Compliance Promotion and Incentives

Principle 12: Compliance promotion.
Environmental Agencies should promote compliance with regulatory requirements by providing information and technical assistance, sharing best practices, and promoting adoption of voluntary measures.

An EA should integrate compliance promotion as a central tool in its compliance and enforcement programs. Through the provision of information and technical assistance, and the sharing of best practices, an EA can assist the regulated community in overcoming barriers to compliance.

Compliance promotion is an especially practical tool for Asian governments, which face significant challenges in controlling the significant and growing levels of pollution from small- and medium-sized enterprises and local governments. Given that most EAs lack adequate resources and regulatory tools to employ an effective command-and-control program, they should work closely with the regulated community to inform them of environmental requirements and possible approaches for compliance. An EA can also promote adoption of voluntary programs that support the principles and practices of corporate social responsibility.

Principle 13: Incentives-based instruments.
Environmental Agencies should employ economic and incentives-based instruments to promote compliance.

As a complement to command-and-control regulation, an EA should develop and employ incentives-based instruments that provide economic and other incentives for the regulated community to adopt technologies and practices that ensure compliance with environmental standards. Possible instruments might include: pollution charges on effluents or emissions, fiscal incentives for compliance or adoption of environmental management systems, or performance bonds.

An EA may establish financial mechanisms, such as independent revolving funds to support agency programs and priorities, or other environmental investments. An EA should take care to integrate incentives schemes with other command-and-control programs to ensure that combined measures serve to deter polluting behavior.

An EA should also develop performance rating schemes that publicly disclose environmental performance information to exert public pressure on violators. Public disclosure programs can either enhance or tarnish the reputation of a regulated entity with consumers and others, and thus far, have already proven an important tool for modifying polluting behavior in Asia.