Regulation or Responsible Care?

A recent chemical spill — of a compound used to clean coal, leaking from an old, rusty tank located near the Elk River in West Virginia state in the USA — has set off a debate here about regulation and the chemical industry.

The spill contaminated the water supply for 300,000 people in this state, in which the inhabitants are famous for their pioneer spirit, independence, and opposition to “big government” http://www.nytimes.com/2014/01/19/us/chemical-spill-muddies-picture-in-a-state-wary-of-regulations.html?src=me&_r=0.

There is a strong feeling among many Americans that there is already too much regulation of industry in general, and of the chemical and energy industries in particular, and that this is a brake on business development and economic growth. Many Americans don’t want the government to be able to tell you what you can and cannot make or what risks you can take to make it.

At the same time, even the most fervent free-market pioneer can feel outraged by the lack of stewardship that allows this kind of accident to happen to the detriment of fellow citizens. The chemical industry should be outraged by the effect of this lapse on the reputation of the industry generally.

Right now, you will hear the chemical industry being tongue-lashed in blogs and in the traditional press for its lack of responsibility. Yet, this is one of the few industries globally with a code to help it avoid such problems. It is the program of continuous improvement in environment, health and safety called the Responsible Care Charter.

Responsible Care was a visionary program that began 25 years ago and which has had a dramatic effect in improving process safety, product stewardship and communication with local communities. It has been embraced by chemical companies large and small as a mechanism for improving their EH&S performance.

Unfortunately, the company that leaked the chemicals into the Elk River, the unlikely-named Freedom Industries, does not seem to be a signee to Responsible Care. It is currently seeking bankruptcy protection, rather than face up to better communication with the public and higher standards for its operations http://www.businessweek.com/articles/2014-01-19/freedom-industries-chapter-11-filing-reveals-owners-strategy.

Perhaps the Responsible Care commitment is sometimes seen as too expensive. But the effect of a failure, like that in West Virginia, has been to reopen the debate about chemical industry regulation.

How sweet it would be if the entire chemical industry got behind Responsible Care and meant it. Many of the debates about how to regulate the industry would wither away as chemical producers showed true responsibility for their actions. 

Yet history tells us that industries rarely self-regulate effectively. You have only to look at the finance industry since 2000 to see that opportunism tends to win out over responsibility. What a shame it is for an industry that had the foresight to create Responsible Care, that incidents like the West Virginia spill are destined to see a tightening of regulation.