British petroleum and the U.S. government can’t figure out how to fix an underwater oil leak, but between the two of them they’ve done a masterful job of putting in the fix on public policy that allows risky businesses to inflict irreversible harm.
[rssbreak]
The out-of-control oil spill in the Gulf of Mexico is an object lesson in the consequences of more than 30 years of the “risk management” and “cost-benefit analysis” approach to regulating iffy technologies of all kinds.
Since the 1990s, the U.S. successfully exported its approach to most of the world through the World Trade Organization. The European Union and some in the United Nations, holding out for the “better safe than sorry” precautionary principle of risk regulation were scorned as technological sissies who threatened economic progress.
Now that a global audience is watching a show that proves the inability of corporations to manage risks, analyze costs and benefits or safeguard economic development, it’s time a campaign to give the public a say about risky businesses gushed up to the surface. As that debate broadens, I predict that Europe will displace the U.S. and WTO as the standard-setters for regulating risk and uncertainty.
The Gulf gusher has been compared to the notorious Exxon Valdez spill of 1989, a benchmark that mainly shows how under-reported oil spills have been over the decades. Between 1970 and 2009, according to Pambazuka News writer Horace Campbell, approximately 6.4 billion litres of fossil fuels have spilled into world waterways from damaged tankers or rigs. The history of the oil industry is the history of spills, and spills waiting to happen.
BP’s accident record isn’t out of keeping with the industry’s. It was fined $87 million for neglect following a Texas refinery explosion in 2005. It was hit with $20 million (both figures in U.S. dollars) in criminal penalties following fuel spills from leaky pipes across Alaska in 2006.
Despite this record of mismanagement of a dangerous product by BP and the industry at large, oil exploration has been regulated with a light touch in both the U.S. and Canada. The Deepwater Horizon rig used to pump BP’s Gulf oil well was built in South Korea and flew the flag of the tiny Marshall Islands – outside the purview of national regulators.
The rig’s device to prevent a blowout from the underwater well was built and installed without government inspection. That device was Plan B, and no Plan C was either required by government licensers or provided by any of the companies involved.
The history of government and corporate irresponsibility around risky practices goes back at least to the 1880s, when the U.S. Supreme Court gave corporations the same rights as individuals. This meant, among other things, that corporations, like any other persons, were innocent until proven guilty.
Some 100 years later, U.S. president Ronald Reagan required that all proposed regulation of corporations come with proof of the costs and benefits of limiting corporate rights, thereby launching the lucrative industry of cost-benefit analysis. This and other such devices have come to be trumpeted in the U.S. as “science-based regulation.” Most of the science comes from the autopsies of those killed by untested technologies.
By contrast, the UN and Europe began moving in the direction of what’s now called the “precautionary principle,” which holds that it’s better to be safe than sorry when dealing with the likes of asbestos, genetic engineering, the combining of multiple chemicals and other untested technologies.
The burden of proof is on the proponent, who must establish that the product or process is safe and that methods to deal with accidents are readily at hand. The European Commission of the EU codified this approach in 2000 and controversially began using it to limit or prohibit genetically modified seeds, hormones and foods.
The U.S and Canada took the Europeans to the World Trade Organization, which ruled against Europe for infringing the trade rights of corporations. The WTO insists on U.S.-style “science-based” regulation. Canada has followed the U.S. in lockstep.
Over the last few months, we have seen at least four U.S. events confirming the wisdom of the precautionary approach. The Gulf oil spill has captured all the attention. But President Obama’s cancer panel has just issued a report linking pesticides and other widespread and loosely regulated chemicals to cancer, while the Environmental Protection Agency has at last conceded that toxic chemicals in combination can be worse than the sum of their parts.
Fourthly, new breeds of nasty “superweeds” have been, as predicted by the greens, confirmed as a consequence of GE crops.
It’s said that the Gulf oil spill will become the Chernobyl of offshore oil drilling, linking it in the public mind to horrific damage and making it impossible for the industry to locate in any places where citizens can organize. It will also be the Chernobyl of the U.S. style of regulation. In the future, Europe will shape our relationship to risk.
news@nowtoronto.com
