Using voluntary instruments

Using voluntary industry agreements

Context

Voluntary instruments are regarded as a substitute for government regulation (often branded as inflexible, unresponsive and ineffective) and because of their flexibility and economic effectiveness.

Implementation

Members of the Alliance for Chemical Awareness (ACA) and other groups, the U.S. Environmental Protection Agency (EPA) and Environmental Defense (ED) have agreed on a plan to increase the pace of screening tests conducted to determine potential health and environmental effects of high production volume (HPV) chemicals. The effort has evolved into one with an international cast-with the involvement of the International Council of Chemical Associations (ICCA). Data availability reviews have begun and hazard data generation of some of the chemicals has started. The goal is for U.S. and foreign companies to complete hazard data assessments on the majority of 2 800 HPV chemicals by 2004. Total cost of the program is estimated to approach $500 million.

Counter-claim

There is no lack of motivation to design codes of conduct and to use them in the lobby against regulation but their is an unwillingness to implement them.

Ambitious target setting in voluntary agreements is restricted by the confines and demands of the market. A 1998 OECD paper concluded that the ability to design effective voluntary instruments is exhausted when economic efficiency is maximized, even though society's objectives lie beyond that economic efficiency boundary.

Voluntary instruments lack accountability. Where corporate voluntary instruments replace government regulation and the ability of governments to set targets, they are undemocratic.

The use of voluntary instruments to achieve policy aims has steadily increased, while corporate accountability to society has invariable decreased. The retreat of governments from governing and the importance of protection from corporate crime pose a serious policy dilemma, given the shortfalls of voluntary instruments and the inefficiencies of government regulation.

Although the old fashioned "command and control' approach is indeed inadequate to govern the complex processes within society, corporate control is no replacement, since it is too limited by the dictates of the market.