Scholars identify self-regulation as alternate compliance plans conceived by regulated entities, with some degree of government review and involvement. It enables industry to propose alternative ways to comply with regulations by using different means to achieve environmental goals (Nik Mustapha et al. 1998). Self-regulation programs can also be industry codes of conduct that are sponsored by trade associations designed to improve members’ environment performance. An example would be the chemical industry’s Responsible Care Program (Hemphill 1996).
Regulatory agencies have a difficult time ensuring that the numerous regulated industries comply with all the volumes of federal and state regulations. As already established, the regulations produce no result if they are not being followed (Tietenberg 1992; Segerson & Tietenberg 1992).
In addition to using enforcement resources more effectively, Iannuzzi (2000) addresses the importance of an enforcement program to develop a complying majority. When the regulatory agency is comfortable that a majority of the companies it regulates are in compliance, it will be able to devote its resources to those that do not comply. One potential way to develop this majority is with an effective self-regulatory program.
Self-regulation is not a phenomenon restricted to the environmental field. It would be enlightening to briefly mention some programs in other fields. Many occupations require a license or certification in order for someone to practice that profession. A self-regulating licensing body that has been given its authority by law, issues the license. For example, a surgeon cannot practice unless the College of Physicians and Surgeons license him. Likewise, an attorney cannot practice law unless she/he is a member of the Law Society (Priest 1997). In Malaysia, most professionals such as accountants, engineers, doctors, and lawyers need a license from their respective professional body to practice.
These brief descriptions of programs outside of the environmental field indicate that self-regulation is a practice employed in some highly critical industries. There would be severe consequences if self-regulation were not effective in these areas. Therefore, it is reasonable to conclude that self-regulation can be considered as a potential policy tool for environmental enforcement.
Self-regulation can be used as environmental enforcement through changing attitudes of regulated individuals. Millar & Millar (1990), and Cialdini (1994) have identified key components of attitude change: the communicator, the communication, the medium, and the audience.
Changing people’s attitudes, and ultimately their behavior, can be difficult if they have well-established habits or are highly motivated in the direction opposite to the desired change. Research also shows that people who positively anticipate a new idea or who feel that others around them are inclined to change their views are likely to exhibit attitude changes (Boninger, Brock, Cook, Gruder & Romer 1990).
Self-regulation has numerous potential economic advantages for both the private and public sectors. It may result in faster assimilation of innovative improvements in environmental process and control technologies, streamlining reporting requirements, and paperwork reduction and slowing the growth of public regulatory bureaucracies (Hemphill 1996). It can also reduce the costs for regulators to prepare and review permit applications, renew and modify, review monitoring and reporting requirement, and perform inspections (Andrews 1998).
The Government sees self-regulation as an opportunity to bring industries into a “normative” behavior. Besides providing lower costs, it can also result in greater speed and flexibility, and since its requirements usually go beyond the letter of the law, it raises standards (Cunningham & Rees 1997).