This article was first published by BBrief – Pages 12-13 in June/July 2025 Issue
South Africa needs urgently to reflect on a landmark legislative initiative that is unfolding in the United States of America: Designed to curtail the expansive authority of federal agencies which are able to issue economically significant regulations without congressional approval, this effort marks a pivotal attempt by American lawmakers to reclaim their constitutionally enshrined role as the nation’s primary lawmakers. It reins in an overextended administrative state where unelected officials wield extensive lawmaking and policy power with minimal constraint.
At the center of this reform is the REINS Act: Regulations from the Executive in Need of Scrutiny. It is an attempt to reclaim legislative sovereignty and to implement the global imperative for full and proper regulatory accountability.
Under its provisions, no federal regulation projected to impose an annual economic impact beyond a limited specified threshold may take effect unless formally approved by both the House of Representatives and the Senate. The purpose of this legislation is to reassert the primacy of the legislative branch over the regulatory domain, ensuring that their sometimes far-reaching economic rules are subjected to rigorous democratic scrutiny.
The REINS Act has been incorporated into a broader legislative package in 2025, one that will also encompass tax reductions and border security reforms. By embedding it within a comprehensive fiscal and policy bill, it is hoped to pass the measure through budget reconciliation, a procedural mechanism in the Senate that allows for expedited consideration and avoids the filibuster, an action that obstructs progress.
The REINS Act aims to decisively prevent unelected bureaucrats from imposing costly regulatory burdens without accountability, thereby safeguarding small and medium-sized enterprises, promoting economic growth and capital formation, encouraging innovation, and driving sustainable job creation.
Complementing this initiative is the proposed Prove It Act, which further advances the goal of regulatory oversight. This legislation requires federal agencies to quantify both the direct and indirect economic costs of any proposed new or revised rule, particularly with respect to its impact on small businesses. By mandating a comprehensive cost-benefit analysis, the Prove It Act seeks to ensure that regulatory interventions are economically justified and proportionate.
These efforts reflect a growing concern in the United States over the concentration of regulatory power within executive agencies. Critics argue that the modern administrative state, exemplified by agencies such as the Environmental Protection Agency (EPA) and the Federal Trade Commission (FTC), routinely issue rules with the full force of law, but absent the consent of the elected legislature. The result is a regulatory regime that undermines both democratic accountability and economic vitality.
The compliance burden imposed by such regulations is often most acutely felt by small and mid-sized businesses, which lack the financial and legal resources to navigate complex regulatory frameworks. The Prove It Act responds to this challenge by requiring agencies to demonstrate that the anticipated benefits of proposed regulations outweigh their economic costs, particularly those borne by smaller market participants.
The REINS Act targets economically consequential regulations – those exceeding a limited designated annual impact threshold – and insists that Congress explicitly authorises such measures. In doing so, the Act seeks to restore a constitutional balance, ensuring that rules are not imposed through administrative fiat but are instead subjected to the representative deliberation of the legislative process.
In recent years, growing segments of the policy, academic and business communities have voiced alarm over regulatory overreach, particularly in sectors such as labour, finance, environment and healthcare. Many of these regulations are criticised as unduly complex, insufficiently justified, and insensitive to their long-term economic consequences. The REINS and Prove It Acts are thus emblematic of a broader political and philosophical shift: a demand for transparency, proportionality and institutional accountability in the making of binding regulations.
By mandating public justification and legislative oversight, these reforms aim to produce fewer, better-crafted, more balanced regulations that respect both economic freedom and the constitutional separation of powers.
The American experience prompts a critical reflection for South Africa: Similar legislation should be introduced here to restore proper parliamentary oversight over our regulatory authorities.
In the current South African context, agencies such as the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) operate with virtually untrammeled power to issue binding instruments with the force of law. These instruments are variously titled. They include “Regulatory Instruments,” “Standards,” “Directives,” “Board Notices,” and “Interpretive Notes” among others, constituting thousands of pages of new law, mostly promulgated without any form of parliamentary debate, approval, or even awareness.
This trend represents a serious erosion of the constitutional doctrine of the separation of powers. Indeed, some legal scholars and commentators have gone so far as to characterise the FSCA as a “state within a state”, not only for its autonomous legislative activity, but also for its ability to impose levies, adjudicate its own rules, and unilaterally determine and collect fines. A particularly troubling feature of the FSCA is that it also claims the authority to set insurance distribution prices, operating in contradiction to established policy under the Department of Trade, Industry and Competition, and without any obligation to justify such decisions.
The FSCA and PA, while prominent examples, are not isolated anomalies. Numerous South African regulatory bodies now possess similar legislative and adjudicative capabilities, functioning with minimal transparency and operating largely beyond the reach of Parliament.
Considering these realities, the introduction of a South African counterpart to the REINS and Prove It Acts would not merely be prudent, it is essential. Such legislation would restore the role of Parliament as the final arbiter of economically impactful rules, ensure proper fiscal and legal oversight of regulatory bodies, and protect small and mid-sized enterprises from the depredations of unchecked bureaucracy.
South Africa’s democratic institutions, if they are to remain resilient and legitimate, must not allow the erosion of legislative sovereignty through regulatory overreach. The public has a right to know, and Parliament has a duty to determine the full extent of laws that govern the economy, who makes them, and on what terms.
A follow-up article will examine the broader scope of regulatory overreach in South Africa, profiling additional state entities that exercise legislative and enforcement powers without adequate democratic and constitutional checks.
