Panel Discussion

GEORGE FREEMAN, Esq., Hunton & Williams, Richmond, VA

DAVID DONIGER, Esq., Senior Attorney, Natural Resources Defense Council, Washington, D.C.

PHILIP T. CUMMINGS, Esq., Minority Counsel, Senate Committee on Environment and Public Works, Washington, D.C.

PHILLIP D. REED, Esq., Moderator, Editor in Chief, Environmental Law Reporter, Environmental Law Institute, Washington, D.C.

GEORGE FREEMAN: This morning, it was noted that longevity has improved substantially over the past decade. As a whole, prople in this country are much better off than they were a century ago.

This fact tells us that the net effect of our increasingly complex industrial society has been more beneficial than detrimental. If we were to examine the roles of the private and public sector in bringing about this effect, I think we would see that the private sector has contributed more to the net result than has the government.

It is important, however, to understand the role of the government, as it has interacted with the private sector to decrease risk. First, the government defines and controls crime, and this power has an incidental effect on the operation of the economy in the private sector.

The government has intervened more directly in the private sector through the courts and the tort system to lessen the risks of economic activity and to compensate individuals on whom the costs of the system have fallen disproportionately and unfairly. In recent years, Congress has increasingly chosen to intervene through administrative agencies and processes.

With respect to risk assessment, government intervention in the private sector is itself noit without risk. When government intervention causes the system to become unpredictable and to be perceived as unfair, as it has in the context of the Resource Conservation and Recovery Act (RCRA) and the Superfund, it discourages innovation, investment, and other factors that have contributed to the net good of society. Despite the imperfections of the economic system, however, we are still better off today than at any time in the past.

When the government intervenes, it isimportant to understand exactly hoiw it intervenes, through what branch, through what mechanism, and for what purpose.

Intervention in the form of compensation is probably more desirable than intervention in the form of regulation, or, even worse, of litigation. We have carried litigation and regulation too far, and have destoryed the predictability and fairness of the system. Without basic reforms, we cannot expect the private sector to make the contributions that are essential to achieving risk reduction goals.

When it comes to the role of Congress in risk management, one should keep in mind that, of all governmental institutions, Congress is the least qualified to perform fact-finding functions. It is also the least qualified to deal dispassionately and rationally with scientific questions. At the same time, Congress is clearly the institution most likely to reflect our current social values.

From these basic observations, I derive the following points. First, aside from outlawing clearly antisocial activities, practices, and products that are without redeeming social value, Congress should leave risk management decisions to the administrative process. Congress has the option of delegating that responsibility to the agencies or to the courts. I think that the agencies are better equipped than are the courts to deal with these matters.

Only in specific contexts — e.g., setting general criteria for clean air and water, and for solid waste and food and drug regulation — should Congress assume responsibility for risk management decisions. Nothing would be more disastrous than the creation of a generic risk analysis section in Congress. [16 ELR 10224] in cost-benefit analysis, I want to start by examining the fundamental values and morality of cost-benefit equations.

Too often, it is accepted without question that the economic notion oif efficiency should be the starting point for discussion, and that once one makes a primary commitment to efficiency, other issues will fall into place. I believe that this approach is wrong.

The fundamental value underlying cost-benefit analysis is that benefit should exceed cost. In a strict cost-benefit approach, the concept of fairness has absolutely no role. One senses a complete insensitivity to fairness in the Office of Management and Budget (OMB) Executive Order 12291 and its implementation.

There is a widespread attraction these days to economically "efficient" solutions. The fact is that what is "efficient" today depends on the current distribution of economic and political power and on current standards of taste, values, and knowledge.

In contrast to the cost-benefit approach to risk management stands what might be called the "rights-based" approach. This approach is grounded in certain of our Judeo-Christian values, such as the right not to lose life or health because of the conduct of another. Under this approach, fairness is paramount, and efficiency is secondary.

If the fair criticism of cost-benefit analysis and the OMB is a lack of concern for the moral consequences of policy, the fair criticism of the rights-based approach is a failure to acknowledge resource limits. It is not practical to fully implement this approach, at least not overnight.

The cost-benefit approach must never be allowed total victory; however, actually, the approach may be its own worst enemy. Cost-benefit analyses (as well as many of their advocates) are so repugnant to most people that they frequently inspire their own rejection. The environmental movement, as many have notices, is in much better shape today because of the governmental excesses of the last four years.

