Open Collections

UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

Co-regulating corporate social responsibility : government response to forest certification in Canada,… Lister, Jane Evelyn 2009

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
24-ubc_2009_spring_lister_jane.pdf [ 5.01MB ]
Metadata
JSON: 24-1.0067123.json
JSON-LD: 24-1.0067123-ld.json
RDF/XML (Pretty): 24-1.0067123-rdf.xml
RDF/JSON: 24-1.0067123-rdf.json
Turtle: 24-1.0067123-turtle.txt
N-Triples: 24-1.0067123-rdf-ntriples.txt
Original Record: 24-1.0067123-source.json
Full Text
24-1.0067123-fulltext.txt
Citation
24-1.0067123.ris

Full Text

CO- REGULATING CORPORATE SOCIAL RESPONSIBILITY: GOVERNMENT RESPONSE TO FOREST CERTIFICATION IN CANADA, THE UNITED STATES AND SWEDEN  by Jane Evelyn Lister B.A., Trinity College, University of Toronto, 1987 M.B.A., University of British Columbia, 1995  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in The Faculty of Graduate Studies (Resource Management and Environmental Studies) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) April 2009  © Jane Evelyn Lister, 2009  ABSTRACT The emergence of private environmental governance has been interpreted in the policy and global governance literature as a “retreat of the state” or “governance without government”. However, the most established example of a corporate social responsibility (CSR) standard, forest certification, reveals governments endorsing, enabling and even mandating certification. Forest certification demonstrates that the state is not in retreat, but has simply shifted its role towards co-regulation. Despite the increasing evidence, scholars have largely ignored the significance of this transformation. This dissertation addresses this critical knowledge gap by developing the governance concept of CSR co-regulation, which serves to explain how governments are harnessing private rulemaking authority alongside state regulation. Through a comparative case study drawing on more than 120 interviews, the research evaluates how and why governments within the world’s leading certified nations (Canada, the United States and Sweden) have responded to forest certification, and the implications for forest governance. The results show that these governments are increasingly engaging in certification through a range of co-regulatory approaches that complement, rather than substitute for forest laws. While the rationale for co-regulation are similar across the case study jurisdictions, government co-regulatory responses have differed as influenced by socio-political, economic and environmental factors within the local context. The cases also highlight how certification coregulation benefits forest administration, decision-making processes, and policy outcomes and suggest that governments are engaging in certification for other than market-driven reasons. The evidence challenges the theory of “non-state market-driven” governance, demonstrating that certification is more accurately classified as a co-regulatory forest governance mechanism. Three new analytical tools are presented to evaluate the co-regulatory arrangements, and establish a framework to facilitate future research in this area. As well, the findings offer practical guidance to policy makers seeking new adaptive governance approaches to address complex sustainability challenges.  ii  TABLE OF CONTENTS ABSTRACT ................................................................................................................................ TABLE OF CONTENTS............................................................................................................ LIST OF TABLES ...................................................................................................................... LIST OF FIGURES..................................................................................................................... ACRONYMS .............................................................................................................................. ACKNOWLEDGEMENTS........................................................................................................ DEDICATION ............................................................................................................................ 1.0  INTRODUCTION ..........................................................................................................  ii iii vii viii ix xii xv 1  1.1 FOREST CERTIFICATION & CSR CO-REGULATION.................................................... 3 1.2 RESEARCH APPROACH & METHODOLOGY ................................................................. 6 1.2.1 Research Design & Objectives ........................................................................................ 6 1.2.2 Case Study Rationale ....................................................................................................... 6 1.2.3 Case Selection ................................................................................................................... 7 1.2.4 Data Collection & Analysis ............................................................................................. 10 1.3 RESEARCH PARAMETERS.................................................................................................. 12 1.4 STRUCTURE OF THE DISSERTATION ............................................................................. 17  2.0  CO-REGULATING CORPORATE SOCIAL RESPONSIBILITY ...................... 18 2.1 INTRODUCTION .................................................................................................................... 2.2 CSR & THE EMERGENCE OF PRIVATE AUTHORITY.................................................. 2.2.1 CSR Definition .................................................................................................................. 2.2.2 CSR Development ............................................................................................................. 2.2.3 The Institutionalization of CSR Initiative........................................................................ 2.3 CLASSIFYING PRIVATE ENVIRONMENTAL GOVERNANCE ................................... 2.3.1 From Government to Governance ................................................................................... 2.3.2 Environmental Governance Typology............................................................................. 2.4 CO-REGULATORY GOVERNANCE SYSTEMS ............................................................... 2.4.1 Prescriptive versus Voluntary Policy Tools.................................................................... 2.4.2 Classifying Self-regulatory Policy Instruments .............................................................. 2.4.3 Co-regulatory Policy Mix................................................................................................. 2.5 EVALUATING PRIVATE ENVIRONMENTAL GOVERNANCE ................................... 2.6 PUBLIC SECTOR ROLE IN CO-REGULATING CSR....................................................... 2.6.1 CSR Co-regulation Rationale .......................................................................................... 2.6.2 Government Role in CSR.................................................................................................. 2.7 SUMMARY ..............................................................................................................................  3.0  18 20 21 22 25 27 27 28 32 33 36 40 45 50 51 52 56  GOVERNMENT ROLE IN FOREST CERTIFICATION...................................... 57 3.1 INTRODUCTION .................................................................................................................... 3.2 THE EMERGENCE OF FOREST CERTIFICATION .......................................................... 3.2.1 The War in the Woods & Tropical Deforestation........................................................... 3.2.2 The Failure to Establish a Global Forest Convention ................................................... 3.2.3 Competing Forest Certification Programs ..................................................................... 3.2.4 Certification Effectiveness ............................................................................................... 3.2.5 Certification Drivers......................................................................................................... 3.2.6 Credibility & Mutual Recognition ................................................................................... 3.3 CLASSIFYING FOREST CERTIFICATION GOVERNANCE .......................................... 3.3.1 Non-state Market-driven Governance.............................................................................  57 59 59 62 65 69 71 75 79 81  iii  3.3.2 Certification as a Global Governance Mechanism ........................................................ 3.3.3 Forest Certification as Domestic Forest Law................................................................. 3.4 FOREST CERTIFICATION CO-REGULATORY GOVERNANCE.................................. 3.4.1 Certification & Forest Law ............................................................................................. 3.4.2 Certification & Self-regulation ........................................................................................ 3.4.3 Certification & Regulated Self-regulation ..................................................................... 3.5 THE SPECTRUM OF GOVERNMENT ROLE IN CERTIFICATION .............................. 3.5.1 The Rationale & Benefits of Government Engagement ................................................ 3.5.2 Challenges of Government Role in Certification............................................................ 3.5.3 Direct & Indirect Government Co-regulatory Approaches ........................................... 3.5.4 Government Positions on Certification ........................................................................... 3.6 SUMMARY ..............................................................................................................................  4.0  CANADA: GOVERNMENT AUTHORITY IN FOREST CERTIFICATION ... 108 4.1 INTRODUCTION .................................................................................................................... 4.2 FORESTRY & CERTIFICATION IN CANADA.................................................................. 4.2.1 Certification Development & Adoption – National Level.............................................. 4.2.2 Provincial Forestry Administration & Certification Uptake......................................... 4.3 BRITISH COLUMBIA ............................................................................................................ 4.3.1 The Provincial Context..................................................................................................... 4.3.2 Forest Certification Uptake ............................................................................................. 4.3.3 Forest Company Certification Response......................................................................... 4.3.4 Government Certification Response................................................................................ 4.4 NEW BRUNSWICK ................................................................................................................ 4.4.1 The Provincial Context..................................................................................................... 4.4.2 Forest Certification Uptake ............................................................................................. 4.4.3 Forest Company Certification Response......................................................................... 4.4.4 Government Certification Response................................................................................ 4.5 QUEBEC ................................................................................................................................... 4.5.1 The Provincial Context..................................................................................................... 4.5.2 Forest Certification Uptake ............................................................................................. 4.5.3 Forest Company Certification Response......................................................................... 4.5.4 Government Certification Response ............................................................................... 4.6 ONTARIO ................................................................................................................................. 4.6.1 The Provincial Context..................................................................................................... 4.6.2 Forest Certification Uptake ............................................................................................. 4.6.3 Forest Company Certification Response......................................................................... 4.6.4 Government Certification Response................................................................................ 4.7 THE SPECTRUM OF PROVINCIAL GOVERNMENT ENGAGEMENT ........................ 4.7.1 Standards Development.................................................................................................... 4.7.2 Implementation ................................................................................................................. 4.7.3 Enforcement ...................................................................................................................... 4.8 FACTORS INFLUENCING CERTIFICATION CO-REGULATION................................. 4.8.1 Background Conditions & Government Rationale......................................................... 4.8.2 Factors Influencing Certification Co-regulation Variance ........................................... 4.9 SUMMARY ..............................................................................................................................  5.0  83 86 89 90 92 95 97 98 99 102 103 105  108 110 110 114 118 118 120 121 123 132 132 134 134 137 141 141 143 144 144 149 150 151 152 154 161 161 162 163 164 165 167 177  THE CERTIFICATION OF U.S. STATE-OWNED FORESTS: ENHANCED STATE FOREST GOVERNANCE CAPACITY ..................................................... 179 5.1 INTRODUCTION .................................................................................................................... 5.2 THE VARIANCE IN U.S. FORESTRY REGIMES.............................................................. 5.2.1 U.S. Forests & State Forest Tenure ................................................................................ 5.2.2 Multi-level Forest Administration ................................................................................... 5.2.3 U.S. Forestry Regimes......................................................................................................  179 181 181 185 188  iv  5.3 CERTIFICATION DEVELOPMENT & ADOPTION .......................................................... 5.3.1 U.S. Certification Status................................................................................................... 5.3.2 U.S. Certification Adoption & Evolution ........................................................................ 5.3.3 Government Role in Forest Certification........................................................................ 5.4 THE CERTIFICATION OF U.S. STATE-OWNED FORESTS........................................... 5.4.1 State Certification Drivers ............................................................................................... 