Outsourcing Rulemaking Powers, by C Jenart

  1. Introduction

Imagine a statute that confers powers on an independent regulator to decide on technicalities related to electricity and gas. Imagine a statute or statutory instrument that incorporates articles of a code against doping in sports developed by a privately notarized Swiss organization (World Anti-Doping Agency). Imagine, finally, a labour rule that was made by private persons that would bind third parties even without legislative ratification. Would these outsourced rules not undermine our image of a Legislature’s or Executive’s primary responsibilities within comparative positive law? In reality, we do not have to imagine these rules, as they already exist to various degrees in the national law of numerous states.

Rulemaking powers are powers to enact, accept, or establish abstract, general, and obligatory norms that have the purpose and effect of altering legal rights, duties, and relations between persons. The book Outsourcing Rulemaking Powers distinguishes three techniques by which these powers can be outsourced.

  1. Delegation: The delegator (i.e., the Legislature or Executive) mandates the autonomous public, private, or hybrid actors to exercise well-defined rulemaking competences in its place.
  2. Referral: The Legislature or the Executive refers in its own rulemaking to an external document that was produced by an autonomous public, private or hybrid actor.
  3. Reception: The Legislature or the Executive receives rubberstamps – and potentially declares it generally binding – the rulemaking initiatives of professional organizations.

The book Outsourcing Rulemaking Powers focuses on five specific countries: the United Kingdom, the United States, Belgium, France, and Germany. These countries were selected, firstly because of the comparable influence that they experience from comprehensive human rights treaties, as discussed in the international framework chapter. Secondly, they were chosen because they represent three dominant legal traditions worldwide. Thirdly, they share an emphasis on constitutional principles, and they were elected because of their strongly interwoven histories and legal systems with regard to transferring rulemaking powers. Finally, in all five cases, I could consult the primary sources in their original languages. The comparative research is strongly contextualized but remains functional in nature to reach an overarching perspective on the phenomenon of outsourcing rulemaking powers. The overarching issue investigated is: How may rulemaking powers be outsourced? This overarching topic can be broken down into two more precise research hypotheses.

  • One research hypothesis concerns the standards and guarantees that rules made by actors outside the three traditional branches must heed to comply with the principles of good rulemaking similarly to traditional rulemakers. The existence, identification, and application of these principles is more administrative in nature and is therefore further developed in a twin blog post published here.
  • Another, more general comparative, research hypothesis concerns the limits to a Legislature or Executive outsourcing rulemaking power. Constitutional provisions or, mainly constitutional principles, may allow for some powers to be transferred to other actors or institutions while obliging the Legislature and/or the Executive to exercise other powers themselves. Some main insights of the book on this matter will be developed in this blog post.

2. Comparative constitutional limits on outsourcing rulemaking powers

The monograph encountered comparative and shared limits placed on traditional politically accountable actors with respect to outsourcing rulemaking powers.

  • Traditional limits on transferring powers from the Legislature to the Executive

In the first instance, in Belgium, France, Germany, the UK, and the US, legal scholars have historically proclaimed a non-delegation doctrine, meaning that rulemaking powers may not be transferred at all. However, the current constitutional texts of Belgium, France, and Germany paint a different picture. Article 105 of the Belgian Constitution, articles 34-–38 of the French Constitution, and article 80 of the Basic Law each countenance the transfer of powers from the Legislature to the Executive. In the US, the non-delegation theory has been mainly theoretical since the New Deal. Moreover, in the UK, the sovereignty of Parliament empowers it to delegate parts of its powers. Constitutional practice has evolved comparably across the researched countries.

The core theoretical locus of all, or the most, essential rulemaking power resides with the Legislature. However, there are few limits barring the delegation of powers to the Executive, unless a constitutional provision specifically so provides. The Belgian Constitution, which aimed to restrict the Executive, and the French Constitution, which aimed to strengthen the reserved rulemaking powers of the Executive, have been interpreted similarly, and have complied with the practice described earlier. Even the UK, without a written or codified constitution, has evolved in a similar pattern, which makes it easy for the Executive to exercise rulemaking powers. The German Basic Law, which quite precisely enunciates the limits to the delegation of rulemaking powers to the Executive, has evolved into an unpredictable judicial essentialness test. In other words, if there are any limits on the transfer of rulemaking powers from the Legislature to the Executive they derive from apex courts —to the detriment of clear constitutional provisions. Finally, this conceptual outcome has also manifested in other countries, particularly the US.

