I. Introduction and Opening Discussion: Bob Ward, US EPA

Section Chairman Bob Ward, Senior Counsel for ADR at the Environmental Protection Agency, welcomed attendees to the second meeting of the Interagency ADR Working Group's Civil Enforcement Section. Following self-introductions by the meeting participants, Bob thanked Aloma Shaw from the Office of the Senior Counsel for ADR at the Department of Justice for her assistance with meeting arrangements. Bob expressed regret that DOJ Senior Counsel Peter Steenland and Deputy Senior Counsel Jeff Senger were unable to attend the meeting due to previous commitments/travel, but advised everyone of their intention to participate in future Section meetings, including leading the training session scheduled for January 27. Bob reminded participants that the goal of the Civil Enforcement Section (CES) for the next several months is to get civil enforcement ADR programs up and running that are appropriate for individual agencies, to be featured in a Section report to the Attorney General in September, 1999. Information was provided on procedures being used in other ADR Working Group sections as background to a discussion on Civil Enforcement Section procedures.

II. Civil Enforcement Section Goals & Procedures: Bob Ward, US EPA

Section members engaged in a discussion of Section goals and procedures, as set forth in a draft statement circulated prior to the meeting. Bob Ward introduced the topic by discussing the EPA's possible roles and responsibilities as Section chair and organizer. Bob stressed that EPA wants to develop section activities that are tailored to the needs of participating agencies. Noting that EPA is enthusiastic about sharing its experience to date with participating agencies, Bob stressed that the EPA does not have all the answers and that like all participating agencies EPA's program will be evolving and changing over the course of the Section's work. Bob recommended that the Section would benefit from a myriad of perspectives on the use of ADR in civil enforcement and enlisted the assistance of Section members in recommending speakers from their own agencies or elsewhere to enrich the content of Section discourse. As a vehicle for crafting a plan for the work of the Section, Bob invited all CES participants to join a core group of EPA staff that meets regularly to plan future CES activities. The next meeting of this group will be on Jan. 11.

In the course of the discussion of Section goals and procedures, one participating agency voiced concern about making an up-front commitment to actually be using ADR in resolving enforcement cases over the course of the Section's work, noting that a full agency needs assessment might conclude that ADR was not appropriate to its particular caseload. Bob responded by noting Peter Steenland's request that no agencies audit any section while noting that this was not intended to prescribe ADR use in inappropriate contexts.

Participants also discussed inter-sessional activities of the CES. While the CES will not have a formal mentor program as has been established in the workplace section, Bob did offer that EPA experts were happy to visit other agencies and help at all stages of efforts to get programs up and running. Bob offered to ask Peter Steenland about DOJ's willingness to join such inter-sessional efforts and invited other agencies to share information on their use of ADR. EPA will develop a list of CES participants' contact information to facilitate networking and consultation among participating agencies.

A discussion followed about how to make CES work practical and useful in setting up an enforcement ADR program. During the discussion, one participant noted that 80% of DOJ cases are settled through some sort of negotiation. This participant asked that the group not lose sight of the fact that there are many ways to settle disputes and to avoid searching unnecessarily for "catchy techniques" that fall under the heading of ADR. Bob shared several points Peter Steenland made about the use of ADR to augment the effectiveness of existing processes for dispute resolution. These points include:

1. Not necessary to give up control as all enforcement options are still available if ADR fails to resolve a dispute,

2. ADR promotes better, smarter negotiation,

3. Provides an opportunity to deal directly with party rather than opposing counsel,

4. Meets goal of clients/business offices that are looking for efficiency.

III. Designing and Implementing an ADR Program: David Batson, US EPA

David Batson, ADR Liaison in the EPA's Office of Enforcement and Compliance Assurance, opened the discussion by reflecting on how in establishing an ADR program with a federal bureaucracy or any structured organization we need to understand the impact on the organization and the reasons behind the inevitable resistance which will be met. David explained that regardless of benefits and reasons for using ADR, you are asking the organization and people in it to undertake a cultural change -- a change in the way that they view conflict, their role in meeting your organization's goals and how they operate on a daily basis. This will be met with resistance due to the nature of organizations and the people within them.