5.4.2 State Certification Implementation Debates ................................................................... 5.4.3 Rationale for Certifying State-owned Forests ................................................................ 5.5 GOVERNANCE IMPLICATIONS OF STATE FOREST CERTIFICATION .................. 5.5.1 Implementation Challenges.............................................................................................. 5.5.2 The Benefits of State Forest Certification ....................................................................... 5.6 SUMMARY ..............................................................................................................................  6.0  CERTIFICATION-POLICY INTERACTION IN SWEDEN: PRIVATEPUBLIC FOREST GOVERNANCE SYNERGIES .................................................. 239 6.1 INTRODUCTION .................................................................................................................... 6.2 THE SWEDISH FOREST REGIME....................................................................................... 6.2.1 Intensively Managed Secondary Boreal Forest.............................................................. 6.2.2 Family Forest Ownership................................................................................................. 6.2.3 Fragmented Fiber Supply................................................................................................. 6.2.4 EU Export Dependence .................................................................................................... 6.2.5 The New Forest Regime – Freedom with Responsibility ............................................... 6.3 SWEDEN’S FOREST CERTIFICATION LEADERSHIP ................................................... 6.3.1 Certification Status ........................................................................................................... 6.3.2 Certification Development & Adoption........................................................................... 6.4 GOVERNMENT ROLE IN CERTIFICATION ..................................................................... 6.4.1 The Government’s Position.............................................................................................. 6.4.2 Expectations of Government Role ................................................................................... 6.4.3 The Range of Government Certification Role................................................................. 6.5 CERTIFICATION-POLICY INTERACTION ....................................................................... 6.5.1 The Window of Co-regulatory Opportunity .................................................................... 6.5.2 Enhancing SFM Targets................................................................................................... 6.5.3 Supplementing the SFM Discourse.................................................................................. 6.6 SUMMARY ..............................................................................................................................  7.0  189 189 190 193 195 198 211 220 221 222 229 236  239 241 241 242 245 246 247 250 250 252 257 257 258 258 262 263 265 273 279  CONCLUSION ............................................................................................................... 281 7.1 CO-REGULATING FOREST CERTIFICATION ................................................................. 7.1.1 The Spectrum of Government Engagement..................................................................... 7.1.2 The Rationale & Drivers .................................................................................................. 7.1.3 The Governance Implications .......................................................................................... 7.2 THE CO-REGULATORY OPPORTUNITIES & CHALLENGES ..................................... 7.2.1 Policy Design .................................................................................................................... 7.2.2 Policy Targets ................................................................................................................... 7.2.3 Institutional Durability..................................................................................................... 7.3 CERTIFICATION CO-REGULATION IN PRACTICE....................................................... 7.4 FUTURE RESEARCH .............................................................................................................  284 285 288 291 298 298 302 304 306 310  v  REFERENCES .......................................................................................................................... 312 APPENDICES ........................................................................................................................... 344 Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G  Research Interviews................................................................................................ The Leading Global Forest Certification Programs ............................................. U.S. State Forest Agency Interview Summary ..................................................... U.S. State Forest Certification Audit Outcomes................................................... Sweden Interview Questions.................................................................................. Certification Co-regulation – A Non-partisan Policy Approach ......................... Ethics Review Board Approval .............................................................................  344 348 350 352 354 355 360  vi  LIST OF TABLES 1.1 2.1 2.2 2.3 2.4 3.1 3.2 3.3 3.4 3.5 3.6 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 6.1 6.2 6.3 7.1 7.2 7.3 7.4 7.5 7.6 7.7  Case Study Forest Regimes.............................................................................................. CSR Codes & Standards................................................................................................... Hard Law vs. Soft Law Regulatory Approaches ............................................................ Theoretical Perspectives on Private Environmental Governance .................................. Government Role in CSR Co-regulation......................................................................... Forest Certification Programs .......................................................................................... Forest Certification Private Governance Classification ................................................. NSMD Authority .............................................................................................................. Forest Certification State-based Drivers & Public Authority Overlap.......................... Forest Certification Self-regulatory Governance Classification.................................... Summary of Government Forest Certification Positions ............................................... Provincial Forestry Comparison, 2004 ............................................................................ British Columbia Major Forest Certification Holders .................................................... Positive and Negative Certification Policy Value .......................................................... New Brunswick Major Forest Certification Holders...................................................... Certification Audit & Crown Land Monitoring Program Alignment............................ Quebec Major Forest Certification Holders .................................................................... Ontario Major Forest Certification Holders .................................................................... Provincial Government Role in Certification Enforcement, 2005 ................................ Canadian Forest Company Expectations of Government Role, 2005 ........................... Industry-government Certification Alignment, 2005 ..................................................... U.S. Forest Ownership...................................................................................................... Comprehensive State Forest Practice Acts...................................................................... Certified State-owned Forests (1996-2007 ..................................................................... State Certification Drivers................................................................................................ Certification Drivers by State........................................................................................... State Certification Private Funding.................................................................................. Industry Perspectives on State Certification ................................................................... Market Uncertainties and Justifications of Certification Expense................................. U.S. State Dual-Certification Status ................................................................................ State Certification Rationale ............................................................................................ Summary of State Forestland FSC Corrective Action Requests ................................... Sustainable Forestry Objectives & National Targets...................................................... Sweden Forest Certification Status, 2007 ....................................................................... “Living Forest” Protection Programs & Status............................................................... Government Forest Certification Co-regulation Strategies............................................ Government Rationale for Certification Engagement .................................................... Certification Co-regulation: Regional Considerations & Drivers ................................. Certification Co-regulation Governance Outcomes ....................................................... Certification Contribution to Forest Policy Process ....................................................... Certification Co-regulation Opportunities & Challenges............................................... Certification & Regulation: Complementary Governance Attributes ...........................  9 25 34 48 54 68 80 82 88 93 103 115 120 126 134 140 143 152 164 169 170 182 188 196 199 199 200 209 214 217 220 225 248 251 270 285 289 291 293 297 298 299  vii  LIST OF FIGURES 1.1 1.2 2.1 2.2 2.3 2.4 2.5 3.1 3.2 3.3 3.5 3.6 3.7 3.8 3.9 3.10 4.1 4.2 4.3 4.4 4.5 4.6 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 6.1 6.2 6.3 6.4 6.5 6.6 7.1 7.2 7.3  Case Study Target Sample ............................................................................................... The Top Certified Countries, 2003-3004 ........................................................................ Shifting Modes of Governance Authority ....................................................................... Scale of Policy Coercion .................................................................................................. Co-regulatory Policy Mix................................................................................................. Regulatory Enforcement Strategies ................................................................................. Government Role in CSR - Spectrum of Engagement .................................................. Percentage Certified Forest Area by Region, 2007 ........................................................ Certification Drivers, 2002............................................................................................... Forest Certification as a Non-state Market-driven Policy Instrument........................... Forest Certification Co-regulatory Governance.............................................................. Forest Certification Overlap with Forest Law ................................................................ Forest Certification Overlap with Self-regulation .......................................................... Forest Certification & Regulated Self-regulation ........................................................... Certification Costs by Ownership Size ($/ha/yr ............................................................. Spectrum of Government Role in Forest Certification................................................... Forest Certification Uptake in Canada (1999-2007 ........................................................ Provincial Government Certification Approach ............................................................. Provincial Government Certification Response.............................................................. Influence of Industry Expectations on Certification Enforcement ................................ Provincial Forest Policy Cycles ....................................................................................... The Temporal Dynamics of Certification-Policy Cycle Alignment.............................. State-owned Forestland versus Total State Timberland Area........................................ The Range of U.S. Forest Policy Regimes ...................................................................... U.S. Forest Regions .......................................................................................................... Certified U.S. Forests (Acreage by Program .................................................................. U.S. FSC and SFI Forest Certification Uptake (1992-2005........................................... State Government Role in Forest Certification............................................................... Certified State Forests, 2007 ............................................................................................ State Certification Timeline ............................................................................................. Evolution of State Certification Drivers.......................................................................... State Forest Certification Implementation Challenges ................................................... State Forest Certification Benefits................................................................................... Sweden Forest Ownership................................................................................................ Regions of Sweden ........................................................................................................... Certified Forest in Sweden (by ownership category), 2007........................................... Forest Certification Uptake in Sweden (1997-2007 ....................................................... Swedish Government Role in Certification .................................................................... Co-regulatory Forest Governance in Sweden ................................................................. Summary of Government Response to Forest Certification .......................................... The Politics of Certification Authority: A Virtuous Cycle ............................................ Optimizing the Policy Target ...........................................................................................  