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Interest Groups and the (Non-)Enforcement Powers of EU Agencies: The Case of Energy Regulation

  • Martino MAGGETTI

Abstract

Some EU agencies have been recently entrusted with enforcement powers, which imply a crucial extension of their regulatory reach. However, other comparable agencies did not receive such powers. This paper explores the case of energy regulation as an instance of these “negative” cases, and suggests that the lack of enforcement powers may have been partially determined by business interest groups. To illustrate this argument, this article firstly relies on official documentation to show that key interest groups were consistently opposed to the option of granting enforcement powers to the EU agency in charge (ACER). Secondly, it is suggested that these interest groups, which have been largely incorporated in regulatory networks during the prehistory of the agency, had access to, and exerted influence in, the governance of EU energy policy, and could plausibly have been able to concretise their preferences. A systematic examination of the representation of interest groups in the European network of energy regulators (CEER/ERGEG) during the period 2004–2011 is undertaken to corroborate this point. The conclusion draws attention to the fact that, although interest groups are less visible than other actors and their presence is less formalised, they could be very influential on decision-making processes within European networks and agencies.

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Copyright

Corresponding author

*University of Lausanne; email: martino.maggetti@unil.ch; url: www.maggetti.org.

References

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1 Scholten, M and Scholten, D, “From Regulation to Enforcement in the Eu Policy Cycle: A New Type of Functional Spillover?” (2017) 55(4) Journal of Common Market Studies 925.

2 Chamon, M, EU Agencies: Legal and Political Limits to the Transformation of the Eu Administration (Oxford University Press 2016).

3 Slaughter, A-M, A New World Order (Princeton University Press 2004).

4 Cf for instance: Baumgartner, FR et al, Lobbying and Policy Change: Who Wins, Who Loses, and Why (University of Chicago Press 2009); Richardson, J, “Government, Interest Groups and Policy Change” (2000) 48(5) Political Studies 1006 ; Beyers, J and Braun, C, “Ties That Count: Explaining Interest Group Access to Policymakers” (2014) 34(1) Journal of Public Policy 93 ; Culpepper, PD, Quiet Politics and Business Power: Corporate Control in Europe and Japan (Cambridge University Press 2010); Coen, D and Richardson, J, Lobbying the European Union: Institutions, Actors, and Issues (Oxford University Press 2009).

5 Gormley, WT, “Regulatory Issue Networks in a Federal System” (1986) 18(4) Polity 595.

6 Wilks, S, The Political Power of the Business Corporation (Edward Elgar Publishing 2013); Ciepley, D, “Beyond Public and Private: Toward a Political Theory of the Corporation” (2013) 107(1) American Political Science Review 139 at p 142.

7 Hanegraaff, M et al, “Open the Door to More of the Same? The Development of Interest Group Representation at the WTO” (2011) 10(4) World Trade Review 447.

8 Nelson, PJ, “Conflict, Legitimacy, and Effectiveness: Who Speaks for Whom in Transnational NGO Networks Lobbying the World Bank?” (1997) 26(4) Nonprofit and Voluntary Sector Quarterly 421.

9 Schneider, V, Business in Policy Networks: Estimating the Relative Importance of Coporate Direct Lobbying and Representation by Trade Unions (Opladen & Farmington Hills: Barbara Budrich Publishers 2006).

10 DB Truman, “The Governmental Process: Public Interests and Public Opinion” (New York, Alfred A Knopf 1951) p 264.

11 Baumgartner et al, supra, note 4.

12 Bouwen, P, “Corporate Lobbying in the European Union: The Logic of Access” (2002) 9(3) Journal of European Public Policy 365.

13 Greenwood, J, Interest Representation in the European Union (Palgrave Macmillan 2011).

14 Majone, G, Regulating Europe (European Public Policy Series; London, Routledge 1996) pp xiv, 315.

15 Greenwood, supra, note 13, p 28.

16 Coen, D, “The Evolution of the Large Firm as a Political Actor in the European Union” (1997) 4(1) Journal of European Public Policy 91 at pp 98–99, see also Coen, D, “Empirical and Theoretical Studies in EU Lobbying” (2007) 14(3) Journal of European Public Policy 333.

17 Klüver, H, “The Contextual Nature of Lobbying: Explaining Lobbying Success in the European Union” (2011) 12(4) European Union Politics 483.

18 Klüver, H, “Informational Lobbying in the European Union: The Effect of Organisational Characteristics” (2012) 35(3) West European Politics 491.

19 Capoccia, G and Kelemen, RD, “The Study of Critical Junctures: Theory, Narrative, and Counterfactuals in Historical Institutionalism” (2007) 59(3) World Politics 341.

