Adding public value: The limits of corporate responsibility

It is suggested that natural resource companies undertaking large-scale projects may be expanding the scope of corporate social responsibility by working to enhance the capabilities of the public sector. Naturally companies are concerned to protect their investments, and to ensure their viability. They will therefore invest in necessary infrastructure and facilities of all types, where those are lacking. Such investment often provides benefits to the wider community, but with a few exceptions these are normally incidental byproducts rather than inherent objectives. The motivation for companies to provide resources of all types in order to enhance the capabilities of the public sector to provide public services is usually an expectation is that the tangible benefits will exceed the costs, rather than altruism. One driving force is to secure and maintain a company's social licence to operate. More recently competition from Chinese firms is prompting private sector companies to offer comparable investments in infrastructure. It is unclear whether investment in public sector capabilities is cyclical and liable to cutbacks when market conditions deteriorate. Changing market conditions affect not just corporate willingness to spend but also host countries’ bargaining strengths. In boom periods host countries will be more able to secure straightforward financial benefits through higher tax receipts than when markets are weak. Beyond the specific needs of individual projects corporate policies are strongly influenced by the beliefs of senior managers. External pressures both from international institutions and from NGOs also drive corporate behaviour. The success of investment in public sector capabilities relies in the end on the responses of host countries, and on how closely the objectives and interests of the government are aligned with maximising the nation's long term wealth and welfare. Where they are not corporate resources may be frittered away. There are also questions over the legitimacy of corporate investments, especially by foreign-owned companies. They have a right to offer advice and protect their legitimate interests, but these may not always coincide with those of their host countries. There is a range of questions about the appropriate role of companies, which lead on to feasible and effective ways of improving weak governance.     

Enhancing climate technology transfer through greater public–private cooperation: Lessons from Thailand and the Philippines

This article contributes to debates about climate change policy and technology transfer by analyzing the success factors underlying collaboration between private companies and communities in developing countries. To date, much attention to capacity building for enabling environments — including public–private collaboration — under the climate change convention has focused on state‐led initiatives and on the innovation and development of technologies. This article, instead, focuses on how private‐sector investors and host communities may collaborate in the diffusion of technologies, by reducing the costs of technology transfer, and making technology more appropriate to developing countries. The article describes cases of collaboration concerning waste management and waste‐to‐energy in Thailand and the Philippines. The article argues that successful public–private partnerships between investors and communities depends on minimizing transaction costs, strengthening collaborative (or assurance) mechanisms, and in maximizing public trust and accountability of partnerships. Lessons are then drawn for enhancing capacity building for technology transfer under the climate change convention and applications such as the Clean Development Mechanism.     

Food Supply Chain Governance And Public Health Externalities: Upstream Policy Interventions And The UK State

Contemporary food supply chains are generating externalities with high economic and social costs, notably in public health terms through the rise in diet-related non-communicable disease. The UK State is developing policy strategies to tackle these public health problems alongside intergovernmental responses. However, the governance of food supply chains is conducted by, and across, both private and public spheres and within a multilevel framework. The realities of contemporary food governance are that private interests are key drivers of food supply chains and have institutionalized a great deal of standards-setting and quality, notably from their locations in the downstream and midstream sectors. The UK State is designing some downstream and some midstream interventions to ameliorate the public health impacts of current food consumption patterns in England. The UK State has not addressed upstream interventions towards public health diet at the primary food production and processing stages, although traditionally it has shaped agricultural policy. Within the realities of contemporary multilevel governance, the UK State must act within the contexts set by the international regimes of the Common Agricultural Policy and the World Trade Organization agreements, notably on agriculture. The potential for further upstream agricultural policy reform is considered as part of a wider policy approach to address the public health externalities issuing from contemporary food supply chains within this multilevel governance context.     

Shareholder activism on environmental issues: A study of proposals at large US corporations (2000–2003)

