Industry self-regulation has been adopted as a complement to traditional government-directed regulation even in high-risk industries, such as the chemical and nuclear sectors. This research asks: can self-regulation programs reduce risks and if so, how should these programs be designed? The researach team approaches this question by examining Responsible Care (RC), the self-regulation program in the chemical sector, and its impact on reducing occupational hazards. RC, which exemplifies key features of industry self-regulation programs, has been broadly adopted worldwide and emulated by other industries.
This project examines the impact of RC on workplace safety, a main focus of the program. Poor management of production processes caused the devastating Bhopal accident, an event that contributed to the creation of RC. Therefore, RC has stipulated codes of conduct on Process Safety and Employee Health and Safety, aimed at reducing risks in the production processes including occupational hazards. This empirical project builds upon the authors? constructed dataset of the US chemical manufacturing sector (2,735 plants owned by 1,523 firms), incorporating economic, environmental, and demographic variables. This research expands this database by linking it to OSHA?s Inspection and Accident databases, and extends the period studied to the years 2002-2007. The expanded data set allows the research team to study the introduction of third party certification into RC in 2002 in order to isolate its effects. If third party certification improves the effectiveness of self-regulatory programs in reducing risks, managers may seek to include credible certification into such programs. The research also examines the effect of participation in RC on regulatory scrutiny.