PUBUC MANAGEMENT OCCASIONAL PAPERS CO-OPERATIVE APPROACHES TOREGULAHON PUBLICMANAGEMENT OCCASIONALPAPERS No. 18 CO-OPERATIVE APPROACHES TO REGULATION ORGANISATIONFORECONOMICCO-OPERATIONANDDEVELOPMENT ORGANISATIONFORECONOMICCO-OPERATION ANDDEVELOPMENT on30PtuhrsSueapnttemtobeArrti1c9l6e1,1tohfetOhregaCnoinsvaetnitoinonforsiEgcnoednoimniPcarCios-oonpe1r4atthioDnecanedmbDeerve1l9o6p0,meanntd(wOhEicChD)casmhaellinptroofmoortcee policiesdesigned: -toachievethehighestsustainableeconomicgrowthandemploymentandarisingstandardoflivingin Membercountries,whilemaintainingfinancialstability,andthustocontributetothedevelopmentofthe worldeconomy; -tocontributetosoundeconomicexpansioninMemberaswellasnon-membercountriesintheprocessof economicdevelopment;and -tocontributetotheexpansionofworldtradeonamultilateral,non-discriminatorybasisinaccordance withinternationalobligations. TheoriginalMembercountriesoftheOECDareAustria,Belgium,Canada,Denmark,France,Germany, Greece,Iceland,Ireland,Italy,Luxembourg,theNetherlands,Norway,Portugal,Spain,Sweden,Switzerland, Turkey,theUnitedKingdomandtheUnitedStates.ThefollowingcountriesbecameMemberssubsequently tAuhsrtoruaglhiaac(c7etshsiJounneat19t7h1e),daNteeswinZdeiaclaatenddh(e2r9etahfteMra:yJa1p9a7n3),(28MtehxiAcporil(181t9h64)M,ayFin1l9a9n4d),(2t8htehCJzaencuharRyep1u9b6l9i)c, bO(e2E1rsCt1D99D6eC)oc.nevTmehbneetriCoon1m)9m.9i5s),siHounnogfartyhe(E7utrhopMeaaynC1o9m9m6)u,niPtoileasndtak(e2s2npdartNoinvethmebeworrk19o9f6)theanOdECKoDre(aArt(i1c2lteh1D3eocfetmh-e RfiGLEMENTPAuTbIliOeNen:SfrTaRn9AaTisEGsoIuEsSleDlEitreCO;OPERATION Reprinted1998 ©OECD1997 Permissiontoreproduceaportionofthisworkfornon-commercialpurposesorclassroomuseshouldbeobtainedthroughthe Centrefran^aisd'exploitationdudroitdecopie(CFC),20,ruedesGrands-Augustins,75006Paris,France, TDsterahlano.nvusell(dra3ts3e,-b1eaM)llAo4ob4rt0a0p1i7a9nre2t4d37ofU7t0hSt,rhAioFs,uagbxohoro(tCk3h3Ce-sC1hC)oouO4pnl6yldri3bni4eeg:h6mth7atdCt1lep9e,:at/for/oawOrnwcwEee.vCceoDrCpyeynPrctuieobgrul,hnittc.arCctyuiosoemtnx/so.c,meApe2ltr,ltroShuteeehrveUAirnncidaetrp,eepd-l(Pi5Sact0asa8tcti)aeo7sln.5,s0I-7fn85o4r7t0h7pe05e,UrPnma2iir2sti2sesidoCRSneotdastetoeexwsreop1po6er,dromFdirDusarcsnieicvoeeo.,nr FOREWORD Regulationsarethesinewsofmoderngovernment,thelegalinstrumentsthatconnectabstract gdoevveerlnompeendtapdomliinciisetsratwiitvhetshteatedsayc-htaor-adctaeyriascttiicviotifesOEofCDcocmomuentrrciees,angdovperrinvamteentlifeef.feIcntitvheeneshsighhlays- becometoasignificantdegreedependentonthequalityofthesystemsthatdevelop,enforce, adjudicate,andterminateregulations.Asaninstrumentofgovernance,regulationswillcontinuetobe usedtomeetawidevarietyoflegitimatesocialandeconomicneeds. Inthepast20years,fewmodernreformsofthepublicsectorhavereceivedmoreattention,and stimulatedmorecontroversy,thanhasregulatoryreform.Fewgovernmentsaresatisfiedwiththe quality,effectivenessandcostofregulation.Newdemands-fromopeningworldmarketsandinterna- tionalintegration,fromproblemsofunprecedentedscalesuchasenvironmentaldegradationandhigh non-cyclicalunemployment,andfromemerginginterestgroupssuchasconsumers,tomentiononlya