Socially Responsible Investing (SRI) has carved out a niche in the financial world, and each year a large number of shareholder proposals are filed at public companies in the US related to issues of corporate social responsibility (CSR). While the primary interests of CSR activists remain distinct from those of traditional corporate governance (CG) activists, the two groups do share an interest in minimizing the risk of negative environmental or social impacts from the operations of the corporation. They also share the objective of achieving transparency and accountability in corporate decision‐making. In relation to this latter objective, they both face similar challenges concerning conflicts of interest among key institutional shareholders. This article examines the record of shareholder proposal filing and voting from 2000–2003 for 81 large US public corporations to determine the relative prominence of CSR shareholder activism and the prospects for effective CSR shareholder activism on key environmental issues. The analysis of these data finds that nearly half (45%) of all shareholder resolutions are related to CSR, and that those resolutions which combine issues of CSR with traditional CG activism appeal to slightly more shareholders than issues of CSR alone. The article also examines shareholder activism at the micro level with a case study of the voting record at ExxonMobil. The article finds that CSR‐related shareholder activism represents the majority of shareholder activism within that firm and that resolutions targeted at climate change are particularly well supported. These resolutions draw a connection between environmental risk and risk to shareholder value. While numerous challenges remain for both CG and CSR activists, the article concludes that reforms that strengthen shareholder rights and corporate governance more generally will also benefit CSR activists and the environmental policies they promote in particular. The article ends with some proposed solutions for addressing the perceived conflicts of interest in corporate governance and the shareholder voting process.     

Governing Quasi-Public Network Services for adaptation to climate change

Adaptation takes place in both private and public sectors, or as an interrelation between the two, and often under the realm of public regulation. Thispaper uses the Swedish and the Norwegian electricity grid sector, as providers of a vital public good under strict public regulation, to analyse reforms' effects on adaptive capacity in this area. The paper shows that transformational changes in both sectors during the 1990s shifted both the formal organisational structure (rules and regulations), as well as the organisational culture, in the direction of economic efficiency. These two dimensions individually reduced adaptive capacity to climate change, although differently in the two countries. However, the formal structure and organisational culture also yielded substantial influence on each other. This leads to the conclusion that when designing public regulations and implementing reforms, organisational culture must be considered in the design. Also the paper contests previous findings in the literature by showing that under given conditions there exist some substitution between the two dimensions in influencing adaptive capacity, implying that both dimensions should be included when analysing adaptation since analysing them in isolation is likely to lead to wrong conclusions.     

INSTITUTIONALIZED INEFFICIENCY: THE UNFORTUNATE STRUCTURE OF COLORADO'S WATER RESOURCE MANAGEMENT SYSTEM1

ABSTRACT: This analysis identifies two basic structural features of Colorado's water management system which inhibit constructive reform and perpetuate inefficiencies in water use and distribution patterns. These features are: (1) the fragmentation of authority and influence over water, and (2) the estrangement of interest in reform from formal control over water policy. These interrelated features have continued to produce: sporadic, high conflict battles over proposed changes in the status quo; decision making which tends to exaggerate the importance of narrow, special interests while virtually ignoring legitimate interests of major sectors of the public; an inertia which discourages innovation; and an agglomeration of rules and water rights that are predicated on obsolete social and economic needs. Two radical proposals for reforming the state's water resource management system in order to overcome these problems and to enhance the probability that wise water policy will result are offered. These proposals are: (1) the abolition of the present system of water rights founded on the doctrine of prior appropriation, and (2) the consolidation of authority over water allocation in a single board of governors.     

Public–Private Partnerships for Solid Waste Management Services

The increasing cost of municipal solid waste (MSW) management has led local governments in numerous countries to examine if this service is best provided by the public sector or can better be provided by the private sector. Public–private partnerships have emerged as a promising alternative to improve MSW management performance with privately owned enterprises often outperforming publicly owned ones. In Lebanon, several municipalities are transforming waste management services from a public service publicly provided into a public service privately contracted. In this context, a regulated private market for MSW management services is essential. The present study examines a recent experience of the private sector participation in MSW management in the Greater Beirut Area. The results of a field survey concerning public perception of solid waste management are presented. Analysis of alternatives for private sector involvement in waste management is considered and management approaches are outlined.     

WATER RIGHTS,EMINENT DOMAIN,AND THE PUBLIC TRUST1

ABSTRACT: Faced with the necessity of meeting growing municipal water requirements in areas where available supplies are completely allocated, numerous cities throughout the West are turning to their eminent domain powers to affect a reallocation of water from less preferred uses to municipal uses, thus bringing about a sharp conflict with agricultural interests. As a basis for discussing these eminent domain powers, this paper begins with a brief review of the development of property rights. The existence of both private and public (social) rights in the “bundle of rights” is noted. In recent years the Public Trust Doctrine has been used to limit private rights in property, and to protect and strengthen social rights. A case study which focuses on a conflict between individual and social interests in water rights is discussed. This case involves the City of Thorton, Colorado which initiated municipal condemnation proceedings to acquire the water rights and structures of two nearby irrigation companies. The case represents an attempt to incorporate the spirit of the Public Trust Doctrine into legislation which sets forth procedures for resolution of similar water rights conflicts that will inevitably become more numerous throughout the West in the future.     

