civil law, the norm violated by the agency Legal Approaches of Purposes: the Case of Independent Agencies must have been intended to protect the interests of the plaintiff.146 Again, purpose provisions may fill that criterion in. If consumers interests are explicitly mentioned amongst the objectives of the agency, liability may be constructed more easily. In summation, independent agencies need to consider what effect purpose provisions – in particular expressly mentioned interests – have on their obligations of due care. 144 See the case against OPTA (communications), described at p25 supra. 145 Dam van C.C. Aansprakelijkheid van Toezichthouders Samenvatting. British Institute of International and Comparative Law/WODC (2006), p7. Available at: www.wodc.nl. 146 Part Three See, for example, in a claim against the former Dutch Verzekeringskamer [Insurance Chamber]: Hoge Raad. Judgment of 13 Oktober 2006. ‘Stichting Vie d’Or vs. Verzekeringskamer’. Rechtspraak van de Week 2006/941, para4.2.1. 50
  • 51. Conclusion on practical effects The value of purpose provisions is greatly determined by how they are drafted. It appeared that the differences in drafting are not only great between the different jurisdictions, but that also within the jurisdictions hardly a consistent approach is taken. The EU is an exception in relation to this. Ambiguity and omissions in drafting purpose provisions seems to have diminished the positive effects that purpose provisions may have. Purpose provisions are to both anchor the role of the agency and provide guidance to the independent agency in fulfilling the intention of the legislator. Purpose defined as political objectives of the legislator guide the agency in setting more detailed policies, and gives a framework of benchmarks for its operations. Purposes defined as functions help to create clarity over its constitutional position, and to define what the ‘independence’ should consist of. Purposes defined as tasks are of particular relevance for liability issues, both for the agency as such and its directors in private capacity. Both the analogy with private law ultra vires concepts, and Runciman’s model of masks may offer guidance in better understanding the current position and desired development of independent agencies. Taking the US as a model for further development of the agencies can be only useful, if the specific constitutional make-up is properly understood and taken into account. Finally, it may be tentatively concluded that it is well possible to find the ‘meaning of life’ for independent agencies, and it pays off to seek it. Legal Approaches of Purposes: the Case of Independent Agencies Part Three 51
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  • 55. Administrative Reform [NL] www.andereoverheid.nl Register of independent agencies [NL] www.zboregister.nl Agencies portal [US] www.whitehouse.gov/government/independent-agencies.html Better Regulation Initiative [UK] www.cabinetoffice.gov.uk/regulation/ Better Regulation Initiative [UK] www.brc.gov.uk Agencies Portal [FR] www.legifrance.gouv.fr/html/sites/sites_autorites.htm New Government Accounting [FR] www.minefi.gouv.fr/lolf/ Government Organization Research www.sog-rc27.org List of independent agencies and their legal acts Art US – NEA National Endowment for the Arts National Foundation of the Arts and the Humanities Act of 1965, codified under 20 USC - 953(a) et.seq. Elaborated in: 45 CFR 1100 et.seq. ∗ UK – ACUK Arts Council England Royal Charter Granted 30 March 1994, as amended by way of Supplemental Charter of 31 - May 2002. NL – Mondriaan Stichting Wet op het specifiek cultuurbeleid [Cultural Policy Act], in particular Chapter IV. - Statuten Mondriaan Stichting [Bye-laws of the Mondriaan Foundation], 12 July 1993, - Amsterdam. Aviation EU – EASA European Aviation Safety Agency Regulation (EC) No 1592/2002 of the European Parliament and the Council of 15 July 2002 - on common rules in the field of civil aviation and establishing a European Aviation Safety Agency. OJ L 240/1. UK – CAA Civil Aviation Authority Civil Aviation Act 1982, Chapter 16, in particular Part I. - NL – LVNL Luchtverkeersleiding Nederland Wet Luchtvaart [Aviation Act], in particular Title 5.2. - Communications EU – ENISA European Network and Information Security Agency Regulation (EC) No 