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Selecting Participants for a Regulatory Negotiation
AGEN
DA G E N D A
Selecting Participants for a Regulatory Negotiation Sam Gusman
Sam Gusman is a consultant based in Taos, N e w Mexico. He frequently serves as the facilitator of policy dialogues on environmental issues. He is currently working with The Conservation Foundation and Western Network. Three articles in recent issues of this j o u r n a l have addressed various aspects of regulatory negotiation. Harter (1982) discusses the concept in the context of "'a cure for the malaise" of r u l e m a k i n g as currently practiced. He presents a g r o u p o f r e c o m m e n d a t i o n s regarding regulatory negotiation that were adopted by the Administrative Conference of the United States in June, 1982. Kirtz (1982)describes a proposed experiment in negotiated r u l e m a k i n g to be conducted by the US E n v i r o n m e n t a l Protection Agency. He presents a check list of criteria to aid in selecting rules most likely to be suitable for negotiation. R o d w i n (1989) presents a critical and broad evaluation of the concept of direct negotiation of'rules by affected parties. These are part of a g r o w i n g literature that describes, analyzes, and criticizes the as yet untested concept of regulatory negotiation. T h e focus of this article is exclusively on one particular aspect of regulatory negotiation, namely the selection of negotiators to represent parties with an interest in the regulatory issue. Selection of negotiators is a difficult and i m p o r t a n t problem from both practical and theoretical points of view. Selection can affect the legitimacy of the negotiating process which, at a m i n i m u m , depends u p o n the perception that all categories of affected parties are represented in a balanced way at the negotiating table. Selection must occur early d u r i n g the regulatory negotiation process, d u r i n g what m i g h t be called a " c o n v e n i n g phase." T h e process by which negotiators are selected can affect their willingness to participate. T h u s , the EnqronmenKd [ralxt(t As,,essmrm Rcqcw. V. 4. N. 2
ot9~-9_~'_,~s~ o~ooJ95s~ooo r
Plenum Publishing Cr, q>~)ration
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DA AGEN selection of negotiators by a process they and others find G appropriate acceptable is as important as, and intimately intertwined with, the E selection of the issue to be negotiated. N Comparisons with Current Regulatory Practice D Current interest in regulatory negotiation is in large measure an outgrowth of dissatisfaction with the current federal regulatory A process. T h e many sources of dissatisfaction include perceptions that costs are too high, that regulation (or lack of regulation) is unreasonable, or that the regulatory process (which may include appeals to administrative, judicial, and legislative channels) is too time consuming and complicated. Regulatory negotiation, an outgrowth and modification of current regulatory practice, does not have a perfect antecedent. Current practice is flawed. Regulatory negotiation will surely be found to be flawed also, but in different ways. It is rational for the parties interested in a regulation to want to participate in a regulatory negotiation only if they see probable net benefits to their interests in comparison with current regulatory practice. T h e key question for participants is not whether the new and unfamiliar process of regulatory negotiation is perfect. It will be compared to current practice, not to some theoretical ideal. At one extreme, since everyone and all future generations are p o t e n t i a l s t a k e h o l d e r s i n m a n y , p e r h a p s all, regulatory a c t i o n , it is o b v i o u s l y i m p o s s i b l e to assemble all s t a k e h o l d e r s for a regulatory n e g o t i a t i o n . At the other e x t r e m e , it is e q u a l l y i m p o s s i b l e to assure t h a t the r e g u l a t o r y a g e n c y staff w h o currently prepare a proposed regulation w i l l h a v e the knowledge a n d w i s d o m to take i n t o account the interests of all p r e s e n t a n d future stakeholders. Current regulatory practice gives all members of the public an opportunity to comment on proposed regulations. Stakeholders in a regulatory issue may carry their participation further, for example, by appeal through administrative and judicial channels. These kinds of participation require the expenditure of time, effort, and often considerable money as well. For this reason, stakeholders rich in resources can have greater opportunity than others to influence the outcome of a regulatory action. This potential inequality of influence is an imperfection of current regulatory practice. However, regulatory negotiation could present even more serious problems of this sort. For example, regulatory negotiation processes that develop a "final" regulation would eliminate the current formal opportunity for public comment on an earlier "proposed" version and the procedural assurance that comments will 196 EIA REVIEW 4/2
AGENDA be addressed by the regulatory agency. T o offset this problem, regulatory negotiation has been suggested for development of proposed regulations which, after publication in the Federal Register, would be o p e n for c o m m e n t as per current practice. Even with respect to the d e v e l o p m e n t of a proposed regulation, it could be argued that the direct or de facto exclusion of any stakeholder from a regulatory negotiation process constitutes an infringement of that stakeholder's relative o p p o r t u n i t y to influence the o u t c o m e of the process, as compared with the o p p o r t u n i t y afforded by current regulatory practice. At one extreme, since everyone a n d all future generations are potential stakeholders in many, perhaps all, regulatory action, it is obviously impossible to assemble all stakeholders for a regulatory negotiation. At the other extreme, it is equally impossible to assure that the regulatory agency staff who currently prepare a proposed regulation will have the knowledge and wisdom to take into account the interests of all present