By Dr Ilise Feitshans JD &ScM &DIR
“Global Health Impacts of Nanotechnology Law ” A Tool for Stakeholder Engagement Dr. Ilise L Feitshans JD and ScM and DIR The Work Health and Survival Project USA 917 239 9960 Switzerland 0041 79 836 3965 firstname.lastname@example.org
MS-JD.org Writer in Residence blog “So You want to be An International Lawyer”
Author of the Council of Europe Handbook for the Convention Against Medicrime
Expert on Nanotechnology and Nanomedicine for the Parliamentary Assembly of the Council of Europe (PACE) ·**Legal Advisor Greek National Platform for Nanomedicine
Presentations at NANOTEXNOLOGY 2012-17 University of Aristotle Thesaloniki Greece NANOEH 2015 Johannesburg South Africa And NANOEH 2017 Denmark
Ms.-JD.org SUPERWOMEN JDs Award winner 2016
Based on the Award winning Doctorate in International Relations, “Forecasting Nano Law: Risk Management Protecting Public Health Under International Law”Geneva School of Diplomacy and Former Scholar in Law of Health, Institute for Work and Health, University of Lausanne, Vaud Switzerland
Chapter VI Stakeholders One and All.
Section I. B. Voluntary Compliance by Multinational Corporations
“A product must not be made available to the public without disclosure of those dangers that the application of reasonable foresight would reveal. Nor may a manufacturer rely unquestioningly on others to sound the hue and cry concerning a danger in its product. Rather, each manufacturer must bear the burden of showing that its own conduct was proportionate to the scope of its duty.”1
The concept of voluntary compliance by corporations under laws addressing big ticket items such as environmental health, workplace safety, products liability and health care delivery poses a dilemma for policymakers. Voluntary compliance programming requires very careful balancing of: practical constraints upon limited enforcement resources, in light of the greater public interest expressed in the agency’s statutory mission mandating inspection and enforcement of the law. Historically, the general public has viewed voluntary compliance at best, with distrust, and, at worst, as a euphemism for uninspected and unchecked hazards, because of
1 Borel, Plaintiff-appellee, v. Fibreboard Paper Products Corporation et al,defendants-appellants, National Surety Corporation,intervenor-appellee 493 F.2d 1076 (5th Cir. 1973) U.S. Court of Appeals for the Fifth Circuit – 493 F.2d 1076 (5th Cir. 1973) Sept. 10, 1973
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fear that wealthy and powerful multinational corporations will use their influence to turn government regulators into captive agencies who will use the illusion of compliance as an excuse not to inspect and not to enforce laws that prevent harm to the public health. 2 Yet, regulatory models in complex aspects of science and law rely increasingly upon voluntary compliance among regulated entities in order to achieve compliance with the law. At the same time, corporate actors complain that government regulators behave in an adversarial posture, using their power of sanctions, fines and criminal penalties to litigate against violations of law, without attempting to solve problems through negotiation and discourse in a manner that can reduce violations with law, promote corporate compliance and avoid litigation expense3. Although litigation is a very effective weapon against violations, the reality that only a handful of violations can logistically be subject to enforcement means that many important violations are ignored; the odds against getting caught for a violation undermines effective regulation. The relationship between government and the corporations that are subject to regulation is triangulated by the role of stakeholder voices from civil society. Voluntary, non-state, organizations formed by people with shared values have a potentially catalytic ability to promote capacity building and shape policy by “doing global health differently.”4 Stakeholder organizations are not a monolith: some major opinion leaders such as former government officials, heads of state and corporate leaders can have a voice through stakeholder organizations that influence policy. Many stakeholder organizations, especially charities, are also employers and producers of goods or services who are also subject to regulation, even though their efforts speak on behalf of a section of the general public. Implementing any framework about nanotechnology protections of public health therefore requires recognizing stakeholder groups and supporting their interventions as vital partners is a first step towards building coalitions, introducing novel policy alternatives, offering positive incentives for voluntary compliance by corporations (whether or not for profit) and ultimately transforming data into moral arguments to steer policy. This triangular conversation is extremely important for any 2 Jay A Sigler and Joseph E Murphy “Interactive Corporate Compliance: An Alternative to Regulatory Compulsion” Quorum Books, Greenwood Press Connecticut USA 1988
3 Jay A Sigler and Joseph E Murphy “Interactive Corporate Compliance: An Alternative to Regulatory Compulsion” Quorum Books,Greenwood Press Connecticut USA 1988 4 Julia Smith, Kent Buse and Case Gordon Civil Society: the catalyst for ensuring health in the age of sustainable development” Globalization and Health201612:40DOI: 10.1186/s12992-016-0178-4 16 July 2016