460/2004 of the European Parliament and the Council of 10 March - 2004 establishing the European Network and Information Security Agency. OJ L 77/1. US – FCC Federal Communications Commission Comunications Act of 1934, codified as: 47 USC 151 et.seq. - UK – OFCOM The Office of Communications Legal Approaches of Purposes: the Case of Independent Agencies Office of Communications Act 2002, Chapter 11. - Communications Act 2003, Chapter 21. - FR – ARCEP l'Autorité de régulation des communications électroniques et des postes Telecommunications Act 1996 [Available in English]. - Law No. 2005-516 of 20 May 2005 on regulation of postal activities [Available in English]. - Code des Postes et des Communications Electroniques. - NL – OPTA Onafhankelijke Post- en Telecommunicatie Autoriteit Telecommunicatiewet [Telecommunications Act]. - Wet Onafhankelijke Post- en Telecommunicatie Autoriteit [Independent Post and - Telecommunications Authority Act]. Environment EU – EEA European Environment Agency Council Regulation (EEC) No 1210/90 of 7 May 1990 on the establishment of the European - Environment Agency and the European Environment Information and Observation Network. OJ L 120. Regulation (EC) No 1641/2003 of the European Parliament and the Council of 22 July 2003 - amending Council Regulation (EEC) No 1210/90 on the establishment of the European Bibliography ∗ All USC and CFR articles refer to the version available through WestLaw on 1 December 2006. 55
  • 56. Environment Agency and the European Environment Information and Observation Network. OJ L 245/1. US – EPA Environmental Protection Agency National Environmental Policy Act 1969. - Reorganization Plan no. 3 of 1970. - Jointly codified in 42 USC 4321 et.seq. - UK – EA The Environment Agency Environment Act 1995, Chapter 25. - Equal treatment EU – EUMC European Monitoring Centre on Racism and Xenophobia Council Regulation (EC) No 1035/97 of 2 June 1997 establishing a European Monitoring - Centre on Racism and Xenophobia. OJ L 151. US – EEOC Equal Employment Opportunities Commission Executive Order 10925 Establishing the President’s Committee on Equal Employment - Opportunity, 6 March 1961. Civil Rights Act 1964, Title VII, in particular 2000e-4 et.seq., codified under: 42 USC 2000e- - 16 and 29 USC 633a. UK – CEHR Commission for Equality and Human Rights Equality Act 2006, Chapter 3. - Haute autorité de lutte contre les discriminations et pour l’égalité FR – HALDE Loi n° 2004-1486 du 30 décembre 2004 portant créati on de la haute autorité de lutte contre - les discriminations et pour l’égalité. Loi n° 2006-396 du 31 mars 2006 pour l'égalité des chances. - NL – CGB Commissie Gelijke Behandeling Algemene wet gelijke behandeling [Equal Treatment Act, available in English]. - Financial markets US – SEC Securities Exchange Commission Securities Exchange Act of 1934, codified under: 15 USC 78b et.seq. - UK – FSA Financial Services Authority Financial Services and Markets Act 2000, Chapter 8, and in particular Schedule 1. - FR – AMF Autorité des Marches Financiers Monetary and Financial Code, L621-1 and further, Loi n° 2003-706 du 1er août 2003 de - sécurité financière [Available in English]. NL – AFM Autoriteit Financiële Markten Wet toezicht effectenverkeer 1995 [Securities Transactions Supervision Act 1995]. - Wet financiële dienstverlening [Financial Services Act 2005]. - Gewijzigde Statuten van Stichting Autoriteit Financiële Markten, 31 mei 2006, Amsterdam. - Transportation safety EU – ERA European Maritime Safety Agency Legal Approaches of Purposes: the Case of Independent Agencies Regulation (EC) No 1406/ of the European Parliament and the Council of 27 June 2002 - establishing a European Maritime Safety Agency. OJ L 208/1. Regulation (EC) No 724/2004 of the European Parliament and the Council of 31 March - 2004 amending Regulation (EC) No 1406/2002 establishing a European Maritime Safety Agency. OJ L129/1. US – NTSB National Transportation Safety Board Independent Safety Board Act of 1975, codified as: 49 USC 1101 et.seq. - 49 CFR 800. - NL – OvV Onderzoeksraad voor de Veiligheid - Rijkswet Onderzoeksraad voor veiligheid [Kingdom Act concerning Safety Investigation Board, available in English]. Bibliography 56
  • 57. Legal Approaches of Purposes: the Case of Independent Agencies ne jamais d´Étudier Fin des Études mais 57