Who should monitor the smokestacks?

Bush team may rely more on self-audits for businesses in areas like environment.

Gale Norton is just the beginning. Long after the debate over the Interior Secretary designee's nomination dies down, President Bush will be left to sort through the environmental issues that surround her. And one of the most controversial is likely to be business self-regulation.

The question is: Should industries be allowed to police what comes out of their smokestacks and waste pipes themselves?

Or does government need to hold a nightstick over companies' heads to keep the nation's skies and waterways clean?

The Bush administration seems poised to push the ethos of self-regulation farther than any recent government in Washington. While experimentation with "self-auditing," as it's often called, has been growing, Mr. Bush's record in Texas and the statements of several of his Cabinet nominees - including Ms. Norton at Interior and Christine Todd Whitman at the Environmental Protection Agency - suggest the practice will accelerate.

This could extend from environmental monitoring to workplace safety to perhaps even regulation of the Internet.

Therein lies something of a paradox. In some areas, like education, Bush talks of testing and accountability, while in others, like business regulation, he espouses flexibility.

"It seems like a contradiction," says William Niskanen, chairman of the libertarian Cato Institute. "They're calling for more accountability in the public sector and less in the private sector. But you have to look at the specifics."

Indeed, in the area of self-monitoring and self-regulation it's all about the details, say experts, and Bush will need to go slow and be careful in choosing which version he adopts.

Self-monitoring programs have been around for years within industries, where groups create higher standards and companies that promise to go along receive a sort of corporate seal of approval.

But these types of programs have mixed records, says Andrew King, a business professor at New York University, who has studied the initiatives.

Often the firms most interested in self-monitoring are the ones most interesting in polluting. "It's all over the map," says Mr. King. "We find some who accept the standards full out and some who accepted them cynically and think, 'Oh, this great cover for us.' "

Impact on company culture

Another problem, says Jennifer Nash, a professor at Harvard's Kennedy School of Government, is that self-monitoring programs tend to do little to change the practices of companies. Overall, such programs tend to reinforce corporate cultures - companies that care do well while companies that don't only get worse.

Proponents, however, maintain that self-monitoring can save money for companies and help do away with the adversarial relationship that often exists between government and business.

Companies want to comply with regulations, they maintain, and if they allow them to look for and catch their own violations before regulators find them, everyone wins.

"We shouldn't be so worried about punishment as an end in itself," says Ben Lieberman, an analyst at the Competitive Enterprise Institute, which advocates limited government regulation.

The point, he says, is not to get rid of regulators, but to supplement their work with regular self-monitoring. "Companies don't make money by polluting," he says. "They want to comply with the law."

But meeting regulations unquestionably means money - million of dollars to industry - and sometimes the issue is how tight the self-regulatory rules are.

Still fresh in the minds of environmentalists is a 1997 Texas law, drafted with Bush's blessing, that grandfathered-in some of the state's oldest petroleum plants and allowed them to follow voluntary standards. The result: The plants, with no threat of punishment, often exceed state standards for the release of various pollutants. By some estimates, they account for one-third of the state's industrial air pollution and are one reason Houston recently replaced Los Angeles as the nation's smoggiest city.

Dangers of too much leeway

Though the release of air pollutants was covered by the federal Clean Air Act - signed into law by Bush's father - states were given a lot of leeway to draft their own rules for older facilities and Texas' rules were particularly lenient, says David Spence, an environmental law professor at the University of Texas at Austin.

Such attempts to allow for complete self-regulation are for the most part dead, says Eric Orts, a professor of legal studies at the Wharton Business School. And the future of self-monitoring may lie in the creation of special organizations or in accounting firms that would help verify the results companies turn in.

So it's still uncertain which model (or models) the new administration might follow.

(c) Copyright 2001. The Christian Science Publishing Society

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