Hard Choices, Soft Law

Voluntary Standards in Global Trade, Environment and Social Governance

John J. Kirton, Michael J. Trebilcock

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351931632
• Edition: 1
• Topic: Droit
• Subtopic: Droit du commerce international

An important read for academics and policy-makers alike, Hard Choices, Soft Law asserts that voluntary standards, or 'soft' law, are an important supplement to international law in a number of areas. This key work firstly outlines the approach taken to combining soft and hard law and trade, environment and labour values in the WTO and NAFTA, and in the prospective Millennium Round. Then, using the forestry sector - a realm where formal international law remains largely absent - the book provides a detailed examination of the role of soft law in action. It demonstrates how soft and hard law can be combined to promote trade, environmental and social cohesion, in ways that also permit sustainable development. The book presents a wealth of knowledge from a range of contributors familiar with the work of the G7/G8, the OECD, the Biodiversity Convention and the Codex Alimentarius.

Part I
Setting Standards for Sustainable Forestry

Chapter 2
Non-state Global Governance: Is Forest Certification a Legitimate Alternative to a Global Forest Convention?

Steven Bernstein and Benjamin Cashore¹

When traditional forms of multilateral governance fail to materialise, is non-state governance a viable alternative? This question besets the forestry issue area, where repeated attempts to forge a binding international convention to manage the use and preservation of forests have failed (Wang 2001; Dimitrov 2003). Most relevant states now strongly oppose a global forest convention, including some that previously voiced support. Moreover, even prominent nongovernmental organisations (NGOs) have withdrawn their support, fearing a convention might do worse at promoting sustainable forest management than no treaty at all. In the wake of this failure, voluntary forest certification and eco-labelling schemes sponsored by environmental NGOs or forest company and landowner associations have arisen to fill this governance gap. Can such schemes gain acceptance as a viable alternative to a global forest convention?

The central argument of this chapter is that as a non-state form of governance, transnational forest certification schemes require political authority beyond the state in order to succeed. In the abstract, power, legitimacy, and community constitute political authority (Bernstein 2003). In other words, authority exists when a community or audience authorises commands to which it feels bound, empowering those rules and, possibly, mechanisms to enforce them. But in the realm of global governance, especially in cases where hard law is absent, legitimacy takes on added importance, because, by definition, non-state governance schemes lack the traditional enforcement capacities associated with the sovereign state — the traditional site of authority in the international system where power, legitimacy, and political community appeared fused. Although one should always be sensitive to the importance of power for political authority, including where it resides and how it manifests, the decoupling of coercive force and legitimate rule is the most striking feature of new sites of authority found in contemporary global governance. According to James Rosenau (2003), 'the essence of [new sites of authority ] is that they derive their legitimacy from the voluntary and conditional participation of individuals who can revoke their consent at any time'.² This chapter focusses on legitimacy for this reason. Nonetheless, it is sensitive to the interaction between legitimacy and power in two regards: first, that underlying power configurations in the international system, as well as in domestic and international marketplaces, could interact with legitimacy dynamics to produce consequences that outside observers might not necessarily view as good or just; and second, that schemes lacking in power resources risk being paper tigers, not really constituting governance in any meaningful way.

Legitimacy of any form of governance may rest theoretically on deeper notions of justice (Rawls 1971) or legitimate procedures — what Thomas Franck (1990) calls generically 'right process'. But on a practical level, non-state governance must ultimately be deemed acceptable or legitimate among its relevant audiences. Criteria of legitimacy in global governance are thus contingent on historical understandings of legitimacy at play and the shared norms of the particular community or communities granting authority, since a scheme's viability depends upon those audiences recognising its legitimacy. In the case of forestry, relevant audiences include forest landowners and forest management companies, producers of forest products and purchasers of those products further down the supply chain (Cashore, Auld, and Newsom 2004; Sasser 2003). Governments also play an indirect role, as the source of authority for the web of existing rules and institutions that form the backdrop of any global governance scheme. While legitimacy does not guarantee a certification scheme's effectiveness in promoting sustainable forest management (Cashore and Noah 2003), it is a necessary condition, especially in the absence of coercive state power.³