few-havefocusedconsiderableattentionontheroleofregulationincausingandsolvingproblems. Thereisgrowingevidence,forexample,thatreformofregulation,properlydesignedandcarriedout, canimproveeconomicperformance. Today,regulatoryreformhasbecomeacoreelementofmodern,effectivegovernment.Today, almostallOECDcountrieshaveregulatoryreformprogrammes,upfromperhapsthreeorfourin1980, andmoreandmorethedebatefocusesonhowtoreformratherthanwhyreformisneeded. This developmentcanbecomparedtotheadoptionofmodernfiscalbudgetingagenciesbygovernments earlierinthiscenturytobettercontrolandmanagenationalexpenditures. Thenewinitiativesareaimedatimprovingtheperformance,impact,andinstitutionsofregulation. Theseinitiativesvarygreatlyinobjectiveanddesign,buttheyhavedistinctivefeaturesthatmarkthem asgenuinelynewmanagementcapacitiesenablinggovernmentstoregulatemorecarefullybyanswer- ingkeyquestions:Areregulatorycostsjustifiedbybenefits?Doesregulatoryinterventionproduce moresocialandeconomicbenefitsthanwouldalternatives?Areregulationsdesignedtoachievepolicy objectivesatlowestcost? TheworkoftheOECDPublicManagementCommittee(PUMA)onregulatorymanagementand reformattemptstorespondtothespecificneedsofthenewreforminitiatives.Thepurposeisto provide betterinformation-drawnfrompracticalexperience,comparisons,and international exchanges-onthebenefits,costs,andrisksofreforminthepolicies,management,processesand institutionsofregulation. TheseriesofOccasionalPapersonregulatorymanagementandreformisintendedtodisseminate morewidelythebackgroundpapers,reports,andpreliminaryresultspreparedfortheprogramme.The regulatorymanagementandreformworkandseriesofpapersisledbyScottH.JacobsofthePublic ManagementService.ThisreportwaspreparedbyHansHuigenandtechnicalassistancewasprovided byJillStobieandMartheWambaughofthePublicManagementService. ThepapersarepublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.Theviews expressedinthepapersarethoseoftheauthors,anddonotcommitornecessarilyreflectthoseof governmentsofOECDMembercountries. TABLEOFCONTENTS ExecutiveSummary 7 Introduction,byHansHuigen 9 Chapter1. ARecsapsoenssitbuldeyCfarroem©Cahiniatidaative:CanadianChemicalProducers^Association (— L Problemtobesolved (— ImnV... DERexoslpceerrioipfetngicooenvseorafnnmtdheenatsAslietnesrsinmmaeptnilvteementingthealternative HIh—- V. Lessonslearned t— Chapter2. TheAdvertisingStandardsAuthorityandtheSystemofSelf-Regulation intheUnitedKingdom,byCarolineCrawford L Problemtobesolved HIII.. DReoslceriopftgioonveorfntmheentalitnerinmatpilveementingthealternative EJhOtObONJtO IV. Experiencesandassessment V. Lessonslearned Chapter3. TAheCaCsoeveSntaundtyafsroamnTIhnestNreutmheenrtlaofndEsn,vibryonKemeesntBaasltmPeoiljiecry: PartI: TheDevelopmentoftheEnvironmentalCovenantintheNetherlands 91. Categoriesofcovenants 3. Policyoncovenants 4. Contentsandprocedure .5. PartII: Casestudyoncovenantswithindustrvtargetgroups Introduction nI.. PDersocbrliepmtiotonboeftshoelvaeldternative m. Roleofgovernmentinimplementingthealternative IV. Experiencesandassessment V. Lessonslearned Chapter4. FilneFxiDbAi’lsitySeTahfroooudghHAPuCbCliPcRPergiuvlataetoPrayrtanlteerrsnhaitpisv:e,PrbeyveDanntiieolnJ.anOidenHoakrmonization L Problemtobesolved HIIT.. DReoslceriopftgioonveorfnmtheentalitnerinmatpilveementingthealternative IV. Experiencesandassessment V. Lessonslearned Box 1992CodeofConductforEnvironmentalCovenants:AsummaryofElements 