01 February 2012 Written by  Aberham Yohannes and Desta G/michael

Powers of Administrative Agencies

Nature and Source of Power of Administrative Agencies

At federal and state levels, administrative agencies gain whatever power they have by delegation-that is to say, that they don’t have inherent, constitutionally mandated power to act. Rather, a, higher level of government, normally the legislature, must delegate some of its own power to the agency.

How much power is that? It depends. In order for an agency to exist, it must first be created by the enabling legislation. This statute is a device that sets up the basic framework for the agency, and the set of rules and limitations by which it must live. These may include a variety of things including organizational matters, staffing, salaries and procedures for conducting business. The most important is the delegation of power and its limitation. The delegation may be quite broad, giving the agency virtually complete power within an area (e.g., all taxation matters within a jurisdiction), or it may be quite specific and restrict the agency's authority to a very narrow range of activities, such as operating a single toll road.

An agency may only exercise authority within the delegation of authority provided for in its enabling legislation, or subsequent legislation granting specific additional power. This specified authority is all the authority the legislature has "handed over" to the agency, and since the agency has no inherent authority outside of this "handed over" authority, there is no other authority to wield.

The limitation of agency power is an important concept, since actions taken by an agency which turn out to be outside the scope of its authority are not binding. A good deal of litigation between agencies and regulated parties concerns the question whether the agency acts within the scope of authority delegated to it, or whether it acts in a manner contrary to the  act of the superior branch of government.

Since the delegating body has such a wide degree of latitude in deciding how much power to delegate, there is no absolute rule as to how much power an agency has. If the question arises, the first step is to read the enabling legislation or decree, and subsequently granting or restricting its authority. These define the parameters of the agency's power. However, since, in most cases, the whole point of creating the agency is to get the legislature out of the business of day-to day management of some area of activity, delegations of power tend to be fairly broad.

Meaning and Significance of the Enabling (Establishment) Act

The F.D.R.E. constitution imposes a duty on the house of people’s representatives to create some agencies. Can you mention some of those agencies?

Even though their establishment has a constitutional basis, is there any way tin which hey may materially exist in the absence of the act of the parliament?

Whatever forms a new administrative agency takes the legislature must enact a statute creating the agency. This statute, sometimes called an agency’s organic act, parent act, or establishment act but more frequently is referred to as an agency’s enabling act, is the fundamental source of an agency’s power. The principle that the legislature creates agencies and sets limits on their authority should be regarded as cardinal rule number one of the administrative law.

Many people running the administrative machinery and on occasion even legal professionals lose sight of this fundamental principle. A misunderstanding of this basic concept can lead to erroneous assumptions about an agency’s ability to deal with a particular issue or a problem.

Some enabling acts contain specific provisions establishing agency procedures, but more often than not, when the legislature creates an agency, that agency acquires a specific substantive mission but derives its procedures from a general statue setting out procedural requirements for all agencies sharing its jurisdiction. One such example is the American Administrative Procedure Act of 1946 that uniformly governs the adjudicative and legislative procedure of administrative agencies. In Ethiopia, neither such broad, uniformly applicable administrative procedure, nor specific law detailing agency procedure exist at all. The first attempt was made under the imperial government in 1967. At that moment, a draft of proclamation dealing only with adjudicatory procedure of administrative agencies was prepared. However, it remained as a draft. Currently, the justice and legal system research institute has prepared a similar draft of the administrative procedure which is more or less similar to the 1967 draft.

Agencies make a great deal of policy within the boundaries of their enabling acts. They also establish procedures for efficient and fair decision – making. Enabling acts and administrative procedure acts often establish only minimum standard and requirements for individual agencies.

These statues are often so broadly phrased that agencies have enormous leeway to fill in the gaps, both procedural and substantive aspect of the legislation so long as they keep within the terms of the governing statutes. The areas in which many agencies are left free to set their own policies and procedures are quite extensive. We refer this to the freedom of action as agency’s discretion. Agency discretion is a second fundamental concept to keep constantly in mind in the study of administrative law.