On the subject of risk assessment, I could describe a panoply of uncertainties so great as to call the entire enterprise into doubt. In one of his more candid remarks, former Administrator Ruckelshaus stated, in effect, that one would not want to put a man into orbit on the strength of equations such as these. If risk assessments are not of the quality we demand before sending people into space, they are certainly not good enough for making life and death decisions on earth.

As currently practiced, risk assessment is seen as a substitute for gaining real knowledge. If functions as a substitute for testing chemicals. In fact, a fair proportion oif current risk assessment methods merely serve as compensation for gaps in data.

Risk assessment, especially when integrated into cost-benefit analysis, is incredibly time-consuming. Look, for example, at the recent decision to remove lead from gasoline. Forget that it took 10 to 15 years to make that decision, and just look for a moment at the last year of the process. Administrator Ruckelshaus announced informally that in early 1984 he had decided to work toward the removal of lead from gasoline. Although lead is one of most common and best understood of environmental poisons, it took over one year to perform a cost-benefit analysis. It should have been possible to make that decision with a snap of the fingers many rears earlier. The processes of risk assessment and cost-benefit analysis, however, paralyzed the Environmental Protection Agency (EPA) and other regulatory agencies.

With only occasional lapses, Congress has strongly resisted the "efficiency-is-all" basis of cost-benefit analysis. Congress has been more resistant to the blandishments of risk assessments than have the bureaucracy and the academic, legal, and scientific communities. Everybody wants an answer, but Congress, for whatever reason, has been less easily seduced into excessive reliance on risk assessment.

Congress seems to take the view that the "margin of safety" approaches and "best available technology" approaches offer a better alternative than either risk assessment or cost-benefit analysis. Congress is more sensitive to considerations of fairness than to those of efficiency, and I think that Congress is our best hope in preventing cost-benefit analysis from achieving total victory. That is why I expect and, in fact, encourage Congress to reject risk assessment and cost-benefit analysis.

PHILLIP REED: David Doniger's last two comments high-lighted Professor Green's basic point, which is that the issues raised by risk assessment are very difficult, politically charged. They get to people's fundamental views about what is important in society, and create, I think, some very troublesome issues for people in any institution to resolve.

PHILIP CUMMINGS: I have discovered that the discussion is quite a bit more intellectual and academic than I'm prepared to be this afternoon. So I thought I'd start with a homely analogy.

During the previous panel I was in the back of the room where I could see out the window. And I could observe a rock wall out in the garden. It's very much like other rock walls. It's made of stones that were dragged from the nearby field, where probably they were obstacles at the time. It's irregular. It does have a certain beauty to it, a certain form. It has moss. It probably harbors lizards and varmints of other kinds. But it does its basic job, which is to keep out the pigs or keep in the dogs, or whatever.

It's like the common law. It's like legislation. I'd be perfectly happy if all the accretions that I had put together in the last 15 years were either as attractive or as durable as a rock wall.

Why should we expect a consistent or rational policy of risk management from Congress, when we do not manage risks rationally or consistently as individuals? As individuals, we treat different risks differently. We might distinguish, for instance, between new risks and old risks. The portfolio concept that Professor Stewart mentioned earlier is a useful, intellectual way of seeing that. It just describes the realities that we face.

We do the same thing societally. The decisions we make through nongovernmental decision-making methods such as the market are not consistent, not rational. At least for myself, I'm not willing to hold a higher standard for Congress than I do for either individuals or society as a whole.

In my remarks today, I would like to turn the focus away from the role of Congress in risk assessment and risk management and towards Congress's increasing specificity in environmental statutes. Why does Congress make these decisions at such a high level of specificity? Why does it make these decisions at such a level of specificity as to indicate the thickness of a liner for hazardous waste landfills, or the degree of destruction and removal efficiency for incinerators, which are two of the amendments in the recent RCRA statute that was referred to earlier.

I have several answers to this question. Consider, for a moment, the Hazardous and Solid Waste Amendments of [16 ELR 10225] 1984, the official title of the RCRA amendments, although we sometimes referred to them as the Recycling, Incineration and Treatment Act of 1984 (or RITA). Congress is a reactive body, and the solid waste legislation is clearly a reaction against the excesses and misfeasances of EPA. Many of the Act's provisions overrule specific administrative decisions. As you might remember, the 1976 Resource Conservation and Recovery Act was originally a model of commitment to the administrative process of deciding how to protect against risks. It did not work. In fact, the situation worsened after passage of the Act, and Congress began to provide specific amendatory solutions.