and future stakeholders. T h u s , the problem of adequate representation involves a comparison between two imperfect processes, t h o u g h in both instances a subsequent period of o p p o r t u n i t y for public c o m m e n t is a partial safeguard. Regulatory agency staff are n o w expected to consider the interests of diverse present a n d future stakeholders (the public interest) d u r i n g the drafting of proposed regulations. In a regulatory negotiation, agency staff is similarly responsible for the public interest and acts as a negotiator in its behalf. T h e negotiating process needs to be devised so that a decision cannot be reached unless agency staff concurs. T h e same "veto" power almost certainly would be d e m a n d e d by the other negotiators, and should be granted to them as a condition of their participation. T h e other negotiators w o u l d probably represent the interests of organized stakeholders, such as regulated industries, public interest groups, and labor unions. Therefore, one can argue that agency staff w o u l d be able to concentrate even more attention on the stakeholders w h o do not or cannot speak for themselves.
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Key Stakeholders Many stakeholders have neither the interest nor the resources to become individually involved in the regulatory process. Many rely on organizations regularly participating in such activity. It is not u n u s u a l for organizations such as public interest groups, large corporations, industry trade associations, and labor u n i o n s to cooperate and rely on other groups with similar interests for representation on particular public policy issues. For example, not every environmental organization will become actively involved in every environmental issue; neither will every industry trade association. For m a n y public policy issues it is possible to identify lead organizations to which other organizations a n d individual stakeholders turn for information and action. EIA REVIEW 4/2
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Lead organizations usually cannot give legal assurances that the other stakeholders will actually follow their lead. Such cooperation is probably the consequence of an extensive t h o u g h largely u n d o c u m e n t e d , informal network t h r o u g h which the staffs of organizations with similar interests c o m m u n i c a t e with each o t h e r a n d with constituencies. These lead organizations are called key stakeholders in this paper. In practice, key stakeholders usually have offices in Washington and staffs that include lawyers with specialized expertise. T h e y usually have sufficient resources to be implacable in p u r s u i n g their interests. It is not u n c o m m o n for their appeals of a regulatory issue through
Convening a regulatory negotiation may thus present more serious disadvantages for agency staff than for other key stakeholders, namely, perceived loss of power to draft proposed regulations unilaterally and the need to negotiate with other key stakeholders. administrative and judicial processes to take m a n y years. Nor is it u n c o m m o n for the apparent defeats they suffer to be recouped through later changes by Congress of u n d e r l y i n g statutes. T h u s , if any key stakeholder is dissatisfied with a regulation or the lack of a regulation, there is a good likelihood that the stakeholder will challenge the regulation, starting the l e n g t h y - - s o m e t i m e s seemingly never e n d i n g - - p r o c e s s of trying to change the situation. Key stakeholders are an i m p o r t a n t part of the current political scene in Washington. T h e y will u n d o u b t e d l y continue to be powerful, and must be taken into account. Hypothetically, regulatory agencies m i g h t involve them in the drafting of proposed regulations. Key stakeholders then m i g h t have a sufficient sense of participation to overcome any " n o t invented here" anxieties about the proposed regulations. Regulatory negotiation is a process that can do this. Itis a process that can give stakeholders direct access t o t h e language of a proposed regulation and an o ~ p o r t u n i t y to be sure that their points of view are not misrepresented. Key stakeholders could expect that direct participation in negotiating the language of a proposed regulation w o u l d offer less o p p o r t u n i t y for distortion of their points of view than is the case in current regulatory practice in which only agency staff drafts proposed regulations. There are, however, other features of a regulatory negotiation that can influence a key stakeholder's decision to participate. A stakeholder with the strength to prevail w i t h o u t negotiating is unlikely to want to participate. Also, an issue m i g h t be a facet of a more general proposition that the stakeholder opposes as a matter of principle. For example, negotiation of the details of operation of a uranium mine would probably not appeal to a stakeholder fundamentally opposed to the development of nuclear energy: 198 EIA REVIEW 4/2
AGENDA G
Regulatory Agencies as Key Stakeholders In principle, a regulatory agency m i g h t be viewed solely as an agent of the public interest and devoid of its o w n institutional interest. T o the extent this is n o t the case, it becomes a key stakeholder in its o w n right. This transformation can occur if agency personnel responsible for writing, reviewing, or a p p r o v i n g a regulation see any personal or institutional advantage in the outcome of a negotiation, apart from the m a n n e r in w h i c h the outcome affects the public interest. For example, if the lead staff person or the responsible officer in the agency has ambitions or an ideological viewpoint that w o u l d be furthered or thwarted by the outcome of negotiations,.it w o u l d not be surprising if this influenced the negotiating stance of the agency. C o n v e n i n g a regulatory negotiation may thus present more serious disadvantages for agency staff than for other key stakeholders, namely, perceived loss of power to draft proposed regulations unilaterally and the need to negotiate with other key stakeholders.