Unfortunately, the concept of agency discretion is one of the least studied and most poorly understood aspects of administrative law. It is so little analyzed that it is frequently referred to as “the hidden component” of administrative law. A complete understanding of administrative law mainly requires a closer examination and appreciation of this phenomenon.

Classification of Powers of Administrative Agencies

Administrative agencies, in order to realize their purpose efficiently and effectively, need wider power and discretion. For this reason, they blend together three powers of government: executive, legislative and judicial powers. Even though in principle the later two powers belong to the legislature and courts, granting such powers has become a compulsive necessity for an effective and efficient administration.

Administrative agency rules and regulations often have the force of law against individuals. This tendency has led many critics to charge that the creation of agencies circumvents the constitutional directive that laws are to be created by elected officials. According to these critics, administrative agencies constitute an unconstitutional, another bureaucratic branch of government with powers that exceed those of the three recognized branches (the legislative, executive, and judiciary). In response, supporters of administrative agencies note that agencies should be created and overseen by elected officials, or the president. Agencies are created by an enabling statute; a state or federal law gives birth to agency and outlines the procedures for the agency's rule-making. Furthermore, agencies include the public in their rule-making processes. Thus, by proxy, agencies are the will of the electorate.

Supporters of administrative agencies also note that agencies are able to adjudicate relatively minor or exceedingly complex disputes more quickly or more flexibly than the state and federal courts, which helps to preserve judicial resources and promotes swift resolutions. Opponents argue that swiftness and ease at the expense of fairness are not virtues, the thrive of the administrative agencies.

The following is a brief discussion of the nature of the three powers of the administrative agencies.

Legislative (Rule Making) Power

Legislative power of administrative agencies, usually known as rule- making power and more formally delegated legislation, is the power of agencies to enact binding rules through the power delegated to them by the legislator.  The complex nature of the modern state is that such elected representatives are not capable of passing laws to govern every situation. Many of their lawmaking powers, as well as the power to administer and implement the laws, are therefore delegated to administrative agencies. These agencies are involved in virtually every area of government activity and affect ordinary citizens in many ways, whether these citizens are home owners needing a building permit to erect a new room, or injured employees seeking workers' compensation, or farmers selling their produce.

Efficient and effective administration necessarily requires promulgation of laws, flexible to the existing situation and dealing with detailed technical matters. These laws have to be provided in the required quantity and quality. However, due to the limitation of the on parliament as regards to the availability of sufficient time and expertise, the lawmaker will be compelled to delegate some of its powers to the administrative agencies.

When legislative power is delegated to administrative agency, it has to be exercised fairly and only with a view to attain its purpose. The agency should also enact rules within the limits of delegation set by the lawmaker.

Practically, it is difficult to avoid instances in which power may corrupt. Thus the lawmaker when delegating power should simultaneously introduce controlling mechanisms to ensure that individual’s liberty and freedom is not violated by the administration. Most importantly, the lawmaker, when granting power, is expected to provide specific procedure of rule-making. In most countries, an administrative agency exercising its legislative function is required to give notice to the public of the proposed rule and incorporate comments from the public. This ensures public participation in the administrative process. The rules issued by the agencies should also be published in a formal instrument, which is easily accessible to the public, thus, encouraging openness in the public administration.

Judicial (Decision – Making) Power

Efficient and effective administration also requires that those entities in charge of implementing the law be armored with judicial power, to some extent, similar to the power of the ordinary courts. Enforcement of law demands imposition of sanction and taking administrative measures and decisions. When agencies exercise their judicial powers, they are in effect applying the facts to the law just like a court. Consequently, they determine rights, entitlements and benefits of individuals. The decisions may greatly affect individual’s rights and benefits, for example, revocation of license, deportation of aliens, determining whether an applicant is entitled to pension, imposition of administrative fines for non- compliance, dismissal of a civil servant, dismissal of a university student, etc … are judicial decisions that by nature that affect the rights of individuals.

