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MANAGING BEST PRACTICES: A new age of regulation?

December 31, 2001
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U.S. businesses are being asked by the leaders of our country to voluntarily do more to beef up homeland security. And government agencies are providing more guidelines that businesses should follow to better protect their employees and the public from terrorist threats. Will the majority of American businesses accept the challenge and do more to voluntarily enhance safety, or will they need to be coerced by laws to act?

If history is any indicator, most businesses will not take extra safety measures until forced to do so.

Biological hazards

Threats from biological hazards such as anthrax and smallpox are concerns now. OSHA recently issued employer guidelines for anthrax hazards and the Centers for Disease Control and Prevention recently published recommendations to address infectious agents such as smallpox.

But this is not the first time our nation faced a perceived crisis from biological hazards. In 1986, CDC issued voluntary "universal precautions" for bloodborne pathogens to help stem, particularly among healthcare workers, the exploding rate of infections for agents such as HIV and hepatitis B virus. But the voluntary precautions did not work as well as they should. In 1992, OSHA promulgated a standard to force employers to follow the universal precautions. The law worked. Within one year following the enactment of the law, HIV and HBV infections among healthcare workers were reduced six-fold.

Chemical hazards

Might terrorists release highly toxic or explosive materials from chemical manufacturing or storage facilities, or release these materials during their transportation? A large release of a toxic, explosive, or flammable chemical in a crowded community could be catastrophic.

In response to these concerns, EPA recently advised chemical and pesticide manufacturing plants to re-check the physical security and safety of their operations. The Department of Transportation issued an "Alert for Heightened Security Measures" to transporters of high-hazard materials.

There's good reason for these measures. In 1984, a release of a toxic chemical from a U.S.-owned pesticide manufacturing plant in Bhopal, India, caused 2,000 deaths and more than 20,000 injuries.

Given the unprecedented tragedy at that time, chemical manufacturers should have scurried to voluntarily implement strict controls to prevent any similar occurrences. But a year later, a similar release by the same U.S. chemical company occurred in Institute, West Virginia. There were no deaths, but 135 people were injured. Studies after the incident revealed that workers, the public, and environmental receptors were at great risk from releases of extremely hazardous substances located across the nation. A succession of laws from OSHA and EPA have been necessary to force businesses to better control and prevent the release of chemicals that may create catastrophes.

Current risks

And we're still vulnerable. In 1999, the Agency for Toxic Substances and Disease Registry (ATSDR) issued a report, "Industrial Chemicals and Terrorism: Human Health Threat Analysis, Mitigation and Prevention." The report revealed a dismal effort by businesses to voluntarily provide effective security at chemical plants and transportation assets.

ATSDR's report found that security at chemical plants within their study ranged from "fair to very poor" and security around chemical transportation assets ranged from "poor to non-existent." Report findings included that "chemical plant security managers were very pessimistic about their ability to deter sabotage, yet none of them had implemented simple background checks for key employees such as chemical process operators."

After September 11, ATSDR withdrew the industrial chemicals and terrorism report from its Web site. And EPA withdrew from its Web site reports on Risk Management Plans that identified plants across the U.S. holding chemicals that could pose a catastrophe if released into the environment. Private sites on the Web, however, still provide access to the report and plans.

Up against the bottom line

So why don't voluntary efforts work? It's a matter of dollars and cents. Unless all businesses play by the same rules, some businesses may incur more expenses to be safer. In theory, these expenses will need to be added to the costs for products and services. Society should be willing to pay more to the company that does more to reduce risks to its employees and the public. But there are very few measures available for consumers to make a "safety investment" choice between two competing products or services.

One benefit of laws over voluntary efforts is that laws, in theory, level the playing field among competitors. Laws help eliminate any unequal competitive advantages or disadvantages.

It's frustrating, and at times unfortunate, that most businesses do not voluntarily follow all guidelines and recommendations that will help reduce EHS risks. We must appreciate, though, the importance of business decisions in adopting or not adopting voluntary guidelines and recommendations.

Are you ready?

Many risks that the government, business, and society were willing to take before September 11 are no longer acceptable. The mood of our government, backed by the psyche of the American public, should result in fewer debates over the necessity for new and expanded environmental safety and health laws. President Bush is urging all Americans to support the war on terrorism and help improve homeland security. When you see monies, and not just lip service, being released by the government, you know that actions will soon be taken. In early December, the Library of Congress was tracking nearly 200 bills and resolutions relating to September 11. One Web site tracking September 11-related legislation is http://thomas.loc.gov/home/terrorleg.htm.

You should help prepare your employer or clients for new and expanded EHS laws by closely reviewing existing guidelines and recommendations. Many of these voluntary initiatives are expected to become mandatory. Follow the regulatory process closely. The competitor that best anticipates, prepares, and most effectively implements new or expanded laws will enjoy a competitive advantage.

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