The legitimacy of transnational governance schemes must be achieved at two levels since, by definition, they occupy political space both internationally and domestically. Internationally, legitimacy requires that the basic institutional elements of the scheme — its norms and rules — fit with existing accepted norms and institutions of global environmental and economic governance. Overt conflict, either with existing hard law or with less formal but widely agreed or accepted international norms or soft international law, would militate against the legitimacy of any emerging governance scheme.⁴ The particular nature of forest certification as a market-based scheme raises the related question of whether acting in the marketplace can avoid conflicts that have militated against a binding global forest convention among states. This question is especially relevant for a central theme of this book: under what conditions can non-state or voluntary forms of governance achieve desirable environmental, social, and economic outcomes, if at all?

Domestic legitimacy is required because targeted firms also operate within domestic regulatory and competitive environments, with their own implicit and explicit norms of behaviour that set the boundaries of what relevant audiences would be willing to accept as appropriate. Two interrelated components of domestic legitimacy must be achieved: first, relevant audiences must accept the notion that a non-state form of governance is an appropriate mechanism for addressing global environmental problems; second, domestic audiences evaluate which of the competing domestic forest certification programmes, with very different conceptions of non-state governance, are most legitimate (Cashore, Auld, and Newsom 2003, 2004).

The chapter proceeds in three parts. First, it discusses the most prominent transnational certification scheme, the Forest Stewardship Council (FSC), as well as competitor schemes. The FSC is identified as a non-state, market-driven form of governance and placed in the context of more traditional forms of global governance. Second, the chapter addresses international legitimacy requirements. The FSC's relative success in meeting these requirements provides one piece of the puzzle of why forest certification has gained some acceptance as a viable form of governance whereas traditional forms of interstate governance have largely failed. The third section examines domestic legitimacy requirements and strategies employed to gain legitimacy for governance schemes. The conclusion identifies limitations to this approach, and cautions against the view that transnational legitimacy automatically or easily translates into effective governance.

Forest Certification and Global Governance

Forms of Global Governance

Despite a great deal of talk about 'governance without government' in the international system, global governance usually brings to mind large and arguably powerful intergovernmental institutions such as the World Trade Organization (WTO), the International Monetary Fund (IMF), or even the United Nations and its affiliated agencies. These organisations, and the broader regimes or institutional arrangements in the areas they help manage, for the most part rest ultimately on the authority of their state members. They are organisations and institutions established by states and for states in order to solve collective action problems and manage interdependence.

As recent writing on global governance makes clear, however, non-state actors — a term that refers to any actor other than governmental actors — increasingly participate in global governance if defined broadly as the method or means of realising shared values, interests, and goals that may or may not derive from a formal centralised political power or authority. Non-state — or soft law — mechanisms, as defined in this volume, meet governance criteria if they purposely steer actors toward collective goals or values, and are recognised as authoritatively doing so (Rosenau 1995). In other words, they qualify as governance as long as what they do rests on the acceptance of shared rule.

The role of non-state actors in global governance ranges from sources of information, influence, or monitoring of traditional intergovernmental institutions to governance schemes that manage in the absence of government control or even blessing. In between are various forms of hybrid governance where governments and nongovernmental groups — be they firms, nongovernmental political or activist groups, individuals, or groups of experts — jointly participate. Table 2-1 identifies ideal forms of global governance depending on the level of governmental authority and control.⁵ The key difference relevant to this discussion is in the location of authority. What separates 'non-state market-driven' governance, as described by Benjamin Cashore (2002), from both traditional international governance and hybrid governance is that authority is diffuse and located in the marketplace. Specifically, producers and consumers along the supply chain grant authority as products move through the market from (in the case of forests) extraction to end users. The institutions or governance schemes themselves are empowered ultimately by acceptance by these players, but also by drawing legitimacy from existing webs of authoritative international norms that define and regulate appropriate behaviour and practices in the issue area. Wider processes and audiences, including environmental groups and governments, may influence both supply chain dynamics as well as these broader norms.