  • Constitutional provisions on outsourcing rulemaking powers

In the second instance, the constitutions of the researched countries tend not to expand on autonomous public or private actors and certainly not on the possibility of outsourcing rulemaking powers to them. Provisions such as article 87 of the German Basic Law, article 1 of the French Organic Statute 2017-54, and article 9 of the Belgian Special Majority Act on the Reform of State Institutions only partly contemplate them. However, this monograph dug below the surface and found that there are, in fact, numerous examples of the three outsourcing techniques (delegation, referral and reception) in the legislation of Belgium, France, Germany, the UK, and the US. As a whole, the researched countries share a current status, in which the political reality of outsourcing rulemaking powers far exceeds the degree to which autonomous public or private actors, and their ability to receive governmental powers, have been ingrained in the national constitutions – where applicable.

  • Constitutional principles on outsourcing rulemaking powers

In the third instance, the genuine key to demonstrating the research hypothesis discussed in this blog post must therefore be found in constitutional principles rather than constitutional provisions. It is striking to establish the influence of the highest national courts on this aspect of the delegation doctrine in a broad sense. I structured the case law and legal scholarship on the outsourcing of rulemaking powers in the researched countries around three constitutional principles: the legality principle, the separation of powers, and the democracy principle.

The legality principle safeguards the core of every rulemaking decision for the Legislature. This legality principle manifests itself in the US, Germany, France, and Belgium. In the UK, parliamentary sovereignty can enable the Legislature to transfer even the core of its rulemaking power if Parliament decides to do so. The legality principle is the first substantive limit to the outsourcing of rulemaking powers, because the core of the competences that are reserved for the Legislature may not be transferred to any other institution or actor.

Subsequently, the separation of powers is a potential, yet largely ignored, constitutional principle influencing the outsourcing of rulemaking powers. Only the US Supreme Court, the Belgian Council of State, and the French Constitutional Council have developed the separation of powers as a founding principle to limit the powers of autonomous public or private actors, although the French Constitutional Council has not yet done so with regard to rulemaking powers. If these autonomous public or private actors receive rulemaking powers, this may disturb the balance between the Legislature, Executive, and Judiciary (institutional separation of powers). Autonomous public or private actors may diminish the power of the Legislature, the unity of the Executive, or the unique independent status of the Judiciary. I categorized the risk to the institutional separation of powers as most likely to be abstract and academic when autonomous public or private actors receive rulemaking powers. However, if these actors receive rulemaking powers combined with other functions, such as an investigatory or adjudicative function, this is more problematic in light of the functional separation of powers.

Finally, the democracy principle ensures that the people will decide who represents them and thus ultimately decide on which rules bind them.

The converging test for all outsourcing techniques entails the precise transfer of powers for non-policy-oriented matters with sufficient political control. The Belgian Constitutional Court has actually adopted these three limits explicitly. The French Constitutional Council has also emphasized all three of these requirements for autonomous public bodies to receive rulemaking powers, namely a determined reach with regard to content and application, in combination with political control. The German Constitutional Court especially highlighted the third requirement for private actors, namely sufficient political control. Elements of the three-pronged test surface in the case law of the US Supreme Court. Finally, in the UK, the overarching democratic limit to political control or influence has also been stressed. Elements of these three restrictions are traceable in other legal systems, such as the Netherlands, Austria, and even in the EU’s exercise of rulemaking powers through the well-known Meroni and ESMA case law.

The last requirement to ensure compliance with the democracy principle—sufficient political control—appears especially paradoxical for autonomous public or private actors. Nevertheless, there are means within the three outsourcing techniques for the Legislature and the Executive to exercise a degree of political control on autonomous public or private actors without jeopardizing their autonomy. Concerning the delegation technique, this can be done by adapting the ordinary means of controlling the Executive to autonomous public bodies. Consider, for example, the possibility of hearings of the employees of an autonomous public or private actor on day-to-day business, receiving annual reports, or even being notified of new rules. For the referral technique, there should at least be a statutory framework and the possibility for politically accountable actors to follow up on amended referred-to-standards. For the reception technique, a politically accountable actor should predetermine the status-defining rules and should ideally ratify the eventual rule afterwards.

3. Conclusion

In summary, confirming the research hypothesis discussed in this blog post, there are limits to the outsourcing of rulemaking powers in the researched countries that do not derive from constitutional provisions but from constitutional principles. The most common constitutional principles with the greatest impact here are the legality principle, the separation of powers, and the democracy principle. A reasonable balance must be found between political control and the status of an autonomous public or private actor in relation to each of the three outsourcing techniques discussed: delegation, referral, and reception; although, in several ways, all of the researched countries appear to have found such a balance for all outsourcing techniques.

The thorough development of both research hypotheses and several other conclusions, recommendations, and insights can be found in the book which offers a unique bridge between traditional comparative constitutional law, on the one hand, and transnational private regulation and global administrative law, on the other.

Posted by Dr Cedric Jenart (assistant professor of constitutional law – University of Antwerp)

Suggested citation: C Jenart, “Outsourcing Rulemaking Powers”, BACL blog available at https://wp.me/p80U0W-1fr.