Regulatory agencies/bodies are institutions created by governments to provide certification, registration, licensing or regulatory affairs thereto ensuring the protection of public interest and other similar components of control. They make rules, implement them and prosecute the violators by performing quasi-legislative, administrative and quasi-judicial functions. They are, therefore, called the fourth branch of the modern government. Being multi-member bodies, they are independent of the executive’s influence. They are also described as ‘headless’ as they owe no subordination to executive. However, their actions are subject to judicial review and can be declared void. In Pakistan, they are called Independent Regulatory Bodies (IRBs). They have been established to undertake public regulation and control of the private economic activities and private property with the aim of protecting and promoting social interest.
Independent Regulatory Bodies (IRBs) were created to remove any kind of high-handedness of autocratic administration. The aim was to give them independent character to carry out the tasks assigned to them. Though, generally, the whole administrative structure of a country is divided into a number of departments, all of which work under the direction, supervision and control of the chief executive, yet there are some public agencies which are not within the administrative hierarchy but they enjoy some amount of statutory immunity.
There are two broad characteristics of the independent regulatory establishment. The first is that they are almost independent of chief executive. They are not responsible to him nor do they report to him. They stand outside the framework of the departmental organization and are like, to many, ‘islands of autonomy’. The second characteristic of these bodies is that their functions are of a mixed nature — administrative, quasi-legislative and quasi-judicial. Thus, they do not fit into any of the three recognized branches of government, i.e. executive, legislative and judicial. They are known as ‘headless branch of the government’ because they are not under the chief executive. They are directly responsible to the legislature.
These bodies are called ‘independent’ because they enjoy the organizational status of independence from the executive and also because they formulate, or are at least expected to formulate, public policy in their respective spheres without any political or economic interest. They are usually established to regulate certain activity which the state itself performs.
Reasons for the Establishment of IRBs
The following are the reasons which lead to the creation of the IRBs:
- Regulatory work involves quasi-judicial element. Quasi-judicial work can be best performed by the independent bodies than by executive department.
- Regulatory work should be performed in a non-partisan way. IRBs are created to give non-partisan character to their work.
- Many regulatory functions are technical in nature, so they require independent experts.
- Sometimes regulatory bodies are created to satisfy regional demands.
- Regulatory work is quasi-legislative. Therefore, it is better to give this quasi-legislative task to a group of persons rather than entrust it to a single person.
Functions of Regulatory Bodies
The IRBs perform mixed type of functions. Their functions are administrative, quasi-legislative and quasi-judicial. These bodies frame rules for carrying out their activities. Finally, they have also to decide both on their own initiative and on representation by interested parties whether — in given cases — the rules and regulations have been complied with or not. This is quasi-judicial work. These three aspects of work may sometimes be distinct and separately performed, but the bulk of their work involves a mixture of legislation, administration and adjudication.
While highlighting their advantages, Hoover Commission, reported:
“The number of members and their security of tenure are intended to assure freedom from partisan control or favouritism. The group is able to resist outside influence more effectively than an individual, and each member is free from a threat of removal as a source of pressure. Moreover, since the activities of the commission may be more subject to public scrutiny than would be a single bureau in a large department, there is greater opportunity for exposure of pressures or improper actions. Finally, while provisions for hearings and similar safeguards against arbitrary actions are not peculiar to commissions, they may be more effective when combined with group action.”
Methods of Safeguarding Independence
The following are the methods which have been devised to safeguard the independence of the regulatory establishments.
1. Organization of the establishment:
The Regulatory establishments are organized on the Board or Commission type. As is well known, a group of persons is less susceptible to pressure than a single individual. The Board can take a decision only when it has been approved by the majority of the members.
2. Removal of members:
Another method of securing independence of the commission is that certain constitutional or statutory restrictions are imposed upon the executive power of removal. Thus the members of such Bodies can be removed only on the ground clearly specified in the statute. Moreover they are not accountable to the executive nor are they required to report to him.
3. Their staggered term:
All of them are not appointed for equal numbers of years. As such all cannot be removed simultaneously. This strengthens their independent positions.
4. Financial independence:
In order to ensure financial independence from the executive, the Bodies’ expenses are charged upon the Revenues of the State. Thus the expenses of Regulatory establishment are charged upon the consolidated fund of the country. This gives guarantee even against the legislative control.
But with all this, it will be wrong to presume that they enjoy complete autonomy. They are also controlled firstly by Civil Services Commissions in personnel administration. Secondly, their budgets are subject to review by the Parliament. Thirdly, their actions are subjects to judicial review. Fourthly, they are subject to the control of the Parliament.
- They owe no responsibility to any constituted authority. They function outside the administrative setup of the executive. Hence, they are termed as headless.
- The bodies possess three functions, viz., legislative, prosecution and that of a judge. As such individual liberties stand jeopardized.
- They have proved to be great disintegrating force in a federal system. Conflicts between government departments and these bodies have often cropped up.
- They have not been able to fulfil the purpose for which they are established. Neither they have safeguarded public interest nor have they assured the long-term progress of the industry.
- They suffer from undue laxity in the performance of their functions.
- They are inherently weak as they are managed not by a single but by a plural body.