David continued by observing that our efforts can be guided by principles derived from years of experience and research in the Organizational Development field about how organizations change their dispute systems. David then provided a brief overview of the principles of organizational change to give perspective to our efforts.

Principles of Organizational Change

1. Bureaucracies are designed to maintain the status quo

Your organization has set ways of handling enforcement issues that are supported and maintained by a myriad of tangible & intangible factors.

Structural - resources; credit systems; dispute escalation procedures

Human - knowledge; professional prejudice

Political - expectations; leadership

These factors were established to keep the organization operating in a predictable, consistent fashion. Though this creates obvious benefits, it also "freezes" the organization making change difficult.

2. Change generally happens during cycles of opportunity.

Consider an organization like an iceberg that to change must thaw to allow for a shift in its structure and operations. Producing such a thaw usually requires some effort or outside force to create an incentive to change. Then, inevitably once changed an organization will recreate the structural and human factors to freeze in its new condition. This creates an ongoing Freeze / Thaw; Change / Refreeze cycle which must be utilized to impact effective change.

3. To affect permanent change within an organization you must create an environment for change that shifts or addresses the needs of an organization and instills change into organizational systems

4. In approaching change within your organization you must consider:

How does your organization handle conflict?

How does your organization define success?

How does your organization respond to change?

(Fight / Flee / Ignore)

5. In effecting change, anticipate:

Resistance

Delay

The unexpected

Dispute Systems Design

David explained that the ADR field has adopted and modified these principles to guide efforts at implementing change in an organization's way of handling disputes. These efforts have created a field of practice called Dispute System Design (DSD). DSD principles suggest a four stage process for establishing an ADR program within an organization. (More in-depth training on DSD will be provided at a later time)

Assess:

1. Your organization's goals

2. Organization's current system for handling disputes to understand

- How it functions

- What tangible & intangible systems support & maintain it

- Where is it inefficient in meeting the organization's goals

Assess the organization from both an internal and external perspective

Design an ADR Program to:

1. Address the inefficiencies in your enforcement program

2. Modify those tangible & intangible systems that hinder the ability of the organization to change

Implement the ADR program in a way designed to obtain buy-in and permanence:

1. Marketing

2. Pilot programs (strategically planned for success)

3. Roll-out into organization with sufficient resources and support to create and meet demand

Evaluate impact of ADR program on organization to provide basis for additional improvements

(And then start the cycle over again ....... )

David concluded that ADR is a valuable tool to help your organization meet its enforcement goals. DSD has shown that getting your staff to use the tool is sometimes challenging but can be accomplished if you keep your organization's goals and culture in focus. David encouraged participants to start this process today using the questionnaire and the break-out sessions to start thinking about what approach would be useful for creating change and implementing ADR programs in their agencies.

Following David's presentation, several questions were raised about the scope of DSD efforts. Participants asked what is driving the development and implementation of ADR programs in the context of a settlement based system such as enforcement. David responded that agencies are not reaching settlements as quickly or as efficiently as possible because of dynamics, and limited resources, and that ADR provides more opportunity to be creative in settlements. Several participants raised the issue of whether the use of ADR by definition incorporates the use of a neutral professional. David pointed out that the ADR Act defines ADR as processes which utilize a neutral to assist in the resolution of disputes. After some discussion, it was agreed the topic would be addressed further at a later time.

IV. Introduction to Small Group Exercise: Lee Scharf, US EPA

In order to explore the dynamics surrounding the use of ADR within member agencies, the meeting was divided into four breakout groups. Lee Scharf of the EPA's Office of Enforcement and Compliance Assurance described the categories of agencies for break-outs are based on the nature of the agency (i.e. commission, etc.) and the agency's mission. Lee asked participants to fill out a questionnaire on enforcement activities including as much detail as possible. Lee explained that an electronic version of this questionnaire would also be sent to the participants. Once in groups, the group members would begin the assessment by identifying conflicts and answering the question, how can the CES be helpful. Lee explained that facilitators (Bruce Engelbert, Monica Gardner, Lee Scharf, and David Batson) would be introduced into the groups and pose focus questions. How do disputes arise? What are difficulties in resolution? What are anticipated barriers?

