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2006 Reg Neg Workshop Summary




Welcome


Lynn Scarlett, Acting Secretary, U. S. Department of the Interior, and Rick Otis, Deputy Associate Administrator, Office of Policy, Economics and Innovation, U.S. Environmental Protection Agency, welcomed the participants to the Negotiated Rulemaking Workshop and thanked them for their efforts to move forward on cooperative conservation.

Secretary Scarlett expressed her ongoing support for processes that motivate action and innovation through stakeholder engagement in discussions to find solutions that enjoy acceptance amongst those with competing values.

Deputy Associate Administrator Otis discussed the President’s management agenda, which calls for increased public participation for cooperative conservation. He saw the workshop as a step in that direction, and encouraged the participants to think about regulations and beyond regulations to other possible tools.

Jeff Lape of EPA’s Conflict Prevention and Resolution Center (CPRC) and Elena Gonzalez DOI’s Office of Collaborative Action and Dispute Resolution (CADR) welcomed the participants and described their goals and expectations for the day.

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Introductions


All participants who were present introduced themselves and provided some background on their negotiated rulemaking (reg neg) experience as well as their expectations for the workshop.

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Looking Backward and Forward at Internal Decision-Making for Reg Neg


The session began with presentations by Patricia Overmeyer, Office of Brownfields Cleanup and Redevelopment, U.S. EPA, on the All Appropriate Inquiries Reg Neg, and Edith Blackwell, Deputy Associate Solicitor, Division of Indian Affairs, U.S. DOI, on the No Child Left Behind Reg Neg mandated by Congress. The presentations were followed by participant discussions.

Presentations

All Appropriate Inquiries (AAI): “All appropriate inquiries” is the process of conducting due diligence, or an environmental site assessment, to determine the environmental conditions of a property. EPA’s decision to use a negotiated rulemaking process to develop the AAI standards was rooted in the Agency’s knowledge of the real estate industry’s use of environmental site assessment processes and specific conditions related to brownfields redevelopment. More than 200,000 site assessments are performed for commercial property transactions each year. The majority of site assessments conducted or overseen by the real estate and banking industries are done using an existing standard developed by a voluntary consensus standards development organization. The widely-used industry customary practice is ASTM International’s E1527 Phase I Environmental Site Assessment Process. Given the number of annual property transactions and the prevalent use of the ASTM standard, there are many stakeholders in the field with extensive experience in performing and utilizing environmental site assessments. Given this situation, EPA’s goal was to limit market disruption as it encouraged the cleanup and redevelopment of brownfields. Finally, the convening assessment determined that many interested parties were willing to participate and virtually all interviewees believed that consensus could be reached.

With the final rule published in December of 2005, EPA found that it benefited from the AAI negotiated rulemaking in many ways. For example, the Agency accessed outside expertise, including direct input from informed and affected parties into the drafting of the proposal. It also obtained public input, in addition to the committee members, throughout the process. This led to proposed standards grounded in practical experience, which is expected to ease implementation, and limit market disruption. In addition, the stakeholders benefited from understanding each other’s needs and interests, and the process created goodwill between EPA and the stakeholders. Finally, there was less extensive public comment after publication of the proposed rule than the Agency generally would have expected when developing a proposed rule using a traditional regulatory development process.

No Child Left Behind (NCLB): DOI was mandated by Congress to use reg neg to develop a suite of regulations to implement NCLB in Indian country. The statute required regulations to establish: 1) definition of adequate yearly progress (AYP) for schools; 2) separate geographical attendance areas for each school; 3) a formula for determining minimum annual funding necessary for each school; 4) a system for the direct funding and support of all schools; 5) guidelines to ensure constitutional and civil rights of Indian students in all schools; 6) a method for administering grants to tribally controlled schools; 7) home living and dormitory standards; and 8) closure and consolidation standards.

DOI insisted on a maximum of six meetings, and the committee reached consensus on all the regulations. However, some participants felt that the time limit restricted their negotiations. According to Edith, “We didn’t gain consensus in the community – even though they gained consensus at the table.”

Reg neg may not be a useful tool for allocating finite resources, as required by the creation of the allocation formula. In addition, after DOI completed the negotiations, the Department of Education, which had participated in the reg neg, was able to influence the regulation in discussions with OMB prior to publication.

