by Paul A. Holmes
From computer keyboards to killer carpets, there are bizarre and unsuspected dangers lurking in even the most mundane household products, it would appear. Few companies today can avoid the subject of risk: how to define it, how to manage it, and how to communicate it. Regulatory relief, in the form of more demanding cost-benefit analysis for new protective measures, may be just around the corner, but it’s unlikely to put the issue to rest.
One hundred years ago, the life expectancy of the average American was less than 35 years. By 1950, it had risen to 68 years. Today, it’s close to 80 years. Infant mortality has been cut in half over the past quarter century. Moreover, longevity has been increasing most rapidly in the most heavily industrialized nations. Statistically speaking, the world has never been safer.
Perceptually, however, the world is an increasingly dangerous place. The most mundane household products are suddenly being tagged as killers. There’s asbestos in the walls and toxic chemicals in the carpeting. Power lines cause leukemia and cellular telephones give people brain cancer. Second-hand smokes clogs the lungs and computer keyboards can leave users crippled.
Scientists at the University of Pittsburgh have claimed that showers can be bad for your health, with toxic chemicals in the water reaching levels of exposure 100 times greater than those normally encountered. A study from Loughborough University in England says snoring can cause brain damage. And two researchers at the University of Louisville say that 13% of all coins and 42% of paper money carries infectious organisms.
Bombarded with the statistics about these lurking dangers, often presented context-free by a media that thrives on the shocking, 78% of Americans believe they are subjected to more risk today than their parents were 20 years ago. Only six per cent feel risk has been reduced.
This yawning chasm between perception and reality means that assessing, managing and communicating these risks is one of the most pressing challenges facing business today. It is challenge further complicated by an environment in which everyone seems to have a different definition of what is and is not acceptable. The standards by which risk is judged appear to differ depending on who is doing the assessing - the media has one standard, the courts another, regulators another, corporations another and there appears to be some confusion about which standard the public accepts - and even what is being assessed.
It is by now well-established that perceptions of risk have little to do with the actual hazard involved in a particular activity. If they were, the media would be filled with stories about the dangers of traveling by car or ultraviolet rays from the sun or having a staircase in your home. In the absence of any real perspective, regulators are making decisions that may cost millions of dollars, and perhaps even lives; the public is being scared away from products that may be wholly innocuous, and perhaps even beneficial.
“The failure to communicate about comparative risk is creating a phobic society and institutionalizing the illusion that a world of zero risks is possible,” wrote Kenneth Millian, vp of environmental affairs at W.R. Grace., four years ago. “Legislators and regulators, backed into a corner - who can be for risk? - are railroaded into passing and implementing laws that authorize billions of dollars for attempts to eliminate extraordinarily small risks.
“The pity is that the resources necessary to combat real risks are wasted. We spend billions of dollars to rip out asbestos - which may create a dangerous situation where none previously existed - when billions are needed to find a cure for cancer, to fight AIDS, to stop the flow of illegal drugs. We must encourage the media to promote reality rather than phobia.”
It is equally apparent that credibility is the single largest issue, that the public is struggling to find a source of risk information it can really trust to provide unbiased risk information. Business is regarded with skepticism, its critics pointing to a history of self-interested lobbying, manipulation of data and downright mendacity. Scientists generally do not make excellent communicators, particularly in a country which wears its scientific illiteracy with perverse pride. Public trust in government is at an all time low. And even the media and the consumer activist movement, having cried wolf repeatedly over the past few years, are now losing their credibility.
There are indications, however, that the tide is turning. Michael Kehs, executive vp and head of the environmental practice at the international public relations consulting firm Burson-Marsteller, observes that the new Republican Congress has “made people feel free to discuss in public the kinds of issues they have been discussing around the water cooler for years.” One of those issues is a change in the way government assesses and regulates risk.
The eighth of the ten points in the GOP’s Contract with America calls for the introduction of a “job creation and wage enhancement act” that would force regulators to conduct a thorough cost-benefit analysis of current and new regulations to establish whether environmental, health and safety laws actually save enough lives to be worthwhile.
Of course, regulatory reform will not end the debate about how much risk is acceptable. Indeed, passing legislation that will remove some environmental protections will require an intensive public education campaign and continued communication. And even if such legislation does pass, companies can expect to encounter concern at the community level, and demands that any potentially hazardous activity be conducted only with the informed consent of those who might be affected.