(A break was taken after which Lee discussed logistics of the break-out sessions. After the groups met, each group gave a report on what they came up with.)

V. Reports of Breakout Groups

Group 1: Agriculture, Environmental Protection Agency, Small Business Administration

While differences in agency size and organization, varying ratios of domestic to international practice and external to internal disputes as well as differing degrees of ADR expertise characterized the agency functions of this group, common concerns about the challenges of ADR implementation were shared by all agencies. Challenges of particular concern include resistant dispute resolution "cultures" and the perception that ADR is too "soft" an approach for enforcement actions. The group identified several needs for which the Section could provide assistance including education and training in basic ADR skills and awareness as well as more advanced convening and case-evaluation tools, and information on use of ADR in public participation and environmental justice issues (Title VI) disputes, and regarding issues of values, fairness and precedent, funding and evaluation.

Group 2: IRS, Corps of Engineers, NOAA, Social Security Administration, Coast Guard

Group members considered all of the opportunities for ADR within their respective agencies to be external - that is, between an agency and an outside entity. Many thought that the use of ADR was a good idea in certain circumstances, but weren't sure that the specific issues they worked with were good candidates. They wanted more information on the various ways that ADR techniques can work.

A number of barriers (either real or perceived) to using ADR were identified. Barriers identified included internal issues such as lack of resources and having a performance system that rewards litigation. External issues were also discussed, including a concern that using ADR might dilute the message being sent to violators. It would show the government as being willing to compromise instead of using its hammer. This was thought to be an issue especially concerning "non-negotiable" health and safety issues. The group also discussed that there seems to be a perception that regulations need to be changed in order to more fully incorporate ADR into the way we do business. Finally, the group talked about the barrier to using ADR brought on by the difficulty of quantifying environmental cleanup.

The group then discussed what it thought it needed to overcome some of the barriers. Many of the suggestions dealt with working to change the culture of agencies to think of ADR first and litigation second. One way that was suggested to change the culture is through the publication of success stories - instances in which ADR proved to be an efficient and good use of resources. The group thought that some "how-to" information would help federal employees figure out if ADR is appropriate in a specific case and, if so, how to "adjust" it to fit the case. Also, some help in figuring out how to identify ADR use in allocating responsibility was identified as a need. Finally, the group thought that if regulatory change is needed (the group was not sure that it was) then it should be implemented.

Group 3: Federal Energy Regulatory Commission, Nuclear Regulatory Commission, Mine Safety Board

The three agencies represented in this group have very different interests and needs. All of these agencies are participating in the Section because they hope to learn useful information and skills. All of them believe that ADR has the potential for helping to conserve scarce resources.

The major barriers mentioned were lack of staff time and resources to get a program designed and implemented, the lack of good information about ADR practices and pitfalls, and limitations on senior management interest and support.

The group believes the Section could help by providing:

Ideas and experiences related to promoting settlement of ongoing contested cases.

Citations of existing agency policies and regulations on ADR.

Lists of effective ADR trainers.

Qualification descriptions for potential neutrals.

Information about Agency successes in ADR system design and implementation and suggestions about how to overcome typical obstacles.

Information about ADR program costs and possible sources of program funding. In particular, does the President's mandate for ADR come with any additional budget priority with OMB this year?

Suggestions for getting buy-in of and support from senior managers.

Ideas for performance measures for ADR programs as well as any Agency experiences with respect to changing performance measurement of existing enforcement programs in order to provide an incentive to do ADR.

The group also raised the possibility of expanding the Federal Shared Neutrals program beyond workplace disputes. They also suggested that a pool of experienced neutrals who could provide settlement support for cases in other agencies would be helpful.

