Overview on Co-Regulation the use of private certification in government regulation

1. Overview on Co-Regulationthe use of private certification in government regulation Philipp Schukat, GIZ Programm forSocial & Environmental Standards BMZ Conference Forests for Future Generations – Public and Private Responsibility for Sustainability

2. The concept of co-regulation: at least three different co-regulation pathways: Governments set binding sustainability goals and assure compliance with those sustainability requirements by recognizing private verification or certification schemes Legal adoption of private standards into legislation create conducive legal and regulatory frameworks (e.g. EU-TR) or by directly supporting implementation of market based standard systems (e.g. by providing loans) Private standards initiatives can complement public regulation -> expand the repertoire of governmental regulatory instruments Private schemes cannot substitute public regulation

3. Co-regulation can combine the strengths of both private and public regulatory capacities: Strengthsofprivate standardsystems: • as market based instrument often flexible, quick and innovative • Internationally applicable beyond national boundaries • linked to economic incentives Weaknesses: • limited sanctions to certificate • holder -> lose of certificate and membership • Proliferation of regulation on standards Strengthsofgovernmentregulation: • State (democratic) legitimacy • Applicability to all firms within its jurisdiction • Enforceability through state supervisory agencies Weaknesses: • Slow (further) development • Not applicable to firms outside its jurisdiction

4. Opportunities of Co-regulation: National regulation to promote sustainable economic activity beyond national boundaries in line with WTO; particularly in the context of globalized supply and value chains, with transnational companies Private standards systems can help promote change processes to improve government regulation Regulation with private standards provides interesting avenues to engage private sector and civil society

5. Risksof Co-regulation: varying and even contradictory demands on private schemes by different governments – proliferation trap Protectionist misuse Insufficient selection criteria of private schemes entail risk of government-supported 'greenwashing.'

6. Quality Check ofprivate schemes Our objective isto provide a tool that businesses and government agencies can use to find environmental and social standards that meet their needs We provide a method for evaluating performance of standard systems; users are enabled to choose best suited system We aim to inform stakeholders about key elements, to be considered when evaluating the credibility of standards and their suitability to certain contexts (industry / region / sustainability hot spots). Scope: all sectors; front ends can be customized for different sectors Jointlyled by BMAS, BMELV, BMU and BMZ Levelof advancement: Winter 2013 – prototype for testing

7. ThankyouforYour Attention! Contact: Philipp Schukat Head GIZ Programme Socialand Environmental Standards philipp.schukat@giz.de BMZ Conference Forests for Future Generations – Public and Private Responsibility for Sustainability