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regulatory framework that is applied to nanotechnologies, regardless whether new or used and retrofitted to novel substances. . Therefore tools that encourage corporate voluntary compliance with law are a “necessary evil”, needed in order to achieve statutory goals that protect public health. Creative approaches to this dilemma can produce effective positive incentives that result in corporate compliance with the law. 5 Positive incentives for compliance with law offer the glimmer of hope for meeting society’s need for implementation of existing laws and ethical standards in corporations. With over a half a century of civil and criminal enforcement authority over eight statutes and a multi-billion dollar budget, one of the most influential regulatory players in the traditional toxic substance regulatory framework has been the USA’s Environmental Protection Agency (EPA), founded under an executive Order from President Nixon in the 1970s. EPA’s thirty year old voluntary compliance policies, which are the antecedents of many later regulations, trust in the power of self-policing another tool of voluntary compliance with law. EPA’s program for reduced penalties for corporate polluters who can demonstrate that the violation was discovered as part of a self-policing internal audit has the goal “to enhance protection of human health and the environment by encouraging regulated entities to voluntarily discover, and disclose and correct violations of environmental requirements”6 Citing reduced costs associated with inspections, prosecutions and the overall shortage of governmental staff to provide adequate oversight that would be distributed fairly across all the possible manufacturers and end users who might be polluters, EPA instituted self-policing policy among the key players in its regulated industries nearly at the end of the 20th century7. Under the EPA’s long-standing approach, corporate polluters are less likely to face stern discipline, in exchange for increased compliance using voluntary mechanisms. “organizational” offenders faced reduced penalties if they had compliance programs in place designed to prevent, detect and reduce harm following an unlawful incident8. EPA’s streamlined view emphasizes self-policing9.
5 ilise Feitshans, “Positive Incentives for Compliance: Balancing New Tools and Their Limits,” 14 Preventive Law Rep No. 3 at 10 (1995);
6 Ilise Feitshans Designing an Effective OSHA Compliance Program West 1990 and 2013 7 Jay A Sigler and Joseph E Murphy “Interactive Corporate Compliance: An Alternative to Regulatory Compulsion” Quorum Book,s Greenwood Press Connecticut USA 1988
8 . Ilise Feitshans, “The Corporate Compliance Extravaganza Guidelines” Corporate Conduct Quarterly, Rutgers University Camden New Jersey 1st quarter, 1996
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Criteria adapted from existing codes of practice such as the 1991 USA Criminal Sentencing Guidelines for Corporations are flexible, to accommodate different types and sizes of businesses. The reward for demonstrated due diligence by self-policing, self-disclosure, and prompt self-correction is significantly reduced penalties. Prompt written disclosure of the violation can prevent EPA from recommending criminal prosecution due to prompt voluntary disclosure of violations, so long as corporate officials did not conceal violations or willfully ignore violations. So long as the corporate polluter acts quickly without delay when offering the information about the violation, prompt self-disclosure is rewarded with incentives that can include elimination or substantially reduced civil penalties for violations, or refraining from recommending cases for criminal prosecution. Skeptics correctly express concern that voluntary compliance and self-reporting opens the door to abuse by unethical corporate actors, but the practical reality is that such partnerships are needed because of the limited resources available for watchdogs and enforcement of important laws that operationalize precautionary principles into the daily work of public health. Although applauded by non-governmental trade associations, many non-governemtnal watchdog organizations that serve consumers have been skeptical of this voluntary compliance policy, because they fear that violators will be given a free ride to flout the laws. The rationale for this approach, however, cannot be denied: given any agency’s limited resources, companies must be encouraged to come forward to resolve environmental problems, using an effective compliance management program because of “Discovery of the Violation Through an Environmental Audit or Due Diligence” 10. Although it seems unfair to give polluters a reward for admitting that they have caused pollution, it is equally important that accurate information be available for rapid cleanup and that limited resources from the agency be spent on other matters besides an expensive and time consuming adversarial investigation. Litigation obviously encourages hiding information and despite the reduced penalties, sanctions under law remain in
9 Federal Register Vol. 60, No. 246. Environmental Protection Agency (Epa) “Incentives For Self-Policing: Discovery, Disclosure, Correction And Prevention Of Violations” Part Iii 60 Fr 66706. December 22, 1995 Final Policy Statement.