33 EXECUTIVESUMMARY ThisOccasionalPaperpresentsfourcasestudiesonalternativestotraditionalregulationfrom Canada,theNetherlands,theUnitedKingdomandtheUnitedStates.Thecasestudiesaredeveloped aspartofalargeractivityonalternativestotraditionalregulationundertheworkprogrammeofthe PublicManagementCommitteeoftheOECD. ThecasestudiesinthisOccasionalPaperareaboutwaysinwhichgovernmentsandbusinessesare seekingtoaddresseconomicandsocialproblemsbyusingnewformsofco-operationthataredifferent fromtraditionalcommand-and-controlregulation.Anewkindofinteractionbetweengovernmentand businessisemerginginwhichbothpartiesseetheneedforco-operativeratherthanadversarial relationships.Inaddition,thereisincreasingevidencethataco-operativeapproachtosolvingregula- toryproblemscanlowercostsforbothpartiesandachieveequalorbetterperformanceinrelationto policyobjectives. Thecasestudiesareorganisedaccordingtoacommonframeworkdesignedtogiveinformation aboutthespecificdesignanduseofthealternative,positiveandnegativeresults,andmoregenerally applicablelessonslearned.Eachcasestudyisorganisedunderfivemainheadings: •adescriptionoftheproblemtobesolved; •descriptionofthealternative,includingdesignandoperation; •theroleofgovernmentinimplementingthealternative; •experiencesandassessment,coveringissuesliketheeffectivenessofthealternative,thecosts anddifficulties,andissuesconcerninglegitimacy; •summaryoflessonslearned,emphasizingthosethatmaybeofmoregeneralrelevance. Thefouralternativespresentedheredifferintheirdesignandimplementation,andindicatethe widerangeofpossibleco-operativeapproachestoregulation. ThecasestudyfromCanadaexaminesaself-regulatoryinitiative:thechemicalindustry’s‘"Respon- sibleCare”initiativedesignedtoprotectemployees,thecommunityandtheenvironment. ThecasestudyfromtheUnitedKingdomalsoexaminesaformofself-regulation.Theadvertising industryintheUnitedKingdomhasestablisheditsownsetofprinciples,procedures,andsanctions, whichareadministeredbytheprivateAdvertisingStandardsAuthoritywithvirtuallynogovernment involvement. ThecasestudyfromtheNetherlandsdiscusses“environmentalcovenants”developedinaframe- workofenvironmentallaw.Thecovenantisatypeofcontractnegotiatedbetweenthegovernmentand afirmoragroupoffirms.Althoughadoptedvoluntarily,ithascertainlegaleffects. ThecasestudyfromtheUnitedStatesdiscussestheimplementationofasystemof“process” regulationthatshiftsresponsibilityfromthepublictotheprivatesector.The“HACCP”approachplaces clearresponsibilityforfoodsafetywiththefirm,replacinganinspectionbasedsystemwhicheffectively requiredtheregulatoryauthoritytodetectnon-compliance. Thesecasestudies,aswellasothersinthePUMAdatabasesuggestthat,ifdesignedandimple- mentedproperly,innovativealternativessuchasthosediscussedinthisOccasionalPapercanstand aloneorcomplementtraditionalregulation,increasingtherangeoftoolsavailabletogovernmentsto influenceprivatebehaviourtoachievepublicgoals. INTRODUCTION by byHansHuigen* Aretherewaystoimprovetheregulatoryenvironmentforbusinesseswithoutlosingsightofthe needtoeffectivelyaddresseconomicandsocialproblems?Thisisakeyquestiontodayforboth governmentsandbusinesses. Governmentshaveidentifiedmanyreasonsforreducingtheuseoftraditionalcommand-and- controlregulation.Economicandsocialchangeappeartobeoccurringfasterthangovernmentscan