The Triple Bottom Line Blog

A fine roundup in today's New York Times concerning the deeply ironic trend of industries begging for federal regulation in hopes of fending off worse problems--consumer backlash, foreign competition, tough state rules, and massive lawsuits. The industries and products involved range from toys, cars, and home mortgages to popcorn flavoring, spinach, and fireworks. One key quote:

"It's definitely a strange-bedfellow situation," said Sarah Klein, a lawyer at the Center for Science in the Public Interest, which is seeking, along with grocery stores and produce growers, new requirements to prevent food-borne illnesses. "The voluntary system is not working from a food-safety perspective, and it's creating real problems for the industry."

The ironies here cut in several directions. First, it's always surprising to see business people asking for government intervention. Of course, the companies leading the charge have self-interest and the interests of their shareholders in mind: They hope that reasonably soft federal regulations will fend off harsher requirements imposed either through litigation or public pressure, allowing them to go back to "business as usual" with just a few new easy-to-manage rules to follow.

Still, a touch of schadenfreude is unavoidable among sustainability advocates as they witness defenders of laissez-faire forced to make the tacit admission that self-regulation and the "invisible hand" of the free market may not be enough to protect the safety of consumers and the quality of the environment.

Second, it's curious to see industry groups expressing frustration over the unwillingness of the current Republican regime to impose the kinds of pre-emptive regulations they are now advocating:

The slow response by the Bush administration to several of these proposals has been a source of frustration to some industry groups.

"We have had a very, very uphill battle trying to get regulation," said David H. Baker, a lawyer for the Lighter Association. The organization, representing cigarette lighter manufacturers, has been seeking a mandatory standard because unsafe, inexpensive Chinese imports were flooding the market, but staff members at the Consumer Product Safety Commission recommended against such a rule, saying the number of deaths and injuries did not justify it.

Similarly, the Bush administration is opposing legislative efforts, endorsed by popcorn makers and health and labor groups, that would impose strict limits on the levels of fake butter that can be found in the air in microwave popcorns plants. An ingredient in synthetic butter can cause deadly lung damage in workers, but the administration says the science on the issue is not conclusive.

Again, the irony is rather delicious: Once-staunch standard-bearers for Adam Smith and Milton Friedman are annoyed to find that officials of the Bush administration took their propaganda a bit too seriously. Now that business leaders are ready to backtrack on their commitment to unfettered competition, they are frustrated that their conservative allies in government aren't doing their own 180 quickly enough to suit them.

Of course, the urgency felt by the industry advocates is understandable. With the 2008 elections looming, and with public opinion shifting in cyclical fashion back toward re-regulation, they are nervous about the kind of drastic policy shifts that might be launched by a Clinton, Obama, or Edwards administration, perhaps abetted by a Democratic Congress. If new federal rules are in the offing, they'd rather have them written by relatively friendly Republican administrators. And that means the clock is ticking.

The gamesmanship of the business advocates profiled in the Times is perhaps inevitable. But those overseeing corporate policy at a higher level should be clear on one thing: Whatever the outcome of the current maneuvering, it will not be possible to put the current controversies about product safety, worker health, environmental contamination, and executive malfeasance "behind us." No set of government regulations, friendly or otherwise, will enable managers to relegate sustainability to the category of "problems solved" and allow them to concentrate solely on the more comfortable, familiar challenges of growing your revenues and maximizing their profits.

One need only look at the automobile and food industries, two of the businesses currently seeking (slightly) tougher federal regulations. Are these industries that have been exempt from government scrutiny in the past? Not at all. And has the existence of regulatory oversight exempted them from being caught up in consumer or environmental controversies? Again, no. Living up to government rules doesn't win you a free pass in the arena of public opinion. In fact, nothing does. There are no more free passes.

The reality is that, in today's interconnected world, sustainability is a never-ending challenge that must be tackled on many fronts simultaneously: through working conscientiously for fair, open, and constructive government regulations; through developing industry-wide self-policing programs and voluntary improvement regimes; through partnering with groups of citizens, activists, and interest groups to find positive solutions to problems and disagreements; and through striving continuously to practice good corporate citizenship, even at times when the TV cameras aren't on you.

That's what "business as usual" amounts to in the twenty-first century, and that's what corporations can look forward to once the current mini-crisis over public confidence in business gets resolved, one way or another.

Labels: Role of Government