When an agency exercises its judicial function it is engaged in adjudication, a process very much similar with a trial court. While adjudicating a case, it will conducts an oral hearing with direct and cross examination, administers oath, decides on the admissibility of evidence and may compel an individual or a company to produce evidence. Then by weighting evidences of the applicant and respondent applies and interpreters the law to give a reasoned decision. To ensure impartiality and fairness the person deciding the matter should be relatively neutral from agency influence.

Still there is likelihood that agencies may abuse their decision- making power. As a result, the lawmaker, while granting such powers, is expected to provide minimum procedures applicable in the adjudication process.

Administrative Power

Administrative power is the residual power that is neither legislative nor judicial. It is concerned with the treatment of a particular situation and is devoid of generality. It has no procedural obligations of collecting evidence and weighing argument. It is based on subjective satisfaction where decision is based on policy and expediency. It does not decide on a right though it may affect a right. Advisory and investigative power of agencies may be mentioned as two typical examples of administrative power. In its advisory function, an agency may submit a report to the president or the head of executive and the legislature. Cases falling under advisory function include proposing a new legislation to the legislature, and informing the public prosecutor the need to take measure when there is violation of law. Disclosing information to the general public that should be known in the public interest and publishing advisory opinions are also regarded as advisory (administrative) functions.

Investigation is one of the major functions of administrative agencies. While exercising their investigative powers, agencies investigate activities and practices that may be illegal. Because of this investigative power, agencies can gather and compile information concerning the organization and business practices of any corporation or industry engaged in commerce to determine whether there has been a violation of any law. In exercising their investigative functions, agencies may use the subpoena power. A subpeona is a legal instrument that directs the person receiving it to appear at a specified time and place either to testify or to produce document require reports, examine witnesses under oath, examine and copy documents, or obtain information from other governmental offices. This power of investigation complements the exercise of the agency’s powers, especially the power to adjudicate.

Powers of Administrative Agencies

3.5.1   Nature and Source of Power of Administrative Agencies

At federal and state levels, administrative agencies gain whatever power they have by delegation-that is to say, that they don’t have inherent, constitutionally mandated power to act. Rather, a, higher level of government, normally the legislature, must delegate some of its own power to the agency.

How much power is that? It depends. In order for an agency to exist, it must first be created by the enabling legislation. This statute is a device that sets up the basic framework for the agency, and the set of rules and limitations by which it must live. These may include a variety of things including organizational matters, staffing, salaries and procedures for conducting business. The most important is the delegation of power and its limitation. The delegation may be quite broad, giving the agency virtually complete power within an area (e.g., all taxation matters within a jurisdiction), or it may be quite specific and restrict the agency's authority to a very narrow range of activities, such as operating a single toll road.

An agency may only exercise authority within the delegation of authority provided for in its enabling legislation, or subsequent legislation granting specific additional power. This specified authority is all the authority the legislature has "handed over" to the agency, and since the agency has no inherent authority outside of this "handed over" authority, there is no other authority to wield.

The limitation of agency power is an important concept, since actions taken by an agency which turn out to be outside the scope of its authority are not binding. A good deal of litigation between agencies and regulated parties concerns the question whether the agency acts within the scope of authority delegated to it, or whether it acts in a manner contrary to the  act of the superior branch of government.

Since the delegating body has such a wide degree of latitude in deciding how much power to delegate, there is no absolute rule as to how much power an agency has. If the question arises, the first step is to read the enabling legislation or decree, and subsequently granting or restricting its authority. These define the parameters of the agency's power. However, since, in most cases, the whole point of creating the agency is to get the legislature out of the business of day-to day management of some area of activity, delegations of power tend to be fairly broad.

3.5.2 Meaning and Significance of the Enabling (Establishment) Act

The F.D.R.E. constitution imposes a duty on the house of people’s representatives to create some agencies. Can you mention some of those agencies?

