Non-Governmental Third-Party Certification Systems

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Description

Brian Milani:

"Civil society seems to be generating new forms of economic regulation—in particular, the rapidly expanding non-governmental stakeholder-based third-party certification systems. These systems—for sustainably-harvested wood, green energy, organic food, green buildings, and the like—tend to be connected with the rise of new enterprise networks, establishing new relationships not just between producers, but between producers, consumers and everyone along the product life-cycle. The most well-known examples are the Green Building Councils, associated with LEED building certification, and the Forest Stewardship Council, which organizes wood and forest certification." (http://greeneconomics.net/ValueRevolution.htm)


Discussion

Brian Milani:

"These networks are not simply business associations pushing market expansion. They are more interested in deriving their financial reward from delivering social and environmental value. For this to actually work, they must be equally valuation, marketing and regulatory systems. Thus, while they may be concerned with growing their markets, their net effect may be a net reduction in the amount of material stuff sold.

The by-word of most of these initiatives is “market transformation.” Many academic and media commentators are hypnotized by this market terminology, and often lump these initiatives in with a host of other neoliberal “market innovations” that have coincided with globalization, privatization, capital flight, and a general undermining of government regulatory power. In the name of flexibility and efficiency, transnational corporations have sought to capitalize on weakened governments to loosen forms of social and environmental accountability established by the postwar welfare state.

The new enterprise and certification systems may be “voluntary,” in that companies have a free choice as to whether to join or not. But these new networks are not undermining accountability; they are increasing it. The standards enforced by these certification systems are by no means arbitrary, or optional, and typically have been stricter than equivalent governmental standards. What is involved, contrary to popular impressions, is not regulation by the “invisible hand” of the market, but the gradual creation of new kinds of markets—“mindful markets” in David Korten’s words—that actually build social and environmental values into market operations and increasingly become the key market drivers. While all these systems must concern themselves with the profitability of the firms involved and move in an incremental way, they are not simply putting dollar values on externalized costs or social benefits. The profit motive remains a dynamic force, but it can be a progressive force only because of the integrity of the certification standards. To the degree that these systems can involve broad and authentic stakeholder participation, they also are expressions of evolving economic democracy." (http://greeneconomics.net/ValueRevolution.htm)