Law of Environmental Quality 3800A- Law 51.380*A

Sustainable Governance: A New Approach to Governing in the 21st Century

Kernaghan Webb, Sustainable Governance: A New Approach to Governing in the 21st Century (excerpt from K. Webb, ed., Voluntary Codes: Private Governance, the Public Interest, and Innovation (Ottawa: Carleton University Research Unit for Innovation, Science and the Environment, 2003).

Sustainable governance begins with the understanding that, while command-and-control regulation is powerful in many circumstances, it is nevertheless not without limitations. As Bryne Purchase indicates in his chapter in this volume, command-and-control regulation can be slow, cumbersome, and expensive to develop and implement, may stifle innovation, can impose unnecessary costs and may not be particularly well suited to operating in an environment of rapid technological, social or economic change. Command-and-control regulation can also be a rather blunt instrument to address a varied set of regulated actors, ranging from those who consistently make efforts to fully comply and even attempt to exceed regulatory requirements, to those who comply only when prodded, to those who are in chronic non-compliance.

Moreover, full enforcement of command-and-control regulation is a condition which is rarely attained or maintained (due to, for example, budgetary cutbacks, staffing reductions, and changing political and management priorities). Full enforcement of command-and-control regulation may be particularly difficult to attain in developing countries, where the legal structure may be weak and financial and human resources limited. For all of these reasons, it is important and indeed prudent to draw on a diversity of both State- and non-State-based structures, processes, instruments and approaches which advance public policy objectives, and not rely too extensively on any one technique.

Sustainable governance also starts from the premise that the State does not necessarily have a monopoly on governance approaches or activities (neither the instruments, the institutions, nor the resources). As this volume has discussed, there are increasing numbers of examples of imaginative private voluntary governance approaches springing up in many jurisdictions (many with significant potential public benefits), but they are not necessarily being developed or promoted in a systematic way (nor has their development necessarily been motivated by any apparent recognition of the problematic nature of over-reliance on the conventional command-and-control regulatory approaches enforced by government). As a result, there may be situations where the quality of the private governance approaches is uneven, or where encouragement, support or coordination of private governance approaches could be undertaken to good effect.

Many process, information, financial, voluntary consent-based, and other instruments are used by the State in support of conventional regulatory enforcement activities, and these approaches can form an essential piece of the sustainable governance picture. Examples include specialized government investigative bodies which have the authority, upon receipt of citizen petitions, to initiate reviews of enforcement effectiveness and if necessary, to recommend corrective action; government-operated information disclosure programs which can form the basis for direct individual, community, NGO or industry action; financial incentives which can stimulate changes of behaviour which would otherwise not be forthcoming or at least not be forthcoming as quickly; use of procurement powers or government foreign aid programs where funding is conditional on compliance with certain public policy-oriented conditions; government-industry covenants or agreements which structure and encourage behaviour beyond that required by regulations; voluntary codes which are government-sponsored, endorsed, supported or operated; and administration of the court system to allow for actions by private individuals and others on public policy issues (e.g., through private prosecutions, private civil actions and class actions). All of these are briefly discussed below.

Sustainable governance also recognizes that particular governance approaches and techniques may be more or less appropriate at different times, and that evolution in the mix and use of governance approaches is natural and to be expected. Put another way, time (and recognition that public policy is a dynamic, not a static exercise) is an important factor in sustainable governance, because sustainable governance is governance over the long term, and is an ongoing learning process. Thus, for example, in the short term, governments, industry and/or non-governmental actors may put in place voluntary, market-based code instruments which can in the longer term become the basis for a command-and-control approach once the understanding and support for a command-and-control regulatory approach has developed. This has occurred in Canada with the transformation of the voluntary CSA model code for the protection of personal information into federal legislation, as discussed elsewhere in this volume.

The concept of sustainable governance is also sensitive to the fact that, at any given moment, for any particular policy problem, it may be necessary to offer a range of governance responses in order to address a range of behaviours. This may mean devising approaches which reward over-achievers, stimulate acceptable levels of compliance from those who are generally law-abiding, and closely control chronic non-compliant actors. Thus, in this volume we have seen firms offered the possibility of expedited permitting if they voluntarily choose to put in place an environmental management system (EMS) in compliance with ISO 14000 standards. We have also seen implementation of a recognized EMSs being used in statutes as a factor to be taken into account in avoiding or reducing regulatory liability. We have also seen courts impose ISO 14001 registration on firms found not in compliance with the law as part of the sentencing process. These three examples show how a private voluntary standard can be used by governments and courts in three different ways to address three different types of regulated actor, as a supplement to a command-and-control regulatory scheme.