International governance, in contrast, ultimately rests on the sovereign authority of states, either directly or because governments have delegated that authority to an institution or to private actors. A non-state market-driven governance scheme does not rely on states and may explicitly exclude them, leaving them in a secondary role of interested actor, albeit a powerful actor and one that may potentially challenge the scheme's legitimacy. While non-state market-driven forms of governance in generic terms might occur within a single state's territory, the focus here on global governance specifically concerns schemes that transcend state borders.

Table 2-1 Alternative Authorities in Global Governance

Features	Non-state Market-Driven Governance	Shared Private/Public Governance	Traditional International Governance
Location of authority	Diffuse: producers and consumers along the supply chain (audience/market players); non-state institution as location, interpreter, implementer of rules.	Some delegation possible (e.g., de facto granting authority to technical experts), but sovereign governments remain ultimate authority (explicit or implicit). Transfer of authority is rare.	Sovereign governments. Some delegation to institutions is possible, e.g., to interpret rules. Transfer of authority is rare.
Source of authority	Shifting international norms enabling markets, economic incentives, acceptance of programme by supply and demand side audiences.	State sovereignty and consent (deep structure of international system). Possibly legalisation or constitutionalisation.	State sovereignty and consent (deep structure of international system). Possibly legalisation or constitutionalisation.
Role of government	Interested player, potential facilitator or debilitator.	Shares policy-making authority.	Has policy-making authority.

Source: Adapted from Cashore (2002).

The reasons for the emergence of these new forms of governance vary and are open to debate. Private governance among corporations may result from firms seeking to co-ordinate standards, form associations, provide services for their own benefit, or avoid state regulation. Similarly, states may enable or encourage private or hybrid governance for reasons ranging from the need to co-operate with firms when attempting transnational regulation to attempts to create regulatory environments consistent with their home firms' interest, to an inability or unwillingness to reach agreement at an intergovernmental level, whether owing to competing interests or structural impediments to co-operation among states. Furthermore, private or hybrid governance may form owing to an ideological or political desire to allow the market to operate with the least amount of political interference. From the perspective of non-state actors, private or hybrid governance may stem from either an attempt to avoid state regulation or to create regulation or incentives for changes in behaviour when governments are unable or unwilling to act. While it is beyond the scope of this chapter to explore fully the reasons for the emergence of non-state governance, some of the factors that led global forestry governance to move in this direction are considered.

Forest Certification and the FSC

Forest certification and labelling programmes are designed to officially recognise those companies and landowners who voluntarily operate well-managed or sustainable forestlands according to predefined criteria. Forest company or landowner associations and environmental NGOs have established the schemes, setting up processes and procedures for developing and administering rules, and monitoring compliance. Governments may be involved indirectly if the scheme falls under larger regulatory or voluntary systems of standards where governments play a role, such as the International Organization for Standardization's (ISO) 14000 series of environmental standards. However, governments can also take on a new role as an interested — but entirely outside — actor, such as in the case of the NGO-led FSC, the main focus of this chapter. The FSC is a primary example of the new breed of governance schemes that falls closest to the ideal type of non-state market-driven transnational governance. It also corresponds very well to the classification of soft law used in this volume, because it relies 'primarily on the participation and resources of nongovernmental actors in the construction, operation, and implementation of [its] governance arrangement' (see page 9). Moreover, participation is voluntary and consensus decision-making is encouraged, although voting procedures are available when consensus fails to develop. Like other soft law institutions, it shares some characteristics of law, and it may possibly form the basis of future binding law. However, its source of authority separates it from more traditional state-centric understandings of international soft law, where authority stems from the stated intention or concern of states.

Forest certification operates according to a market-driven logic, based on the expectation that customers — whether manufacturers, retailers, or end users — prefer sustainably produced forest products and will demand them in the marketplace. Market incentives will then operate to produce forest products sustainably.⁶ This ordering o...