Mary Woodell, formerly a consultant with Arthur D. Little and now president of her own controversy management and risk communications firm in Washington, D.C., tracks the evolution of the public’s involvement in corporate decisions: “From ‘the public be damned,’ once the watchword of American industry, we have progressed to acknowledgment of ‘the public’s need to know.’ This grudging acknowledgement has in turn given way to ‘the public’s right to know.’ Now a third generation is emerging: the public’s right to intervene.”
Whatever happens in the 104th Congress, the public will not easily surrender that right.
Nevertheless, regulatory relief is high on the agenda for business lobbyists in Washington, and it is likely that changes will be made in the way the process works, despite the concerted opposition of the environmental activist community and the concerns of the White House.
A draft of the Risk Communications Act of 1995 began circulating last year, including the following provisions: a risk assessment must be performed for each major rule relating to health, safety or the environment; a rule is deemed major if it affects more than 100 people or compliance requires any person to spend more than $1 million; risk assessments must consider and discuss both negative and positive laboratory or epidemiological data; flaws in design, or implausible assumptions, must be highlighted; the risk must be put in context with comparisons to other known risks; an independent peer review panel must consider each risk assessment and cost-benefit analysis; and no final rule can be issued if the panel disputes the data or methods used.
Says Marc Scheineson, a senior vice president with the Washington, D.C., government affairs firm of Bailey & Robinson, which has been lobbying for regulatory reform: “This bill exposes all assumptions and methodologies to the light of day. It requires explanation by scientists of the choices made to improve the understanding of Congress. It invites debate. It requires peer review and public explanation.”
Earnest Davenport, chairman and ceo of Eastman Chemical Co. and chairman of the Chemical Manufacturers’ Association, calls on government to “balance the interests of its various stakeholders” when considering new regulation, and adds: “In the face of limited resources, the propensity to regulate under our current system has become so great that it consumes more value than it creates. If we continue using our current process of managing risk where good science is too often contaminated by politics, where risk prioritization is conducted without conviction, where no provisions exist for weighing the costs against the benefits, and where peer review is just another insider’s game, then we are being irresponsible environmental stewards.”
Davenport, like most corporate executives lobbying for change, has learned from business’s past mistakes and appears to understand that many people assume a crass, profits-at-any-expense motivation for industry’s promotion of this issue. He strives to reassure people that he is seeking not deregulation, but regulatory reform. This means a process in which scientific risk analysis becomes the centerpiece of any regulatory initiative.
Not everyone is enthusiastic about the bill’s proposals, however. U.S. EPA administrator Carol Browner and even a key Republican committee chair (Sen. John Chaffee, whose Environment and Public Works Committee must approve the statute before the Senate can vote on it) have suggested that the bill will increase red tape and make the regulatory process even more adversarial by opening up new avenues for legal challenges to regulatory proposals.
Consumer groups, too, have been vocal in their opposition. The Natural Resources Defense Council, for example, says the bill would “increase red tape, increase taxpayer burden, increase opportunities for frivolous lawsuits and radically decrease the effectiveness of existing environmental safeguards.” Others suggest that risk analysis remains an inexact science, and that in matters of public health and safety it is important to err on the side of caution.
One example of how the risk analysis process works, and how inexact the science often is, involves the battle during the Bush administration over regulations that the Occupational Safety and Health Administration proposed to reduce cadmium dust and fumes in factories. OSHA’s studies and the conclusion that they would save 14 lives each year were assailed by both Vice President Dan Quayle and business interests on one side, and environmental and public safety activists on the other.
Everyone agrees that at high doses, cadmium, which is used to coat metals and make batteries and pigments, can damage kidneys and possibly cause lung cancer. But at lower levels, there is considerable debate over the danger.
OSHA first suggested that current guidelines concerning cadmium exposure might be too high in early 1988, after reviewing a petition from the consumer group Public Interest. The administration relied on two studies: one, a German study conducted in 1983, reported that as many as 71% of rats developed lung cancer after breathing air with a cadmium content similar to that found in U.S. factories; the other, published in 1985, showed that workers in a Denver cadmium factory were more likely to get lung cancer than the general public, although rates were nowhere near 71% higher.
However, other studies have shown that mice and hamsters that breathe high levels of cadmium don’t get lung cancer, while the Denver study also showed that workers exposed to lower levels of cadmium (lower than had previously been permitted, but higher than OSHA’s proposed new rule