Some politicians are advocating governmental regulation of Michigan's timber producers to protect the public interest. A review of government licensing of occupations, however, has revealed many problems. Licensing restricts the supply of practitioners, which raises costs for consumers. Also, licensing requirements often are arbitrary, self serving, and outdated. Administration and enforcement of licensing requirements is often lax.
For market failures due to a dearth of information, licensing is only one of various means that are available to serve the public. While some means of lowering information costs to consumers is warranted, licensing, and the accompanying restriction of the number of practitioners most likely harms the poorest consumers, who are the least able to seek out and receive information to judge the quality of a service (Hood 1991).
Licensing, or certification requirements, usually fail to protect the public interest because passing the regulatory test does not predict a good job performance. In addition, when the government requires licenses to perform a certain practice, they are expensive to administer, monitor and enforce, so much so that enforcement is often lax. Administrators of forestry agencies are rightly pessimistic about the feasibility of implementing governmental regulation given budgetary constraints of the states.
Self regulation of occupations through certification is not perfect, but with public participation it works much better than government regulation. Self regulation preserves consumer choice, and, when it incorporates consumer participation, it ensures that information about markets is widely spread. Public participation also reduces negative externalities. A well designed system of self regulation should include the following:
Criteria should be impartial, reasonable (Jacobs 1983), and related to the job (Shimberg 1982). Criteria that are arbitrary or only customary should be eliminated.
Requirements for training, education, and experience should be developed based upon the best available knowledge of their relationship to performance. "Educational requirements need to be carefully scrutinized to determine whether they are related to safe practice and whether they serve a useful social purpose" (Shimberg 1982). Those people who do well on an appropriate forestry exam can be certified even though they do not have much formal education.
Examinations must be related to job performance, and test skills or knowledge that are related to the desired performance of the service (Shimberg 1982). Experts on forestry should evaluate the questions for their clarity and relevance to the subject.
Procedures must be fair, and all applicants should receive due process (Jacobs 1983, 1981). After all, the results of licensing, or certification, affect applicants, practitioners, and consumers. The process of establishing criteria for certification should be open, with reasonable opportunities for practitioner and consumer participation (Jacobs 1983). If an examination is given, the passing score should be determined based upon an analysis of the minimum necessary for satisfactory practice. All examinations must be graded fairly and accurately (Shimberg 1983). Notification of denial of certification must be made in writing, specifying the procedures for appeal. A process for monitoring and review of rules and appeal of decisions must be established (Shimberg 1983).
Public support for the regulatory mechanism is necessary. Consumers must be able to trust the validity of a license, or certificate, and the authority of the body issuing it. Public participation is required where accounting for third-party interests is one of the driving forces for regulation.
Governmental support must be strong. Self-regulatory programs should not unreasonably restrict trade and may need governmental sanctions and guidance to avoid antitrust violations (Jacobs 1983, Jacobs 1981). Language contained in enabling legislation might be necessary.
Review Boards should be composed of both practitioners and consumers who have received training that relates to performance and the desired outcome. Participation should not be limited to members of the self-regulating association nor to members of the occupation who stand to gain from elimination of competition (Jacobs 1983).
Public and consumer complaints and comments should be handled systematically. The process for contacting the review or monitoring board should be clear and publicized.
Periodic reexamination or reassessment is necessary. Continuing education may not be sufficient to ensure that performance standards continue to be met. A self certification program could be less costly than government administered and monitored programs and would not incur implementation costs of a new bureaucratic system. A system modeled after the Montana Logging Association and, to a lesser extent, the Virginia DOF-Cooperative Extension Service deserve serious consideration for adoption in Michigan.
Michigan is in the fortunate position of being able to take advantage of existing programs which meet the criteria for components of a self-regulatory system. Education and training in silviculture to improve harvesting performance is in place through the Forest Stewardship Program and its logger education program, LEAP, and public education program, Volunteer Master Woodland Manager. The Michigan Association of Timbermen gives structure to the timber-producing sector, greatly facilitating producer participation in an organized certification program. MAT also would be valuable in providing members for a certification-review board. Review-board members who would represent landowner interests, e.g. Michigan Forest Association, and third party interests, e.g. the Sierra Club, Michigan United Conservation Clubs and others, have an established working relationship with MAT though the Forest Practices Act Committee and other policy activities. Although these components provide a starting point for a self-certification program in Michigan, its success would depend upon the cooperation of non-industrial private timberland owners, timber producers, the forest products industry and third parties in the design of program criteria and structure. This design would necessarily include a strong monitoring component with means to report results to interested parties, and means for these parties to voice concerns over practices of certified producers.
A starting point in the establishment of standards is best management practices (BMPS) for water quality. These are currently voluntary but could be made mandatory for certified producers.
Since demand for timber is derived demand, we need to inform those who buy timber and forest products about certification. That way they can vote in the marketplace for products from certified-timber producers.