Ultimately, Edith’s sense is that the NCLB negotiated rulemaking was more expensive than a traditional rulemaking would have been and questioned whether DOI got a better rule for its intensive efforts. In reflecting on the reg neg, she thinks there are simply times when the executive branch needs to make the decisions that will result in winners and losers.

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Discussion

Mandatory versus Voluntary: Some participants stated that mandatory reg negs are likely to have dynamics similar to other forms of mandated mediation, which tend to have lower rates of sustainable agreements and overall satisfaction among parties.

There was a great deal of discussion about the value of a convening assessment for mandated reg negs, given that a key goal of an assessment is to determine feasibility. For its mandatory reg negs, the Department of Health and Human Service (HHS) conducted assessments to identify the interested parties for participation on reg neg committees and the key issues that would be addressed during the negotiations. In NCLB, Congress not only mandated the use of reg neg, but also the participants.

Said one participant, “The more you take away the ability to design [the reg neg] to work, the poorer the outcome.” Said another, “The difference is profound between ‘blank sheet’ and mandated. This is a completely different species and needs to be evaluated differently.”

Reg Neg in Indian Country: Participants discussed the unique nature of using reg neg in Indian country, including the involvement of multiple federal agencies, representational limitations, and requirements for consultation. Reg Neg relies on stakeholder representation, but tribes will not represent other tribes. A range of tribes (e.g. small, large, reservation-based, northern plains, etc.) may assist the federal agency in getting various perspectives of different tribes, but cannot count on support for agreements from the hundreds of tribes across the country that were not directly involved in the negotiations. In addition, working in Indian country includes requirements for consultation whether rules are created via reg neg or not. A number of participants expressed frustration with their past reg neg experiences in Indian country and were loathe to initiate another.

Criteria for Deciding on the Use of Reg Neg: Since its experimentation with reg neg in 1985, EPA has created and applied criteria for determining whether or not to use reg neg. (See EPA Negotiated Rulemaking Fact Sheet.) One criterion is that the issues subjected to negotiations should comprise a narrowly defined topic. This correlates with DOI’s Indian Roads reg neg experience, which was a “really broad law with many parts that made the application of reg neg very difficult.”

Many participants discussed the importance of having internal decision makers and stakeholders on board. Said one, “It is essential that internal actors be involved and kept abreast of developments throughout the process. If they disagree with the concept – you can pay now or pay later.”

Participants were reminded that reg neg is just one of the tools available to gain stakeholder input on rules. At EPA, there have been few reg negs, but many successful FACA processes.

Costs and Benefits of Reg Neg: Participants discussed the costs of reg neg compared with those of traditional rulemaking. Though many found it hard to calculate, given potential litigation and transaction costs, most felt reg negs costs more than traditional rulemakings. Some participants felt costs were outweighed by benefits; others questioned if the rules were any better for the increased cost and effort.

A participant, whose office both promulgates and interprets rules had an expansive view of costs. “When we have a crappy rule, we have to live with the consequences, and the cost of doing that is incalculable. One of the great benefits of reg neg is the technical aspects of the rule tend to be better, so you avoid basic problems.”

Other participants stated that with reg neg, compliance occurs more quickly and with less agency effort, and the agency benefits for having used a cooperative process. Said one, “It’s not something to be fearful of. Collaboration is cost competitive.”

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After the Stakeholders Go Home: Negotiations Within Government


The session began with presentations by Patricia Overmeyer, Office of Brownfields Cleanup and Redevelopment, U.S. EPA, on the All Appropriate Inquiries Reg Neg; Linda Canzanelli, Associate Regional Director, National Park Service, on the Off-Road Vehicle Regulations (ORV) Reg Neg at Cape Cod National Seashore; and Barry Sullivan, Superintendent, Gateway National Recreation Area, on ORV Regulations at Fire Island National Seashore. The presentations were followed by participant discussions.

Presentations

All Appropriate Inquiries (AAI): The Brownfields office was required to prepare the following analyses to support the proposed rule: Regulatory Flexibility and Small Business Impacts Screening Analysis; Paperwork Reduction Act and ICR analysis; and an economic analysis in compliance with Executive Order 12866. In support of these analyses, EPA had to create new regulatory options against which to compare the costs and impacts of the proposed rule that was developed by the Negotiated Rulemaking Committee, after the Committee reached consensus on a proposed rule. Thus, the analyses required under EPA’s regulatory development process did not mesh well with the reg neg process because the Negotiated Rulemaking Committee considered multiple options based on its “sense” of costs, but not via a formal economic analysis.