respondthroughcommand-and-controlregulation.Rapidtechnologicalinnovationinexistingsectors andtheemergenceofnewindustriesrequirethatgovernmentsusemoredynamicandflexibleinstru- mentsindealingwitheconomicandsocialproblems. Responsivenesstoinnovationisimportant.Governmentsinmanycasesdonothavethetimeto regulateintraditionalways.Productcycles,forexample,areoftenmuchshorterthanthetimegovern- mentsneedtochangeregulation.Governmentsneednewwaystobalancetheneedforinnovationinan internationalcompetitiveenvironment,andtheneedtoaddresssocialandeconomicproblems. Atthesametimegovernmentsfacebudgetpressures.Traditionalcommand-and-controlregulation isoftencostlyandtime-consumingtodevelopandtokeepup-to-datewiththedynamiceconomic environment.Enforcementofcommand-and-controlregulationisalsocostlyforgovernments,and budgetsforenforcementarenotexcludedfromtheoverallpressuresongovernmentbudgets. Businessesalsohavereasonstoco-operatewithgovernments,partlybecauseofnegativeexper- ienceswithcommand-and-controlregulation,whichcanbecostlytocomplywithandcaninterferewith theefficiencyofbusinessoperations.Also,governmentsarenottheonlyorganisationstodaythatare monitoringthebehaviourofbusinesses.Interestgroups,consumersandotherbusinessesarealso demandingmoreandmoreperformancefrombusinesseswithregardtoissuessuchastheenvironment andconsumerinformation. ThecasestudiesinthisOccasionalPaperareaboutwaysinwhichgovernmentsandbusinessesare seekingtoaddresseconomicandsocialproblemsbyusinginstrumentsthataredifferentfromtradi- tionalcommand-and-controlregulation.Anewkindofinteractionbetweengovernmentandbusinessis emerginginwhichbothpartiesseetheneedforco-operativeratherthanadversarialrelationships. Thefourcasestudiesdifferintheirdesignandimplementationandindicatethewiderangeof possibleapproachesfallingundertheheading“Co-operativey^proachestoRegulation”. TheCanadiancasestudyontheResponsibleCareinitiativediscusseshowbusinessesinthe chemicalsectorwereveryawareofthenegativepublicimageoftheirindustryandthattheyneededto acttoimprovetheirenvironmental,healthandsafetyrecordtoavoidpotentiallyverycostlygovern- mentcontrols.Leadershipbyastrongbusinessassociationbroughttheindustrytogethertocreatea systemofcodesonlifecyclemanagementthatisintendedtoprotectemployees,theenvironmentand communitiesaffectedbytheoperationsofchemicalproducers.Thecasestudyshowsthatdeveloping HrreeapfnrosersmHenuitni^OthnEeCivsDieanwcosuAnodtfmritinehises.tOTrEahtCeoDrviioenrwstihteesxpMOreEemCsbsDee’drsicnRojutbhnlitisrciiensMt.arnodau^cmtieonntarSefetrhveiceviweowrskoifngthoenaurtehgourlaatnodrydomannoatgenmeceenstsarainldy CO-OFERATIVEAPFfDACHESTOREGULATION successfulcodesisalearningprocessthatinvolvesstakeholders,publicinformation,stafftraining,and complianceverificationprocedures.Muchtimewasspentondevelopingtrustamongcompetitorsto bringoutpeerinformationandpeerpressureandtocreateastrongmutualaidnetworkamong companies.Informationsharingamongpeers,andmutualaidwereanimportantunderpinningforthis initiative.Thecasestudyalsoshowsthattheincentivesprovidedbythisvoluntaryinitiativecan producemoreenvironmentalprotectionthanrequiredbyregulation.Personalcommitment,training, information-sharingamongcompanies,anddiscussionswiththepublic,plantcommunities,andgovern- mentscanmotivateexecutivesandemployeestofocusonVkatistherightthingtodo’inawaythat