Policy expectations and the use of market mechanisms for regulatory OSH certification and testing regimes

Governments strive increasingly to reduce the ‘burden of legislation’ by shifting responsibilities to private institutions, thereby making use of ‘the market’ as regulating mechanism, and striving to base the relationship with industries on trust, rather then stringent enforcement. This makes mandatory certification and testing arrangements in occupational safety and health (OSH) an attractive alternative for traditional legislation and enforcement. The functioning of such OSH market arrangements has, however, hardly been investigated so far.The research described in this paper elaborated on the same cases that were used in the twin article (Zwetsloot et al., this issue) on risk control in mandatory occupational safety and health certification and testing regimes. In this research we carried out additional analyses on the functioning of market mechanisms in (mandatory) OSH regimes.Other market interests may prevail over the OSH aspect, and the conditions for good market functioning (a well-functioning supply and demand side, independency of the agents, informedness and transparency of the agents, and the added-value of the certificate expressed in the price), are not always met. The results show that policy makers are often too optimistic in their assumptions about the functioning of the market mechanisms in mandatory certification and testing.This does not imply that mandatory certification cannot be an interesting policy option. However, there seems to be a need for a second generation of mandatory certification arrangements, whereby the limitations of the market regulation are recognised, and the consequences are digested.

Research highlights
► Market interests may prevail over the OSH aspect on mandatory OSH Certification.
► The conditions for good market functioning in OSH certification are not always met.
► Policy makers are often too optimistic in their expectations about the functioning of the market mechanisms in mandatory certification and testing.
► There seems to be a need for a second generation of mandatory certification arrangements, whereby the limitations of the market regulation are recognised, and the consequences are digested.