Legal natural resource governance: Innovation in response to fundamental rural challenges. Professor Paul Martin

Australian Centre for Agriculture and Law

University of New England

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The argument• Evidence suggests that resource

governance can be too costly, ineffective and/or unfair. Why?– 5 basic challenges– 5 rural challenges

• What should the next generation of resource governance be like?

• Proposed directions to consider– Research and investigation methods– Better frameworks for public policy– Governance instruments and systems

• Where might we go to from here?

+ IUCN/WCEL investigations of legal governance effectiveness (x2)

16th 17th 18th 19th 20th 21st

6B-9B

2B-6B

1B-2B

<1B

Is this the best rural governance model?

Frontier 1

Agricultural / monarchic system

The instrument explosion

Frontier 2 Industrialised/populist system

Mercantile/technocentric system

Ecolex: 2,070 treaties; 110,000 national laws and regulations 1,100 court decisions.

Ecolabels Index 458 ecolabels in 197 countries, and 25 industry sectors

Governance effectiveness: the evidence

The biophysical and social evidence plus•Political and scholarly critiques; business sector critiques•Rio+20 ‘The Future We Want’: Cl 19. •IUCN

– Natural Resource Governance Framework (NRGF) (World Commission

on Environmental Law and the Environmental Law Centre. Bonn). – Academy of Environmental Law

•UNEP’s Environmental Governance sub-programme •Memorandum of Understanding UNEP and International Organization of Supreme Audit Institutions (INTOSAI - Working Group on Environmental Auditing, WGEA)

•Organisation of American States

Society needs fundamental governance improvement

5 basic challenges

1. Ever-increasing human pressures upon the earth. 2. Governance systems that privilege harm-doing.3. Failures of public will and institutional capacity.4. Dynamic, complex and changing systems.5. Fragile governance paradigms

– We lack continuous improvement based upon objective performance analysis (e.g. system and instrument performance).

– We are misled through instrumentalism (e.g. laws, markets).

– We lack realism in design and implementation.– The evolution of methods is shackled by disciplines.

Overlaid by rural-specific characteristics

Rurality & governance: international evidence

Country People./ha.

Employ’t % Ag.

GDP% Ag.

Switzerland 2 3 1UK 2.62 1 1USA 0.35 1 1Canada 0.04 2 2France 1.2 4 2Iceland 0.03 5 6Argentina 0.16 5 9China 1.41 35 10Thailand 1.32 38 12Indonesia 1.39 39 14

Ag-independent 1 2 1Ag-Dependent 1 24 10

National accounts

Gov't revenue/p (US$1000)

GDP/ha (US$1000)

GDP/p (US$1000)

Net Public Social $ (%GDP)

Ag-independent

17 69 44 18

Ag-Dependent

5 5 16 4

Natural resources

Biodiversity Benefits

Index

Renewable water

(GL1000)

Extraction per person (L1000/y)

Ag-independent

30 1543 936

Ag-Dependent

35 860 635

Social welfare SchoolingChild Labour

(% 5-14)Health $ (%GDP)

Ag-independent

17   12

Ag-Dependent

14 7 6

Rural-specific concerns, Australia as an example

Rural Australia in context

What is feasible?

Pest animals – a rural problem

People: the issue and resource

Capacity: A critical limit

Education: shaping responses

“Vicious” rural system issues

Depth of shading is a 3 way function of1.Number of the 4 pest species present.2.Population sparsity; and3.Index of social disadvantage

Indicators of variability in capacity to address target pest species

5 rural-specific challenges ( # 1 & 2)

1. Major problems have special systemic cause/effect/solution characteristics.– Extensive, trans-boundary collective action problems.– “Autopoietic”, often coupled with adaptation.

