Mode of Creating an Agency

In Ethiopia, whether it is at the Federal or state level, agencies are creatures of the legislature. They do not spring up on their own, and courts or the council of ministers cannot create them. The F.D.R.E. constitution expressly requires the establishment of some independent agencies. They do not have i.e. material and legal existence unless the house of people’s representatives enacts a specific law for their establishment. Hence, agencies that are in function so far those that  a legislature has given them the authority to function. The authority may be exceptionally broad or incredibly narrow.

Hence, it may be said that agencies are created in two ways: one is through the constitution, and the second is through act of parliament. However, one important point that should be emphasized. Is that the independent agencies, which have a constitutional basis, still require an enabling act of  the parliament for their legal existence. The only difference between the two modes of creating an agency is that when the constitution requires the establishment of some agencies the house of people’s representatives has a duty to promulgate the enabling act for that specific agency. When an agency is created only through the enabling act, in the absence of constitutional duty from the parliament, its existence is totally dependent on the will or option of the parliament.

Apart from the above two modes, there is no other means of creating an agency. Neither the prime minister, nor the council of ministers has the power to create an administrative agency.

3.2.2 Reasons for the Creation of Agencies

Agencies are created and assigned specific tasks by the legislature. They carry out the tasks making decisions of various sorts and supervising the procedure by which the decisions are carried out. There are many reasons why administrative agencies might be needed. Almost every governmental agency has been created because of a recognized problem in society, and from the belief that an agency may be able to help in solving the problems. The following are the main reasons for the creation of the administrative agencies.

A. Providing Specificity

The legislative branch of government cannot legislate in sufficient detail to cover all aspects of many problems. The house of the people’s representatives cannot possibly legislate in minute detail and, as a consequence, it uses more and more general language in stating its regulatory aims and purposes. For instance, the house of people’s representatives cannot enact a tax law that covers every possible issue that might arise. Therefore, it delegates to the council of ministers and ministry of revenue the power to make rules and regulations to fill in the gaps, and create the necessary detail to make tax laws workable. In many areas, the agency has to develop detailed rules and regulations to carryout the legislative policy.

It is also true that courts could not handle all disputes and controversies that may arise. They simply do not have the time or the personnel to handle the multitude of cases. For instance, the labour relations board entertains and resolves so many number of collective labour disputes between employees and employers. Similarly, the tax appeal commission and the welfare (pension) appeal tribunal adjudicate and decide vast number of administrative litigations within their jurisdiction. The creation of such adjudicatory agencies (usually known as quasi- administrative agencies) is necessary, because of the fact that they have, specialized knowledge and expertise to deal effectively with the detailed, specific and technical matters, which are normally beyond the competency of judges of ordinary courts.

A reason many agencies are created is to refer a problem or area to experts for solution and management. The National Bank of Ethiopia, Ethiopian Science and Technology Commission, Intellectual Property Office are examples of such agencies with expertise beyond that of the house of people’s representatives or council of ministers. The development of sound policies and proper decisions in many areas requires expertise. Similarly, administrative agencies often provide needed continuity and consistency in the formulation, application, and enforcement of rules and regulations governing business.

B. Providing Protection

Many government agencies exist to protect the public, especially from the business community. Business has often failed to regulate itself, and the lack of self- regulation has often been contrary to the public interest. For instance, the Environmental Protection Agency is created to regulate environmental pollution. In the absence of such agency, business could not voluntarily refrain from polluting the environment. The same can be said with respect to quality of private higher education and unjustified and unreasonable increase in the price of essential goods. The Ministry of Education and Ministry of Trade and Industry, regulate respectively both of these cases to protect consumers and the public at large.

Most of the time, an agency protects the public   from the negative impacts of business through regulation. When a business organization is given monopoly power, it loses its freedom of contract, and a governmental body is given the power to determine the provisions of its contract. We have some government companies that have monopoly power in Ethiopia, like the Ethiopian Electric and Light Corporation and Ethiopian Telecommunication Corporation, which have the monopoly of power over electricity and telecommunication. Previously, there was no agency regulating such business. Currently, we have the Electric Agency and Telecommunication Agency, which have the power to set the rate for the utility.

Similarly, agencies also regulate transportation, banking and insurance because of the disparity in bargaining power between the companies and consumers. The ministry of transport for instance determines the rate taxi and bus owners may charge the customer for their service. The National Bank of Ethiopia is given wider power to regulate banking and insurance due to the difference in bargaining power between bankers and customers.

C.  Providing Services

Many agencies are created simply out of necessity. If we are to have roads, the Ethiopian Roads Authority is necessary. Welfare programs require government personnel to administer them. Social security programs necessitate that there should be a federal agency to determine eligibility and pay benefits. The Ethiopian Social Security Authority is established to process pension payment and to determine entitlement to such benefit. The mere existence of most government programs automatically creates new agencies or expands the function of the existing ones.

3.3 Structure and Organization

The structure and internal organization of an administrative agency may greatly vary depending on the government policy and the programme it is expected to accomplish. Some of them may have different departments enjoying a substantial portion of power given to the agency by the enabling act. Still there will be lower organs labeled usually as sections with the specific tasks of the day-to-day governing. Usually, the arrangement of the internal organization will take so many factors into considerations, like budget implication. However, the main objective of the form of structure is aimed at ensuring efficiency and effectiveness in administration. Since this requires expertise, such task is left to the executive branch. In Ethiopia, the constitution specifically authorizes the council of ministers to determine the structure and organization of the administrative agencies.

Due to the limitation on parliament to deal with structure and organization of an agency, which is justified on the lack of expertise, the pardiment does not interfere with the internal form of that agency. The enabling act simply provides in broader terms, the function, power, duty and rights of the agency. This being the case, it has to be noted that the enabling act greatly influences the form and scope of structure and organization that an agency assumes. The type and scope of government programme, the extent of its power and the nature of mission to be accomplished by the agency outlined in the enabling act are factors to be taken in to consideration before designing the appropriate structure and organization.