‘Not So’ Smart Regulation?

An overview report on AquaNet SE 9

Dr Jeremy Rayner (Malaspina University-College)

Dr. Michael Howlett (Simon Fraser University)

What did we set out to achieve?

• An overview of the regulatory framework for shellfish aquaculture

• Characterize the “policy style”• See what steps have been taken to move away

from traditional policy instruments to more innovative approaches

• Focus on particular cases in which we can see the effect of the policy style in context

What’s the context of our study?

• International regulatory context– Network governance– Smart regulation

• Canadian context– DFO Aquaculture Framework– Federal legacies and initiatives

• Local context– Tenure Expansion and “50 in 5"– Provincial policies and initiatives in BC

How did we proceed?

• The Regulatory Review• Case Studies (reported)

– First Nations Dr. Chris Tollefson with Alyne Mochan

– Gulf Islands: Dr. Rick Rollins with Dave McCallum

– The New Zealand Experience: Dr Peter Clancy with Krista MacEachern

What did we find?

• Though most provinces are committed to industry expansion, vertical integration of policies remains a serious problem

• The policy style is dominated by the legacy of the old “regulation and subsidies” approach

• New policy mixes are being created by overlaying new instruments on older ones, creating complex rather than smart regulation

Where are we going?

• Other Case Studies (ongoing or not reported)– The European Experience: Dr. Jeremy Rayner– Baynes Sound Management Plan: Dr. Chris Tollefson– Atlantic Provinces: Dr. Peter Clancy

• New research– Integrating Shellfish Aquaculture and Marine

Protected Areas: Rollins, Tollefson, Rayner– Federalism and Aquaculture: Rayner and Howlett – CURA on communities and shellfish– New directions?

What can we hope to achieve?

• If it’s already broken, we can’t fix it

• We can step back and try to anticipate future problems– Advise putting the policies in place that will

mitigate or even head off the problems before they become chronic irritants

Network governance

• Key link is between Network Structure and Propensity for Change

• Change Drivers Are New Ideas and New Actors

Figure I – Basic Policy Subsystem Configurations

Receptive to New Ideas

Receptive to New Actors

No Yes

No Closed Subsystem

Resistant Subsystem

Yes Contested Subsystem

Open Subsystem

Networks and Regulation

Private Capacity

Government capacity

Low High

Low Interfering

Interventionist

HIgh Private Self-regulation

Regulated Self-Regulation

Policy Instruments

• Policy Instruments are Basic Tools of Governance

• Tools Use Different Governing Resources• The “NATO” scheme

– Nodality– Authority– Treasure– Organization

Tools and Resources

Nodality Authority Treasure Organization

Information Monitoring and Release

Command and Control Regulation

Grants and Loans

Direct Provision of Goods and Services and Public Enterprises

Advice and Exhortation

Self-Regulation User Charges Use of Family, Community and Voluntary Organisations

Advertizing Standard Setting and Delegated Regulation

Taxes and Tax Expenditures

Market Creation

Commissions and Inquiries

Advisory Committees and Consultations

Interest Group Creation and Funding

Government

Reorganization

Substantive Policy Instruments• Policy Instruments Used to Deliver Goods and Services• Examples of Substantive Policy Tools Listed Below (by level

of state involvement in production activities)

Family & community

Voluntary organis-ations

Private market

Inform-ation & exhortat-ion

Subsidy

Tax & user charges

Regulation Public enterp-rise

Direct provision

voluntary Mixed compulsory

Low High

Procedural Policy Instruments• Policy Instruments Used to Alter and Legitimate Policy Processes• Examples of Procedural Policy Tools Listed Below (by level of state

involvement in network activities)N

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Man

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Management Mixed Restructuring

Low High

Smart regulation

• A context-sensitive MIX of instruments• Draw the mix from the full range of available

instruments• Be sensitive to the continuing pressure on

governments to do more with less• Continue the search for new instruments

Smart regulation: mixing instruments

• Context dependent– Agriculture or fishery?

– Structure of the industry?

• Positive interactions– A code of conduct should

improve performance

– Improved performance should trigger regulatory relief

Smart regulation: consider all the options

• Regulation isn’t just a choice between government and markets

• Don’t let ideology decide

Smart regulation: doing more with less

• Self regulation and co-regulation• Incentive-based instruments• Regulatory surrogates

– Suppliers– Customers– Auditors and certifiers

Smart regulation: the search continues

• Procedural instruments• Information instruments• “make it so” – the next generation?

– Environmental Improvement Plans (EIP)

– Negotiated and implemented with community participation

– Companies devise their own EIP’s

– Those who fail to do so can be forced to do so by regulators acting under statutory authority

Federal Policy Framework: the constitutional tangle

• Aquaculture is not mentioned by name and no legal definition has been provided

• Aspects of aquaculture come under a variety of the enumerated heads of ss. 91 and 92

• The unfinished business of aboriginal title and rights

• Jurisdiction is sometimes held by one level of government and sometimes overlapping or ambiguous

• Aquaculture is not presently recognized as an area of concurrent jurisdiction like agriculture or immigration

The reality of federal policy: policy legacies (1)

• The federal Fisheries Act and Navigable Waters Protection Act

• Traditional regulatory instruments – close to the “command and control” model

• In practice, they involve extensive discretion creating uneven application and the perception of unfairness