2. Eco-social system complexities.– Farming and commodity system economics– Interwoven social, economic and ecological factors.– Social disadvantage linked to resource dependence.– Rural cultural and political distinctiveness.– Traditional owners’ eco-dependency and interests– Societies depend on private rural actions.– Private costs of providing these public benefits

3. Spatiality has complex, often hidden, governance implications.– “Space between”, social isolation, collective action and

transaction costs.– “Distance to”, cultural and political isolation, service

access.– “Extensiveness”

4. Sparcity limits which interventions are feasible and fair.– Low manpower intensity of rural spaces– Low economic intensity of rural economies – Limited human capacity of rural spaces

5 rural specific challenges (# 3 & 4)

5. Fragmentation limits effective (extensive scale) collective action.– Title fragmentation– Institutional fragmentation– Program and policy incoherence– Instrument proliferation– Land use and enterprise diversification– Emerging rural economies– Intensifying resource conflicts– Increasingly diverse rural values and interests– Strengthening non-local communities of interest

5 rural-specific challenges (# 5)

Dynamics of rural futures

Unpublished Direction and magnitude of future changes in sustainability indicators for the five agro-climatic regions of Australia from 2011 to 2100 under Representative Concentration Pathways. Brett Bryan, CSIRO.

Where to from here ??

10 directions for rural governance

1. Rural governance systems, not mere instruments.2. Precise multi-point, multi-instrument strategies.3. Science-informed behavioural focus.4. Streamline institutional architectures.5. Broaden rural regulatory evaluation.6. Use hybrid governance, with integrity

mechanisms.7. Empower ‘collective citizen action’ via institutions.8. Actively manage (citizen) transaction costs.9. Implement policy risk management.10.Apply scientific continuous improvement.

Paul Martin & Neil Gunningham Improving regulatory arrangements for sustainable agriculture: Groundwater as an illustration. Macquarie Journal for International and Comparative Environmental Law Volume 1 (1), 2014

IUCN Academy of Environmental LawInnovation in risk management arrangements for biofuel weeds

Weed pathway Whose decisions? What institutions? Risk themes ?

How could we act more strategically to change a

rural system? An example..

IUCN Academy of Environmental LawInnovation in risk management arrangements for biofuel weeds

Weed pathway Whose decisions? What institutions? Risk themes ?Science institutions

Enterprise investors

Bio-security agencies

Policy agencies

Commercial insurers

Land-use agenciesEconomic agenciesProperty investorsIndustry organisationsPrimary industry agencies

Standards CertifiersPublic media

Fuel companies

Legal system

Consumer organisations

Conservation agencies

Science institutions

Monitoring agencies

Field scientistLab scientist

Industry Entrepreneur

Risks expertCustoms Bureaucrat

Commercial PropagatorDevelopment agency staffSite investor/ownerLand-use approver

Plantation entrepreneurPlantation manager

Biofuel processorBiofuel investorBiofuel consumer

Extension officerRural NGO activistPlantation neighbour

Government weeds managerRegional environmental officerLocal weeds managerWeeds officer

Field scientists

Risk/context scientific evaluation

Closing the risk-responsibility/reward cycle

Risk-calibrated management options

Economic incentive for risk management

Informed, harm-accountable investors

Risk-control by the industry

Risk-informed consumer choices

Active harm monitoring

Compensation

Knowledge for avoidance/control/remediation

Incentives for control/remediation

Funds for control and remediation

Civil liabilityCivil liability

Scientific protocolScientific protocol

Administrative controls

Administrative controls Land use

bondsLand use

bondsInvestor codes of conduct

Investor codes of conduct Industry codes

of conductIndustry codes

of conduct“Green” branding“Green” branding

Risk insurance policies

Risk insurance policies

Performance accountabilityPerformance accountability

Creating a systemic governance strategy.

Integrity mechanismsIntegrity mechanisms

Instrument focussed

or Systemic behaviour focussed?

4 rural oversight reforms

Regulatory processes need to drive government to more effective, efficient and fair governance:1.Use more robust benefit/cost assessment, with realistic assumptions.2.Make the distributions of benefits and costs transparent and contestable.3.Evaluate the true feasibility for citizens and agencies to implement.4.Implement a discipline of policy risk management.

Martin, Bartel, Sinden, Gunningham and Hannam Developing a Good Regulatory Practice Model for Environmental Regulations Impacting on Farmers Australian Farm Institute and Land and Water Australia 2007

What is policy risk?

The risk that a policy may:1. Fail to be effectively

implemented– Through formal political

processes; or– Informal political resistance.

2. Be adopted politically but fail in practice

– Transaction costs– Implementation platform

failings3. Cause excessive harmful

‘spillovers’.

How often do governance policies fail?

They said it better than I ever could:Match the words to the mind.

He who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new.

For every complex problem, there is a solution that is simple, neat, and wrong.

Insanity: doing the same thing over and over again and expecting different results.