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D X
For many public p o l i c y issues it is possible to identify lead organizations to w h i c h other organizations and individual stakeholders turn for information and action. However, balanced against some loss of sole control of the process are m a n y advantages, particularly the o p p o r t u n i t y for the agency to resolve thorny issues by negotiation, with the expectation that private stakeholders w h o participate in a negotiated agreement will usually not challenge it later. In effect, the agency w o u l d be trading a perceived loss (of power) against a speculative but larger gain (of efficient and effective decision making). In the face of public dissatisfaction with current regulatory processes and Congressional interest in regulatory reform, it is not surprising that some agencies are considering demonstration trials of regulatory negotiation -- but only some agencies and so far only in a veery limited sense.
Selection of Negotiators A m e c h a n i s m must be devised to select negotiators w h o represent the interested parties. Direct negotiation of e n v i r o n m e n t a l issues has been successful with as m a n y as about a dozen negotiators. It is conceivable that m a n y more, perhaps hundreds, could be a c c o m m o d a t e d in a regulatory negotiation t h r o u g h a g r o u p i n g of negotiators into coalitions that would choose representatives to sit at a b a r g a i n i n g table, and report back periodically to the other members of their coalitions. T h i s would be a difficult process and is conceivably impractical. If the development of a proposed regulation by negotiation required the participation of hundreds of separate negotiators m a n y regulatory topics w o u l d surely be discarded (at least EIA REVIEW 4/2
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ENDA at present) because of lack of experience in negotiating agreemen a m o n g such numbers. There are, however, several ways to limit th~ n u m b e r of negotiators. One alternative is to have the regulatory agency or some othe~ authority select the negotiators with due attention to m a i n t a i n i n g p r o p e r balance of interests and adequate representation of eacF different kind of interest in the negotiating g r o u p . T h i s has th~ advantage of l i m i t i n g the n u m b e r of participants, but it offers nc protection against objections to a negotiated agreement by those whc were excluded from participation. Excluded parties m i g h t 1~ antagonized by their exclusion and, because of heightenec If t h e d e v e l o p m e n t of a proi~osed regulation by negotiation required the participation of hundreds of separate negotiators m a n y r e g u l a t o r y t o p i c s w o u l d s u r e l y be discarded... antagonism, object to features of the negotiated agreement they might otherwise have f o u n d acceptable. A second alternative is to have the agency or some other authority designate the n u m b e r of seats at the negotiating table, allocating several to each kind of interest group. A major disadvantage of this approach is that the allocation may be challenged. Also, there w o u l d still be the p r o b l e m of dealing with excluded parties. A third alternative is to have the agency establish a selection committee comprised of people w h o are balanced with respect to their affiliations and w h o represent all major interests. For example, the selection committee m i g h t operate by choosing negotiators from
...regulatory issues for which there are limited numbers of interested parties might serve adequately for early demonstration of the regulatory negotiation process. a m o n g those who volunteer, in response to a Federal Register notice. T h o s e selected could be a s k e d t o represent not only themselves but also a g r o u p of others w h o volunteered, thus establishing a form of constituency relationship a m o n g interested parties. T h e negotiated agreement would be reached w h e n all parties (the constituents as well as those at the table as negotiators) reach consensus. T h i s approach m i g h t be challenged less frequently than the second alternative, but it w o u l d be more unwieldy. For m a n y subjects it m i g h t be so unwieldy as to be impractical. A fourth alternative is for the agency, an authority, or a balanced committee to identify the key stakeholders for the proposed regulation, that is, those key stakeholders with both the interest and the will to challenge an o u t c o m e if it did not a c c o m m o d a t e their interests adequately. These key stakeholders would be selected as the negotiators. T h i s is a modification of the first alternative, and has the advantage of emphasizing selection of negotiators likely to have both 200 EIAREVIEW