Assessing the role of economic actors in the production of private and public goods in three EU agricultural landscapes

The study analyses the contribution of relevant economic actors to the provision of private and public goods in agricultural landscapes. A method consisting of a multi-sectoral perspective and an integrated approach based on the analytic network process (ANP) and the use of selected local stakeholders is applied. The usefulness of the method is demonstrated in three European case studies in Austria, Italy and Spain. The results show that agriculture and tourism are the sectors that contribute the most and the least, respectively, to the provision of goods and services in agricultural landscapes. Moreover, the results underscore that policy instruments towards such provision need to be targeted differently in different areas and must take into account the different roles of the local actors involved.     

Integrating fisheries into the national development plans of Small Island Developing States (SIDS): Ten years on from Barbados

The development and effective introduction of strategies designed to ensure the ecologically and economically sustainable utilization of coastal and marine resources is perhaps the major challenge for Small Island Developing States (SIDS). In response, the 1994 Barbados Programme of Action (BPoA) called upon the SIDS to implement appropriate coastal and marine strategies and, crucially, ensure that such strategies were integrated into sustainable national development plans (NDPs). This article examines the extent to which contemporary NDPs and donor support programmes have incorporated the fisheries sector — arguably the most important coastal/marine resource for many SIDS — into such documents. Applying an assessment methodology, originally developed to identify levels of environmental mainstreaming within World Bank country assistance strategies to NDPs and donor support programmes, we are able to identify those SIDS who have most effectively integrated the fisheries sector into such documents. Comparison with data indicating the importance of the sector to the national economy (in terms of generating foreign exchange, employment generation and/or supporting domestic protein consumption levels) enables us to pinpoint those countries with substantial fisheries sectors, but a correspondingly lower than expected degree of sectoral mainstreaming. We suggest that the January 2005 review of the BPoA offers an opportune moment for such countries to redress these omissions.     

Public-private partnerships for solid waste management services

The increasing cost of municipal solid waste (MSW) management has led local governments in numerous countries to examine if this service is best provided by the public sector or can better be provided by the private sector. Public-private partnerships have emerged as a promising alternative to improve MSW management performance with privately owned enterprises often outperforming publicly owned ones. In Lebanon, several municipalities are transforming waste management services from a public service publicly provided into a public service privately contracted. In this context, a regulated private market for MSW management services is essential. The present study examines a recent experience of the private sector participation in MSW management in the Greater Beirut Area. The results of a field survey concerning public perception of solid waste management are presented. Analysis of alternatives for private sector involvement in waste management is considered and management approaches are outlined.     

Uneven Environmental Management: A Canadian Perspective

Advocates of community-based approaches to environmental management argue that by respecting local circumstances, skills, and concerns we may improve the prospects of achieving environmental sustainability; yet, within nation states such as Canada, environmental conditions, management and enforcement costs and capabilities, and power differentials within and among civic and public sectors may result in a highly differentiated capacity for environmental management across different localities and regions. This article draws on insights of political ecology to 1) create a conceptual framework that identifies key elements shaping regional environmental management regimes and to 2) undertake a comparative analysis to assess how elements interact to generate uneven management outcomes. I compare experiences of two Canadian biosphere reserves designated in 2000: Clayoquot Sound, BC; and Redberry Lake, SK. Analysis reveals that differences in governance and institutional capacities in the biosphere reserves are key to explaining uneven local outcomes. Where the public and civic sectors are strong, a robust and publicly vetted form of management will emerge. Where these sectors are weak and land is held as private property, environmental nongovernmental organizations can set the type and level of management, to the exclusion of effective civic and state involvement. This result may improve environmental sustainability but hinder social sustainability of a management regime and raises questions about the efficacy of community-based management.     

How can public–private partnerships contribute to security and human rights policy and practice in the extractive industries? A case study of The Democratic Republic of Congo (DRC)

Across sub-Saharan Africa, the presence of foreign large-scale mining companies is increasing. This is in part a result of depleting resources in countries such as Canada, United States and Australia, and in part from a more favorable national mine investment climate in several mineral-rich African countries. Their increased presence raises important questions around the potential role and function of Corporate Social Responsibility (CSR) in the sector. In post-conflict and/or fragile states, CSR has further implications for conflict and risk mitigation strategies to ensure the protection of human rights. One CSR approach increasingly being considered is the public–private partnership, whereby companies, public donors, and development agencies leverage their relationships for mutual benefit. There is merit in exploring its function in post-conflict fragile states, where socio-economic needs are high and the capacity of the state to respond to a variety of mine governance challenges is limited. Two case studies from the Democratic Republic of Congo (DRC) are presented, and their policy implications, discussed.     