Even though their establishment has a constitutional basis, is there any way tin which hey may materially exist in the absence of the act of the parliament?

Whatever forms a new administrative agency takes the legislature must enact a statute creating the agency. This statute, sometimes called an agency’s organic act, parent act, or establishment act but more frequently is referred to as an agency’s enabling act, is the fundamental source of an agency’s power. The principle that the legislature creates agencies and sets limits on their authority should be regarded as cardinal rule number one of the administrative law.

Many people running the administrative machinery and on occasion even legal professionals lose sight of this fundamental principle. A misunderstanding of this basic concept can lead to erroneous assumptions about an agency’s ability to deal with a particular issue or a problem.

Some enabling acts contain specific provisions establishing agency procedures, but more often than not, when the legislature creates an agency, that agency acquires a specific substantive mission but derives its procedures from a general statue setting out procedural requirements for all agencies sharing its jurisdiction. One such example is the American Administrative Procedure Act of 1946 that uniformly governs the adjudicative and legislative procedure of administrative agencies. In Ethiopia, neither such broad, uniformly applicable administrative procedure, nor specific law detailing agency procedure exist at all. The first attempt was made under the imperial government in 1967. At that moment, a draft of proclamation dealing only with adjudicatory procedure of administrative agencies was prepared. However, it remained as a draft. Currently, the justice and legal system research institute has prepared a similar draft of the administrative procedure which is more or less similar to the 1967 draft.

Agencies make a great deal of policy within the boundaries of their enabling acts. They also establish procedures for efficient and fair decision – making. Enabling acts and administrative procedure acts often establish only minimum standard and requirements for individual agencies.

These statues are often so broadly phrased that agencies have enormous leeway to fill in the gaps, both procedural and substantive aspect of the legislation so long as they keep within the terms of the governing statutes. The areas in which many agencies are left free to set their own policies and procedures are quite extensive. We refer this to the freedom of action as agency’s discretion. Agency discretion is a second fundamental concept to keep constantly in mind in the study of administrative law.

Unfortunately, the concept of agency discretion is one of the least studied and most poorly understood aspects of administrative law. It is so little analyzed that it is frequently referred to as “the hidden component” of administrative law. A complete understanding of administrative law mainly requires a closer examination and appreciation of this phenomenon.

3.6 Classification of Powers of Administrative Agencies

Administrative agencies, in order to realize their purpose efficiently and effectively, need wider power and discretion. For this reason, they blend together three powers of government: executive, legislative and judicial powers. Even though in principle the later two powers belong to the legislature and courts, granting such powers has become a compulsive necessity for an effective and efficient administration.

Administrative agency rules and regulations often have the force of law against individuals. This tendency has led many critics to charge that the creation of agencies circumvents the constitutional directive that laws are to be created by elected officials. According to these critics, administrative agencies constitute an unconstitutional, another bureaucratic branch of government with powers that exceed those of the three recognized branches (the legislative, executive, and judiciary). In response, supporters of administrative agencies note that agencies should be created and overseen by elected officials, or the president. Agencies are created by an enabling statute; a state or federal law gives birth to agency and outlines the procedures for the agency's rule-making. Furthermore, agencies include the public in their rule-making processes. Thus, by proxy, agencies are the will of the electorate.

Supporters of administrative agencies also note that agencies are able to adjudicate relatively minor or exceedingly complex disputes more quickly or more flexibly than the state and federal courts, which helps to preserve judicial resources and promotes swift resolutions. Opponents argue that swiftness and ease at the expense of fairness are not virtues, the thrive of the administrative agencies.

The following is a brief discussion of the nature of the three powers of the administrative agencies.

3.6.1   Legislative (Rule Making) Power

Legislative power of administrative agencies, usually known as rule- making power and more formally delegated legislation, is the power of agencies to enact binding rules through the power delegated to them by the legislator.  The complex nature of the modern state is that such elected representatives are not capable of passing laws to govern every situation. Many of their lawmaking powers, as well as the power to administer and implement the laws, are therefore delegated to administrative agencies. These agencies are involved in virtually every area of government activity and affect ordinary citizens in many ways, whether these citizens are home owners needing a building permit to erect a new room, or injured employees seeking workers' compensation, or farmers selling their produce.