A key theme and understanding underlying the concept of sustainable governance is the value of harnessing the energies, expertise and advantages of multiple actors, instruments, institutions and processes. Diversity, and even some degree of conflict, rivalry and overlap among actors, instruments, etc., creates a thriving (if somewhat chaotic and confusing), multi-variate "eco-system" of approaches addressing a particular policy issue or problem, with the effect that the failure of any one technique does not necessarily mean an overall implementation failure, but rather that another actor, instrument, institution or process is in a position to "pick up the slack" or otherwise act as a check and balance concerning a particular behaviour. There is a form of "mutually assured implementation" dynamic which can occur when multiple actors, instruments, institutions and processes are all brought to bear on the same activity. Sustainable governance should not be looked upon as a zero-sum game: that is, energy and resources spent on developing and implementing one initiative takes away from attention devoted to another initiative. A key value of sustainable governance is harnessing energies and expertise which is currently under-utilized, and thereby increasing the total attention spent on addressing a particular problem.

Use of the sustainable governance approach is intended to assist policy makers in determining whether any particular policy context is as "robust" as it could be: i.e., are there the full range of actors, instruments, policies, processes, etc., in use? If not, why not? Where can adjustments and additions be made? What sort of interactions between instruments and actors are taking place? Could the system be better coordinated? Where are the gaps? By mapping the range of instruments and actors employed in several particular contexts using the sustainable governance model, it may be possible to identify under-utilized or over-utilized approaches or actors, as well as opportunities for better coordination.

The concept of sustainable governance should in no way be considered a call for the abandonment or even necessarily a reduction in command-and-control regulation. Rather it is to acknowledge the limitations of the command-and-control model and the value of drawing on approaches which are not so limited. Undoubtedly, these other approaches have limitations of their own. For example, limitations of voluntary approaches which have been discussed in this volume include difficulties addressing free riders, lower visibility and often lower credibility, the possibility of less rigorous standards being developed and applied, variable public accountability, and the potential for conflicts with regulatory approaches. As discussed in Chapter 5, some of these limitations of voluntary approaches may be rectified or minimized through use of legal approaches. While the concept and realization of sustainable governance involves much more than simply welcoming voluntary approaches into the instrument choice calculus, it is the role of voluntary approaches in sustainable governance which is the focus of attention here.

The three diagrams below are an attempt to visually depict how sustainable governance works in practice, in the context of consumer and environmental protection in Canada, and environmental protection in Indonesia. In all three diagrams, the large arrow in the centre represents the dominant instrument used in the particular context, with the smaller arrows on either side representing supporting programs and instruments. The indentations on either side of the large arrows in all three diagrams are intended to represent an occasional budget cutback or other setback which occurs to regulatory programs. The indentations do not relate to any particular cutback or setback -- their specific location on the side of the arrows is not significant. In all three diagrams, the smaller arrows are not placed in any particular order on either side of the main arrows. In other words, no attempt should be made to interpret the placement of any of the small arrows as particularly significant in relation to the main arrow or to the smaller arrows. Simply put, they represent supplementary or secondary instruments. In all three diagrams, there are many more secondary instruments which could be included: the instruments which have been identified should be considered a more or less representative sampling of what is currently in operation.

[see table: Sustainable Governance: Consumer Protection in Canada]
Looking first at Sustainable Governance: Consumer Protection in Canada, there are a host of federal and provincial (and other levels of government) command-and-control regulatory instruments which together form the backbone of consumer protection efforts. Included here are federal laws such as the Competition Act, the Consumer Packaging and Labelling Act, the Hazardous Products Act, and provincial laws such as the Ontario Consumer Protection Act and the Alberta Fair Trading Act, 1998. In recognition of their pivotal role, these command-and-control instruments comprise the large arrow in the centre. On both sides of these regulatory instruments are a range of other support instruments including an internet-based Consumer Gateway (a portal to government, industry, and NGO consumer information) and Complaints Courier (facilitating the ability of consumers to effectively resolve problems with merchants directly online), private law civil and class actions, and an Airline Ombudsman. All of these approaches are administered by federal, provincial, or other levels of government.

