The Problem With Relying (Too Much) On Industry-Hired Professionals

From West Coast Environmental Law

When Randy Saugstad realized that clearcut logging by forestry giant Tolko was probably going to affect the water he uses to raise cattle on his ranch, he went to the B.C. Ministry of Forests, Lands and Natural Resource Operations.

“We know,” they told him. “But we don’t have the power to stop them logging.”

They explained that B.C.’s forestry laws turned over the final decision about whether to log upstream from his ranch to Tolko’s foresters. Randy’s fears were later realized and his stream wrecked, so he sued Tolko, ultimately forcing the company to settle for an undisclosed amount (although the company continues to deny responsibility).

The B.C. government is in the process of conducting a review of professional reliance, so we have a chance to change some provincial laws to make sure that decisions are made in the best interest of British Columbians, and not corporations. This review is being headed by Mark Haddock, a long-time environmental lawyer and former West Coast staff member, who has previously written critically of the professional reliance model.

Currently, government staff are interviewing representatives of organizations with experience in professional reliance. But public consultations started December 1, 2017 and will continue until January 19th, 2018.

Professional reliance v. conflict of interest

Broadly, the term “professional reliance” refers to any situation in which the government relies upon industry-paid professionals — such as biologists, archaeologists, engineers, geoscientists and environmental scientists — to conduct studies, monitor activities, and more.

However, in cases ranging from sewage management to pesticide regulation to forestry, B.C. laws often go further — turning government decisions over to those private professionals, and restricting the ability of the government to intervene when things go wrong.

B.C.’s Forest Practices Board, a government-created watchdog, warned in 2015 that:

In recent years, [we have] seen situations arise where forestry development was putting local environmental and community values at risk, yet district managers could do little to affect the development and protect the public interest. … [C]onflicts between resource-users could have been avoided if district managers had the authority to intervene to ensure operations would meet local management objectives and respect tenured interests.

Don’t get me wrong — generally professionals are educated, dedicated and highly competent people. As a lawyer, I am a professional. In most cases, professionals aim to use their skills in the service of their clients and with an eye to making the world a better place.

But although I respect my fellow lawyers, I wouldn’t want a lawyer hired by a mining company to have the last word on that company’s legal obligations to protect fish from toxins. That’s what we have judges for — to decide between different interpretations of the law. And yet, engineers and specialists hired by mining companies have final sign-off on how close the companies can build to a fish-bearing stream.

Professionals are important sources of expertise and information. But when they actually have free reign to make decisions about their employer’s use of public resources, this looks, to many people, like the fox guarding the hen house (or perhaps just paying for its security).

Proponents of professional reliance argue that professionals have training, oversight and accountability, so they can apply rules intended for the protection of human health or the environment just as well (and sometimes better) than government professionals.

They argue that government’s role is to set the standards and then monitor to make sure that those standards are met, ensuring that there are consequences if they aren’t.

Experience in B.C. has shown that there are a number of problems with that theory — from weak environmental standards that allow professionals to trade off environmental values against economic values, to documented cases of corporations cherry-picking their professionals, to the government’s failure to enforce when standards aren’t met.

This post focuses on just one fundamental flaw with corporate professionals taking over government approval functions: the assumption that professionals can be objective in applying legislative rules, especially when they do so for a client with a vested interest in a particular outcome.

Behaviour economics and professional reliance

In The (Honest) Truth about Dishonesty, behavioural economist Dan Ariely gives a firsthand account of his experience as a paid expert witness in a court hearing. Before doing so, he reviewed the transcripts of testimony given by some of his colleagues in past trials:

… I was surprised to discover how one-sided their use of the research findings was. I was also somewhat shocked to see how derogatory they were in their reports about the opinions and qualifications of the expert witnesses representing the other side — who in most cases were also respectable academics.

Ariely nonetheless agreed to testify and was “paid quite a bit to give my expert opinion.” He became aware that the lawyers were “trying to plant ideas in my mind that would buttress their case.”

He explains:

They did not do it forcefully or by saying that certain things would be good for their clients. Instead, they asked me to describe all the research that was relevant to the case. They suggested that some of the less favorable findings for their position might have some methodological flaws and that the research supporting their view was very important and well done. They also paid me warm compliments each time that I interpreted research in a way that was useful to them. After a few weeks, I discovered that I rather quickly adopted the viewpoint of those who were paying me. The whole experience made me doubt whether it’s at all possible to be objective when one is paid for his or her opinion.

Ariely’s candid account of his own experience is supported by the wide range of behavioural economic studies that demonstrate that such interactions are only human.

Ariely writes:

One other common cause of conflicts of interest is our inherent inclination to return favors. We humans are deeply social creatures, so when someone lends us a hand in some way or presents us with a gift, we tend to feel indebted. That feeling can in turn color our view, making us more inclined to help that person in the future.

