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And Their Interaction with Parliament Independent and Regulatory Independent and Regulatory Agencies in Moldova and their Interaction with Parliament Chisinau, 2011 Independent and Regulatory Agencies in Moldova and their Interaction with Parliament Franklin De Vrieze & Ludmila Ieseanu DISCLAIMER The report “Independent and Regulatory Agencies in Moldova and their interaction with Parliament” has been drafted by Franklin De Vrieze with the support of Ludmila Iesanu. It was developed in the framework of the “Support to Parliamentary Development in Moldova” project, funded by the Ministry of Foreign Affairs of Denmark (DANIDA), Swedish International Development Agency (SIDA) and co-funded and implemented by the United Nations Development Programme (UNDP). The views expressed in this report are those of the authors and do not necessarily represent the views of these institutions. Independent and Regulatory Agencies in Moldova and their Interaction with Parliament Table of Content Acronyms ................................................................................................................... 5 Foreword .................................................................................................................... 6 I. Executive Summary ............................................................................................. 7 II. Introduction: Moldova country context for regulatory reform .......12 III. Conceptual framework on independent and regulatory agencies 15 IV. Analysis of Moldova’s independent and regulatory Agencies .........35 4.1. National Agency for Energy Regulation (ANRE) ................................................36 4.2. National Regulatory Agency for Electronic Communication and Information Technology (ANRCETI) ...............................................................42 4.3. National Commission of Financial Market (NCFM) ...........................................47 4.4. Audiovisual Coordinating Council (ACC) ..............................................................52 4.5. National Bank of Moldova (NBM) ..............................................................................57 4.6. Court of Account (CoA) .................................................................................................66 4.7. National Agency for the Protection of Competition (NAPC) ......................72 4.8. Civil Aviation Authority (CAA) ....................................................................................76 4.9. Medicines Agency ............................................................................................................79 4.10. International Association of Road Transporters of Moldova (AITA) ........83 Comparative analysis and overview table of Moldova Agencies’ application of instruments of independence and accountability ..85 V. International practices and European policy framework for the energy regulatory agency ..........................................................................90 VI. European policy framework and international practices for the telecommunications regulatory agency ................................106 3 VII. Parliament of Moldova and independent and regulatory agencies ...........................................................................123 VIII. Recommendations on independent and regulatory agencies in Moldova ....................................................................................................127 ANNEXES: ..............................................................................................................140 Annex 1. Short biography of the authors of the report in Moldova ..............140 Annex 2. Bibliography ..........................................................................................................142 Annex 3. List of interlocutors ............................................................................................149 Annex 4. Questionnaire to independent and regulatory agencies in Moldova ...................................................................................................................................152 4 Independent and Regulatory Agencies in Moldova and their Interaction with Parliament Acronyms ACC Audiovisual Coordination Council in Moldova BEREC Body of European Regulators for Electronic Communications CAA Civil Aviation Authority CAAM Civil Aviation Administration in Moldova CoA Court of Accounts of Moldova CEER Council of European Energy Regulators CIS Commonwealth of Independent States DG Directorate-General EBRD European Bank for Reconstruction and Development ECJ European Court of Justice ECTA European Competitive Telecommunications Association ERG European Regulators Group ERGEG European Regulators’ Group for Electricity and Gas ERRA Energy Regulators Regional Association ETSI European Telecommunications Standards Institute ICT Information and Communication Technologies IERN International Energy Regulation Network MA Medicines Agency in Moldova MAIRT Moldovan Agency for International Road Transportation MOJ Ministry of Justice of Moldova NAER National Agency for Energy Regulation in Moldova NAPC National Agency for Protection of Competition in Moldova NARECIT National Agency for Regulation in Electronic Communications and Informatics Technology in Moldova NBM National Bank of Moldova NCFM National Commission of Financial Market in Moldova NRA National Regulatory Agency SEE South-Eastern Europe SMP Significant Market Power UNSCR United Nations Security Council Resolution VAT Value Added Tax UNDP United Nations Development Fund 5 Foreword his report has been commissioned by UNDP Moldova upon the request Tof the Committee on Economy, Finance and Budget of the Parliament of the Republic of Moldova. The report constitutes one of the key programmatic activities of the “Support to Parliamentary Development in Moldova” Project, UNDP’s parliamentary assistance project (December 2009-December 2013). The project aims to enhance parliamentary efficiency in carrying out its functions and responsibilities thus contributing to viable democracy and open society in Moldova. The project adopts a comprehensive, long-term approach to parliamentary development including strengthening of the legislatures law-making, representation and oversight roles. Considering the Parliament’s current cooperation with the independent and regulatory agencies in Moldova, it was deemed necessary and urgent to review the current legal framework and working practices; with the aim to up-date them and bring them into accordance with European/international standards. For this purpose, UNDP hired an international consultant with experience in parliamentary strengthening assessments and parliamentary program development (Franklin De Vrieze, Belgium); and a local consultant with knowledge on Moldova’s independent and regulatory agencies (Ludmila Ieseanu, Moldova). This report has been drafted by Franklin De Vrieze, with the input from Ludmila Ieseanu, and based upon the assessment mission to Moldova on 25 April – 7 May 2011. During this mission, the team of both consultants conducted meetings with the leadership of 10 independent and regulatory agencies as well as the parliament Committee chairpersons and staff which were available. On 20 – 24 June 2011 a second mission took place. It enabled finalization of the draft report, based upon feedback received on the draft report from all interlocutors. The report has been developed based upon the policy documents of the Organization for Economic Cooperation and Development (OECD) in Paris, and following consultations with the OECD – staff working on regulatory reform across the OECD. 6 Independent and Regulatory Agencies in Moldova and their Interaction with Parliament I. Executive Summary How do Moldova’s independent and regulatory agencies exercise their role and responsibilities and interact with parliament? How can the independence and the accountability of the agencies be strengthened simultaneously? What initiatives can parliament undertake to optimize its interaction with the agencies? These are the key questions which the authors want to address in the current report. The report has four main chapters, the key findings of which are summarized below. I. The first chapter of the report provides the conceptual framework to analyze the functioning and the main institutional characteristics of independent and regulatory agencies. The framework is based upon principles and policy guidelines for regulatory agencies issued by the Organization for Economic Cooperation and Development (OECD). The last decennia have seen an unprecedented global rise in the use of regulatory agencies, especially in transitional economies like Moldova. These agencies regulate a number of economic sectors with network characteristics where technical specialization and prudential oversight are essential, such as civil aviation, energy and telecommunications. The effectiveness of these regulatory agencies is primarily a function of the degree to which their mandate strikes a balance between their ‘independence’ from industry and the government, and their ‘accountability’ towards the public.1 A key driver of this balance lies in the interaction between the agencies and parliament. Therefore, the central challenge outlined in this report is to design this interaction in a way that optimizes the equilibrium between independence and accountability. This means that the agencies are neither fully independent from the government and parliament, nor fully subordinate to parliament, but operate ‘at arm’s length’, at an appropriate distance.
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