The remaining 22 small arrows identify voluntary codes or approaches pertaining to product safety, use of products, claims about foods, products and drugs, the reliability of online and conventional merchants, characteristics of the foods, accuracy of check-out scanner technologies, protections associated with certain services, quality assurances, and private redress mechanisms. Some of these voluntary codes and initiatives involve the State in some capacity (e.g., governments have approved, sponsored, funded, or participated in the development of the codes), and some of these do not. As discussed above with respect to personal information protection, voluntary initiatives can eventually be transformed into regulatory initiatives. Taken together, the diagram seems to suggest a thriving eco-system of command-and-control, process, information, and voluntary code/redress initiatives, an eco-system where the failure of any one instrument does not necessarily lead to no protection whatsoever.

Clearly, the diagram cannot accurately depict the inter-action between instruments and actors. For example, it does not portray the dynamic relationship between the Better Business Bureau as a "front-line" consumer complaints response, redress and market intelligence mechanism and government regulators, who share information and work out coordinated responses to emerging problems. Unanswered questions about the Canadian consumer protection sustainable governance model include whether the range of voluntary codes and initiatives are as effective as they could be, whether there are mechanisms for "quality control" of the voluntary instruments, whether there is adequate information disclosure and sharing among players and instruments, whether there is adequate coordination between the instruments, whether consumers are confused by or unsatisfied with the range of instruments, and whether there are gaps which need to be addressed.

[see table: Sustainable Governance: Environmental Protection in Canada]

Looking next at Sustainable Governance: Environmental Protection in Canada, again it is federal and provincial command-and-control regulation which is the dominant policy instrument, and hence command-and-control regulation occupies the "main arrow" position in the centre of the diagram. Included here are such federal statutes as the Canadian Environmental Protection Act, 1999, and the Fisheries Act pollution control provisions, as well as provincial legislation such as the Ontario Environmental Protection Act and the British Columbia Waste Management Act. Supporting the command-and-control regulatory approach are inter-governmental, federal, and provincial process instruments facilitating citizen petitions concerning instances of alleged problematic enforcement, private prosecutions and private civil actions including class actions on environmental matters, information disclosure initiatives, financial incentives, and a range of voluntary codes and agreements pertaining to environmental and energy characteristics of products, reduction of toxic substances, reduction of harmful climate change activity, sector-specific environmental management initiatives, and generic environmental management system initiatives. As has been discussed above with respect to use of ISO 14000 environmental management standards, there are a wide number of ways in which the voluntary approaches can interact with and supplement regulatory command-and-control approaches. It is also possible for there to be useful interaction between other instruments. For example, use of the National Pollutants Release Inventory, an information instrument, can assist in verifying progress or failure with voluntary toxic reduction programs. As with the questions articulated above concerning coordination of instruments and processes, effectiveness, quality control, etc. in the context of Canadian consumer protection, similar questions can be posed concerning the range of instruments and actors involved in the Canadian environmental protection sustainable governance model.

[See table: Sustainable Governance: Environmental Protection in Indonesia]
The final diagram, Sustainable Governance: Environmental Protection in Indonesia, is provided to illustrate the somewhat different dynamic typically at work among command-and-control regulatory instruments and other approaches in developing countries. Again, the command-and-control regulatory approach occupies the "main arrow" position, but here it is more of a work-in-progress rather than a fully actualized instrument. In light of the comparatively weak nature of the command-and-control instrument, the support approaches are of particular importance in developing countries. Thus, community information programs such as PROPER (discussed in Chapter 13), as well as foreign aid programs, international conventions, pressure at the local community, supplier, NGO, consumer, and regional level, and international voluntary programs such as ISO 14000, and the FSC sustainable forestry standards can all play important roles in stimulating environmentally sensitive behaviour. While a modern, fully funded, properly administered command-and-control regulatory instrument might be the preferred option, in its absence, the other approaches can at least provide some degree of market and community pressure for private sector companies to meet basic environmental protection norms.

The sustainable governance model was developed by the author in an attempt to convey more clearly the value of diverse, multi-variate and multi-actor approaches to governing, and to illustrate the important role that voluntary codes can play in contributing to more robust, flexible and effective public policy. Sustainable governance is essentially a lens for better understanding how instruments and actors can and do interact, but it is also intended to assist in critical analysis of the sufficiency of current governance approaches in particular policy contexts. Making the shift from conventional thinking about governing to sustainable governance may be difficult for some, who have ideological predispositions in favour of or against certain approaches, who are uneasy about the varying degrees of control offered by different approaches, and who are troubled by a complex, non-linear approach to achieving public policy objectives. The immediate issue here, however, is more modest: how can the State more systematically integrate use of voluntary codes into their public policy design and implementation thinking and activities, and thereby improve the quality of life, and the economic well being of its citizens and businesses, and those of the broader global community?

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