legalmandatesdonot. TheDutchcasestudyonenvironmentalcovenantsdescribesasituationinwhichbothgovernment andbusinessesfelttherewasaneedtostepawayfromanadversarialrelationshiptowardsamoreco- operativerelationshipinwhichbothpartieshaveobligations.Thegovernmentofcourseretainsits obligationtowardthepublicbutinthiscasegovernmentwasalsowillingtoshareobligationswith industry.Thisbroughtaboutanatmosphereinwhichbothsides,withoutlosingsightoftheirprimary responsibilities,coulddiscussproblemsmuchmoreopenlyandconstructively.Theobligationsthatthe governmenthasintheseenvironmentalcovenantsincludeinformingthepublicaboutthecovenants, givingcreditforsuccesstosectorsorindividualcompanies,co-ordinatingbetterenvironmentallicens- ingprocedures,engaginginresearchtogetherwithindustry,andinformingtheinternationalcommunity, especiallyEUcountriesandregulators,aboutthecovenants.Thislatterobligationrespondstofearson thesideofDutchindustrythattheymightbeconfrontedwithtworegulatoryregimesthatmaynotbein harmonyandthereforecostlytocomplywith.Thecovenantsmustbeseenaspartofalargerlegal frameworkintheNetherlandsdealingwiththeenvironment.EnvironmentalgoalsaresetinNational EnvironmentalPolicyPlans(NEPP)thatgothroughParliament,andcovenantsareusedasinstruments forimplementationoftheseplans. IntheUnitedKingdomcasestudyonself-regulationinadvertising,theadvertisingindustrywas awarethattheconfidenceandtrustoftheaudience(consumers)wasessentialtoitsproduct.Private standardsalonewerenotenoughtogainthattrust.Independentoversightofthesystemofself- regulationwasessential.TheAdvertisingStandardsAuthority(ASA)wascreatedasanindependent bodyapartfrombothgovernmentandindustry,thatwasfundedbyindustrythroughavoluntarylevy. Theoversightsystemhasproventobeeffective,/^artfromeffortstoraisepublicawarenessofthe existenceofthecodesandofindependentoversight,specialattentionisgiventocreateincentivesto complywiththecodes.Severaleffectivesanctionsfittingthecharacteroftheindustryareavailableto ASAGovernmentreviewshavebeenhelpfulinmakingtheindustryrealisethatthesystemneeds continuousimprovementbothintermsoftheCodesandadministrationofthesystem. TheUnitedStatescasestudydealswithseafoodsafety.Existingregulatoryapproachesbasedon command-and-controlruleswerenotadequatetoensureseafoodsafety.Diminishingconsumerconfi- denceinseafoodandpressurefromtradingpartnersledtheU.S.FoodandDrugAdministrationto adoptanewapproach.Inthiscase,asafetymanagementsystem,developedintheprivatesectorand knownasHazardAnalysisCriticalControlPoints(HACCP)ismademandatoryforallseafoodprocessors. Thecasestudydemonstrateshowworkingwithindustrycanexpandthecapacityofgovernmentto achievepublicgoalsinamoreeffectiveandefficientway.Thesystemplacestheresponsibilityto identifyandcontrolproblemswiththeindividualfirm,whichallowsforavariedandtailoredapproach compatiblewith-firmspecificproductionprocessestoaddressingrisksratherthanaone-size-fitsall regulatorystrategy.ThishaschangedconsiderablythewaytheFoodandDrugAdministrationenforces foodsafety;itmustnowworkwiththeprivatesectortounderstandandaddressfirm-specificrisks. Therearesignificantdifferencesbetweenthetypesofinstrumentspresentedinthesecasestudies