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AGENDA the resources and the will to challenge u n w e l c o m e outcomes. T h i s diminishes but does not eliminate potential problems with excluded parties. T h i s alternative still m i g h t be considered unfair by parties w h o are excluded or w h o believe they are underrepresented. A fifth alternative is to limit attention to only those candidates for regulatory negotiation that are characterized b y a small n u m b e r of interested parties, say about a dozen or fewer. T h i s could be a very small universe of proposed regulations. If regulatory negotiation were to be viewed as applicable only to this limited g r o u p of issues, questions could legitimately be asked about the desirability of giving so m u c h attention to so limited a process. Nonetheless, regulatory issues for which there are limited n u m b e r s of ir/terested parties m i g h t serve adequately for early demonstration of the regulatory negotiation process. Such demonstrations could provide valuable experience on which to base the design of regulatory negotiations involving larger numbers of parties. There are, of course, other variations on these five themes but the criticisms of these five w o u l d probably be applicable to the variations. In any event, a whole different class of options opens u p if the process uses a neutral facilitator, that is, a person (or persons) w h o can be expected to facilitate the process free of control (or the perception of control) by the regulatory agency or any other party. T h e facilitator w o u l d then be able, as a consequence of credibility as a neutral, to work toward selpselection of negotiators t h r o u g h use of interactive processes of consultation with interested parties. T h e following illustrates one way this could occur. T h e agency could assemble a small, balanced ad hoc selection committee comprised of key stakeholders w h o w o u l d almost certainly be included as negotiators if a regulatory negotiation were to take place. T h e facilitator could meet with committee members, individually a n d as a group. He or she w o u l d ask w h o should be selected to be the negotiators and presumably state desirable conditions
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T h r o u g h an iterative and personalized process of contacts, the facilitator would seek to identify a balanced group of negotiators w h o are willing to participate, and who are acceptable to each other and to all k n o w n key stakeholders. for the negotiator selection process. Some exemplary conditions m i g h t be the i n c l u s i o n at the negotiation table of all parties with the interest and power to overthrow a negotiated settlement, the representation of all substantially different points of view, a n d the restriction of the n u m b e r of negotiators to about a dozen. T h r o u g h an iterative and personalized process of contacts, the facilitator w o u l d seek to identify a balanced g r o u p of negotiators w h o are willing to participate, a n d w h o are acceptable to each other and to all k n o w n key stakeholders. T h o s e EIAREVIEW
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ENDA selected by this process would comprise a "preliminary" negotiating group. T h e i r names would be published in a Federal Register notice that also invites attendance at a meeting of the " p r e l i m i n a r y " group for the purpose of selecting still other candidates for participation as negotiators. Based on this meeting, the facilitator would determine by consultation with the "preliminary" group whether they wished to proceed with their present group, with substitutions, by addition of others, or not at all. A decision not to proceed could occur for any of a n u m b e r of reasons. For example, if one party believes that a second party's willingness to participate is cynical, based on a desire to use negotiations to postpone regulatory action, the first party would be unlikely to want to participate. A decision to proceed would.imply a j u d g m e n t by each member of the group that a negotiated agreement can probably be reached, and is not likely to be successfully challenged. T h e facilitatoi7 could use some variation of the personalized process described above to convene a negotiating group. By agreeing to negotiate, the group already will have started on the path to consensus. Conclusion T h e goal of regulatory negotiation proposals is not to foster negotiation for its own sake. T h e goal is a practical one, to overcome some unsatisfactory aspects of current regulatory practice. Regulatory negotiation is simply a procedural device that may - - if properly used reduce dissatisfactions with that process and, more particularly, with the regulations it produces. Regulatory negotiation is based on a simple premise: people like to be powerful e n o u g h to have a meaningful voice in making the decisions that are important to them. T h e implication of this premise for the selection of negotiators is equally straightforward: involve interested parties in the negotiator selection process to the m a x i m u m extent that is practical. Re~e~nces
~
Harter, P. 1982. Negotiating Regulations: A Cure for the Malaise? Environmental Impact Assessment Review 3,1: 75-92. Kirtz, C. 1982. EPA A n n o u n c e s N e g o t i a t e d Rulemaking Project. Environmental Impact Assessment Review 3,4: 367-372. Rodwin, M.A. 1982. Can Bargaining and Negotiation Change the Administrative Process? Environmental Impact Assessment Review 3,4: 373-386.