Perspectives on corporate social responsibility in the chemical sector: A comparative analysis of the Mexican and South African cases

In recent years, the debate on corporate responsibility has shifted from a focus on environmental management towards a broader concept of corporate social responsibility (CSR). This article examines the chemical industry's approach to CSR from the perspective of two emerging economies: Mexico and South Africa. The global chemical industry was one of the first to respond to public concerns about environmental pollution, toxic waste and human health by adopting an industry‐wide code of practice, known as Responsible Care. This article examines the extent to which the chemical industry has responded to the broader debate on CSR. On the basis of a comparative case study, this article argues that the response to social issues by Mexican and South African chemical companies has tended to be limited to the ‘community awareness and emergency response’ (CAER) or community dialogue component of the international voluntary management framework, Responsible Care. Similarities and differences in regulatory and institutional conditions, as well as different levels of civil society engagement, reveal additional limitations for CSR, beyond that of the Responsible Care framework. This article argues that the socio‐political context influences the extent to which companies embrace CSR, especially in emerging economies, and highlights several challenges for the chemical industry in moving forward on CSR: credibility, stakeholder engagement, value‐chain accountability, disclosure and transparency. Reflecting on these challenges, the authors conclude by recommending a renewed focus on: (1) developing a broader set of CSR management practices beyond Responsible Care; (2) institutionalizing stronger accountability measures, such as reporting and verification; and (3) developing multi‐stakeholder partnerships that complement regulation and build public sector regulatory and guidance capacity.     

Trade in fisheries services under the WTO and GATS framework

This paper studies how fisheries services are classified in the World Trade Organization (WTO) framework for trade in services and discusses the potential impact of unclear classifications. The WTO plays a key role in regulation and assessment in the area of trade in services, mainly due to the General Agreement on Trade in Services (GATS), which contains the only set of multilateral rules managing such trade internationally. The purpose of GATS is to create a credible and reliable system of international trade rules that ensures fair treatment of all participants. Through negotiations, individual countries establish commitments to provide market access and limiting national treatment in various service sectors. During such negotiations, the classification of services is a prerequisite to ensure unambiguous and comparable commitments. However, the classification list used by the WTO, namely the W/120, is based on, and corresponds to, old versions of other classification lists, leading to unclear classifications. This lack of clarity in sectoral classifications makes policy analysis unnecessarily difficult and creates a risk that trade agreements may be interpreted differently by different parties.     

Affordable technologies for utilization of methane in a landfill environment: An example of an integrated technology array and evolving institutional networks

CARIBELATE, the Caribbean Environmental Laboratory for the Advancement of Technological Entrepreneurship is an evolving institutional concept, as well as a physical complex, that provides a dynamic environment for public, academic and private sector organizations to conduct proof of concept technology demonstrations in a landfill environment. This article traces the successful networking of demonstrations at a landfill in New Jersey and the subsequent design of the CARIBELATE project in the Municipality of Carolina, Puerto Rico. The institutional model developed for the Puerto Rico facility has brought together an unlikely combination of stakeholders. Those from the private sector, here called industrial partners, are paired with academic researchers to optimize products for local markets. The basic technology system demonstrated in New Jersey and to be replicated in Puerto Rico removes harmful contaminants from landfill gas and in so doing produces a variety of useful products. A portion of the landfill gas is utilized for micro‐turbine electricity generation and for heating a demonstration greenhouse that houses aquaculture coupled with hydroponic crop production, where aquaculture effluents are recycled as plant nutrients. A strict protocol to verify emission reduction is imposed on all the demonstrations at the CARIBELATE project. Although greenhouse gas credit verification is not the prime mission, it is suggested that the credits verified from these demonstrations are of high quality, and can serve as an excellent training platform. CARIBELATE is conceived to be operated at the municipal level and contribute to income generation and economic development. The continuing networking of stakeholders from the public and private sectors offers some potential guidance for replicating this design in the developing world.     

