Email Jim at jthompson@taii.com

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Last week I gave you my definition of regulations: "Regulations are imposed by those who have artificially gained power on those who own assets." I would like to spend this column discussing those who have artificially gained power.

There are three groups that come to mind when I think of those who have artificially gained power. They are environmental NGOs, lawyers and governments. Let's take these one at a time.

Nearly twenty-five years ago when I started my consulting practice, I thought an important service I could offer the industry was to work with it on public relations with local communities. What I quickly found out was that the industry was not interested in working with their local communities--they would rather fight in court in those days. What small efforts the pulp and paper mills were expending were laughable. For instance, I remember putting on a seminar where I actually got some mill people to show up to talk about the subject (most of the time, I talked to empty rooms in those days). In this seminar was a young pulp and paper engineer who handled the environmental issues in his mill. Management had put a direct telephone line on his desk and published the number in the local community. The idea was that if anyone in the community smelled, heard or saw anything, they could call that number and he would give them an explanation. So, I asked him what he would do if I lived in the community, smelled a chlorine smell, then called the number. In a very lucid and clear manner, he gave me an absolutely perfect scientific and text book answer as to what he would say. I gave him a failing grade on the spot.

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He was shocked. I explained to him that the average person in the community never heard anything he said after he said, "That odor is likely a whiff of chlorine." All that happened after that is they freaked out and thought they were going to die or their future grandchildren would have three noses, and if that wasn't bad enough, not all of the noses would be on their heads. No one had trained this young engineer as to what to say in various scenarios. This was typical of the industry's reaction to community relations in those days.

The typical reaction of the person who made the phone call was likely as follows. If they read an article in a newspaper or saw a news story on television showing an environmental NGO such as Greenpeace, the World Wildlife Fund or others protesting at some manufacturing facility anywhere in the world, they nodded their head knowingly. If a lawyer sent them a letter asking them to join a class action suit against the local mill for some allegedly bad thing the mill had done, they sent their affirmative response back the next day.

So this is the way the environmental NGOs have gained traction. The ignorance of the local population about scientific matters has made it easy to raise concerns (and money) to fight big business. Another long term trend has helped, too. An agrarian population is far smarter when it comes to dealing with chemicals and other potential hazards than is an urban population. If you think about it, all manufacturing had its origins as extensions of agrarian activities (for instance, soap was made in a kettle over an open fire long before it became a manufacturing business). As businesses were formed from nascent processes on the farm, they moved to urban areas and brought the people with them. Succeeding generations of city dwellers were further and further isolated from the farming roots and, shall we say, farming chemistry. Generations lost their familiarity with common processes, in fact became fearful of them as they continued to dwell and raise succeeding generations in the protected cocoons of the city. This is how environmental NGOs gained power--exploiting this ignorance.

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Lawyers in recent decades have perfected the art of the class action suit. This is another way to monetize the ignorance of the lay person far removed from the processes of our industry and others. FUD (Fear, Uncertainty and Doubt), one of the most effective sales tools ever invented, plays well into the class action lawyer's skill set. Add the fact that you don't have to put up any money, just get on a list containing enough potential litigants to convince a judge there is a case, and the lawyer is in business.

Finally, the actions of the environmental NGOs and the lawyers give politicians a reason to be elected. Yes, the politicians use FUD as well. Once elected, they can influence matters on federal, state and local government levels to the point that regulations come out the other end. Regulations are a two edged-sword for the politicians. Having a track record of producing regulations that "bring those mean old industries in line" is good for re-election campaigns. Along with regulations come fines for non-compliance, yet another source of revenue for governments.

The ultimate culmination of all three of these entities' efforts, at least to this point in time, is the concept of "Global Warming." I can assure you at least half the readership of this column will be defensive of the global warming movement and its objectives. I will submit that the science has been so obfuscated and otherwise distorted, that in a world of purely scientific reasoning it would be extremely difficult to discern a sane scientific prediction as to the existence of or the effects of what is labeled as global warming. What is for sure is there are winners and losers as the initiatives play out. Whether the winners deserve to win and the losers deserve to lose is anyone's guess. Yet this process has produced mounds of regulations and other actions, deserved and undeserved, as they are served on the owners of assets.

Can you think of any source of regulations I have missed? Let us know in our quiz this week.

As I said last week, some regulations, particularly as related to safety, are very good. They can save you and your coworkers' lives. Follow them.

Be safe and we will talk next week.

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