The Brownfields office worked hard to involve all the relevant EPA offices and other federal agencies throughout the regulatory development process. In keeping with the EPA regulatory structure, the Brownfields Office established an internal work group, before the negotiations began, to develop an analytic blueprint for the effort. The workgroup met before, during, and after the negotiated rulemaking process. Despite the Brownfields Office’s best efforts, one EPA office did not engage in the process until after the Committee completed its negotiations. This led to difficult and time-consuming internal negotiations before the proposed rule could be submitted to OMB. However, the members of the Negotiated Rulemaking Committee maintained support for the rule, which motivated OMB’s approval of the proposed and final rulemaking, despite EPA’s internal conflicts.

Working with OMB went well, in part, because the stakeholders agreed that the reg neg process improved the existing ASTM standard. In addition, other federal agencies that were impacted by the rule were supportive because they had been involved and consulted as part of a federal partners workgroup that met throughout the reg neg process.

The key lessons of the AAI post-negotiations experience is that all internal stakeholders must be fully engaged and on board throughout the negotiated rulemaking process, and EPA needs to evaluate structural impediments in its regulatory development process that may discourage the use of the negotiated rulemaking process and derail the success of such processes. The AAI experience suggests that the lack of involvement by a single office within the Agency can significantly stall publication of a rule and the potential success of negotiated rulemakings. Using the negotiated rulemaking process for the AAI rule created a significant amount of good will between EPA and the regulated community and probably decreased the time required to respond to comments on the proposed rule. However, the rigidity of the Agency’s regulatory development process and a single office’s decision not to support the negotiated rulemaking process increased the amount of time and effort required for internal EPA negotiations and significantly increased the level of EPA resources that needed to be dedicated to the rulemaking development process.

Off-Road Vehicle Regulations at Cape Cod National Seashore: The Cape Cod ORV rule was the first DOI reg neg. As would be expected, DOI staff were not familiar with the process and did not buy into it at the outset. Because of the challenges of charting a new course, for a process that was new to DOI, it took more than two years from the time the process was initiated until the first FACA meeting was held. Negotiations were completed in late fall of 1995 and the final rule was published in July 1997, in time for the summer season.

One unexpected difficulty encountered during the post-negotiation phase was that the new Plain English requirements for regulations went into effect, and so the proposed rule had to be re-written in plain English before it could be published. On the other hand, in response to the proposed rule, the National Park Service (NPS) received 15 written comments, of which nine supported the regulation, one opposed, and five raised other issues. This was “phenomenal given that prior to the reg neg, [Linda] spent 25% of her time on ORV complaints and communications from user and environmental groups.”

Off-Road Vehicle Regulations at Fire Island National Seashore: The Fire Island ORV reg neg was initiated to replace a rule that had become too restrictive and no longer met the needs of the community or the park service, due to increased development on Fire Island. The process began with an assessment in November of 1999 and the reg neg committee held three meetings between March 2002 and August 2003. The committee developed a consensus agreement that addressed 75% of the issues under discussion, but did not develop the actual rule. The post-negotiation process is still ongoing. The need to spread costs for the reg neg across multiple fiscal years significantly increased the time it has taken to develop the rule.

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Discussion

Internal Processes: The numerous components of the internal processes at play throughout and beyond the negotiations include the selection of the federal negotiator, based on the skills and personal qualities necessary to lead a committee of diverse and often antagonistic stakeholders; attention to the internal team that supports the negotiator; internal communications at the highest level to ensure buy-in for agreements reached; and the ongoing post-negotiation activities within and across federal agencies prior to publication of the proposed rule.

According to one participant, the federal leadership for the Cape Cod ORV reg neg contributed enormously to its success. Prior to the reg neg, the situation at Cape Cod had been so bad that it required law enforcement involvement. By the end of the negotiation, people who had been unable to talk civilly to each other were literally working side by side. The speaker credited this to the federal “people at the front of the room who had the aptitude to accomplish this.” The federal negotiator brought an honesty and integrity into the room that suffused the process and came to be the prevailing norm in the room. The participant remarked that deciding who will represent the government in a reg neg is a crucial internal decision that should be made with ‘realpolitik’ in mind.

