Stratfor: Public Policy Intelligence Report, May 25, 2006


[Rachel's introduction: Stratfor, a corporate intelligence service, describes our upcoming conference in Baltimore and offers its readers a lengthy opinion about the state of precautionary thinking in the U.S.]

By Bart Mongoven

Leading advocates of chemical policy reform will meet in Baltimore in early June to discuss progress made in changing how the United States regulates chemicals, genetically modified organisms (GMOs) and products of nanotechnology. The title of the conference, "Taking Precautionary Action," suggests that these activists will meet as advocates not just of regulatory policy reform, but as advocates of the precautionary principle.

The word choice is interesting, because the "precautionary principle" -- from which the conference title derives -- is no longer at the center of regulatory reform efforts. Nevertheless, advocates of the principle who attend the conference will have a great deal to celebrate. The precautionary principle -- which advocates a certain forward-looking decision-making ethic for regulators -- is taking hold in commerce, but the way in which it is emerging is quite different from that envisioned by the most ardent supporters of the principle. Ultimately, the conference's title and agenda suggest that the goals of those who support the precautionary principle have changed markedly in the past few years and -- as a result -- are poised to become far more effective in the United States than ever before.

The significance of the advocates' discussion ultimately does not lie in questions about who is winning tactical debates or even whether the precautionary principle will survive as a regulatory tool. The important question is, instead, how far activists will be able to push more traditional, familiar types of regulatory reform while still clinging to the rhetoric of the precautionary principle debate.

Precaution: The Regulatory Context

In its pure form, the precautionary principle demands that a practice or product should not be permitted by regulators unless it has been proven not to do harm. Ten years ago, this argument was presented in highly moral terms. Its advocates claimed that creators and producers of goods in commerce should know beyond doubt that what they are selling is safe -- and further, that it is immoral for them to place consumers in harm's way or treat their customers as guinea pigs or canaries in coal mines.

Though this sentiment was, framed in those terms, unobjectionable, turning that into a foundation for regulatory decision-making processes has proven difficult. Advocates framed the principle as the antithesis of risk assessment in determining how chemicals in commerce, nanotechnologies, and GMOs should be regulated. At that point, the debate stalled.

At a basic level, the precautionary principle sounds like common sense to most people, who are inculcated from an early age with admonitions to "look before you leap" or that it is "better to be safe than sorry." The practice is invoked, at some level, in people's daily lives. However, everyone's threshold of risk tolerance differs: Some people refuse to fly; others not only fly, but sky dive. In the regulatory context, this means that it is impossible to enforce a precautionary principle for an entire society without severely curtailing human action. This has been a perpetual problem with the principle as a regulatory tool.

To make it easier for the public to understand their goals, advocates have defined four elements of the precautionary principle:

-- Taking precautionary action before cause and effect relationships are established scientifically, if there are concerns that an activity might pose a threat to health or the environment.

-- Placing the burden of proof on the proponent of an activity (usually industry) in determining whether an activity or product is harmful.

-- Demanding "open, informed, and democratic" decision making structures for regulators, and thus placing approval of an activity under a political process.

-- Requiring alternatives assessment -- that is, shifting the central organizing principle of policymaking away from quantifying and managing risk, and toward minimizing risk to the greatest extent possible. Rather than asking what level of pollution is safe or acceptable, activists reason, society should constantly strive to find the least hazardous or dangerous alternatives available for achieving the same goals, and industry should be required to use them.

In early attempts to apply the principle to regulatory decision- making, advocates of the precautionary principle often got hung up on the first element above. The tendency was to argue that an activity or product should not be allowed until it had been proven not to cause harm. The problem was that, despite centuries of careful thought and study, proving a negative remains impossible, so applying this strict standard was never a credible approach. And parsing the issue -- for instance, defining whether a practice or substance gave rise to "concerns" -- proved too vague for the precautionary principle to withstand scrutiny from legislators or regulators.

In response to early failures, most precautionary principle advocates simplified the issue into one that simply demanded a reversal in the burden of proof standard. In order to win regulatory approval, the party that wants to make something new must convincingly show that the product, process or practice is not harmful. Advocates compare the precautionary principle in this form to the reversal of the burden of proof that drug companies face in phased trials.

While this makes sense in a vacuum, it has a clear stifling effect in the regulatory context. Drug companies invest millions of dollars and tremendous man-hours in convincing Federal Drug administration boards that a proposed drug is safe and effective. Now imagine having to go through a similar test for every new cleaning solution, every new nanoparticle created, every new genetic manipulation. The process would be clumsy and wasteful (and if drug approval is any model, a streamlined system likely would be more prone to mistakes -- allowing unsafe products onto the market while banning safe ones).

Policy reform advocates have called for regulators to focus on those substances that are most heavily used in commerce and those with characteristics that make them inherently more likely to be problematic. Demanding that some products and processes be proven safe -- but not forcing the issue for others -- is fundamentally at odds with the application of the "precautionary principle."

And this is where things get impossibly fuzzy. If the precautionary principle is based on the belief that the only moral course of action is to force the maker of a product to prove the product safe, invoking it occasionally is not enough. Practicing only half of a precautionary principle is not precautionary. Half a precautionary principle means either invoking an ethic with no follow-through, or more interestingly, the dramatic politicization of regulatory decision- making -- placing the advance of science and technology in a completely political forum.

