In general, the regulatory process involves three critical moments: the first stage, of public consultation, where the interested parties are given the chance to provide their opinion and views regarding some regulatory issue, a second stage at which the decision is made and publicized along with the detailed reasons behind it, and the last moment at which the stakeholders are provided an opportunity to challenge a regulatory decision through a process of appeal.
Appeal processes start by adequately hearing the party challenging a regulatory decision. Then, based on the evidence presented by that party and the contents of the law regulating the issue and relied upon by the regulator, a decision is reached for or against the appellant.
Having procedures for appeal is critical in order that the decisions made by a regulatory agency may be adequately challenged. It is indeed the manner in which the agency is held accountable to those who disagree on its decisions and thus make the claim. The appeal can be started before the regulator itself prior to resorting to the courts.
Moreover, it is important to guarantee that, during such appeal process, the regulator abides by its mandate and the applicable rules, and that it observes the general transparency criteria.
Two aspects must be factored into the definition of a procedure for the filing and resolution of appeals: the appellate body and the reasons for the appeal.134
The appellate body must be independent. In most countries, appeals against regulatory decisions are filed directly in court. However, in some cases there are intermediate stages, and the appeal is filed with organs with greater experience in and technical knowledge of the issue at dispute than judicial courts. In turn, such intermediate body is expected to respond in a shorter period of time.
The grounds for the appeal are usually limited to factual or legal errors. Appellate bodies are allowed to reconsider the merits of the appealed decision, merely substituting it with their own view.
Table 16 : Instances of appeal for regulatory decisions
COUNTRY - SECTOR | APPELLATE INSTANCE |
Brazil Electricity sector | Appeals are made in the first instance to the agency itself; if it does not result in a satisfactory solution, the judiciary is resorted to. |
Colombia Telecommunications, Water and Energy. | ■ The Commission's decisions are not subject to review by any administrative authority; only specific-scope decisions are subject to appeal before the Commission itself (recurso de reposición). ■ Specific-scope decisions of the Commission can only be challenged by way of a Recurso de Reposición appeal, to be filed and settled as provided for in the Contentious-Administrative Code and related provisions. |
Chile Energy, Water and Sanitation. | Any person or entity claiming to be negatively affected by a resolution or omission by the Superintendent's Office that is allegedly not in compliance with the applicable law, regulations or rules can challenge any such action before the Santiago Court of Appeals. |
Mexico Energy | As far as administrative remedies go, the Commission's decisions can only be subject to a petition for reconsideration, to be decided on by the Commission itself pursuant to the provisions of the Federal Administrative Procedures Act. |
Peru Telecommunications, Energy, Water and Sanitation | ■ In the event of a dispute concerning the interpretation or application of a regulation and/or legal provision by the Agency in a specific case, the service provider is allowed to challenge the interpretation or application before the Board of Directors. No such challenge is available against the contents of the regulatory and/or legal provision. ■ Supervision is entrusted to the Agency's General Manager. The General Manager's decisions are appealable before the Board of Directors. ■ Control and penalization are first performed by the Agency's General Manager, subject to appeal to the Board of Directors. ■ Collegiate Bodies have first-instance jurisdiction over disputes arising between service providers. Appeals are settled by the Dispute Resolution Tribunal. The Tribunal's decisions can be appealed to the Judiciary. |
Australia Telecommunications | The agency's decisions can be appealed to the Administrative Appeals Tribunal. |
Australia Energy | The regulatory agency's decisions can be appealed to the Federal Court of Australia. |
UK Energy, Water and Sanitation | Regulatory decisions can be appealed to the Monopoly and Mergers Commission, the U.K. anti-trust agency. |
Spain Energy | Resolutions passed by the National Energy Commission can be appealed to the Ministry of Industry and Energy. |
Spain Telecommunications | Decisions and resolutions passed by the Commission in the exercise of its public functions entail the exhaustion of administrative remedies and may be appealed before contentious-administrative tribunals. |
New Zealand Public Utilities | The Commission's decisions can be appealed to the Supreme Court. |
Appeals are a necessary tool to provide protection from and, to a certain extent, set a limitation on the regulator's excessive discretion.
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134 Warrick Smith, "Utility Regulators - Decision-making Structures, Resources, and Start-up Strategy", Public Policy for the Private Sector, Note No 129, The World Bank, October 1997.