8 9 29 35 41 43 53 71 72 86 89 90 93 96 100 102 111 117 161 170 175 177 184 188 189 190 191 194 195 198 211 222 229 243 244 251 256 259 264 288 294 302  viii  ACRONYMS AFPA APEC ATFS ANSI BC BCTS BMPs BOF C&I CAR CCFM CFL CFSA CI CIS CLFA CoC CPET CORE CPPA CSA CSFCC CSR DEC DFA DNR EESC EMS ENGO EPA EU FLEGT FAO FIA FPAC FPB FPC FRA FRPA FS FSC GAO GDP GRI Ha HCP HCVF IN  American Forest and Paper Association Atlantic Provinces Economic Council American Tree Farm System American National Standards Institute British Columbia British Columbia Timber Sales Program Best Management Practices Bureau of Forestry Criteria and Indicators Corrective Action Request Canadian Council of Forest Ministers Crown Forest License Crown Forest Sustainability Act Continual Improvement Commonwealth of Independent States Crown Lands and Forests Act Chain of Custody Central Point of Expertise on Timber Procurement Commission on Resources and Environment Canadian Pulp and Paper Association Canadian Standards Association Canadian Sustainable Forest Certification Coalition Corporate Social Responsibility Department of Environmental Conservation Defined Forest Area Department of Natural Resources European Economic and Social Committee Environmental Management System Environmental Non-governmental Organization Environmental Protection Agency European Union Forest Law, Enforcement, Governance and Trade Food and Agriculture Organization of the United Nations USDA Forest Inventory Analysis Forest Products Association of Canada Forest Practices Board Forest Practices Code Forest Resource Assessment Forest and Range Practices Act Forest Service Forest Stewardship Council Government Accountability Office Gross Domestic Product Global Reporting Initiative Hectares Habitat Conservation Plan High Conservation Value Forest Indiana  ix  ISEAL ISO ITTO LRMP MAI MB ME MEA MFL MI MOF MOU MRNFP MSC MTCC NB NBF NC NGO NIPF NRCan NRDC NSMD OECD OMNR ONT PEFC PQ QFIC QUE RAN SBFEP SCC SCS SEPA SFA SFB SFI SFIA SFL SFM SIC SLU SSNC SWEDAC TFL TQM TRN TSFMA UBC UK  International Social and Environmental Accreditation & Labeling Alliance International Organization for Standardization International Tropical Timber Organization Land and Resource Management Plan Mean Annual Increment MacMillan Bloedel Maine Millennium Ecosystem Assessment Managed Forest Law (Wisconsin) Michigan Ministry of Forests Memorandum of Understanding Ministère des Ressources naturelles, de la Faune et des Parcs Marine Stewardship Council Malaysian Timber Certification Council New Brunswick National Board of Forestry North Carolina Non-governmental Organization Non-industrial Private Forestland Natural Resources Canada Natural Resources Defense Council Non-state Market-driven Organization for Economic Cooperation & Development Ontario Ministry of Natural Resources Ontario Programme for the Endorsement of Forest Certification Province of Quebec Quebec Forest Industry Council Quebec Rainforest Action Network Small Business Forest Enterprise Program Standards Council of Canada Scientific Certification Systems Swedish Environmental Protection Agency Swedish Forest Agency Sustainable Forestry Board Sustainable Forestry Initiative Swedish Forest Industries Association Sustainable Forest License Sustainable Forest Management SFI Implementation Committee Swedish University of Agricultural Sciences Swedish Society for Nature Conservation Swedish Board for Accreditation and Conformity Assessment Tree Farm License Total Quality Management Taiga Rescue Network Timber Supply Forest Management Agreements University of British Columbia United Kingdom  x  UN UNCED UNECE UNEP UNFF USDA USFS VAs WA WBCSD WCED WFP WRI WTO WWF  United Nations United Nations Conference on Environment & Development United Nations Economic Commission for Europe United Nations Environment Program United Nations Forum on Forests United States Department of Agriculture United States Forest Service Voluntary Agreements Washington State World Business Council for Sustainable Development World Commission on Environment & Development Western Forest Products World Resources Institute World Trade Organization Worldwide Fund for Nature/World Wildlife Fund  xi  ACKNOWLEDGEMENTS  I am foremost indebted to my supervisor, Professor Peter Dauvergne for encouraging and supporting my interdisciplinary research. Over the past several years I have been in the envious position of having a masterful advisor who not only inspired and entrusted me with creative freedom to explore across disciplinary boundaries but also provided timely and enthusiastic expert guidance that focused and continually raised the bar on my efforts. I am very appreciative of our many wide-ranging, thought-provoking discussions and for the valuable pragmatic lessons I have learned, not the least of which include the dangers of the passive voice and the importance of a clear argument. But most importantly, Peter has taught me about character and the qualities of humility and respect – traits that don’t just make someone a good researcher and colleague but are fundamental to citizenship and the hopes of achieving any sort of sustainability solutions. I am truly fortunate to have such an exceptional mentor. I have also been privileged to have the support and guidance of my dissertation committee including Professor Peter Nemetz at the Sauder School of Business, and Linda Coady, Vice-President of Sustainability for the Vancouver 2010 Olympic Committee. I am grateful to Peter Nemetz for his keen editorial eye and tough questions that highlighted important revisions along the way; and to Linda Coady for volunteering her professional time, keeping my research relevant, and continuing to amaze me with her inspiring ability to translate critical ideas into action. I would also like to thank Professors Gary Bull and John Innes at the UBC Faculty of Forestry for their contribution as university examiners and to Professor Kernaghan Webb at Ryerson University for his helpful feedback as external examiner. I owe a great deal of gratitude to the faculty, staff, and students at the Institute for Resources, Environment & Sustainability (IRES) who provided a stimulating interdisciplinary home. In particular, I am grateful to Professor Les Lavkulich (the founding director of IRES) for welcoming me into the RMES PhD program; and to xii  Professor Gunilla Öberg (the present IRES director) for assistance with my Sweden research and for our many engaging conversations about leadership and the challenges of interdisciplinarity. As well, I am appreciative of the generous guidance at various key points over the course of my doctoral program from a number of professors across the UBC campus including: Kathy Harrison, Rob Kozak, Warren Mabee, Alan Jacobs, George Hoberg, Mark Warren, and Bill Rees. In addition, I would like to acknowledge several scholars from outside of UBC for their helpful insights and advice at critical stages of my research including: Michael Howlett (SFU), Lars Gulbrandsen (FNI), Connie McDermott and Ben Cashore (Yale), Tom Koontz (Ohio State), Fred Cubbage (North Carolina State), Katarina Eckerberg (Umeå), Karin Lindahl (SLU), and Tage Klingberg (Gävle). I am also grateful for the opportunities I had to participate and receive scholarly feedback at several academic workshops including initial guidance from Atle Middtun (BI) and Ed Freeman (Virginia) at the EABIS-sponsored CSR PhD workshop at the Copenhagen School of Business (CBS) in October 2004; exploration of the emerging private environmental governance research agenda with Robert Falkner, Andy Gouldson and Philip Pattberg and their graduate students at the London School of Economics, Role of Private Actors in Global Politics Workshop in November 2005; and valuable feedback on my research methodology at the Dartmouth College Workshop on Industry Selfregulation in February 2006 from in particular, Andrew King (Dartmouth), Michael Toffel (Harvard), Aseem Prakash (Washington), and Cary Coglianese (Penn). The research would not have been possible without the participation of the many interviewees across Canada, the United States, and Sweden who were incredibly generous with their time and insights. In particular, I am indebted to J.P. Keikins (ForestWatch), Jeff Serveau (Industry Canada), and Rick Fox (USDA) for directly facilitating my research by inviting and supporting my attendance and participation at their forest conference and delegation meetings.  xiii  I am also appreciative for the following awards and grants I received that enabled my dissertation research: a UBC Faculty of Arts U.S. Studies Weyerhaeuser Foundation Research Grant; an Environment Canada Applied Environmental Economics and Policy Research Scholarship; a Social Sciences and Humanities Research Council of Canada (SSHRC) Doctoral Fellowship Award; as well as generous financial support provided by Professor Peter Dauvergne under his SSHRC-sponsored project on the Global Environmental Politics of Corporate Social Responsibility. I have been very lucky and am extremely grateful for the many friendships I have developed at UBC over the past several years. My new friends and colleagues not only provided a valuable sounding board for my research ideas but also helped me to balance incredibly hard work with having fun throughout the PhD process. I especially want to thank Natalia Vidal for our weekly pub sessions to rave, rant, question, and laugh about the highs and lows of our CSR research and life in general. Michelle Boyle for lingering coffee sessions in Chelsea, Quebec, and regular long distance phone calls to deconstruct the psychological aspects of motivation and writer’s block. Natalie Ban and Anton Pitts for re-fueling my spirits and re-inspiring my research efforts with kayaking, sailing, hiking, and backcountry ski outings. Christina Cook for exciting new adventures in skate skiing; and Meg O’Shea for helping to offset the long desk hours with glorious leaping and bounding through muddy north shore running trails while contemplating the connections between sustainability and embodiment. And finally, I am most thankful to my family for their strength and resilience in coping with our loss and difficult family transformation over the past several years, and to my longtime friends Jodi Norrison, Peter Gill, Alexandra Rockingham, Sheila Scott, and Sandy Scott for anchoring me and reminding me of my tremendous fortune. This dissertation is dedicated to my mother, Marilyn Lister, who I know would be very proud.  xiv  To my loving mother, Marilyn Jane Lister (1938-2004) – A tireless consumer advocate, community volunteer, and sage council to whom I can only hope to aspire.  xv  Chapter 1 Introduction Over the past 15 years, private environmental codes and transnational corporate social responsibility (CSR) standards have proliferated. Led by industry and/or nongovernmental organizations, these multi-stakeholder standards now address sustainability issues in a wide range of sectors across the globe – from forestry, mining, oil and gas, fisheries, agriculture, finance and chemicals to apparel, coffee, jewelry and tourism. Governments, corporations and non-governmental organizations have been enthusiastic about CSR with many groups heralding these voluntary multi-stakeholder efforts as the path to sustainable development.1 The CSR opportunity is enticing to all stakeholders – when corporations voluntarily take on greater responsibility for achieving societal goals, the company’s long-term value can increase, negative environmental impacts ideally are reduced, and the regulatory costs to governments are ultimately lessened. It is a win-win scenario. However, as CSR participation is uneven and as environmental and social conditions worsen in vulnerable areas across the planet, skepticism about CSR standards is growing: the sense is that on their own, they are falling short. Attention is shifting back to governments to “scale up” CSR efforts. Some governments have heeded the call while others remain on the sidelines. The role of the public sector is unclear and a point of global debate. Should governments ignore, facilitate, compete with, or perhaps even mandate CSR? On the one hand, by enabling CSR, governments could be perceived as handing over the policy reins – effectively turning the fox loose in the henhouse (i.e. trusting the market with the public good). On the other hand, by ignoring or merely observing CSR, governments may lose the opportunity to leverage private resources as well as the chance  1  Sustainable development is a contested term however the standard definition from the Brundtland Commission is, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” See World Commission on Environment and Development (1987).  1  to reward corporate virtue. The implications of government CSR engagement are largely unexplored. This dissertation addresses this significant research gap. The following seven chapters assess the public sector role in CSR by evaluating government response to the most well-established CSR standard, forest certification. The research focuses on forest certification not just because it is a highly developed CSR example but also because the pattern of certification adoption and its theoretical classification are puzzling: If certification was intended to fill a governance gap in tropical regions, what role is it actually serving in the highly regulated northern nations where 90% of certification participation is occurring? And why does the environmental governance literature label certification a non-state market-driven mechanism when the standards incorporate public forest laws and governments are directly engaging? In this dissertation I argue that while governments in developed countries have communicated a position of non-interference in forest certification, they have responded to certification through a range of direct co-regulatory approaches. Specifically, they have engaged in certification at the development, implementation and/or enforcement stages of certification governance systems, integrating the private governance mechanism as an additional policy tool alongside traditional forest regulation, and resulting in supplemental forest governance capacity. Specifically, the contest of overlapping forest rules, as well as the beyond-compliance forest certification requirements have encouraged adaptive improvements in forest management practices and policy. While it is reasonable to expect that the political ideology of the elected government would be a major explanatory factor of government response to private forest governance, the patterns of government response to certification do not support this. Direct co-regulatory policy approaches have emerged and been carried forward across electoral cycles, whether a left-of-centre or a right-of-centre government (see Appendix F). Although elected officials play an obvious role in supporting forest policy initiatives, certification co-regulation has been largely non-partisan, with policies and programs developed and delivered at the level of the bureaucracy. As shown in the cases examined  2  in this dissertation, the response of government forest agencies to certification have been influenced by a range of socio-political, economic and environmental factors that have played out differently within the respective forest regimes. This introductory chapter is divided into four sections. The first section introduces forest certification, defines the concept of CSR co-regulation, and outlines the central arguments regarding certification co-regulation. I then provide an explanation of the research approach and methods before turning to a review of the parameters of the research. The chapter concludes with a brief overview of the structure of the dissertation.  