andthetransferabilityofthesemodelstootherareasorinothercountries.Oneneedstohaveagood understandingofspecificcircumstanceswhendesigningeffectiveinstruments. Oneofthequestionsfrequentlyraised,especiallywithrespecttothetypesofalternativesdis- cussedinthisOccasionalPaper,ishowtointroducesuchinnovationsintopublicadministration.Asin 10 atlhlecUasneist,edthSetaptreosceasnsdsDtaurttcshwictahseresctougdniietsiotnheofparopbrloebmleamrotsheatferxoimsttsheorimnitegrhatctoicocnusroifnetxhiestniengarrefguutulraeti.oInn INTRODUCTION andthenewchallengesfacingbothindustryandgovernments.LitheUnitedKingdomandCanada, businessestooktheinitiativefrom“enlightenedself-interest”,whichgavethemtheopportunityto designamodelthatsuitedthem.Theroleofgovernmenthasinthosecasesbeensmaller. When businesssetstheagenda,itprovokesgovernmentstoinnovate.Oncetheseinstitutionsareestab- lished,governmentsneedtodealwiththemwhencarryingoutrelatedpolicies. Legitimacyissuesalsostarttoplayarole.Partoftheresponsibilityofgovernmentsistoensure transparency,accountabilityandconsultationwithinterestedparties.Thesecasestudiesshowthat suchvaluescanbeserved,butthattheyrequirecontinuingattentionasthealternativeisimplemented. Itisclearthattransparency,accountabilityandconsultationarenotprimaryobjectivesoftheprivate sector.TheCanadiancasestudyshowsthatbusinesshasnotalwaysbeenkeentobetransparentandto openupconsultationwithinterestedparties.InavoluntaryprogrammesuchastheResponsibleCare initiativetheissueofaccountabilityisadifficultone.Whyshouldabusinessbeheldaccountablefor theobligationsthatittookuponitselfvoluntarilyandwithoutgovernmentintervention?Anattemptto answerthatcentresonthepointthatmostlikelythegovernmentwouldregulatedifferently(orevennot regulate)whensuchavoluntarycommitmentonthesideofindustryhasbeenmade.Therefore, ensuringaccountabilitywhenpublicinterestsareconcernedshouldbeamajorconcerninthedesignof avoluntaryprogramme. Inallcases,buildingtrustandconfidenceseemstobethestartingpointsothatallpartiesare assuredthatriskoffailurehasbeenminimised.IntheUnitedStatesandDutchcasestudies,wherea regulatoryapproachalreadyexisted,trusthadtobebuiltwithinthegovernmentthatanewapproach couldwork.FortheU.S.FoodandDrugAdministrationtheHACCPmodelwillcreateconsiderable changeinhowitenforcesfoodsafety.Politicians,administrators,foodsafetyinspectorsand,ultimately, consumersneedtotrustthisnewsystem,whichtransfersaconsiderableamountofresponsibilitytothe individualfirm.IntheNetherlands,developmentofthecovenantsinvolvedParliament.SincetheDutch covenantsarevoluntary,andbusinessesareengaginginaformofcontract,trustingovernmentneeded tobebuiltatthebusinesslevelaswell.IntheUnitedKingdomandCanadiancasestudies,trust neededtobedevelopedfirstwithinthebusinesscommunitytodevelopaninstrumentthatitselfwas aimedatbuildingtrustwiththepublicaboutbusinessactivities. Bothgovernmentsandbusinessesneedinallcasestoworkontheissueoftrustandcontinuously reinforcethetrustofthepublicatlarge.Howtodothisdependsonthespecificcircumstancesofeach case,butthecasestudiesgivemuchinformationonthekindofchecksandbalancesneededtocreate aneffectivealternativetocommand-and-controlregulation. Thesecasestudies,aswellasothersinthePUMAdatabase,suggestthat,ifdesignedand