10Under Section D(1), the violation must have been discovered through either
(a) an environmental audit that is systematic, objective, and periodic as defined in the 1986 audit policy, or (b) a documented, systematic procedure or practice which reflects the regulated entity’s due diligence in preventing, detecting, and correcting violations
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place. Therefore, from a practical standpoint society cannot afford to avoid an approach based on voluntary compliance as one more tool for stakeholders to use for enforcement. Also in the USA, the Occupational Safety and Health Administration ( OSHA) published in 1989 a set of voluntary management guidelines.11 During OSHA’s second decade, new administrative perspectives in OSHA greeted voluntary compliance and voluntary protection programs with energy and enthusiasm, and as one of several vital examples of government in partnership with management and labor. published in early 1989.12 OSHA reflected its progressively increasing recognition of the importance of effective in-house OSHA compliance programs standards by recommending safety and health program improvements in conjunction with inspections and by crafting a regulatory agenda that made employer-initiated identification of hazards and self-inspection the centerpiece of its administrative efforts in a program called Voluntary Protection Programs (VPP) The guidelines were designed to assist employers in establishing and maintaining programs based on voluntary compliance. From its inception, VPP, represented the evolution into a new generation of compliance programs. This path has been consistently followed, as stated by Gerry Catanzaro, Acting Chief, OSHA’s Division of Voluntary Programs in 1991:
Employers… use OSHA’s Safety and Health Program Management Guidelines to evaluate their program, to determine where they are strong and where they are weak, and to develop program(s) to maintain the strengths and strengthen the weaknesses. These guidelines developed from OSHA’s experience with the VPP where it has been demonstrated that safety and health program management will provide for a safe and healthful workplace in a cost-effective manner. 13 OSHA emphasizes that commitment to occupational safety and health protection must be found in the words of the written policies and the deeds of top level managers.14 In addition,
11Ilise Feitshans Designing an Effective OSHA Compliance Program West 1990 and 2013
12 OSHA Management Guidelines, 54 Fed. Reg. 3904 to 3916 (1989).
13 Jerry Catanzaro, cited in letter reprinted in the first edition, ilise Feitshans Designing an Effective OSHA Compliance Program (Clark Boardman Callahan, 1991).