1.1 Forest Certification and CSR Co-regulation Forest certification is a multi-stakeholder, voluntary CSR initiative that encourages sustainable forest management (SFM)2 by leveraging the global supply chains of multinational corporations and linking customer demand for certified forest products with producer supply.3 Environmental non-governmental organizations (ENGOs) initiated forest certification in the early 1990s to serve as a non-state global governance mechanism to curtail tropical deforestation in developing regions lacking sufficient public regulatory capacity. However, instead of addressing a governance gap, certification systems have been adopted in highly regulated forest producing nations as a supplementary forest governance mechanism within the domestic forest policy mix. Only one-tenth of one percent of forests in Africa and Asia are certified, and the majority of the 1.6 percent of certified Brazilian forest is plantation.4 So far, certification has not been an effective governance mechanism to combat tropical deforestation. Rather, it is promoting continual forest governance improvements in highly regulated northern boreal and temperate regions.  2  The term “sustainable forest management” (SFM) is employed throughout the dissertation. As a policy goal, it refers to the balancing of economic, environmental and social forest values so as to ensure a healthy and productive forest landscape that can meet the needs of present and future generations. 3 The forest certification process involves an independent third-party audit to verify and provide written assurance that forests have been managed in accordance with pre-established ecological, economic and social principles of sustainable forest management. 4 UNECE/FAO (2008:107).  3  Rather than dismiss the pattern of certification adoption as a complete global regulatory failure, this dissertation seizes a window of opportunity to learn about the importance of public sector capacity in enabling CSR. Given that forest laws are already well established in the industrialized countries where certification is occurring, what regulatory purpose is certification actually serving? If certification is gaining a regulatory foothold, does this imply that the state has retreated? How are governments responding to certification? What is the dynamic between public and private forest rule-making authority? Traditional statist governance scholars interpret the emergence of private authority as a retreat of the state or governance without government. Political authority is assumed to be a zero-sum contest.5 However, forest certification demonstrates the co-existence of public and private authority. Governments are actively engaging in and even mandating certification. This dissertation therefore argues that with private environmental governance the state is not in retreat but rather there is a shift in government role from state-centric to multi-centric governance within an expanded political space that encompasses both state and non-state deliberative arenas. Until recently, political scholars have largely ignored this governance transformation. Governments are engaging in CSR private standard-setting and CSR is serving a policy role but we have very little empirical or theoretical understanding of these newly forming “post-sovereign” coregulatory governance systems.6 In the absence of a theory of CSR governance, this dissertation introduces the concept of CSR co-regulation in order to provide an analytical lens through which to identify and assess the emerging public-private shared governance arrangements. With CSR coregulation, governments engage with CSR standards so as to leverage private rulemaking alongside public regulation. CSR co-regulation is about achieving an optimal 5  In other words, the authority “pie” is only so big and therefore, necessarily, if private authority increases than the state must be in retreat. 6 Co-regulation in a general sense refers to shared decision-making. Some scholars have interpreted this as private rule-making between corporations and civil society organizations. See Pattberg (2005) and Utting (2005). In this dissertation, I accept the governmental definition of co-regulation (i.e. co-operative policymaking between state and non-state private actors). See European Commission (2001).  4  balance of public and private rule-making authority within the policy mix in terms of maximizing the strengths while minimizing the weaknesses inherent in each regulatory system. In addition, I develop three analytical tools to support the development of the CSR co-regulation concept and guide the empirical evaluation of forest certification coregulation (see section 1.2.4). Governance scholars have attached many labels to certification in order to emphasize its private regulatory capacity, including such terms as civil regulation, private hard law, and non-state market-driven (NSMD) governance. NSMD has gained acceptance in the certification literature. Under the NSMD theory, forest certification is considered a purely private mechanism, establishing private forest rules independent of state authority.7 Yet forest certification systems rely on a baseline legal framework, require regulatory compliance and incorporate international forest principles; what’s more, government authorities are overseeing, facilitating, legitimating and, in some cases, even enforcing certification. This research therefore challenges the NSMD theory, arguing that this is a partial classification. Forest certification is unique with respect to its non-delegated private authority but certification systems also overlap with public authority and state processes, as well as rely on public governance capacity. By evaluating the role of government in certification in the leading global certified nations (Canada, the United States and Sweden), I show that forest certification is more accurately classified as a co-regulatory forest governance mechanism. I demonstrate that although certification has weaknesses as a stand-alone policy instrument, it provides supplementary governance capacity alongside public regulation. In particular, combining the dynamic innovative qualities of private certification standards with the stability and democratic accountability of traditional state-led regulatory approaches, certification coregulation encourages greater adaptive governance (i.e. decision-making processes that are responsive to complexity and uncertainty and are constantly testing, receiving feedback and continually improving). Overall, I argue that certification co-regulation  7  Cashore (2002).  5  constitutes a progressive step towards more responsive and adaptive rule-making, and hence more effective collective sustainability solutions.  1.2 Research Approach and Methodology 1.2.1 Research Design and Objectives This dissertation employs a mixed methods approach within an overall case study research design.8 As opposed to a scientific-based method of seeking to disprove a hypothesis based on pre-defined variables, I apply a historical-political method of interpreting past and present qualitative and quantitative evidence to develop and present a logical narrative and argument. The overall case study methodological design is comparative,9 as well as, hierarchical and temporal.10 The research not only compares and contrasts how and why government responses to certification have varied over the period 1995 to 2007, but it also evaluates the co-regulatory variance at the sub-national level, and the relative timing of government certification engagement. The five objectives of the case study analyses include: -  Assess the emergence, evolution and adoption of the leading certification programs;  -  Identify and compare government responses to forest certification;  -  Investigate and compare the rationale and drivers of government certification engagement;  -  Examine the dynamic of certification-forest policy interaction; and  -  Evaluate the forest governance implications of certification co-regulation.  1.2.2 Case Study Rationale The research employs a case study methodology so as to identify and assess the range of factors influencing government response to certification within each jurisdiction.  8  Yin (2003). Lijphart (1971). 10 Mahoney (2004). 9  6  The three central questions posed in the cases are: -  How has government responded to certification?  -  Why has government adopted its particular certification co-regulatory approach?  -  How has certification co-regulation affected forest governance?  Anticipating that government certification engagement would be varied and multi-causal as per a wide range of influencing and interacting factors and contextual considerations, the research methodology needed to identify and capture this dynamic. A statistical modeling approach would have restricted an investigation of the contextual complexity. Fundamentally, the case study approach facilitates the achievement of the main research objectives: explaining why governments are engaging in certification, and also exploring how certification co-regulation is occurring and the implications. It also enables the analysis of causal factors as well as the interpretation of historical influences. In addition, the case study methodology permits the use of multiple research strategies. For example, the U.S. case study includes an open-survey method. 1.2.3 Case Selection As the aim of this research is to understand the dynamic of interacting public and private authorities, the cases needed to be regions with operational public and private forest rulemaking systems. Although it might seem intuitively obvious to simply focus the research where the worst forest degradation and deforestation problems are occurring (i.e. tropical forests), this would not have permitted the investigation of interacting authorities. It was absolutely critical that the sample constitute jurisdictions with both high public and high private governance capacity. This would encourage the greatest political rule-making tension in terms of overlapping public and private governance systems and enable the study of certification co-regulation challenges, benefits and optimal arrangements.11 High public capacity refers to regions with well established legal frameworks and forest institutions, and high private capacity concerns global forest producing regions with multinational forest company ownership and/or management. As shown in Figure 1.1, 11  Knill & Lehmkuhl (2002).  7  having both high public and high private capacity places the research sample firmly within developed rather than developing or transitioning countries.12  Private Capacity  Figure 1.1: Case Study Target Sample  Developed Countries Developing Countries  Public Capacity  The research addresses the three critical cases: Canada, Sweden and the United States. I selected these countries for three reasons. Firstly, they are among the top global forest producing and exporting nations. Secondly, they all have well established yet, varying forest regimes (Table 1.1). And thirdly, they are leaders in terms of certification development and adoption (Figure 1.2). Global forest production is an important criterion because certification achieves leverage through global supply chains. A variance in forest regimes within the research sample provides an opportunity to examine the institutional influence of baseline regulatory structures to the co-regulatory dynamic. And lastly, certification leadership is essential, as certification needs to have gained a sufficient foothold in the region in order to study co-regulation.  12  In this dissertation, developed countries are distinguished from developing countries by their membership in the Organization for Economic Co-operation and Development (OECD). See: www.oecd.org/membercountries.  8  Table 1.1: Case Study Forest Regimes Canada  •  Highly regulated at the provincial level with majority public land.  United States  •  Variable regulatory approaches at the state level with majority private land.  Sweden  •  Highly regulated at the national level with majority private land.  The obvious omission from this sample is Finland. Although Finland meets the case selection criteria, I did not include this Nordic global timber producer in the study, as I wanted to focus on the “harder cases” with the greatest public-private tension (i.e. rulemaking contest). Very early on in April 1996, the Finnish government took a direct, leadership role in initiating the development of a national certification standard based on the country’s national forest program.13 Thus, rather than a tension in deliberating over public and private forest rules, over 95 percent of forestland in Finland was certified to the Finish Forest Certification standard within two years of its approval in 1998. Figure 1.2: The Top Certified Countries, 2003-200414 70 60  Million hectares  50 PEFC FSC SFI CSA ATFS  40 30 20 10  04 03 20  20 ria  st Au  nd Po la  an m G  er  20 04 20 03  20 04 20 03 y  20 04 20 03 ay  rw No  ed  en  20  04 20 03  20 04 20 03 Sw  A US  Fi nl an d  Ca  na  da  20 04 20 03  20 04 20 03  0  Source: UNECE/FAO (2004). 13 14  For a concise summary of forest certification in Finland see Cashore, Egan, Auld & Newsom (2007). See Appendix B for a description of the various lead certification programs.  9  As forest regulatory responsibility resides at the sub-national level within Canada and the U.S., I include provincial and state governments for comparison within these jurisdictions. For example, in the Canadian case study, I evaluate certification coregulation in four provinces – British Columbia, Ontario, Quebec, and New Brunswick. I selected these four sub-cases, as they are the top forest producing regions across Canada, and present a variance in terms of government certification response and industry expectation of government role (e.g., two of the four provinces have mandated certification). Although a significant Canadian forest producing region, I exclude Alberta as forestry constitutes only a small percentage of the overall provincial economy relative to oil and gas, and the Alberta government has played a “hands-off” role in certification. The public-private certification dynamic in Alberta has, therefore, been less complex (i.e. less competing) than in the other four provinces selected. Within the U.S. case study, I evaluate the twelve states that have certified their stateowned forests. The inclusion of such a large number of similar cases is based on my decision to conduct a “direct method of agreement” comparative methodology.15 I chose the direct method of agreement (i.e. comparing all twelve similar cases of co-regulation) as opposed to the indirect method of difference (i.e. comparing one or two states that have certified with a few that haven’t) because of the absence of an established coregulation theory. In other words, I recognized that before I could isolate and test the influence of a particular causal driver of certification co-regulation, it was necessary to first gain an appreciation of the range and interaction of various influencing factors associated with this particular certification co-regulatory approach. 1.2.4 Data Collection and Analysis The arguments and research findings in this dissertation are supported by multiple sources of secondary and primary data. I gathered unique empirical evidence over a three-year period through in-depth, semi-structured interviews with over 120 key forest governance stakeholders across Canada, the United States and Sweden (See Appendix A). As well, I conducted extensive document reviews of both primary and secondary 15  Mill (1843).  