Group 4: Federal Communications Commission, Federal Trade Commission, Securities &

Exchange Commission, Pension Benefits Guarantee Corporation

All of these organizations operate under a structure that utilizes a Commission or Board of Directors as the ultimate decision making authority. Though this raises some unique practical issues regarding the promotion of ADR within the organization, all participants agreed that ADR could play a role in assisting staff to resolve disputes.

Two basic enforcement approaches exist within these organizations; a traditional administrative process operating under the Administrative Procedures Act or similar procedures, and a guarantor/trustee relationship with the regulated community. Depending on the organization, enforcement efforts encompassed one or both of these approaches. To some extent, all of the organizations use traditional settlement efforts to resolve matters prior to litigation. Depending on the organization and value of the dispute, settlement authority is held by the Commissioners or Board or, if delegated , to lower officials.

Group members identified several potential barriers to the ready acceptance of ADR by staff and management of their organizations. Key barriers identified included:

A perception that each enforcement program is unique and cannot be assisted by a generic process

A lack of knowledge about how & when ADR is appropriate

The limited scope of remedies available to resolve disputes that creates inflexibility in settlement options

Concern about settlements being seen as a weak approach to enforcement and a general desire by counsel to "hammer" the opposition

A lack of resource accountability which makes an increase in efficiency through use of ADR difficult to prove or justify

Group members identified several types of information and skill that could be developed by the Section which they believe will help them in developing an ADR program.

A compilation of how ADR is being used in enforcement actions

Methods for the selection of and contracting with neutrals / Both external and internal professionals

Training in ADR and consultation skills

Models for measuring success of an ADR program

VI. Group Discussion: Future Civil Enforcement Section Activities

Following the breakout group reports, attendees participated in a discussion of suggestions on how CES could help agencies develop and implement ADR use within their organizations. Suggestions identified included:

Create teams of experts ("tiger teams") to help agencies train staff

Organize teams of experienced staff to consult with Section members

Follow-up disputes system design presentation with case studies

Assist with internal team-building and awareness training for senior managers by senior managers (peer to peer)

Develop data to demonstrate increased efficiency-not just anecdotal data-and processes and methodologies to prove/illustrate data

Identify tools/info to answer a program officer's concerns about "what's in it for me"

Develop a bibliography specialized for enforcement accessible through the internet

Develop resources for training - suggest USDA to develop training or compilation of some other courses

Craft model performance measures

Generate list of ADR regulations and provisions

Discuss incentives for use of ADR

Determine rationale for how ADR process will help agencies shift to interest-based negotiations without interrupting the use of an aggressive enforcement "hammer"

Information on advocate's use of ADR

Bob welcomed these suggestions and asked participants to think about priority topics to aid agencies in meeting the Attorney General's goal of developing operating ADR programs by September, 1999. Bob suggested that the participants' ideas covered two areas: topics relevant to organizing agency-specific programs and topics of more general interest that will improve government-wide capacity to effectively use ADR in the enforcement context. Bob again invited participants to work with EPA in setting the agenda for meetings of the CES and inter-sessional activities. There was discussion of numerous related topics, including the importance of involving stakeholders and the public. At least one participant suggested that informal brown bags would be helpful between CES meetings to keep the dialogue going among agencies setting up enforcement ADR programs.

VII. Closing of Meeting and Next Steps

At the close of the meeting, next steps were discussed. Interested participants are invited to the next CES planning session on Jan. 11 from 2 pm - 4 pm, Room 6204 of the Ariel Rios Building. The CES ADR training session, lead by DOJ ADR Senior Counsel Peter Steenland, is scheduled for Jan. 27, from 9 am - 5 pm, Room 6045 Ariel Rios Building. At that session, CES participants should expect to be informed about a range of ADR techniques tailored to enforcement applications. A draft business plan for future CES activities will be developed at the January 11 meeting and circulated to participants prior to the January 27 session.