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DA G E N D A
Selecting Participants for a Regulatory Negotiation Sam Gusman
Sam Gusman is a consultant based in Taos, N e w Mexico. He frequently serves as the facilitator of policy dialogues on environmental issues. He is currently working with The Conservation Foundation and Western Network. Three articles in recent issues of this j o u r n a l have addressed various aspects of regulatory negotiation. Harter (1982) discusses the concept in the context of "'a cure for the malaise" of r u l e m a k i n g as currently practiced. He presents a g r o u p o f r e c o m m e n d a t i o n s regarding regulatory negotiation that were adopted by the Administrative Conference of the United States in June, 1982. Kirtz (1982)describes a proposed experiment in negotiated r u l e m a k i n g to be conducted by the US E n v i r o n m e n t a l Protection Agency. He presents a check list of criteria to aid in selecting rules most likely to be suitable for negotiation. R o d w i n (1989) presents a critical and broad evaluation of the concept of direct negotiation of'rules by affected parties. These are part of a g r o w i n g literature that describes, analyzes, and criticizes the as yet untested concept of regulatory negotiation. T h e focus of this article is exclusively on one particular aspect of regulatory negotiation, namely the selection of negotiators to represent parties with an interest in the regulatory issue. Selection of negotiators is a difficult and i m p o r t a n t problem from both practical and theoretical points of view. Selection can affect the legitimacy of the negotiating process which, at a m i n i m u m , depends u p o n the perception that all categories of affected parties are represented in a balanced way at the negotiating table. Selection must occur early d u r i n g the regulatory negotiation process, d u r i n g what m i g h t be called a " c o n v e n i n g phase." T h e process by which negotiators are selected can affect their willingness to participate. T h u s , the EnqronmenKd [ralxt(t As,,essmrm Rcqcw. V. 4. N. 2
ot9~-9_~'_,~s~ o~ooJ95s~ooo r
Plenum Publishing Cr, q>~)ration
EIA REVIEW 4/2
195
DA AGEN selection of negotiators by a process they and others find G appropriate acceptable is as important as, and intimately intertwined with, the E selection of the issue to be negotiated. N Comparisons with Current Regulatory Practice D Current interest in regulatory negotiation is in large measure an outgrowth of dissatisfaction with the current federal regulatory A process. T h e many sources of dissatisfaction include perceptions that costs are too high, that regulation (or lack of regulation) is unreasonable, or that the regulatory process (which may include appeals to administrative, judicial, and legislative channels) is too time consuming and complicated. Regulatory negotiation, an outgrowth and modification of current regulatory practice, does not have a perfect antecedent. Current practice is flawed. Regulatory negotiation will surely be found to be flawed also, but in different ways. It is rational for the parties interested in a regulation to want to participate in a regulatory negotiation only if they see probable net benefits to their interests in comparison with current regulatory practice. T h e key question for participants is not whether the new and unfamiliar process of regulatory negotiation is perfect. It will be compared to current practice, not to some theoretical ideal. At one extreme, since everyone and all future generations are p o t e n t i a l s t a k e h o l d e r s i n m a n y , p e r h a p s all, regulatory a c t i o n , it is o b v i o u s l y i m p o s s i b l e to assemble all s t a k e h o l d e r s for a regulatory n e g o t i a t i o n . At the other e x t r e m e , it is e q u a l l y i m p o s s i b l e to assure t h a t the r e g u l a t o r y a g e n c y staff w h o currently prepare a proposed regulation w i l l h a v e the knowledge a n d w i s d o m to take i n t o account the interests of all p r e s e n t a n d future stakeholders. Current regulatory practice gives all members of the public an opportunity to comment on proposed regulations. Stakeholders in a regulatory issue may carry their participation further, for example, by appeal through administrative and judicial channels. These kinds of participation require the expenditure of time, effort, and often considerable money as well. For this reason, stakeholders rich in resources can have greater opportunity than others to influence the outcome of a regulatory action. This potential inequality of influence is an imperfection of current regulatory practice. However, regulatory negotiation could present even more serious problems of this sort. For example, regulatory negotiation processes that develop a "final" regulation would eliminate the current formal opportunity for public comment on an earlier "proposed" version and the procedural assurance that comments will 196 EIA REVIEW 4/2
AGENDA be addressed by the regulatory agency. T o offset this problem, regulatory negotiation has been suggested for development of proposed regulations which, after publication in the Federal Register, would be o p e n for c o m m e n t as per current practice. Even with respect to the d e v e l o p m e n t of a proposed regulation, it could be argued that the direct or de facto exclusion of any stakeholder from a regulatory negotiation process constitutes an infringement of that stakeholder's relative o p p o r t u n i t y to influence the o u t c o m e of the process, as compared with the o p p o r t u n i t y afforded by current regulatory practice. At one extreme, since everyone a n d all future generations are potential stakeholders in many, perhaps all, regulatory action, it is obviously impossible to assemble all stakeholders for a regulatory negotiation. At the other extreme, it is equally impossible to assure that the regulatory agency staff who currently prepare a proposed regulation will have the knowledge and wisdom to take into account the interests of all present and future stakeholders. T h u s , the problem of