10  sources including the relevant scholarly literature, as well as publications, reports, articles, websites and press releases from non-governmental advocacy organizations, private research institutes, companies, industry associations, and governmental departments and agencies within each case study jurisdiction. And finally, I supplemented and triangulated my primary and secondary data and empirical evidence with observational information gained by attending several industry and academic forest certification and forest policy conferences within Canada, the United States and Sweden, including participating on the Canadian federal delegation to the United Nations Timber Committee policy forum on “government role in forest certification” in October 2005. Reflective of the cross-cutting, interdisciplinary dissertation topic, the data collection and analyses are supported by a number of comparative tools, frameworks and lessons drawn from several fields of study including: environmental policy, global environmental governance, environmental management, and business sustainability. In addition to the traditional case study methodology, the research draws upon methodological frameworks from “new tools of governance” research16 and applied CSR studies.17 As well, I reference and expand upon the regulatory typologies from the “responsive regulation”18 and emerging co-regulatory governance literature.19 I also leverage insights from the growing research on global environmental regime effectiveness, accountability and legitimacy.20 And finally, I utilize the concept of adaptive management from the environmental sustainability literature to assess and interpret certification co-regulation governance outcomes.21 Given the lack of an established theory or framework for understanding government response to CSR standards such as forest certification, I developed three analytical tools to aid in the data collection and analysis. The first is a governance typology that classifies and highlights the unique aspects of non-delegated voluntary CSR standards such as 16  See Eliadis, Hill & Howlett (2005); Jordan, Wurzel & Zito (2005); and Salamon (2002). See Conference Board of Canada (2004); Fox et.al. (2002); NRCan (2004c); and Ward (2004). 18 See Ayres & Braithwaite (1992); and Gunningham & Grabosky (1998). 19 See Fiorini (2006); Gunningham & Sinclair (2002); Haufler (2001); Knill & Lehmkuhl (2002); McBarnet et.al. (2007); Schulz & Held (2004); Utting (2005); and Webb & Morrison (2005). 20 See Held & Koenig-Archibugi (2005) and Wettestad (2001). 21 See Gunderson & Holling (2002); Holling (1978); and Walters (1986). 17  11  forest certification among the array of traditional regulatory and emerging public-private co-operative policy instruments (see Figure 2.1). The second is a matrix for illustrating the overlapping public-private boundaries of CSR standards with traditional and emerging forms of regulated self-regulation within co-regulatory governance systems (see Figure 2.3). And the final is a framework to map government response to CSR along a spectrum of engagement at the various stages of the policy cycle (standard development, implementation and enforcement) (see Figure 2.5). I had the opportunity to present and receive progressive feedback on these tools, as well as, my overall analytical approach at three academic workshops: “The CSR PhD Seminar” at the Copenhagen Business School in October 2004; ” “The Role of Private Actors in World Politics” meeting at the London School of Economics in November 2005 and “The Institutional Mechanisms of Industry Self-regulation” workshop at Dartmouth College in February 2006. Research Timing This research was conducted over a three and a half year period (2004-2007). I carried out the Canadian case study in 2004-2005; the U.S. study in 2006-2007; and the Swedish research in 2007. Following the completion of the Canadian and U.S. cases, I prepared summary reports and circulated copies to interviewees for comment and feedback. The findings have already had useful application. For example, the United Nations Timber Committee referenced the Canadian report as background material to their October 2005 certification policy forum, and the U.S. Forest Service cited the U.S. case study results in their recent report examining the implications of federal forestland certification.22  1.3 Research Parameters In order to ensure a feasible research project that facilitates optimal insight into the emerging CSR co-regulatory governance dynamic, the dissertation is focused within specific parameters. These research boundaries are explained below. 22  See: www.unece.org/timber/strategic_review/2007-2008/Table%20A.pdf and www.fs.fed.us/projects/forestcertification/executive-summary.pdf.  12  Firstly, although the central aim of the dissertation is to understand the broader question of the public sector role in CSR co-regulation, the research is concentrated on the specific case of government response to forest certification. As explained in the previous section, this is logical as forest certification is the most well developed and established example of a CSR governance standard. As private environmental governance standards develop and gain institutional capacity in other industry sectors, there will be opportunity to apply the analytical framework presented in this research to compare government co-regulatory responses to several different CSR standards within and across political jurisdictions. As well, although CSR encompasses both social as well as environmental considerations, I concentrate on the environmental aspects of sustainability rather than social considerations such as equity, security, employment, and community health and safety. Community engagement is addressed within the context of encouraging improved forestry practices to achieve and maintain healthy and productive forests.  In terms of the level of the analysis, the research is focused at the level of the bureaucracy (i.e. the lead forest departments and agencies within each jurisdiction) where co-regulatory policy development and implementation occurs. Broader speculative political questions regarding the degree of influence of the type of state and form of government (e.g., presidential versus parliamentary; federal versus unitary); the role of party politics (e.g. left versus right-of-centre); or the comparative contribution of executive, legislative and judicial actors in certification co-regulation are not systematically evaluated as they lack explanatory importance. However, as all of the case study jurisdictions are democratic, and the bureaucracy an agent to the elected government, by concentrating at the level of the forest agency, this not only provides a means to evaluate certification co-regulation policy formulation and delivery but also permits for an understanding of the influence of elected officials and internal administrative politics. At this point, it is important to note that unless specified, the terms “government” and “state” are employed interchangeably and inclusively throughout the dissertation to encompass the different public sector  13  actors, and levels and branches of the public service at the national and sub-national levels. With respect to the subject of the research, unlike most of the certification governance literature that only addresses the Forest Steward Council (FSC), the analyses in this dissertation concern both PEFC and FSC systems.23 As of late 2006, PEFC and FSC international certification programs accounted for 70 percent and 27 percent of the total global certified forest area respectively, and over the past decade the two systems have been converging in their multi-stakeholder design and SFM content. As well, governments have taken neutral positions in terms of their support for one system over another and both systems have been adopted in all of the case study regions, including increasing examples of “dual-certification”. Consequently, unless specified, the terms certification and certification co-regulation refer to both PEFC and FSC programs throughout the dissertation. As previously noted, this research addresses certification co-regulation within the major forest producing nations of the developed world. As explained in the previous section, the case study research method facilitates an in-depth examination of the contextual conditions influencing the range of certification co-regulatory approaches. However, this method also imposes certain research constraints, such as a limitation on the number of cases. Therefore, the research is focused on the three critical cases within developed forest producing countries where the vast majority of forest certification is occurring and where forest rules are already well-established. The concentration is on the major industrialized producer nations not just with the knowledge that these jurisdictions offer the necessary conditions to examine the tensions between public and private forest governance systems, but also with the intent that the findings from this study will offer useful guidance as certification uptake increases among the major forest producing regions of the transitioning and developing world (e.g., Brazil, Russia, China and India, as well as, other Latin American, African and South East Asian countries). 23  PEFC refers to the Programme for the Endorsement of Forest Certification. See Appendix B for a description of the FSC and PEFC programs.  14  In addition, the research is focused on certification co-regulation within the large developed forest exporting countries rather than the major importing consumer nations. Although the U.S. is also a top global forest consumer, the analysis does not include the demand-side role of state governments in co-regulating certification (e.g., establishing public procurement policies, providing chain of custody certification incentives, etc.) as state government attention during the period of the research (2004-2007) was directed towards the supply-side concern of increasing certified forest area. While the case selection provides an essential research parameter, the dissertation is also bound by the research questions. As the aim is to evaluate the interaction of public and private rule-making systems, the case evaluations are focused on how and why certification co-regulation is occurring and the governance outcomes. The analysis does not include on-the-ground effectiveness of certification co-regulation (i.e. the difference a shared governance approach is making to resolving specific forest problems such as deforestation, illegal logging, forest conversion, biodiversity preservation, endangered species, carbon storage or Aboriginal rights). The effectiveness with respect to the positive forestry management governance outcomes is addressed but the evaluation excludes actual forest outcomes. Few studies have yet to tackle the question of certification “problem-solving” effectiveness. This is because forest certification is fundamentally a forestry stewardship tool focused on improving site-level forestry practices rather than achieving broader landscape-level forest conditions (e.g., wildlife, biodiversity, etc.). As well, there is a tremendous level of complexity and uncertainty in defining, isolating and measuring the on-the-ground forest impacts attributable to certification. Given the lack of empirical data, this aspect of certification co-regulation is not included in the case study evaluations. However, forest outcome effectiveness presents an important area for future investigation. Although the cases are bound by the same research approach and questions (e.g., how and why did governments engage in certification and what were the implications), each case presents a slightly different co-regulation puzzle as per local forest regime conditions. Therefore, the focus in each case is slightly different. This enhances the  15  contextual details but also limits the direct comparison between the cases. For example, in the Canadian case, the compelling question is why is it that across similar forest regulatory regimes, provincial governments have responded differently to certification? In the U.S. the situation is the opposite. Why have different state forest regulatory regimes responded similarly to certification? And in the Sweden case, given the “frame law” policy environment that enabled certification development and adoption, how have certification and public policy interacted and have the Swedish forest authorities retreated? Although limiting comparison between cases, this slight variance in focus facilitates an important progression in the cases. The empirical cases evolve in their depth and focus from a broad examination of the range of government certification roles (Canada); to a concentrated study of the governance implications of a specific coregulatory approach (U.S.); to an in-depth investigation of the certification co-regulation policy dynamic (Sweden). Consequently, rather than including a separate comparative evaluation of the cases at the end of the dissertation, the key analysis occurs within the cases, and a synthesis of the case study results is presented in the conclusion. A final important research parameter concerns the governance target. Both the Canadian and U.S. cases concentrate on the governance implications of certification co-regulation on public land. In Canada, this is appropriate because over 90 percent of forestland is publicly owned. In the U.S., although the majority of forestland is privately owned, it is logical to focus on state government adoption of certification on state-owned public forestland as state lands account for a surprisingly disproportionate percentage of the total certified forest area across the country. The analysis does not include U.S. private nonindustrial forestland, as less than 1 percent of family forest owners have certified their forestland and government certification incentives have only just begun to develop. As well, the U.S. evaluation does not address national forest certification as the federal government’s position during this period has been to study rather implement certification. In summary, this dissertation constitutes a small contribution to the much larger emerging area of research concerning CSR co-regulation and, therefore, necessarily has distinct parameters. It is the intent that by outlining the focus and boundaries of the research in terms of the cases selected, questions examined and the research approach, that these  16  parameters will serve as a guide to the limits of generalizing the study results to other cases, as well as highlight opportunities for future research.  1.4 Structure of the Dissertation Over the course of the next seven chapters, this dissertation develops the central argument that CSR co-regulatory arrangements are emerging whereby governments harness private authority within their policy mix to enhance governance capacity and encourage ongoing voluntary corporate responsibility initiative while continuing to ensure corporate accountability through prescriptive baseline regulation. The purpose of this first chapter has been to introduce the topic, present the main arguments, and review the research methodology and scope. Chapters 2 and 3 provide the background and the theoretical context for the three case study evaluations. Specifically, Chapter 2 explains the emergence of CSR; defines the concept of CSR co-regulation; and presents a typology as well as a mapping tool for evaluating the shifting regulatory role of the state with regard to the various new modes of co-regulatory governance. Chapter 3 follows a similar progression to Chapter 2 but with respect to the particular CSR example of forest certification. It begins by explaining the emergence of forest certification and evaluating its unique classification as a non-delegated private governance mechanism. The chapter then introduces the specific case of certification co-regulation and, in particular, applies the co-regulatory matrix introduced in Chapter 2 to assess the range of regulatory instruments within a co-regulatory forest governance system. Chapters 4, 5 and 6 comprise the three empirical case studies – Canada, the United States and Sweden. Each case study has a similar structure in that each evaluation begins with background on the local forest regime and an overview of forest certification development and adoption within the respective jurisdiction. Government role in forest certification is then assessed in terms of the approach, drivers and the governance implications of certification co-regulation within each jurisdiction.  