TCS Daily

REACH and Risk

By Angela Logomasini - August 2, 2005 12:00 AM

One of the key reasons the European Union's proposed constitution was rejected by French and Dutch voters is that they dislike having their lives controlled by rigid, centralized dictates from Brussels. The most recent example of job-killing, nanny-state policy from the EU is a chemicals regulation called REACH, an acronym for Registration, Evaluation and Authorization of Chemicals. The E.U. Parliament is currently amending the proposal, with final passage expected in 2007.

REACH would apply to all chemicals produced in or imported into Europe the bogus "precautionary principle," which holds that if the evidence about a product, technology or activity is any way incomplete, it should be prohibited or at least stringently regulated.

Potential risks should be taken into consideration before proceeding with any new activity or product, to be sure, whether it is the siting of a power station or the introduction of a new flame retardant. But what is missing from precautionary calculus is an acknowledgment that even when technologies and products introduce new risks, most confer net benefits -- that is, their use reduces other, far more serious hazards. The danger in the precautionary principle -- which in concept is centuries old -- is that it diverts consumers and policymakers from possible solutions to known, significant threats to human health. Its overall impacts may be overwhelmingly net-negative.

REACH's registration component requires manufacturers and importers to submit health data on 30,000 existing substances and any new substances produced or imported into Europe in yearly quantities exceeding one ton. Evaluation requires regulators to assess risks for about 4,000 substances produced or imported in yearly quantities exceeding 100 tons, and also for substances in lower quantities if they are "of concern." Authorization applies to substances of "very high concern," for which specific permission would be required for certain uses. According to the European Commission, approximately 1,500 registered substances will be subject to authorization.

Of special concern is the fact that REACH also applies to "downstream" products derived from regulated chemicals: Because chemical products are used in virtually all consumer products, the new rule REACHes the daily life of every European.

The ultimate goal is to "substitute" safer products for allegedly "dangerous" ones. But the assumption that regulators know best is, at best, dubious. While the World Trade Center was under construction, New York City regulators decided to ban asbestos insulation and forced the builders to stop applying it above the 64th floor. Had asbestos been applied to the upper floors, the buildings would not have collapsed as quickly (and perhaps not at all), sparing the lives of many who would have been able to escape.

Similarly, the pesticide DDT was once used to control malaria-carrying mosquitoes around the world, drastically reducing rates and eradicating the disease in many places. Yet in the 1970s, based on claims about adverse health effects, American regulators prohibited all uses of DDT. Other nations followed, and DDT has been included on the list of "persistent organic pollutants" to be banned worldwide under a U.N. treaty. With DDT severely limited, malaria cases have skyrocketed. Malaria now infects 300 to 400 million people a year and kills between one and three million, mostly children. Yet inexplicably, many politicians and regulators still think it somehow "safer" to let children die than to make DDT available.

In addition, the high costs of REACH will divert significant resources away from far more serious needs. The Commission's own (very conservative) estimates for only the registration phase of the October 2003 version of REACH range from €2.3 to €5.2 billion; and although they are likely to be significant, the costs of evaluation, authorization, and other REACH-related regulations were not estimated. The regulations will exert a disproportionate effect on smaller businesses: In Germany alone, small businesses could lose 50,000 out of a total of 150,000 lost jobs, according to claims by an alliance of small and medium sized businesses explained at a recent protest in Berlin.

The Commission recently released two new studies of the likely impacts of REACH. The first, conducted by consulting firm KPMG, suggests that REACH will produce a one-time increase in production costs of between 6 and 20%, which supposedly is tolerable. However, the study only attempted to measure one component of the costs of REACH -- those associated with registration -- while neglecting the authorization regulations, which will likely be the most expensive part. In spite of these limitations, the study still indicates that small and mid-sized firms -- more than 99 percent of EU businesses, and representing two-thirds of the jobs -- will suffer considerably.

Initial findings from the second study, conducted by the Institute for Prospective Technological Studies (IPTS), reveal that REACH will have protectionist effects, reduce innovation, and make businesses less competitive in precisely the nations that need development most -- the newer E.U. members in Eastern Europe.

IPTS also points out that a reliable assessment of benefits from the implementation of REACH has been "entirely neglected." The sweeping program's presumed benefits are based on the assumption that testing chemicals, filing paperwork, and pursuing politically correct product bans will somehow reduce cancer rates. But the vast majority of cancers are not related to chemicals. According to the World Health Organization, the major preventable causes are tobacco use, diet, and infections, which account for 75% of cancer cases worldwide. WHO bases these findings on a landmark study conducted by scientists Sir Richard Doll and Richard Peto, which concluded that all environmental pollution might amount to only as much as 2% of cancers.

The Commission's only study of likely benefits from REACH, conducted by Risk and Policy Analysis Limited (RPA) in 2003, addresses occupational exposure to chemicals and attempts to estimate the extent to which REACH would reduce health problems among workers. However, it is based on sketchy, incomplete, and inconsistently collected data assembled from a handful of member governments.

Estimates of additional, potential benefits are problematic: The report explicitly assumes that problems related to currently known chemical causes will be taken care of under existing laws, while REACH will prevent currently unknown health problems from chemicals. But if these cases are "unknown," how can we know they are even work-related or caused by chemicals?

The deeply flawed RPA report does offer persuasive evidence of one thing: The Burger King Principle -- "you get it your way" -- is alive and well in Europe. Consultants will serve up whatever conclusion the Commission orders.

Europe's attempts to extend their REACH worldwide, something officials are pushing relentlessly at the United Nations and Organization of Economic Cooperation and Development, is reason for concern -- and action -- on the other side of the Atlantic. By opposing this example of ill-conceived, regulatory self-immolation, the United States could save Old Europe from itself - and the world's chemical industry in the bargain.

Angela Logomasini is director of risk and environmental policy at the Competitive Enterprise Institute. Henry I. Miller, a physician, is a fellow at the Hoover Institution and the Public Health Policy Advisory Board. He was a US government official from 1977 to 1994.


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