adequate representation involves a comparison between two imperfect processes, t h o u g h in both instances a subsequent period of o p p o r t u n i t y for public c o m m e n t is a partial safeguard. Regulatory agency staff are n o w expected to consider the interests of diverse present a n d future stakeholders (the public interest) d u r i n g the drafting of proposed regulations. In a regulatory negotiation, agency staff is similarly responsible for the public interest and acts as a negotiator in its behalf. T h e negotiating process needs to be devised so that a decision cannot be reached unless agency staff concurs. T h e same "veto" power almost certainly would be d e m a n d e d by the other negotiators, and should be granted to them as a condition of their participation. T h e other negotiators w o u l d probably represent the interests of organized stakeholders, such as regulated industries, public interest groups, and labor unions. Therefore, one can argue that agency staff w o u l d be able to concentrate even more attention on the stakeholders w h o do not or cannot speak for themselves.
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E N
D
A
Key Stakeholders Many stakeholders have neither the interest nor the resources to become individually involved in the regulatory process. Many rely on organizations regularly participating in such activity. It is not u n u s u a l for organizations such as public interest groups, large corporations, industry trade associations, and labor u n i o n s to cooperate and rely on other groups with similar interests for representation on particular public policy issues. For example, not every environmental organization will become actively involved in every environmental issue; neither will every industry trade association. For m a n y public policy issues it is possible to identify lead organizations to which other organizations a n d individual stakeholders turn for information and action. EIA REVIEW 4/2
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Lead organizations usually cannot give legal assurances that the other stakeholders will actually follow their lead. Such cooperation is probably the consequence of an extensive t h o u g h largely u n d o c u m e n t e d , informal network t h r o u g h which the staffs of organizations with similar interests c o m m u n i c a t e with each o t h e r a n d with constituencies. These lead organizations are called key stakeholders in this paper. In practice, key stakeholders usually have offices in Washington and staffs that include lawyers with specialized expertise. T h e y usually have sufficient resources to be implacable in p u r s u i n g their interests. It is not u n c o m m o n for their appeals of a regulatory issue through
Convening a regulatory negotiation may thus present more serious disadvantages for agency staff than for other key stakeholders, namely, perceived loss of power to draft proposed regulations unilaterally and the need to negotiate with other key stakeholders. administrative and judicial processes to take m a n y years. Nor is it u n c o m m o n for the apparent defeats they suffer to be recouped through later changes by Congress of u n d e r l y i n g statutes. T h u s , if any key stakeholder is dissatisfied with a regulation or the lack of a regulation, there is a good likelihood that the stakeholder will challenge the regulation, starting the l e n g t h y - - s o m e t i m e s seemingly never e n d i n g - - p r o c e s s of trying to change the situation. Key stakeholders are an i m p o r t a n t part of the current political scene in Washington. T h e y will u n d o u b t e d l y continue to be powerful, and must be taken into account. Hypothetically, regulatory agencies m i g h t involve them in the drafting of proposed regulations. Key stakeholders then m i g h t have a sufficient sense of participation to overcome any " n o t invented here" anxieties about the proposed regulations. Regulatory negotiation is a process that can do this. Itis a process that can give stakeholders direct access t o t h e language of a proposed regulation and an o ~ p o r t u n i t y to be sure that their points of view are not misrepresented. Key stakeholders could expect that direct participation in negotiating the language of a proposed regulation w o u l d offer less o p p o r t u n i t y for distortion of their points of view than is the case in current regulatory practice in which only agency staff drafts proposed regulations. There are, however, other features of a regulatory negotiation that can influence a key stakeholder's decision to participate. A stakeholder with the strength to prevail w i t h o u t negotiating is unlikely to want to participate. Also, an issue m i g h t be a facet of a more general proposition that the stakeholder opposes as a matter of principle. For example, negotiation of the details of operation of a uranium mine would probably not appeal to a stakeholder fundamentally opposed to the development of nuclear energy: 198 EIA REVIEW 4/2
AGENDA G
Regulatory Agencies as Key Stakeholders In principle, a regulatory agency m i g h t be viewed solely as an agent of the public interest and devoid of its o w n institutional interest. T o the extent this is n o t the case, it becomes a key stakeholder in its o w n right. This transformation can occur if agency personnel responsible for writing, reviewing, or a p p r o v i n g a regulation see any personal or institutional advantage in the outcome of a negotiation, apart from the m a n n e r in w h i c h the outcome affects the public interest. For example, if the lead staff person or the responsible officer in the agency has ambitions or an ideological viewpoint that w o u l d be furthered or thwarted by the outcome of negotiations,.it w o u l d not be surprising if this influenced the negotiating stance of the agency. C o n v e n i n g a regulatory negotiation may thus present more serious disadvantages for agency staff than for other key stakeholders, namely, perceived loss of power to draft proposed regulations unilaterally and the need to negotiate with other key stakeholders.