The dissertation  concludes in Chapter 7 with a synthesis of the case findings; an evaluation of the limits and potential of CSR co-regulation; operational recommendations for policy makers on achieving optimal forest certification co-regulation; and suggestions for future research.  17  Chapter 2 Co-regulating Corporate Social Responsibility  2.1 Introduction Corporate social responsibility (CSR) standards have not only recently increased in prevalence but also many are gaining unprecedented private rule-making authority and governance capacity – essentially mimicking the policy role of public institutions. While NGOs, corporations and governments have initiated and/or promoted transnational CSR standards as a global environmental governance mechanism to supplement international laws and agreements, the standards are also functioning as private regulations in developed nations that have established laws and strong public institutions. This raises an interesting puzzle. How is CSR private authority interacting with state authority in domestic political environments with high public capacity? Are the public and private rule-making systems competing or co-operating? What is the policy role of CSR private standards and what is the role of government in CSR private rule-making in these jurisdictions? In this chapter, I argue that CSR private governance standards not only constitute a distinct mode of governance but also a new self-regulatory policy instrument. Furthermore, I argue that with the emergence of private authority, governments are not in retreat but rather transforming in their role from policy delivery and delegation to also enabling private regulations alongside traditional regulation within multi-centric coregulatory governance systems that include public and private rule-making authority. And finally, I argue that there is a spectrum of intervention by which governments can co-regulate CSR so as to supplement governance capacity. The aim of this chapter is three-fold: to outline the emergence of private environmental governance authority; to explain the nature of co-regulatory governance systems; and to review the range of government approaches to co-regulating CSR. To achieve these  18  objectives, the chapter introduces three analytical tools. Firstly, I develop a typology to classify the vast environmental governance literature and to distinguish private environmental governance among the shifting hierarchical and self-regulatory modes of governance. I then present a matrix for illustrating a co-regulatory governance system in terms of positioning policy instruments along two key dimensions – public versus private rule-making authority, and market versus state-initiated policy development and delivery. And finally I introduce a regulatory scale to identify and position government response to private environmental governance along a spectrum of engagement ranging from indirect to direct mandating at the rule development, implementation and enforcement stages. These tools provide an analytical lens on CSR co-regulation as well as a theoretical framework to guide the empirical case study investigations, detailed in Chapters 4 to 6. The chapter begins by defining CSR, outlining the emergence of CSR initiatives, and explaining how many CSR standards have gained legitimacy and rule-making authority as private environmental governance mechanisms. I then evaluate how these CSR efforts constitute a unique case of “non-delegated” self-regulatory authority within the traditional shifting dynamic of state-delegated policy mechanisms. In particular, I argue that CSR initiatives such as certification and eco-label programs and multi-stakeholder codes are distinct as compared to historic examples of “delegated” industry selfregulation, and therefore present an unprecedented co-regulatory governance challenge and opportunity. I outline the interaction of public and private rule-making systems within a co-regulatory governance system and review the criteria for assessing the governance strengths and weaknesses of CSR mechanisms. The chapter concludes with an assessment of the range of approaches by which governments can co-regulate CSR alongside traditional regulation. It is important to note that an evaluation of the governance implications of CSR is somewhat complicated by the fact that there are two bodies of literature that address the subject of private environmental governance authority. The first is the global governance literature that focuses on the emergence and role of private authority in addressing the global governance gap that occurs given the absence of a sovereign world government.  19  The other is the public policy/new governance literature that examines private authority from the perspective of new multi-centric modes of governance in the domestic environment that constitute a shift from government to governance. This chapter draws largely upon the global governance literature to explain the emergence and assess the legitimacy of private environmental governance authority, while the analysis of co-regulatory governance is anchored in the domestic public policy/new tools of governance literature. However, it should also be noted that as the boundaries between public regulation and private governance become increasingly blurred, there is also a growing cross-over in the political science literature, with a growing number of public policy and global governance scholars addressing both the domestic policy and global governance implications of private authority.  2.2 CSR & the Emergence of Private Authority Corporate social responsibility (CSR) is fundamentally about the role of business in society and the balancing of public and private responsibility. To what extent does a company have a responsibility to go beyond the law to meet societal expectations? Is the corporate mandate solely to deliver a financial profit to shareholders or do businesses also have a responsibility to create value for society? Are the two goals mutually exclusive? There is a long history of debate over these normative questions with shifting emphases and fluctuating levels of societal concern.24 Over the past fifteen years, since the United Nations Conference on Environment and Development (UNCED) in 1992, there has been a resurgence of CSR interest, with societal attention directed towards increasing the accountability and responsibility of multinational corporations to address environmental issues and contribute to global sustainability solutions. This section defines CSR and outlines the social, political and economic factors that have influenced its re-emergence. I explain how running in parallel to public sector reforms 24  See Anderson (1989) for a concise historical overview of CSR debates regarding the role and responsibilities of commercial entities dating back to the pre-medieval period, through the mercantile period and early industrial era, to the present day.  20  and mounting global governance challenges, corporations and NGOs have co-operated in the development of a wide range of transnational CSR standards. The section concludes with an assessment of how many of these CSR initiatives are gaining institutional capacity as private environmental governance mechanisms with private rule-making authority. 2.2.1 CSR Definition CSR in its present manifestation is focused on harnessing the skills, power and resources of corporations to meet global sustainability goals. Non-governmental organizations (NGOs), governments and businesses around the globe have promoted CSR as a progressive, self-regulatory approach to achieving sustainable development. For example, the European Commission designated 2005 as the year of corporate social responsibility in European Union countries.25 While there is no single accepted definition of CSR, fundamentally, it concerns companies voluntarily choosing to integrate societal concerns (alongside shareholder interests) into their business operations. For example, leading companies demonstrate CSR and corporate citizenship by often going beyond compliance to meet stakeholder expectations regarding a triple bottomline of economic, social and environmental sustainable development objectives. 26 Specifically, these exemplary corporations undertake firm-level sustainability management initiatives such as environmental auditing and reporting, life cycle assessments, stakeholder consultation, socially responsible investing, and sustainability reporting. As well, many firms that embrace CSR co-operate in the development and implementation of industry-level accountability  25  European Commission (2006). The terms “corporate responsibility” and “corporate sustainability” are often used interchangeably with the concepts of CSR and corporate citizenship to describe the social and environmental responsibilities of the firm beyond legal compliance and maximizing shareholder profit. In this dissertation, I use CSR to encompass all of these terms. As well, CSR does not necessarily require going beyond compliance. For example, Industry Canada defines CSR as, “the way a company achieves a balance or integration of economic, environmental and social imperatives while at the same time addressing shareholder and stakeholder expectations.” The foundational literature on corporate citizenship and CSR includes: Bowie (1991); Carroll (1991, 1999); Elkington (1998); and Zadek (2001). 26  21  and transparency initiatives such as CSR codes and standards that encompass CSR principles and firm-level initiatives. While CSR initiatives are not formally delegated or enforced by the state, confirmation of conformance with the voluntary private standards is achieved through audits, public reporting, oversight by the standards boards, and “naming and shaming” of noncooperators (free-riders). Corporations are motivated to adopt voluntary CSR initiatives by many factors including an effort to avoid regulation, reduce risk, and manage corporate reputation in the face of environmental lobbying efforts.27 As well, many companies have sought to realize the potential win-win “sustainable development” and “ecological modernization” opportunities and advantages of combining economic growth with environmental and social considerations, and green technology innovation as promoted by academics, governments, business associations and non-governmental organizations.28 2.2.2 CSR Development Broadly speaking, a convergence of social, political and economic factors in both the domestic and global arenas contributed to the recent emergence of CSR initiatives. At the domestic level, during the 1980s and 1990s, governments in industrialized countries implemented public sector reforms and encouraged neo-liberal market-based selfregulatory policy approaches in order to achieve greater efficiencies in public administration and policy delivery.29 Running in parallel in the global arena, with the increased power of multinational corporations and the growing prevalence of global human rights, labour and environmental issues, newly forming transnational advocacy groups directed attention to a global governance gap, i.e. concerns that the challenges of economic globalization were outpacing the governance capacity of state governments and 27  For evaluations of voluntary beyond-compliance corporate environmental behaviour see Hoffman (2001); Lyon and Maxwell (2004); and Prakash (2001). 28 Key sustainable development references include: Dale and Robinson (1996); Daly (1990); Meadowcroft (2000); World Commission on Environment and Development (1987); and the World Business Council for Sustainable Development (2001). For an understanding of ecological modernization theory, (i.e. sustained growth through “green” technological innovation) see Christoff (1996); Hajer (1995); Mol and Sonnenfeld (2000); and Spaargaren and Mol (1992). 29 See Hood (1991); Kickert (1996); Osborne and Gaebler (1993); Peters (1994); and Sabatier (1986).  22  international mechanisms to achieve timely, democratic and effective outcomes.30 During this period, global civil society organizations as well as domestic-level advocacy groups called on corporations to take on increased environmental and social responsibilities. Corporate response to the global and domestic pressures for greater self-regulatory CSR efforts were mobilized within the United Nation’s World Commission on Environment and Development (established in 1987) and at the ensuing United Nations Conference on Environment and Development (UNCED) in 1992. In both forums, governments introduced and promoted the win-win possibilities of sustainable development solutions as a means to help close the global environmental governance gap. This set the stage for individual company CSR efforts, unilateral industry codes of conduct, as well as the development of a broad spectrum of multi-stakeholder CSR standards. Following UNCED, industry groups such as the World Business Council on Sustainable Development, the International Business Leaders Forum, CSR Europe and Business for Social Responsibility formed to develop and promote CSR initiatives. However, it was not only corporations that were spurred towards initiating, developing and implementing CSR standards. Non-government organizations also played a key role. During the 1980s, in the face of continuing evidence of corporate environmental abuses31 and the mounting environmental effects of globalization, (e.g., climate change, deforestation, depletion of the oceans, species extinction, etc.), environmental nongovernmental organizations (ENGOs) recognized a need as well as an opportunity to develop new advocacy strategies. Instead of negatively campaigning against individual companies, they began working directly and collaboratively with corporations and industries to develop multi-stakeholder CSR standards. Their interest in working cooperatively not only grew out of concerns but also hopes that while increasingly powerful  30  See Haas (2004); Keck and Sikkink (1998); and Keohane (2003:11). For example, Union Carbide’s denial of accountability for the 1984 Bhopal gas leak that killed 3000 people; and the Exxon-Valdez oil tanker disaster in 1989 that damaged the ecology of pacific northwest coastal areas. 