WATER MARKETS AND DECENTRALIZED WATER RESOURCES MANAGEMENT: INTERNATIONAL PROBLEMS AND OPPORTUNITIES1

ABSTRACT: Because of its importance and the perceived inability of private sector sources to meet water demands, many countries have depended on the public sector to provide water services for their populations. Yet this has resulted in many inefficient public water projects and in inadequate supplies of good quality and reliable water. Decentralization of water management, including the use of water markets, cannot solve all of these water problems, but it can improve the efficiency of water allocation. When given adequate responsibility and authority, water user associations have effectively taken over water management activities at a savings to tax payers. Moreover, water markets add the potential benefit of improving water efficiency within a sector as well as providing a mechanism for reallocating water among sectors. The key question involves developing innovative mechanisms for reducing the transaction costs of organizing water users and of making water trades. Water rights need to be established which are recorded, tradable, enforceable, and separate from land if markets are to operate effectively. Also, institutions are needed that effectively resolve conflicts over water rights, including third party impacts and water quality concerns.     

Adaptation as a Political Process: Adjusting to Drought and Conflict in Kenya’s Drylands

In this article, we argue that people’s adjustments to multiple shocks and changes, such as conflict and drought, are intrinsically political processes that have uneven outcomes. Strengthening local adaptive capacity is a critical component of adapting to climate change. Based on fieldwork in two areas in Kenya, we investigate how people seek to access livelihood adjustment options and promote particular adaptation interests through forming social relations and political alliances to influence collective decision-making. First, we find that, in the face of drought and conflict, relations are formed among individuals, politicians, customary institutions, and government administration aimed at retaining or strengthening power bases in addition to securing material means of survival. Second, national economic and political structures and processes affect local adaptive capacity in fundamental ways, such as through the unequal allocation of resources across regions, development policy biased against pastoralism, and competition for elected political positions. Third, conflict is part and parcel of the adaptation process, not just an external factor inhibiting local adaptation strategies. Fourth, there are relative winners and losers of adaptation, but whether or not local adjustments to drought and conflict compound existing inequalities depends on power relations at multiple geographic scales that shape how conflicting interests are negotiated locally. Climate change adaptation policies are unlikely to be successful or minimize inequity unless the political dimensions of local adaptation are considered; however, existing power structures and conflicts of interests represent political obstacles to developing such policies.     

Prospects for the co‐management of mangrove ecosystems on the North Brazilian coast: Whose rights,whose duties and whose priorities?

This article describes the co‐management approach in situations of open access to and of increasing pressure on resources, using a mangrove coastal zone in North Brazil as an example. Co‐management clearly has the potential to turn nonviable, de facto open access to mangroves into effective common property management. Alliances of different political and ideological groups have been formed under the RESEX (reservas extrativistas — natural resource user reserve) model of coastal co‐management. Local economic interests have been mobilized as client constituencies. The RESEX system of co‐management assigns additional duties to both co‐managing parties, i.e., the state administration and the local users, in exchange for new rights. The authors argue that local support for the RESEX model has been gained on partially distorted premises. As the public authority passes on responsibility for management to local users under the RESEX model, this entails a number of duties for the local users. Thus local users assume the duty to implement and monitor resource management; they also appear to gain the right to take local decisions, such as excluding outsiders from resource access, and designing local resource management rules. However, as this article shows with two examples, some important new rights for local users under the RESEX co‐management concept are contrary to environmental legislation in force. This conflict is at present unresolved. It is argued that increased transparency about their precise rights for local resource co‐managers will considerably improve the prospects of coastal co‐management in Brazil.     

Qualifying irrigation system sustainability by means of stakeholder perceptions and concerns: lessons from the Segarra‐Garrigues Canal,Spain

When planning interventions, water and land resource managers increasingly need to take the opinions of stakeholders into account. In the present study, stakeholders’ concerns in a multifunctional water system are assessed, with a focus on the debate about the sustainability of irrigation projects in stressed and competing water contexts. The selected case study pertains to the Segarra‐Garrigues irrigation canal (Spain), the promotion of which has generated social debate and mobilization, as well as pronouncements from European authorities for ensuring its environmental sustainability. Data was collected through semi‐structured interviews and analysed by means of a new codification system for identifying the affinities and conflicts arising from existing water demands. Results show that sustainability concepts are more present in civil society than in public administration and private services or the rural community. However, social sustainability and environmental sustainability are a priority for most stakeholders, while the economic perspective of sustainable development has been conditioned by the first two. These results can be used by relevant authorities as a first step in customizing their interventions, as they provide a clear initial idea of what stakeholder priorities are in the framework of sustainable development.