Thus, in one sense, Congress has become increasingly specific in risk management, because its actions are not conclusive or dispositive. Many decisions must be left to the agencies and the courts. Statutes are interpreted at great length through litigation, through enforcement actions, through writing and contesting permits, and through the seeking of criminal penalties against violators.

One must judge regulatory legislation by its results. Basically, my operating principle on the question of risk management is that a statute is useless if it uses "unreasonable risk" or any similar formula as its standard. There is absolutely nothing in the implementation of statutes using that formula to give the public any comfort that it is being protected from the risks the statutes were created to address. The problem is compounded — as in the case of chlorinated drinking water — where the level of control for the real risk presented by the trihalomethanes must be balanced against the risk of classic diseases that chlorination is used to reduce. One cannot deal effectively with this problem through the concept of "unreasonable risk." Unfortunately, we do not yet have a replacement for this formula.

Liability, whether legislatively created or reinforced, constitutes another approach to risk management. For many years, it has been an operating principle of the U.S. Senate Environment and Public Works Committee that maximizing liability does, in fact, influence the behavior or risk-averse entities. One can even use this approach to recruit nongovernmental allies to manage risks. I am thinking particularly of the "financial responsibility" statutes that require people who handle hazardous substances to get insurance. The insurers, who are classically sharp managers of risk, become useful allies in the government's effort to manage risk.

PARTICIPANT: Congress is understandably impatient with agencies' slowness in implementing regulations to protect the public health. EPA's recent radionuclide rulemaking, for example, was not an efficient process. Many of us were astonished when the Administrator withdrew the rule last October. I question the efficiency and viability of Congress's effort to list chemicals and prescribe strict procedures and deadlines with which agencies appear unable to comply.

DONIGER: As one who brings deadline suits, I think that we are obviously accomplishing something simply by getting people so upset about the process. The function of deadline suits — and of the so-called Hammer (self-executing) provisions — is to make agencies face up to decisions that are simpler and politically less painful to postpone. Deadline suits also force the gap between the budget and the mandate into high relief. Thus, they give agencies a better chance to obtain the money needed to meet their mandate.

CUMMINGS: Congress is not always enthusiastic about using techniques such as deadlines, lists, and specific numbers, but it often has little choice. It is difficult to prod agencies into action without providing tools that outside forces can use. Citizens, environmental groups, and industry groups have proved the only way to make progress in a number of areas.

PARTICIPANT: Two years ago, just after he went back to EPA, Administrator Ruckelshaus came to Harvard as a member of a visiting committee. Among other things, he said that given the inconsistency of the laws, there was no way that he could be a fully honest man and Administrator of EPA.

CUMMINGS: Congress does try to make the laws consistent, but that does not necessarily mean logically consistent. I agree with Bill Ruckelshaus's feeling that they do restrain what he would like to do. Sometimes, laws are written with a specific intent in mind. Earlier, it was suggested that we did engage in a fairly elaborate risk assessment process before sending people into space. That was probably a worthwhile exercise, both the risk assessment and the space exploration itself. It is different from the kind of risk assessment we've been talking about today, however, because those people were volunteers. Today's session is about involuntary exposures. Both the moral implications and the methodologies are quite a bit different.

FREEMAN: I would say that Congress careens back and forth in these environmental statutes between elaborately specific lists and total abdication of political responsibility. In order to get the 1980 Superfund legislation passed in the lame duck session, Congress abdicated its responsibility and removed all clarity as to whether liability is always to be strict, retroactive, joint and several. It was also left unclear whether equitable principles are to be involved.

REED: It seems to me that there is a fundamental impasse here. On the one hand, risk assessment is full of uncertainties and is a long and expensive process. On the other hand, a massive number of chemicals are constantly being used and introduced into the market. Congress cannot possibly list all of these chemicals. If they are lift to the risk assessment process, five or 10 chemicals might be regulated over the next 10 years; if they are left to Congress, 10 to 20 chemicals might be regulated. Is there a constructive way out of this unacceptable situation?

FREEMAN: Your question presupposes that the use of both old and new chemicals carries great risk of harm without also carrying the potential for good. I am thinking in particular about the current refusal of pharmaceutical companies to manufacture whooping cough vaccine. Whooping cough is beginning to reappear and may reach epidemic proportions before we can get all the clearances through the risk assessment process. Even then, the tort system may still discourage companies from manufacturing the vaccine. There are trade-offs involved. Chemicals do good as well as harm.