Ariely recounts a study which attempted to measure the impact of a financial gift on appreciation of art. The participants were told that their payment for participating in the study was being sponsored by an art gallery (“Third Moon” or “Lone Wolfe”). They were then shown a series of sixty paintings and asked to rate how much they liked or disliked each, while they were hooked up to a brain imaging scanner (an fMRI). Each picture displayed a small logo of an art gallery — including some from Third Moon or Lone Wolfe galleries — as if the pictures had been provided by those galleries.

As you might suspect, when researchers examined the ratings they found that participants gave more favorable ratings to the paintings that came from their sponsoring gallery… You might think that this preference for the sponsoring gallery was due to a kind of politeness … [but] the brain scans showed the same effect; the presence of the sponsor’s logo increased the activity in the parts of the participants’ brains that are related to pleasure… This suggested that the favor from the sponsoring gallery had a deep effect on how people responded to the art.  And get this: when participants were asked if they thought that the sponsor’s logo had any effect on their art preferences, the universal answer was “No way, absolutely not.”

This study suggests that indebtedness actually changes the way that people perceive the world — and that they don’t realize it. It also found that increasing the amounts of payments to the participants increased this bias.

Of course, proponents of professional reliance might argue that the participants in the study were not professionals (art critics for example). And that’s true. But professionals are still human, and professionals can be very influenced by personal factors. For example, one well-publicized study showed that judges (highly trained professionals) are much more likely to grant parole to defendants at the beginning of the day, or after a snack, than those who appear before them when they are hungry.

Our legal system (with a few exceptions) has always required that a government decision-maker be unbiased and, in particular, not receive a financial benefit from his or her decision.

And yet under many B.C. environmental and public health laws, professionals who are paid by a party with a definite interest in the outcome are making key decisions. For example, in the controversial Shawnigan Lake contaminated soil debacle, neither the government nor the Association of Professional Engineers and Geoscientists of B.C. had any issue with the project’s engineers actually having an ownership interest in the project.

Where next?

Critics of professional reliance refer to professionals who do what their paying client wants as “biostitutes.” While there are undoubtedly professionals who are less than professional, I think the challenges of professional reliance are much broader and more difficult to counter than a few bad actors.

If government establishes a standard but leaves it to industry professionals to interpret it, then even well-intentioned professionals may start to interpret ambiguities in favour of clients, rather than the public interest. That’s not a slur on professionals — professionals are supposed to problem-solve for their clients within the bounds of the law.

At the same time, the B.C. government has spent almost two decades downsizing the departments responsible for regulation, monitoring and enforcement (a trend which actually began in the final years of the previous NDP government). As a result, it would be difficult to turn all environmental and public health decisions back over to government.

Mark Haddock’s challenge is to balance the fundamental difficulties of professional reliance (as implemented in B.C.) with the resources available to government. Fortunately, his past report includes some general principles — suggesting, for example, that government should retain legal authority for decisions with particularly important consequences for human health and the environment.

The behavioural economics research, as well as basic principles of unbiased decision-making, suggest that one important issue for the review to grapple with is whether professionals employed by industry players can ever be neutral — let alone pro-public health and pro-environment.

One possible solution is having industrial players pay the cost of evaluating their proposals, but having the professionals employed by and accountable to the government. This may not entirely remove the bias towards the company ultimately paying your bill, but it would create a competing legal and employment obligation to publicly elected officials.

At West Coast Environmental Law we propose that:

• Government (and not industry) select the professionals from a pre-approved list of qualified professionals. Professionals who deliver biased or poor quality work could be removed from the list. A similar system is already used for professionals working with contaminated sites.
• Except where specialized expertise is required, there’s a lot to be said for making the selection random, so that industry cannot influence government staff in the selection.
• The professional would sign a retainer agreement with the government, not the proponent, and government would have the ability to dismiss poorly performing professionals and/or remove them from the pre-approved roster. Conflict of interest rules would prevent the professional from working for the company whose project is under consideration (although the professional might well still do work for clients within the same industry).
• All documents prepared by the professional should be owned by the government – which then makes them available to the public under Freedom of Information laws (unlike the current professional reliance model, under which key documents are sometimes kept from the public).

What do you think? Would government-employed/industry-funded professionals help address concerns about the bias of industry-funded professionals? What do you think should be done to ensure that professionals protect the public interest, and not just the interests of industry? Tell us in the comments below.

Public consultations will continue until January 19, 2018.  Please let the government know what you think of professional reliance.  Click here to fill out a brief survey or here for information on sending detailed submissions.

Image: Premier John Horgan visits the Rio Tinto Alcan smelter in Kitimat. Photo: Government of B.C. via Flickr