20 Scholten and Scholten, supra, note 1.

21 See for instance Ofgem stakeholder consultation, from whom it appears that enforcement is increasingly perceived as a matter of national competency: Ofgem, Consultation Decision. Review of Ofgem’s Enforcement Activities – Decision Strategic Vision, Objectives and Decision Makers, 2013.

22 Mahoney, J and Goertz, G, “The Possibility Principle: Choosing Negative Cases in Comparative Research” (2004) 98(4) American Political Science Review 653.

23 Bennett, A and Checkel, JT, Process Tracing: From Metaphor to Analytic Tool (Cambridge University Press 2014); Collier, D, “Understanding Process Tracing” (2011) 44(4) Political Science and Politics 823 ; Mahoney, J, “The Logic of Process Tracing Tests in the Social Sciences” (2012) Sociological Methods & Research.

24 Blatter, J and Blume, T, “In Search of Co-variance, Causal Mechanisms or Congruence? Towards a Plural Understanding of Case Studies” (2008) 14(2) Swiss Political Science Review 315.

25 Fearon, JD, “Counterfactuals and hypothesis testing in political science” (1991) 43(2) World Politics 169.

26 Seawright, J and Gerring, J, “Case Selection Techniques in Case Study Research: A Menu of Qualitative and Quantitative Options” (2008) 61(2) Political Research Quarterly 294.

27 Künneke, RW, “Convergence of Gas and Electricity Markets: Economic and Technological Drivers” in Bausch, A and Schwenker, B (eds), Handbook Utility Management (Dordrecht, Springer 2009) p 263.

28 Finger, M and Varone, F, “Regulatory Practices and the Role of Technology in Network Industries: The Case of Europe” in The Governance of Network Industries: Institutions, Technology and Policy in Reregulated Infrastructures (Cheltenham, Edward Elgar 2009) p 87.

30 Bennett and Checkel, supra, note 23.

31 It is worth noting that comparative evidence on the dynamics at work with respect to other agencies would be needed to cross-validate the proposition; eg by showing that ceteris paribus a lower preponderance of business interest groups is associated with the positive attribution of enforcement powers to another agency. However, comparable longitudinal data on external stakeholder participation to the policy process within networks were not available for other, similar cases. The present research strategy has to be intended as instrumental for an exploratory study pointing to an emerging question that deserves to be examined more systematically with cross-sectoral analysis.

32 Borgatti, SP et al, “Ucinet for Windows: Software for Social Network Analysis” (Harvard: Analytic Technologies, 2002).

33 Scott, J, Social Network Analysis: A Handbook (2nd edn, London, Sage Publications 2000) pp x, 208; Wasserman, S and Faust, K, Social Network Analysis: Methods and Applications (Cambridge, Cambridge University Press 1994) ch 8, pp xxxi, 825.

34 Report on the proposal for a regulation of the European Parliament and of the Council establishing an Agency for the Cooperation of Energy Regulators (COM(2007)0530 – C6-0318/2007 – 2007/0197(COD)).

35 European Commission, 18 June 2006, ‘Commission Position on EP Amendments at first reading’, SP (2008) 4439 <www.europarl.europa.eu/oeil/spdoc.do?i=15160&j=0&l=en>.

36 Common Position (EC) 10/2009 of the Council, OJ 2009 C 75E/1.

37 Collier, D, “Understanding Process Tracing” (2011) 44(4) Political Science and Politics 823.

38 Cf namely Art 13 of Regulation (EU) No 1227/2011 of 25 October 2011 on wholesale energy market integrity and transparency; Safeguarding the independence of regulators Insights from Europe’s energy regulators on powers, resources, independence, accountability and transparency CEER report; ACER Public Consultation on Recommendations to the European Commission as regards the records of wholesale energy market transactions according to REMIT,.Evaluation of Responses

39 ACER Recommendations to the Commission as regards the records of wholesale energy market transactions, including orders to trade, and as regards the implementing acts according to Art 8 of Regulation (EU) No 1227/2011, Public Consultation Document, 21 June 2012.

40 ACER’s Annual Report on its Activities under Regulation (EU) No 1227/2011 on Wholesale Energy Market Integrity and Transparency (REMIT) in 2014, prepared by ACER, Market Monitoring Department September 2015.

41 European Parliament, EPRS, New rules for the Agency for the Co-operation of Energy Regulators (ACER), Briefing, EU Legislation in Progress, May 2018, p 7.

42 It should be noted that the public sector is also included into these figures because some energy firms and facilities are partially state-owned. However, in these cases, these actors still represent the interests of energy producers, and not of consumers or of the civil society at large.

43 Coen (2007), supra, note 16.

44 Culpepper, supra, note 4.

Interest Groups and the (Non-)Enforcement Powers of EU Agencies: The Case of Energy Regulation

  • Martino MAGGETTI

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