E N
D X
For many public p o l i c y issues it is possible to identify lead organizations to w h i c h other organizations and individual stakeholders turn for information and action. However, balanced against some loss of sole control of the process are m a n y advantages, particularly the o p p o r t u n i t y for the agency to resolve thorny issues by negotiation, with the expectation that private stakeholders w h o participate in a negotiated agreement will usually not challenge it later. In effect, the agency w o u l d be trading a perceived loss (of power) against a speculative but larger gain (of efficient and effective decision making). In the face of public dissatisfaction with current regulatory processes and Congressional interest in regulatory reform, it is not surprising that some agencies are considering demonstration trials of regulatory negotiation -- but only some agencies and so far only in a veery limited sense.
Selection of Negotiators A m e c h a n i s m must be devised to select negotiators w h o represent the interested parties. Direct negotiation of e n v i r o n m e n t a l issues has been successful with as m a n y as about a dozen negotiators. It is conceivable that m a n y more, perhaps hundreds, could be a c c o m m o d a t e d in a regulatory negotiation t h r o u g h a g r o u p i n g of negotiators into coalitions that would choose representatives to sit at a b a r g a i n i n g table, and report back periodically to the other members of their coalitions. T h i s would be a difficult process and is conceivably impractical. If the development of a proposed regulation by negotiation required the participation of hundreds of separate negotiators m a n y regulatory topics w o u l d surely be discarded (at least EIA REVIEW 4/2
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ENDA at present) because of lack of experience in negotiating agreemen a m o n g such numbers. There are, however, several ways to limit th~ n u m b e r of negotiators. One alternative is to have the regulatory agency or some othe~ authority select the negotiators with due attention to m a i n t a i n i n g p r o p e r balance of interests and adequate representation of eacF different kind of interest in the negotiating g r o u p . T h i s has th~ advantage of l i m i t i n g the n u m b e r of participants, but it offers nc protection against objections to a negotiated agreement by those whc were excluded from participation. Excluded parties m i g h t 1~ antagonized by their exclusion and, because of heightenec If t h e d e v e l o p m e n t of a proi~osed regulation by negotiation required the participation of hundreds of separate negotiators m a n y r e g u l a t o r y t o p i c s w o u l d s u r e l y be discarded... antagonism, object to features of the negotiated agreement they might otherwise have f o u n d acceptable. A second alternative is to have the agency or some other authority designate the n u m b e r of seats at the negotiating table, allocating several to each kind of interest group. A major disadvantage of this approach is that the allocation may be challenged. Also, there w o u l d still be the p r o b l e m of dealing with excluded parties. A third alternative is to have the agency establish a selection committee comprised of people w h o are balanced with respect to their affiliations and w h o represent all major interests. For example, the selection committee m i g h t operate by choosing negotiators from
...regulatory issues for which there are limited numbers of interested parties might serve adequately for early demonstration of the regulatory negotiation process. a m o n g those who volunteer, in response to a Federal Register notice. T h o s e selected could be a s k e d t o represent not only themselves but also a g r o u p of others w h o volunteered, thus establishing a form of constituency relationship a m o n g interested parties. T h e negotiated agreement would be reached w h e n all parties (the constituents as well as those at the table as negotiators) reach consensus. T h i s approach m i g h t be challenged less frequently than the second alternative, but it w o u l d be more unwieldy. For m a n y subjects it m i g h t be so unwieldy as to be impractical. A fourth alternative is for the agency, an authority, or a balanced committee to identify the key stakeholders for the proposed regulation, that is, those key stakeholders with both the interest and the will to challenge an o u t c o m e if it did not a c c o m m o d a t e their interests adequately. These key stakeholders would be selected as the negotiators. T h i s is a modification of the first alternative, and has the advantage of emphasizing selection of negotiators likely to have both 200 EIAREVIEW