Many participants raised issues related to the internal team that supports the federal negotiator and which often carry heavy workloads during a reg neg. Participants suggested that structural support should be available for these teams, including lessons learned from past reg neg experiences, so each team does not have to “reinvent the wheel.”

Clear lines of communication are also required internally to build and sustain support for the eventual consensus agreement as well as to obtain guidance on resolving controversial issues. Said one participant, “one of the ways that we tried to keep the process honest was with an internal communication process all the way up to the Secretary.”

Finally, one participant talked about the need for organizational change rather than having to work so hard on each individual process. She asked, “How do we change the infrastructure, and [create] cultural changes? We exist to try to be a catalyst for organizational change.”

One reason for the success of the Cape Cod ORV rule is that it included a mechanism for mid-course corrections. The rule set a limit on the number of available permits, which sold out earlier and earlier with each passing year. As a result of the reg neg, there was local ownership of the problem, which evolved into an ongoing advisory committee that enables NPS to address issues and problems without having to re-write the rule.

FACA: EPA has found a way to expedite the paperwork required under FACA. The Agency has negotiated a 30-day turn around and charters are completed within 2 weeks. They have an internal expert who helps with FACA technicalities.

GSA offers a training on FACA and reg neg, which was highly recommended by participants, who have attended it in the past. Some participants suggested that it would be helpful to create a FACA handbook, with model documents available on line, for all federal agencies.

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What Makes a Negotiated Rulemaking a Success?


The session began with presentations by Dr. Andy Rowe, GHK International, and Dr. Laura Langbein, School of Public Affairs, American University, which were followed by participant discussions.

Dr. Rowe explained his work for EPA and DOI to create useful data to improve collaborative decision-making processes, including reg neg, and to evaluate the impacts of collaborative environmental and natural resource management decision making. His criteria for success include:

  • Parties will use collaborative processes more frequently and expend fewer resources on disputes
  • Agreements endure changes in conditions and unanticipated events
  • All parties are satisfied with what they have achieved
  • Parties reach complete and durable agreements
  • Parties’ capacity to manage and resolve conflicts is improved
  • Parties communicate and collaborate effectively
  • Use of ECR narrows disagreements on key issues
  • Appropriate scope and design used
  • Appropriate neutral guides the process
  • Parties have the capacity to engage in the process
  • Best information used by the parties
  • Right parties are effectively engaged

Dr. Rowe’s work with the Conflict Prevention and Resolution Center at EPA to evaluate the results of collaborative decisions and compare them to a reasonable alternative has led to the interim observations that collaborative decisions in four site specific cases are more effective compared to their likely alternatives including:

  • Inputs are less
    • Estimated time savings of 0.5 to 1.5 PY on three of the cases
    • Decisions reached more quickly
  • Gains are better
    • Environmental effects are judged to be about 25% better
    • Agreements are judged to be better and more durable, easier to implement
    • Modest gains in environmental management
    • Indications of gains in organizational effectiveness
    • Post agreement costs to state and federal agencies are modest and associated with improved environmental gains

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Dr. Langbein presented on her research, which compared reg neg to traditional EPA rulemakings. Like most studies with statistical controls, there is a focus on the process, not outcomes, which are harder to measure. A complete set of indicators would include:

  • Responsiveness:
    • satisfaction of stakeholders at the table and not at the table
    • satisfaction of citizens
    • approval of principals (legislators)
    • participation of clients/citizens
  • Legitimacy: above measures of client and citizen satisfaction/participation
  • Accountability:
    • Conformance of implementation to established procedures and guidelines,
    • Did rule get litigated?
    • Quality, accuracy, and timeliness of information
    • Level of implementation and cost
  • Effectiveness:
    • output measures
    • outcome measures
    • intended and unintended consequences
    • beneficial or harmful, e.g. pollutant levels risk/accident levels, morbidity/mortality
  • Equality/Equity/Social Justice by firm size, ability to pay, location

Her most striking results concerned a great increase in the quality, accuracy, and timeliness of information and the reduction in public comments on proposed rules resulting from reg neg compared to traditional rulemaking. With regard to accountability, many suggested that in a reg neg, agencies are abdicating responsibility in rulemaking. Her study found no less accountability in negotiated rules, but only a different path. Her study also found that conventional rules are less expensive to write, but from a cost-benefit framework, there was no difference between reg neg and traditional rulemaking.