31  23  multinational corporations were a significant contributor to the worsening global environmental problems, these transnational firms through their global supply chains were also a potentially significant contributor to the solutions.32 Companies responded to the NGOs to protect their reputations, avoid regulation, manage risks, and maintain their “social license to operate”.33 The shift in ENGO strategy towards working collaboratively rather than against industry was not only prompted by discouragement with the level of corporate commitments and what appeared to be ineffective business responsibility codes but also by a growing frustration with governments, and the inefficiency and ineffectiveness of state-based international processes. Non-governmental organizations argued that neoliberal policies had brought forth “the competitive state” which was more focused on lowering trade barriers and creating financial incentives to attract mobile capital and achieve global economic competitiveness than on developing new international laws and multilateral agreements to halt environmental destruction.34 Thus, in most cases, while the multistakeholder CSR initiatives leveraged international standards and agreements they intentionally steered around government participation so as to avoid marginalizing the CSR outcomes. Industry supported this approach as they deemed governments to be inflexible and likely to stall the process. Since UNCED, the result has been a rapid proliferation of CSR codes and standards developed by multinational firms and industry alone and/or in co-operation with civil society organizations, cutting across industry sectors and going beyond legal compliance and the reach of the state. Examples include company-specific codes of business conduct; unilateral industry codes of conduct; multi-stakeholder industry-specific CSR standards; and cross-sector multi-stakeholder global CSR standards (Table 2.1).35 32  Utting (2005). See Gunningham (2007:481-485) and Gunningham & Sinclair (2002:135-136) for an explanation of the importance of “social license” i.e. meeting social expectations to maintain corporate privileges (beyond legal and economic license to operate). 34 Barry & Eckersley (2005); Biermann & Dingwerth (2004); and Eckersley (2004). 35 As well as environmental standards, a similar range of social codes, labeling schemes and certification systems concerning child labour and working conditions emerged during this period including: the Sullivan Principles, the Social Accountability 8000 CSR standard and the Rugmark and Fair Trade coffee social 33  24  Table 2.1: CSR Codes & Standards CSR Initiative  Description  Examples  Company Codes of Business Conduct  Company statements of commitment to environmental and social responsibilities.  Nike, Royal Dutch Shell, PepsiCo, Gap Inc., etc. global sourcing and worldwide codes of business conduct.  Industry Codes of Conduct 36  Responsible business practices as defined by industry associations.  Chemical Industry Responsible Care Program, etc.  Industry-specific multistakeholder CSR standards  Responsible environmental and/or social business practices defined for a particular industry sector by a range of interested parties.  FSC and PEFC certification programs, the Marine Stewardship Council, the Equator Principles, Fair Trade coffee, Rugmark and the Kimberly Process, etc.  Cross-sector multistakeholder CSR standards  Responsible environmental and/or social business practices that cut across all industry sectors as developed by a range of interested parties.  AA1000, the Global Reporting Initiative, the Global Compact, ISO 14000, etc.  With increasing acceptance and adoption, these various transnational codes and standards are becoming increasingly powerful governance mechanisms. And as explained in the next section, many are gaining private rule-making authority. 2.2.3 The Institutionalization of CSR Initiative As noted earlier, the societal role and responsibilities of commercial entities have been debated for centuries. As well, there is a long history of governments sanctioning trades, industries and professions to self-monitor their practices to ensure responsible conduct and fair play. So, is there really anything new about the present wave of CSR self-  labeling programs. For a description of the range of global CSR codes and standards see Leipziger (2003); and McKague & Cragg (2007). 36 The World Bank estimates there are approximately 1000 codes of conduct that have been developed by multinational firms across a range of sectors including apparel, footware, agribusiness, tourism as well as the oil and gas and mining resource sectors. See World Bank (2003). For an inventory description of industry codes of conduct see OECD (1999).  25  regulatory mechanisms? In this section I argue that current CSR initiatives do constitute an important new governance phenomenon. In particular, an increasing number of CSR standards are becoming institutionalized; i.e. they are gaining legitimacy and authority as private governance mechanisms that perform environmental policy functions similar to governments.37 CSR standards and codes represent a new governance approach as they have distinct design features as compared to traditional examples of industry self-regulation. Firstly, they are “non-delegated”; i.e. they have not been formally initiated or sanctioned by the state but rather gain legitimacy through the acceptance of external actors.38 Secondly, the majority of these non-state initiatives are multi-stakeholder – developed by corporations and NGOs in partnership. And thirdly, they are typically trans-boundary and multi-scalar in nature, going beyond jurisdictional legislative constraints and operating in expanded political arenas that bridge local and global concerns. Beyond this, certain CSR initiatives such as certification programs, eco-labeling standards and multi-stakeholder codes are gaining private authority as they have specific features that constitute unprecedented self-regulatory governance capacity. For example, they have democratically-designed, multi-stakeholder rule-making and adjudication bodies that operate under written constitutions. As well, they have independent audit processes to enforce compliance to a prescriptive standard. Because of this unique governance capacity, as these CSR mechanisms achieve acceptance by markets and society as well as governments, they are gaining legitimacy and rule-making authority, essentially mimicking the policy role of public institutions. The standards are gaining market acceptance among suppliers, manufacturers, distributors, customers and consumers by leveraging the various industry supply chains. Societal acceptance is occurring through open, ongoing multi-stakeholder participation. And the standards are achieving governmental acceptance through their co-regulatory 37  See: Cashore (2002); Clapp (1998); Falkner (2003); Haufler (2001); Karkkainen (2004); Knill & Lehmkuhl (2002); Levy & Newell (2005); Meidinger (1997, 1999); and Pattberg (2007). 38 Cashore (2002).  26  design (e.g., incorporating legal compliance) and potential to supplement state governance capacity. The distinct institutional capacity of certification, eco-labeling and multi-stakeholder codes pertains to the three key aspects of governance – the polity, politics and policy. In terms of the polity, these private mechanisms are providing a new decision-making forum beyond the traditional state-centered political arena. With respect to politics, the private governance bodies are encouraging multi-stakeholder policy deliberation and increasing direct stakeholder rule-making responsibility. And with regard to policy, the private standards are establishing rules that not only reinforce legal requirements but also go beyond the law. Thus, as will be evaluated over the course of this dissertation, the emergence of private environmental governance authority has significant implications for policy-making, the traditional role of government, and overall state governance capacity to address local and global sustainability challenges.  2.3 Classifying Private Environmental Governance 2.3.1 From Government to Governance Governance refers to a decision-making system that provides direction to an organization or society. Although there is no single standard definition of the term, in common political usage, governance is ultimately about how to steer the economy and society towards reaching collective goals.39 Governance has therefore been synonymous with government as democratic governments are vested with the constitutional political authority to make and implement rules.40 However, today, new modes of governance have emerged that go beyond the traditional hierarchical model in which state authorities exert sovereign control over society. Rather 39  The usages of the term governance have developed separately within different academic sub-fields such as public administration, public policy, international relations and organizational theory. For example, there are micro-level corporate governance concerns with respect to organizational accountability and transparency and macro-level international development concerns regarding good governance political reforms. See Rhodes (1997). 40 Stoker (1998).  27  than government at the centre of governing decisions, there are now new governance multi-centric and private modes of networked and market-based governance with government role shifted towards greater steering, coordinating and facilitating through partnership arrangements and co-regulatory governance approaches. The policy and governance literature interprets this as a shift from government to governance whereby private actors participate to a greater degree in the formation and implementation of public policy and global governance mechanisms.41 As illustrated in the next section, CSR private environmental governance standards are not only a new governance mechanism but also government response to CSR constitutes a new mode of governance within emerging co-regulatory governance systems. 2.3.2 Environmental Governance Typology There is a vast literature on environmental governance that includes varied terminology and definitions of traditional and new governance forms of regulation, and modes of governance authority. The typology presented in Figure 2.1, categorizes the literature, firstly, along a continuum of public, private and hybridized governance authority, and secondly, by regulatory function (i.e. rule-development, implementation and enforcement).42 In particular, the typology highlights the unique case of non-delegated private governance and the emerging mode of multi-centric CSR co-regulatory governance. As evaluated in the next section 2.4, the combination of all four modes of governance constitutes a co-regulatory governance system.  41  Kooiman (1993); Mayntz (2003); Peters & Pierre (1998); Rhodes (1996); Rosenau & Czempiel (1992). For more recent literature on the transformed state role see Bartle and Vass (2005); Hennebel et.al. (2007); Heritier (2001); Jordan, Wurzel & Zito (2005); Knill & Lehmkuhl (2002); and Schulz & Held (2004). 42 Rule-making refers to the formulation of regulations. Implementation concerns the on-the-ground delivery of the rules. Enforcement refers to the mechanism to ensure transparency and accountability of rule implementation. This typology is based on the “stages heuristic” developed by policy scholars, Jones (1970), Brewer Anderson (1975), and Brewer & deLeon (1983), and as reviewed by Sabatier (1999:6-8).  28  Figure 2.1: Shifting Modes of Governance Authority Co-regulatory Governance System  Governance Function  Top-down Hierarchical Governance  Delegated Governance  CSR Co-regulatory Governance  Non-delegated Private Governance  Rule-making (Formulation)   Commandand-control regulation   Market-based voluntary regulation  Negotiated agreements   Multi-centric regulations  CSR co-regulation   Private regulations  CSR standards  Implementation (Delivery)   Regulatory agencies   Industry selfregulation  Policy networks  Public-private partnerships   Public-private cogovernance   Beyond compliance private initiative  Multi-stakeholder self-regulation  Enforcement   Monitoring  Compliance auditing   Shadow hierarchy  Responsive regulation   Regulated selfregulation   Independent audits  Public reporting  Naming & shaming  Public Authority  Private Authority  Hierarchical modes of governance concern the traditional bureaucratic, command and control style of direct government intervention through economic and social regulation in which legally binding standards are prescribed, policy and programs are implemented, and compliance is monitored through a government agency. With hierarchical governance, the state has central authority, makes the decisions, and delivers and enforces compliance. Delegated governance refers to the state ‘handing-off’ governance functions to non-state actors. Governments maintain central authority but delegate certain self-regulatory responsibilities. This category of regulatory instrument constitutes the traditional forms of voluntary industry self-regulation. For example, in terms of rule-making, rather than ‘hard law’ command-and-control direct regulatory intervention, governments take indirect approaches through ‘soft law’, market-based voluntary instruments such as industry self-regulation and negotiated agreements and covenants, as well as  29  informational tools and moral suasion.43 The implementation (delivery) of certain public services, provision of some public goods and/or achievement of specific collective goals are formally delegated to the private sector through self-regulation, policy networks and public-private partnerships. Governments focus less on “rowing” (i.e. direct delivery) and more on “steering” (i.e. enabling self-regulation).44 And finally, regarding enforcement, government delegates compliance responsibility to private actors under a shadow of hierarchy, meaning that they promote less coercive voluntary approaches but “move up” in terms of imposing direct intervention if there is industry non-cooperation.45 The governance literature refers to this as responsive regulation.46 As well, network governance scholars evaluate this as a form of meta-governance (i.e. government oversight of private networks).47 As previously outlined, private governance refers to self-regulatory CSR codes and standards, developed by private actors that have gained private rule-making authority. Unlike state-centric delegated self-regulation (discussed above), with private governance, self-regulation occurs outside of the realm of government sanction. Private governance concerns ‘non-delegated’ private authority whereby the agenda, rules, implementation and enforcement governance functions are carried out by private actors without necessary state participation and/or sanction.48 Implementation relies on voluntary corporate initiative to go beyond legal compliance and respond to societal concerns.  And  enforcement is achieved through independent third party audits, transparency through public reporting, and “naming and shaming” by citizens, media, non-governmental organizations and other firms.  43  ‘Soft law’ is declaratory but non-binding law. See Kirton &Trebilcock (2004). Examples include communication, knowledge transfer and voluntary approaches such as industry self-regulation, voluntary codes, voluntary challenges, charters, covenants and negotiated agreements. 44 Osborne & Gaebler (1993:34); Rhodes (1996). 45 Ayres & Braithwaite (1992); Gunningham & Grabosky (1998); Gunningham & Sinclair (1999); Phidd & Doern (1983). 46 Ayres & Braithwaite (1992). See section 2.3.3 for a more complete explanation of responsive regulation. 47 Meta-governance refers to the governance of governance -- for example, state governance of selfregulation. See Peters (2006) and E. Sorensen & Torfing (2007). For network management literature see Jessop (2002); Kickert, Klijn, and Koppenjan (1997); Kooiman (1993, 2003); Koppenjan and Klijn (2004); and E. Sorensen & Torfing (2007). As well, see Parker (2007) for a discussion of meta-regulation (i.e. employing the law to encourage beyond-compliance CSR behaviour). 48 Cashore (2002); Haufler (2003).  