Efficient and effective administration necessarily requires promulgation of laws, flexible to the existing situation and dealing with detailed technical matters. These laws have to be provided in the required quantity and quality. However, due to the limitation of the on parliament as regards to the availability of sufficient time and expertise, the lawmaker will be compelled to delegate some of its powers to the administrative agencies.

When legislative power is delegated to administrative agency, it has to be exercised fairly and only with a view to attain its purpose. The agency should also enact rules within the limits of delegation set by the lawmaker.

Practically, it is difficult to avoid instances in which power may corrupt. Thus the lawmaker when delegating power should simultaneously introduce controlling mechanisms to ensure that individual’s liberty and freedom is not violated by the administration. Most importantly, the lawmaker, when granting power, is expected to provide specific procedure of rule-making. In most countries, an administrative agency exercising its legislative function is required to give notice to the public of the proposed rule and incorporate comments from the public. This ensures public participation in the administrative process. The rules issued by the agencies should also be published in a formal instrument, which is easily accessible to the public, thus, encouraging openness in the public administration.

3.6.2   Judicial (Decision – Making) Power

Efficient and effective administration also requires that those entities in charge of implementing the law be armored with judicial power, to some extent, similar to the power of the ordinary courts. Enforcement of law demands imposition of sanction and taking administrative measures and decisions. When agencies exercise their judicial powers, they are in effect applying the facts to the law just like a court. Consequently, they determine rights, entitlements and benefits of individuals. The decisions may greatly affect individual’s rights and benefits, for example, revocation of license, deportation of aliens, determining whether an applicant is entitled to pension, imposition of administrative fines for non- compliance, dismissal of a civil servant, dismissal of a university student, etc … are judicial decisions that by nature that affect the rights of individuals.

When an agency exercises its judicial function it is engaged in adjudication, a process very much similar with a trial court. While adjudicating a case, it will conducts an oral hearing with direct and cross examination, administers oath, decides on the admissibility of evidence and may compel an individual or a company to produce evidence. Then by weighting evidences of the applicant and respondent applies and interpreters the law to give a reasoned decision. To ensure impartiality and fairness the person deciding the matter should be relatively neutral from agency influence.

Still there is likelihood that agencies may abuse their decision- making power. As a result, the lawmaker, while granting such powers, is expected to provide minimum procedures applicable in the adjudication process.

3.6.3 Administrative Power

Administrative power is the residual power that is neither legislative nor judicial. It is concerned with the treatment of a particular situation and is devoid of generality. It has no procedural obligations of collecting evidence and weighing argument. It is based on subjective satisfaction where decision is based on policy and expediency. It does not decide on a right though it may affect a right. Advisory and investigative power of agencies may be mentioned as two typical examples of administrative power. In its advisory function, an agency may submit a report to the president or the head of executive and the legislature. Cases falling under advisory function include proposing a new legislation to the legislature, and informing the public prosecutor the need to take measure when there is violation of law. Disclosing information to the general public that should be known in the public interest and publishing advisory opinions are also regarded as advisory (administrative) functions.

Investigation is one of the major functions of administrative agencies. While exercising their investigative powers, agencies investigate activities and practices that may be illegal. Because of this investigative power, agencies can gather and compile information concerning the organization and business practices of any corporation or industry engaged in commerce to determine whether there has been a violation of any law. In exercising their investigative functions, agencies may use the subpoena power. A subpeona is a legal instrument that directs the person receiving it to appear at a specified time and place either to testify or to produce document require reports, examine witnesses under oath, examine and copy documents, or obtain information from other governmental offices. This power of investigation complements the exercise of the agency’s powers, especially the power to adjudicate.

Last modified on Wednesday, 02 May 2012 13:05