The reality of federal policy: policy legacies (2)

• The Canadian Shellfish Sanitation Program (CSSP)

• An early example of horizontal coordination• Expensive• Focuses on a narrow range of hazardous

conditions• Blunt instrument for improving access to

clean water

Federal policy: new instruments

• The Canadian Environmental Assessment Act (CEAA)– More complex, hybrid instrument

– Attempts to embody risk management and the precautionary principle

– Has become a cumbersome and hated planning tool for dealing with hazards to navigation

• In the process, undermines the legitimacy of EIA as a policy tool in the eyes of the industry

Federal policy: new instruments (2)

• Species at Risk Act (SARA)

– Would use EA to address issues of harm to habitat

• Oceans Act

– Committed to DFO’s version of the precautionary principle

• Canada’s Oceans Strategy

• Aquaculture Policy Framework

– Introduces concept of “ecosystem-based management”

• Both unknown quantities with potentially huge consequences for shellfish aquaculture

• How do they “fit” with the older instruments?

Federal policy: subsidy

• Aquaculture as an engine of regional development– ACOA, WED and the politics of regional

development– The EU model: “social cohesion” funding– Do we know whether aquaculture does the

job?

• The reappearance of the agriculture model– Farm credits– OCAD and the “level playing field”

BC policy legacies

• BC Fisheries Act– Aquaculture Reg. 364/89: licensing– Reg. 140/76: shellfish culture and

harvesting

• Waste Management Act

• Local Government Act, Islands Trust Act– Local authority planning powers

• What’s missing …..?

BC new instruments

• Farm Practices Protection (Right to Farm) Act– The agricultural model again

• Code of Practice– Regulation, co-regulation, self-regulation?

– We don’t know and this affects our evaluation of the content

• Land Use Planning– Planning fatigue?

Existing network management tools

• Jurisdiction addressed by intergovernmental agreement– MOU’s

• Policy formulation coordinated by intergovernmental negotiation– CCFAM and the Aquaculture Task Group

• Implementation coordinated by service agreements and ad hoc committees– BC Agreement on Compliance and Enforcement

– The Directors of Aquaculture Committee

Network governance: taking stock

• To date most activities have focused exclusively on governments not governance– Locally, a small group of agencies consider

themselves to be the policy network – they “consult”as they think necessary

• Their objective has been to expand the industry, hence the legitimation problems with non-producer interests– Not even the industry is very happy about this

Network governance: where we need to be

• Need more attention to network issues both for legitimation and production purposes

• Need to help the industry organize

• Need to make the policy network more inclusive without inducing planning fatigue

Smart regulation: where we need to be (1)

• Smart regulation calls for the integration of effective community participation in planning and implementation activities

• EIP instead of COP– COP is a codification of existing “normal”

practices with vague “good neighbour” provisions

– EIP is a mechanism for continuous improvement

How would EIP work?

– Have to be organized at industry rather than company level

– Goals would be drawn from ecosystem management literature such as “desired future state”

– Audit of industry activities that affect the goals

– Environmental management guidelines

Next generation EIP

• Introduce a simple self audit system for applying the guidelines

• Build on the guidelines towards a recognized EMS, such as ISO 14001, with voluntary industry involvement

• Maintain community participation• Offer significant regulatory relief for those who

adopt the EMS, subject to external accreditation

Smart regulation: where we need to be (2)

• Smart regulation calls for the development of mechanisms which integrate local concerns with larger ones significant beyond the locality– The internationalization of domestic policy

Smart responses to internationalization

• BC industry is potentially vulnerable to NGO campaigns in export markets– 80% of BC product exported

• Conforming to NSSP is a minimal requirement that addresses regulator not consumer confidence

• Quality assurance and certification– Will almost certainly involve an accommodation of

First Nations’ interests– Other industries built on their prior experiences

with ISO or CSA standards

Recommendations

• Canadian governments should give more thought to the use of ‘smarter’, next generation substantive instruments

– streamlining regulation, self-regulation, auditing, certification and management accountability.

– Avoid moving down the subsidy path unless linked to larger goals, such as enabling network governance and improving stakeholder organization and capacity

Recommendations (2)

• Canadian governments devote much more attention to the use of procedural instruments beyond ‘authoritative’ ones (industry advisory committees).

– These should include activities using other resources such as financial support for interest groups (community, industry, first nation, environmental NGOs);

– the use of information resources to promote scientific and stakeholder networking,

– the use of organizational resources such as (legislative as well as administrative) commissions and inquiries to promote knowledge transfer and networking;

– consultative mechanisms and strategies need to show real payoff for participants and include arrangements for continuing involvement

Recommendations (3)

• Canadian governments should specifically address the issue of instrument mixes and attempt to consciously design an optimal governance strategy;

– specifically by drawing on lessons from other jurisdictions – such as US states, EU member nations, Australia and New Zealand – with experience in aquaculture and coastal zone planning.

Recommendations (4)

• Canadian governments should examine their commitment to network governance carefully.– The prevailing managerialism is

incompatible with the governance model– Implementation will require serious

reexamination of the institutional culture of key federal and provincial agencies.

Concluding unscientific postscript

“The construction of an effective regulatory program must be based on a recognition of political forces. To rephrase Clausewitz’s aphorism on war ‘the regulatory process is the continuation of political struggle by other means’”