30  It is of note that the policy and governance literature classifies private governance under many conceptual labels. As a mechanism of industry self-regulation, there are numerous descriptors such as pure self-regulation, unilateral self-regulation, or multi-stakeholder regulation. As well, governance scholars have employed other terms including: corporate social responsibility,49 non-state market driven governance (NSMD),50 non-state global governance,51 private regulation,52 private hard law,53 civil regulation,54 and corporate codes of conduct.55 All terms highlight the private governance capacity of CSR codes and standards. The final mode of governance in the typology is CSR co-regulation. It refers to a hybridized governance approach whereby regulations are specified, administered and/or enforced through a combination of public and private rule-making systems.56 Although similar to delegated public-private co-operative arrangements, CSR co-regulatory governance is multi-centric in the sense that public and private policy authority co-exist rather than authority residing solely with the state.57 Hence, with CSR co-regulatory governance, private actors have rule-making authority rather than just policy influence. Public authorities co-regulate CSR private rule-making, implementation and enforcement through enabling legislation, hard law regulation and/or soft law approaches.  49  Auld, Bernstein & Cashore (2008); Moon (2002b); Vogel (2005). Cashore (2002); Cashore, Auld & Newsom (2004). 51 Bernstein & Cashore (2004). 52 Bernstein & Cashore (2007); Meidinger (1999). 53 Cashore, Egan, Auld & Newsom (2007). 54 Meidinger (2003); Vogel (2006). 55 Jenkins (2001). 56 For operational literature on co-regulation (e.g., the policy and practice of co-regulation) see Bartle & Vass (2005); European Economic and Social Committee (2005); Eijlander (2005); Hennebel, et al. (2007); Palzer & Scheuer (2004); and Senden (2005). 57 This differs slightly from the EU definition that regards co-regulation as a mechanism to implement legislation through delegated self-regulation. See Palzer & Scheuer (2004). Specifically, the EU defines co-regulation as, “…the mechanism whereby a Community Legislative Act entrusts the attainment of the objectives defined by the legislative authority to parties which are recognized in the field (such as economic operators, the social partners, non-governmental organizations, or associations).” See European Commission (2001). The term co-regulation is less commonly applied to describe the joint private governance arrangements between regulated organizations (e.g., corporations) and non-governmental actors (e.g., civil society organizations). See Pattberg (2005) and Utting (2005). As well, in some instances, the term co-regulation is employed to describe joint governance arrangements between government authorities (i.e. collaborative governance). See Ansell & Gash (2007). 50  31  The different means of meta-governing CSR include endorsing and participating in the private decision-making processes; enabling implementation; and/or the mandating the uptake of private standards. The particular case of government enforcement of a private governance standard in a co-regulatory system is an example of “regulated selfregulation.”58 In summary, private governance mechanisms are a distinct policy instrument as compared to traditional voluntary instruments because they have not been formally sanctioned by the state, and also because they have gained private rule-making authority. With private governance, private actors formulate the policy agenda, implement the rules, and oversee enforcement while governments are positioned in a lagging role having to decide whether and how to respond. Government engagement in CSR therefore constitutes a new mode of governance. As examined in the next section, with CSR coregulation, public and private authority are coincident within a shared governance system.  2.4 Co-regulatory Governance Systems There is an ongoing debate in political science as to whether the transformation from government to governance has constituted a retreat of the state,59 a hollowing of the government60 and/or governance without government.61 New governance scholars emphasize that rather than government retreat, traditional hierarchical forms of command-control intervention have been accompanied by other more complex and fluid forms of governance that leverage the capacity of private actors alongside state authority,  58  Knill & Lehmkuhl (2002); Schulz & Held (2004). These scholars argue that the state is in retreat as state sovereignty and capacity to govern at both the domestic and international levels has receded relative to accelerating financial and technical resources of private actors, global networks and increasing private self-regulatory governance authority. See Ohmae (1995); and Strange (1996). 60 In the global governance literature, a hollowing of the state refers to “the state losing power and authority upward to supranational institutions; sideways to the private sphere; and downward to the increasing demands for localism and devolved government.” See Lister and Marsh (2006:258). In the public policy literature, the hollowing of government refers to new public management reforms transferring various functions and activities traditionally undertaken by governments to private actors. See Brinton & Provan (2000); Brinton, Provan & Else (1993); Howlett (2000); and Peters (1994). 61 Mayntz (2003); Peters & Pierre (1998); Rhodes (1996); Rosenau & Czempiel (1992). 59  32  i.e. examples of governance with government.62 Rather than a hollowing of the state, there is a flux in regulation with de-regulatory and re-regulatory shifts occurring simultaneously.63 Governance scholars, Levi-Faur and Braithwaite refer to this shift as the emergence of regulatory capitalism.64 Building on the new governance position, in this section, I present a conceptual tool to clarify the mix of self-regulatory and co-regulatory tools of governance, beyond command-control regulation, that are emerging within co-regulatory governance systems. However, prior to this, I review the traditional policy debate regarding the pros and cons of statutory intervention versus market-based voluntary self-regulation and argue that while the policy literature generally paints a black and white distinction between these regulatory instruments, in fact, the public-private boundaries are increasingly blurred. Through a comparative evaluation of several regulatory typologies, I show that there is an increasingly complex array of unilateral, multi-stakeholder, delegated and non-delegated self-regulatory and co-regulatory approaches that reflect varying public and private hybridized arrangements. The section concludes with an overview of the underlying objectives of an optimal co-regulatory policy mix. 2.4.1 Prescriptive versus Voluntary Policy Tools Governments depend on markets for the efficient provision of goods and services that enhance societal well-being. Markets depend on government rules to function efficiently and fairly.65 Achieving an optimum public-private balance of state intervention and market freedom is a source of ongoing political debate. At one end of the spectrum are those who advocate “civic governance” whereby the state is required to intervene to protect the public good. Those on the opposite pole support an economic “consumer sovereignty” model of laissez-faire market dynamics and minimal government intervention. 62  Gunningham & Sinclair (1999); Karkkainen (2004); Knill & Lehmkuhl (2002); G. Sorensen (2004). Ayres & Braithwaite (1992); Jordan et. al., (2005); Utting (2005). 64 Regulatory capitalism refers to the expansion in the scope (state and non-state), arenas (international and domestic), instruments (hybridized) and depth of regulation (i.e. more governance of more kinds). See Levi-Faur (2005) and Braithwaite (2008). 65 Lindblom (2001). 63  33  This fundamental political debate threads through the environmental governance literature. Are sustainability goals best achieved by “hard law” legislated regulatory intervention or by “soft law” delegated voluntary approaches that leverage the power of the market to move firms toward better environmental performance?66 Table 2.2: Hard Law versus Soft Law Regulatory Approaches “Hard Law”  “Soft Law”  •  Regulatory prescription: The traditional command and control style of government regulation in which legally binding standards are prescribed.  •  Information: Influence constituents through the transfer of knowledge and the communication of reasoned argument and persuasion.  •  Economic regulatory instruments: • Include pollution fees, emission taxes and tradeable permits that aim to encourage firms to internalize the costs of environmental externalities through price signals.  Voluntary Approaches (VAs): VAs include many arrangements including industry self-regulation, voluntary codes, voluntary challenges, eco-labels, environmental charters, co-regulation, covenants and negotiated environmental agreements.  Source: Maged (2004).  Hard law and soft law approaches represent state-based regulatory and delegated voluntary mechanisms that range from high to low coercion (see Table 2.2). Assuming that policy instruments are substitutable, regulatory theory argues that governments prefer the least intervention (lowest coercion) in order to maintain legitimacy (policy acceptance).67 Governments then typically “move up” in level of coercion as necessary to overcome any social resistance to their policy goals and to achieve effective policy outcomes (Figure 2.2).  66 67  Gibson (1999); Harrison (2002b); Kagan et.al. (2003); Maged (2004); May (2005). Phidd & Doern (1983).  34  Figure 2.2: Scale of Policy Coercion Self-Regulation Voluntary Approaches  Low Coercion  Statutory Regulation Economic Incentives  Regulatory Prescription  High Coercion  There is an extensive literature on the benefits and drawbacks of voluntary versus government regulated approaches.68 Traditional ‘hard law’ regulation is generally criticized for being slow and expensive to develop, operate and amend; for fostering adversarial relations; for dampening innovation and beyond-compliance behaviour; and for producing unintended outcomes. Voluntary approaches such as self-regulation are criticized for being difficult to apply; less rigorous in their performance requirements; and for their uncertain public accountability. Industry generally advocates for the use of voluntary rather than regulatory approaches as this avoids the imposition of inefficient regulation and offers policy direction while at the same time providing a flexible framework for innovation. Further, industry argues that self-regulation generates business process improvements and positive changes in corporate culture that are often hard to quantify. As well, policy scholars argue that voluntary approaches can enhance efficiency and effectiveness by positioning the development and implementation of agreements in the hands of those closest and most knowledgeable about the issues.69 Some analysts disagree with the generally held position that government regulations raise costs and encourage inefficiencies and competitive disadvantage. For example, Porter and van der Linde argue that properly designed environmental regulations can trigger innovations that can offset the costs of reducing the negative effect of operations on the  68  For literature on the strengths and weaknesses of voluntary policy approaches see Coglianese & Nash (2001); Gibson (1999); Gunningham & Rees (1997); Harrison (2002b); Maged (2004); May (2005); Morgenstern & Pizer (2007); OECD (2003); Potoski & Prakash (2002); Webb & Morrison (2005). 69 Schulz & Held (2004).  35  environment, resulting in "enhanced resource productivity" (greater efficiencies), making companies more competitive within the global market.70 Research to assess the effectiveness of voluntary versus prescribed regulatory approaches finds that voluntary approaches as a stand-alone policy instrument generally fail to make substantial contributions to improved corporate environmental performance.71 In particular, in the absence of a threat of government penalty, there is incentive for companies to “free ride”, i.e. take advantage of benefits without participating and bearing costs. As well, the research finds that through the processes such as negotiated voluntary agreements, governments can become ‘captured’ by industry interests, thus compromising the achievement of performance targets.72 While the policy literature emphasizes the limitations of voluntary approaches on their own, these studies also highlight that voluntary approaches, in fact, rarely occur as stand alone policies. Rather, many voluntary approaches incorporate regulatory requirements and government oversight, and are seldom implemented in isolation of other policy instruments.73 As Gunningham and Sinclair explain, “…although analysts have traditionally painted a black-and-white distinction between prescribed statutory and market-based voluntary approaches, in reality, there is significant overlap.”74 This is demonstrated in the next section with respect to the increasingly hybridized range of selfregulatory policy instruments. 2.4.2 Classifying Self-Regulatory Policy Instruments From a political science perspective, self-regulation has traditionally referred to the statedelegation of regulatory powers to non-governmental bodies. As explained in the previous section, self-regulation represents the low-coercion end of the scale of regulatory tools that governments can employ. Self-regulation is not a new concept. For  70  Porter & van der Linde (1995). Antweiler & Harrison (2007); Harrison (2002a); Lyon & Maxwell (2002); Morgenstern & Pizer (2007). 72 OECD (2003). 73 Gunningham & Sinclair (2001); Gunningham & Young (1997); Harrison (2002b). 74 Gunningham & Sinclair (2001). 71  36  example, there is a long history of governments sanctioning self-regulation in the broadcasting, communication and financial sectors. Professional associations such engineers, lawyers, medical doctors and accountants continue to be largely self-regulated, although recently for some, under the increasingly watchful eye of the state. With neoliberal reforms, state delegated self-regulation has not only increased in prominence as a favoured environmental policy tool but also new forms of non-delegated CSR selfregulation have emerged. This has broadened the spectrum of self-regulatory approaches, as well as created a varied landscape of regulatory terminology. This section applies the previously introduced governance typology (presented in section 2.2.2), to the literature on self-regulation to sort and categorize the various theoretical definitions, distinctions and approaches that scholars have employed to classify regulatory policy tools. Specifically, I review the self-regulation typologies developed by Haufler (2003), Knill & Lehmkuhl (2002) and Gunningham & Rees (1997). The section begins with Haufler’s classification of self-regulation based on rule-making authority and stakeholder involvement. Knill and Lehmkuhl’s typology of self-regulation in terms of policy delivery is then presented. The section concludes with Gunningham and Rees’ categorization of self-regulation based on the degree of government involvement in rule-making and enforcement. a) Rule-making Authority Haufler (2003) applies the criteria of rule making authority to distinguish between four categories of regulation: •  Traditional regulation  Rules developed, promulgated and enforced by government.  •  Industry self-regulation  Private sector on its own develops standards and best practice.  •  Multi-stakeholder regulation  A variety of stakeholders, including nonprofit groups, negotiate and develop a set of standards; a decision-making framework and