Ultimately, Dr. Langbein suggested that there is no agreement on indicators of success, and it is not likely that researchers will ever be able to say with certainty that one process is unequivocally better than the other.

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Discussion


The discussion centered on the criteria for success from a scientific or economic-type analysis versus realpolitik measures of success. In addition, participants pointed to the inability of evaluation tools to measure the ways in which reg neg processes are refined, in real time, to match the situation’s unique characteristics.

The indicators of success vary with each person’s perspectives and needs relative to the rules being created. For example, for some, success may mean improvement in environmental quality, and for others, it may be an efficient regulatory process. One participant framed the challenge in this way, “There are very few situations in which you can actually measure environmental or resource impacts at all, and we are talking about trying to measure the difference a decision-process makes on improved environmental quality and resource management.”

Others talked about the realpolitik measures of success for their agencies. One participant remarked that an absolute measure of success for political administrations is “how much whining they are getting from the political corners.” He went on to say, “One of the things we have found is that with reg neg, the perception of the participants is particularly positive. They have learned a great deal from fellow participants and they become the strongest advocates for the new reg. We can’t tell within the federal agency if what we did saved lives; we need proxies in the field. If they say yes – participants are usually in leadership in the fields –you have a groundswell of people who are saying this is effective. In a political environment that counts for a great deal.”

Another participant gave his measures of success, the first of which, was “Is there a rule or not?” His secondary questions related to cost, time, litigation risk, market acceptance, and goodwill for the next thing the office wants to do. He stated that you can’t quantify environmental improvement for assessing the value of reg neg because “it’s too far downstream.”

A third participant stated that one of her measures of success was that participants were supportive of the procedure, “the ‘warm glow’ is demonstrable,” which is consistent with evidence that suggests that face-to-face interactions typically improve outcomes. On the other hand, she commented that there are winners and losers, “the evidence is inconclusive, but rulemaking is often seen as putting smaller competitors out of business.”

Finally, one participant pointed to the unique qualities of each process as an insurmountable challenge to useful evaluations of reg neg. He said, “The greatest element of wisdom has something to do with the variability of the processes. Any adoption of an altitude from which to observe, loses sight of the important point that when there are an infinite number of variables, it’s hard to generalize about the important things. Results are often the result of idiosyncratic events. ...Something gets lost that is essential, which is the capacity to [refine] the process to fit to the situation.”

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Key Issues of Interest Including Next Steps


Participants divided into small groups and discussed next steps and/or key issues of interest within and across agencies. The items discussed included:

  • Reg Neg as creating technically better rules that result in fewer complaints so everyone’s happy!
  • National Technology Transfer and Advancement Act (NTTA) as applied to industry consensus standards developed by ASTME and ASME
  • Evaluation in the real world
  • Reg Neg in Indian country
  • Bringing back ACUS
  • USIECR and Off Road Vehicle Reg Negs
  • Revising the Negotiated Rulemaking Source Book
  • Information Technology in Cooperative Decision Making

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Concluding Remarks / Lessons Learned


Workshop participants were given an opportunity to share something they will take back with them from the workshop. Below are some of the participants closing comments.

  • A major problem is when high-level officials don’t care about decisions made during a reg neg because it leads to a proposed rule, which they expect they can always change in the final rule.
  • I will solicit comments on proposed members and add members in response.
  • It is a good idea to have in place a process for adding members to replace members who leave the committee.
  • If negotiations stray into areas not originally anticipated, it may be necessary to add new members to represent additional interests or retreat from the concept.
  • There must be a difference in how you handle the reg flex analysis in the context of a reg neg. We could ask for cost information as topics arise.
  • If new paperwork requirements are proposed, we can ask the committee why it is essential so that we have a response for OMB later.
  • I like the idea of the committee agreeing to concepts, the agency writes the regulatory text, and the committee wordsmiths to fix it.
  • Reg Neg needs to be able to fit into the existing regulatory development frameworks.
  • GSA and EPA will discuss updating the information in the reg neg source book regarding the list of reg negs, bibliography, regulatory information sources, and website resources.
  • Improve reg neg in Indian country by understanding that tribes, as sovereign entities, represent the tribe, not constituents. Tribes define success differently.
  • Agencies should share information on reg neg and all other collaborative policy-making processes.

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Conclusion


Elena Gonzalez thanked all the participants for their deep engagement in the discussions throughout the day. She stated that the workshop was the beginning of many conversations that she hopes will continue.

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