141 Jerry Catanzaro & Judith Weinberg, “Answers to Some Frequently Asked Questions On VPP,” 22 Job Safety & Health Q Summer 1994; ilise Feitshans & Victoria Bor, Eds, Occupational Safety and Health Law 1995 Supplement, Bureau of National Affairs (BNA) Washington, D.C. 1995; Ilise Feitshans & Cathy Oliver, “More Than Just a Pretty Program: OSHA Voluntary Protection Programs Improve Compliance by Facing Problems Head-On,” Corp Conduct Quarterly Sept. 1997; OSHA Safety and Health Program Management Guidelines; Issuance of Voluntary Guidelines [Docket No. C-02] 54Fed. Reg. 3904 (Jan26, 1989)
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commitment to these goals must be clearly visible so that employees have the freedom to implement workplace safety and health rules without stigma or reprisal, regardless whether those rules were devised by in-house counsel as part of a team of industrial hygienists and medical professionals, or were promulgated by the agency after a long rule-making process. This path has been consistently followed, as stated by Cathy Oliver Chief, OSHA’s Division of Voluntary Programs in 1997:
OSHA’s Safety and Health Program Management Guidelines are an excellent resource to focus employers and employees on improving workplace safety and health conditions. Performance-oriented and flexible, the guidelines have been successfully applied to a variety of industries and worksites: small and large, union and non-union. The Voluntary Protection Program (VPP) … recognizes worksites with excellent comprehensive safety and health programs, demonstrates the impact the guidelines can have on workers and on the bottom line. VPP works. Experience injury and lost workday case rates are 50% of the national average, Many VPP sites also boast production improvements, reduced absenteeism and lower workers’ compensation costs–a real competitive advantage! 15
According to OSHA, VPP cost only 1% of the agency’s entire fiscal budget. Although there is controversy surrounding the program, VPP worksites experience injury and lost workday case rates 50% of the national average. Many VPP sites also boast production improvements, reduced absenteeism and lower workers’ compensation costs. But, like every OSHA program, VPP has its critics. According to Franklin Mirer, Former Director of Occupational Safety and Health for the International Union of Automobile Workers, “VPP is a flawed program because it misdirects OSHA’s limited resources, but it also has several very serious policy errors. The fundamental error is that VPP is based on a trade of employee rights to OSHA enforcement by employees (by taking the facility out of the inspection schedule), … entry depends upon a low employer-recorded injury rate (an incentive for falsification) and programs require an element of discipline for worker violation of safety rules.”16
16 Ilise Feitshans Designing An Effective OSHA Compliance Program citing interview with Frank Mirer, West 2013 , section about VPP.
POSITIVE INCENTIVES FOR VOLUNTARY COMPLIANCE:
AN ALTERNATIVE MODEL TO “punishment and deterrence” model for governing organizational activity:
1. Creating reasonable and workable alternatives to existing regulatory mechanisms thereby saving administrative enforcement and monitoring resources that could never enforce every rule or inspect every violation.
2. Implementing these strategies by recognizing positive achievements towards compliance and by giving greater currency to so-called positive incentives for compliance and by encouraging stakeholder NGOs to serve as watchdogs.
3. NOTE: Under Swiss law, there is an affirmative obligation to prove voluntary compliance with the law. The Swiss approach presumes that companies will come forward with information even if it is self-incriminating, and therefore the penalties for failure to do so are much more severe in the event of non-disclosure when violations are discovered by the government or third parties.
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OSHA issued Revisions to the Voluntary Protection Programs To Provide Safe and Healthful Working Conditions.17 a year after it had issued draft revisions and requested comments from stakeholders18 and the general public19. Decades later in 2016, the guidelines remained in place and their possible update was the subject of public hearings in Washington DC, but without substantive changes.20 Adjusted for nanotechnologies, these solutions offer more than a “pretty face”21 for voluntary compliance and may prove to be an effective tool for the new approach to regulatory governance of risk under an international framework.
17 OSHA, Revisions to the Voluntary Protection Programs To Provide Safe and Healthful Working Conditions. 65 Fed. Reg. 45,649 to 45,663 (July 24, 2000)
18 Public comments submitted to OSHA in response to its October 12, 1999 Notice: OSHA received comments from 15 respondents. These included eight VPP participating companies, two professional associations, two trade associations, two private consultants, and the Voluntary Protection Programs Participants’ Association. OSHA, Announcement of Voluntary Protection Programs (VPP), 47 Fed. Reg. 29025
19 Occupational Safety and Health Administration, Voluntary Protection Programs (VPP), draft revisions and requested comments from stakeholders and the general public Federal Register Notice 64 Fed. Reg. 55390, October 12, 1999
20 Ilise Feitshans, “ OSHA Management Guidelines: Proposed Revision Response To Request For Public Comments, Testimony Before The Us Department Of Labor Washington Dc March 10 2016” The Work Health And Survival Project 2016.
21 Ilise Feitshans with Assistance from Cathy Oliver, “More Than Just A Pretty Program: OSHA Voluntary Protection Programs Improve Compliance By Facing Problems Head-On” Corporate Conduct Quarterly Rutgers University 1997.