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AGENDA the resources and the will to challenge u n w e l c o m e outcomes. T h i s diminishes but does not eliminate potential problems with excluded parties. T h i s alternative still m i g h t be considered unfair by parties w h o are excluded or w h o believe they are underrepresented. A fifth alternative is to limit attention to only those candidates for regulatory negotiation that are characterized b y a small n u m b e r of interested parties, say about a dozen or fewer. T h i s could be a very small universe of proposed regulations. If regulatory negotiation were to be viewed as applicable only to this limited g r o u p of issues, questions could legitimately be asked about the desirability of giving so m u c h attention to so limited a process. Nonetheless, regulatory issues for which there are limited n u m b e r s of ir/terested parties m i g h t serve adequately for early demonstration of the regulatory negotiation process. Such demonstrations could provide valuable experience on which to base the design of regulatory negotiations involving larger numbers of parties. There are, of course, other variations on these five themes but the criticisms of these five w o u l d probably be applicable to the variations. In any event, a whole different class of options opens u p if the process uses a neutral facilitator, that is, a person (or persons) w h o can be expected to facilitate the process free of control (or the perception of control) by the regulatory agency or any other party. T h e facilitator w o u l d then be able, as a consequence of credibility as a neutral, to work toward selpselection of negotiators t h r o u g h use of interactive processes of consultation with interested parties. T h e following illustrates one way this could occur. T h e agency could assemble a small, balanced ad hoc selection committee comprised of key stakeholders w h o w o u l d almost certainly be included as negotiators if a regulatory negotiation were to take place. T h e facilitator could meet with committee members, individually a n d as a group. He or she w o u l d ask w h o should be selected to be the negotiators and presumably state desirable conditions
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T h r o u g h an iterative and personalized process of contacts, the facilitator would seek to identify a balanced group of negotiators w h o are willing to participate, and who are acceptable to each other and to all k n o w n key stakeholders. for the negotiator selection process. Some exemplary conditions m i g h t be the i n c l u s i o n at the negotiation table of all parties with the interest and power to overthrow a negotiated settlement, the representation of all substantially different points of view, a n d the restriction of the n u m b e r of negotiators to about a dozen. T h r o u g h an iterative and personalized process of contacts, the facilitator w o u l d seek to identify a balanced g r o u p of negotiators w h o are willing to participate, a n d w h o are acceptable to each other and to all k n o w n key stakeholders. T h o s e EIAREVIEW
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ENDA selected by this process would comprise a "preliminary" negotiating group. T h e i r names would be published in a Federal Register notice that also invites attendance at a meeting of the " p r e l i m i n a r y " group for the purpose of selecting still other candidates for participation as negotiators. Based on this meeting, the facilitator would determine by consultation with the "preliminary" group whether they wished to proceed with their present group, with substitutions, by addition of others, or not at all. A decision not to proceed could occur for any of a n u m b e r of reasons. For example, if one party believes that a second party's willingness to participate is cynical, based on a desire to use negotiations to postpone regulatory action, the first party would be unlikely to want to participate. A decision to proceed would.imply a j u d g m e n t by each member of the group that a negotiated agreement can probably be reached, and is not likely to be successfully challenged. T h e facilitatoi7 could use some variation of the personalized process described above to convene a negotiating group. By agreeing to negotiate, the group already will have started on the path to consensus. Conclusion T h e goal of regulatory negotiation proposals is not to foster negotiation for its own sake. T h e goal is a practical one, to overcome some unsatisfactory aspects of current regulatory practice. Regulatory negotiation is simply a procedural device that may - - if properly used reduce dissatisfactions with that process and, more particularly, with the regulations it produces. Regulatory negotiation is based on a simple premise: people like to be powerful e n o u g h to have a meaningful voice in making the decisions that are important to them. T h e implication of this premise for the selection of negotiators is equally straightforward: involve interested parties in the negotiator selection process to the m a x i m u m extent that is practical. Re~e~nces
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Harter, P. 1982. Negotiating Regulations: A Cure for the Malaise? Environmental Impact Assessment Review 3,1: 75-92. Kirtz, C. 1982. EPA A n n o u n c e s N e g o t i a t e d Rulemaking Project. Environmental Impact Assessment Review 3,4: 367-372. Rodwin, M.A. 1982. Can Bargaining and Negotiation Change the Administrative Process? Environmental Impact Assessment Review 3,4: 373-386.
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