Examples of both problems can be found in Europe, which has not found a solution to either. Almost all E.U. laws or regulations drafted this decade invoke the precautionary principle, but it is seldom used as a decision-making tool. The principle has been invoked in contexts like the emerging chemical policy reform known as REACH, under which the stringency of testing standards for chemicals likely will be correlated to the volume of their usage in commerce. This is a logical policy but does not, of course, rise to the level of the precautionary principle as defined above.

Europe also is grappling with the politicization of science and technology as a result of the precautionary principle, which was invoked for more than a decade in the battle over whether Europe would import GMOs. There was no clearly risk-based reason to exclude GMOs from the market, so regulators invoked the principle to justify the E.U.'s opposition to the imports. The E.U. was forced to change its law after the World Trade Organization judged the use of the principle to be a non-tariff barrier to trade. Nevertheless, the appeal of the precautionary principle can still be seen among the many European consumers who were sold on the notion that GMOs actually posed a danger to their health.

Precautionary Elements: Coming Into Practice

With de jure adoption of the precautionary principle making little headway, it is interesting to see the various ways in which the principle is being used. What is emerging in the United States is a new approach to risk and risk policy, one that does not demand purity or portray risk as morally repugnant. Instead, some of the elements of the four-part definition of the precautionary principle are coming to the fore in their own right. This does not necessarily add up to regulatory adoption of the precautionary principle, but it does signal that decision-makers are being pushed away from pure risk assessment and reliance on current science, and that a new decision-making environment is being ushered in.

The most powerful engine of precautionary thought right now is the advocacy of "alternatives assessment." This is seen both in shareholder campaigns and in pressure toward new security approaches for chemical, nuclear and other types of industrial facilities.

Crucial issues are becoming evident in the move toward creation of a "chemical risk" argument. Chemical risk holds that science (especially toxicology) is changing rapidly and new things are being learned. In this environment, consumer product companies -- the downstream customers of businesses involved in chemicals, genetic modification and nanotechnology -- run the risk that the products they are buying now eventually could be found to be contributing to health problems. Such discoveries could lead to lawsuits, or to rapid phase-outs of the hazardous substances -- leaving the downstream customers with significant challenges in reformulating their own products.

Given these possibilities, activists increasingly are appealing to consumer product companies (currently through their shareholders) to examine the substances they use and to assess which of them could in the future become controversial or problematic. The argument is that a smart company should immediately begin looking for alternatives to these substances, and should phase out the troublesome materials as quickly as possible. In practice, these phaseouts would not be based on current risk assessments or on any findings of danger. The substance or practice would be phased out simply because it is controversial. If this trend wins support, substances that are politically unpopular will be phased out with increasing frequency -- and one important element of the precautionary principle, alternatives assessment, will be in de facto operation.

The second area in which the precautionary principle is making strides is in the arena of facility security, and -- again -- it is through the alternatives assessment concept. In the wake of the 9/11 attacks, Americans began assessing their security from a terrorist's perspective and identifying potential risks. Chemical and nuclear plants have been seen by many as potentially attractive targets for terrorists.

Activists who had long been supportive of the precautionary principle saw an opportunity in the chemicals industry. They began to demand not simply that chemical manufacturing facilities should improve their security measures and safeguards, but that the companies should begin using "inherently safer technologies" as well. This approach is the production-side corollary to alternatives assessment. In effect, engineers are being asked to assess the potential risks associated with the operations of a chemical or nuclear facility and to determine what alternative means of production are available that would reduce the risks to the local populace if the facility were attacked by terrorists.

This kind of regimen is certainly more realistic for chemical and manufacturing facilities than it is for nuclear power plants. The alternatives assessment argument has been most effective in the context of municipal water systems, which are often located in populated areas and which naturally keep on hand significant stores of volatile chemicals (usually chlorine). Similarly, facilities that use ammonia in the creation of fertilizer fall into this group, as do the rail companies that transport chemicals like chlorine and ammonia.


The crucial question that arises is whether the meaning of the precautionary principle has undergone a fundamental shift in the last five years. In the 1990s, the term was used in the United States as the basis for a moral appeal to change the way government regulates products. Today, it is invoked as a social ethic and as a symbolic goal, but its advocates generally promote the principle's adoption only in a symbolic sense. This is a critical point.

When advocates of the precautionary principle meet next month in Maryland, it will be with the stated goal of assessing local, state, and federal governments' progress toward implementing the principle. But judging from the conference agenda, participants instead will be discussing regulatory changes within a risk-based framework. They will debate the degree to which Europe's REACH policy might be emulated in the United States and the ways in which a proliferation of state laws ultimately can be used to pressure the federal government for fundamental regulatory reform. The pure precautionary principle -- reverse burden of proof, precautionary action, alternatives assessment -- will not feature as prominently at the conference as will discussions of regulatory reform.

If the precautionary principle remains synonymous with "regulatory restructuring" -- rather than with "proving a substance or activity is not harmful" -- advocates of regulatory reforms have a genuine chance of succeeding. They will be speaking in terms that can be implemented, and they will still be appealing to the public with a defensible moral argument.

(c) 2006 Strategic Forecasting, Inc.