Tuesday, May 14, 2013

An Analysis of the NAC's Proposal on the Pre-Legislative Process (Part I)

Last week, the National Advisory Council made a little noticed recommendation concerning what they term the pre-legislative process. The name “pre-legislative process” is a bit of a misnomer in that their recommendation concerned how ministries approach not only drafting legislation, but also drafting rules, or subordinate legislation.

For both new legislation, new rules, and amendments to either the NAC recommends that an executive order be passed requiring all central ministries put into the public domain for 45 days an announcement that it will be drafting a piece of legislation or rule. This announcement would not only lay out the essential elements of the proposed legislation/rule, but give a statement of reasons justifying the proposal and detail the broad financial implications and the estimated impact on the environment, fundamental rights, and the lives of affected people. The Ministry is also required to make the eventual draft legislation public for 90 days and reach out to the public for consultation. All feedback received about the legislation/rule must be made public, as well as the Ministry’s response to the feedback.

The general thrust of the NAC’s recommendations should be welcomed and are in many ways long overdue. Essentially, the proposal would add transparency and the requirement of reason-giving and consultation to all Ministry action concerning the creation of legislation and rules.

However, it’s worth breaking down the justification for doing this for legislation and rules separately, as they are indeed separate justifications conceptually and the recommendation concerning legislation is generally considered more controversial than concerning rules.

Let’s start with rule-making to understand what is going on here. Rules are important (if anyone doubts this consider how Indian politics would be moving forward right now if there had been, let’s say, different rules created for the allocation of coal or telecom spectrum). Crores of Rupees are often at stake or the livelihoods of thousands. Yet, rules are often created under the guidance of one Minister or even just some top-level bureaucrats. All rules are technically tabled in Parliament for a vote and there is a committee in Parliament looking at such subordinate legislation, but even committee members do not have time to examine most rules in any detail and generally just make sure that the proposed rule does not violate the constitution.

Every modern democracy faces this problem. Major decisions are being made through rules, yet representatives of the people are generally not aware of them. So what to do? One response globally is to create a requirement (often through an act) that all rules have to be tabled by ministries/agencies in advance, justification given, and some degree of consultation with the public mandated. This creates a double check. Ministries are forced to publicly think through the reasons they are creating rules. For example, if a ministry decides it doesn’t want to allocate telecom through an auction it will have to explain why in advance and can’t change its reasons later if such a decision becomes contested. Secondly, the public can act as an alarm bell for Parliament, or even others in the Executive, to flag particularly poorly designed rules. Then, if necessary, Parliament can reject a poorly designed rule or perhaps the Prime Minister can step in to see that it is changed.

Countries that have mandates like the ones being proposed for the creation of rules in India usually find such reason-giving and consultation a step-forward, even if a limited solution. Those with money (and near the capital) are in the best position to track rule-making and give input. Diffuse public interests are often not represented in the rule-making process although environmental and some civil society groups have proved savvy at shaping the process as well. In an attempt to overcome these representation problems, in the United States law firms will sometimes make comments on rules with the public interest in mind as a pro bono service. In South Africa, comments are often made by government created institutions like human rights commissions that attempt to serve as a proxy for the broader public interest. Still, special interests are often in the best position to give comments. 

The second challenge countries with such mandates for consultation and reason-giving face is getting the government to follow the process. For a responsive government, not all rule making should require such long drawn-out public input.  However, in the US the government has often cited exemptions built into the Administrative Procedure Act to get around publishing rules in advance even for rule-making that is important (see this GAO report for more details about how agencies in the US did not follow the pre-publication requirement for about 35% of major rules between 2003-2010).

Reason-giving for rules – i.e. a justification and cost-benefit analysis – can seem like a pure good and step forward. Who wouldn’t want rules that hadn’t been thought through? Yet, even here the challenge is finding the balance between meaningful due diligence and the costs of such reflection. For example, what would constitute an adequate assessment of the impact of a proposed rule on fundamental rights? Is it just a bureaucrat thinking about it for a few moments at her desk and then writing down whatever she thinks? Or would it require an expensive study from an outside group that included large surveys of the impacted population? Likely, the answer is somewhere in between.

Given the blurriness of what is effective consultation and reason-giving the most difficult challenge is enforcement. In particular, what redress do parties have if they claim the government has not gone through the required process? Can they go to court? If so, by what standard will a court judge whether there has been effective consultation or reason-giving, and if the court finds it has been lacking will the judge actually strike down the rule, even if millions of people have already relied on it?

Much of administrative law is about trying to force the state to think in certain ways - taking on board multiple interests and shared values. As Jerry Mashaw has written in one of my favorite adlaw essays, administrative law is the embodiment of the enlightenment project - - the triumph of public reason over cloistered thinking, prejudice, and arbitrariness. Yet, given the messiness of what constitutes "reason" and the limited avenues of influence on the state, it structures a process that can get us only so far.

All in all, the NAC proposal on rule-making is a step in the right direction, even if there are many unanswered questions about enforcement or on the mechanics of implementation. In Part II of this post, I will discuss the more controversial proposal to have a similar process for the drafting of legislation by ministries, as well as some reflections on the proposal to push these reforms through an executive order rather than an act.
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