implementedproperly,innovativealternativessuchasthosediscussedinthisOccasionalPapercan standaloneorcomplementtraditionalregulation,increasingtherangeoftoolsavailabletogovern- mentstoinfluenceprivatebehaviourtoachievepublicgoals. RESPONSIBLECARE©INITIATIVE: CANADIANCHEMICALPRODUCERS’ASSOCIATION ACASESTUDYFROMCANADA* L PROBLEMTOBESOLVED ThiscasestudyexaminesfactorsthatledtotheestablishmentoftheResponsibleCareinitiativeby Canada’schemicalproducers,anddescribesdetailsoftheprogramme.Wereitnotforthisinitiative,it seemedinevitablethatgovernmentswouldhavebeenforcedtolegislatetoughermeasurestocontrol theproductionandhandlingofchemicalsinCanadaandtodealwithdisasteravoidanceandresponse scenarios.Governmentsinthe1970sand1980swereoperating,aswasthechemicalindustry,ina climateofincreasingpublicawarenessandglobalconcernaboutenvironmentalissues,including sensationalmediaandpoliticalcoverageofecologicaldamageandemergenciesinvolvingchemicals. ResponsibleCareisthenamegivenbytheCanadianChemicalProducers’Association(CCPA)toa programmethatincludessevenGuidingPrinciplesandsixCodesofPractice.TheResponsibleCare systemisintendedtohelpinprotectingemployees,theenvironment,andcommunitiesthataremost directlyaffectedbytheoperationsofchemicalproducers.ItformallycommitsmembersoftheCPC“to achieveastandardoflifecyclemanagementofchemicalsthatmeetsthepublic’sexpectationsof responsibleenvironmentalperformance”. Beginninginthe1970s,thechemicalindustryinCanadatookstepstopresentapositiveprofileto theCanadianpublic.Itwasperceivedthat,whiletheindustrydidnothaveanegativeimage,neither pduibdliitchpaovleicaiecso,nsotriitfuperncoybltehamtswaoruolsde.bSeosmueppoinrttihveeiinfdtuhsetrcyheamliscoalresaescotnoerdwitshhaetdatmoolroebbpyosfiotripvaertiimcualgaer wouldbegoodforemployeemorale,andmightfacilitateattractionof“thebestandthebrightest”to workfortheircompanies.Anearlyeffortrespondingtoindustryconcernswasthedevelopmentofaset ofguidelinesfordealingwithdangeroussubstances,andResponsibleCarebuiltonthatbeginning. AcatalystforthealternativetoregulationoutlinedinthisstudywastheBhopal,Indiadisaster, whichsentashockwavethroughthechemicalindustryinCanadaandelsewhere.Environmental activismalsoincreasedduringthe1980s,partlyasaresultofpublicitygiventothepossibleeffectsof ozonedepletionandglobalwarming.Therewerealsoafewspillsofchemicalsbeingtransportedwithin Canada,incidentsthatcaughttheattentionofthemediaandofthewiderpopulation. Theneedtoactpreventivelytoreducetheriskoflawsuitswasonelessondrawnfromthe aftermathoftheBhopaldisaster.BecauseCanadiansarelesslitigiousthan,forexample,Americans,and becausedamageawardshavetraditionallybeenmuchlowerinCanada,thereislesslikelihoodofcostly litigationagainstallegedpollutersinCanadathanthereisintheUnitedStates.Nonetheless,Canadian judgessometimesborrowprecedentsfromtheUnitedStates(thoughtheyarenotobligedto),anda lawsuitofanysizecouldbeembarrassing.Itwasprudentforthechemicalsectortoguardagainstlarge lawsuits,aspublicconsciousnessaboutenvironmentalharmsandrelatedhealthissuesincreased. TbheniesfpitaepderfrhoasmbteheencaodmampetendtsbyontheanSfeeacrrleitearrivaetrfsiroonmgavpeanpebrypJrbeapnaBreeldanfgoerr,thfeoOrmEeCrDPrbeysiAdlelnatnoMfctChheesCnaenya.diIatnhaCshgermeiactl^y Producers’Association.