The NZ Chemical Industry Council Annual General Meeting

  • Simon Upton

National Library Auditorium

The Government passed the Hazardous Substances and New Organisms Act last year. It replaced a raft of statutes which were inadequate to the task of meeting public concern and were riddled with gaps and overlaps in the management of hazardous substances. It also set up a very powerful new agency called the Environmental Risk Management Authority.

The Act was designed to do several things:

to take explicit account of the environment in managing hazardous substances,

to update the decision-making processes and criteria for introducing new organisms to New Zealand's island ecology,

to provide the legislative tools for the community to control genetic manipulation.
These latter two elements are important because New Zealand still earns much of its living from biological production - most of it from species not native to New Zealand. We've made errors before introducing species that have become pests - yet there are so many opportunities in the field of biological control.

Genetic manipulation, stripped of unhelpful `Day of the Triffods' imagery, will, over the long term, prove to be an essential aid in keeping New Zealand competitive. The world demands high quality, blemish free produce with reduced chemical residues and if genetic engineering can help, it would be foolish to dismiss it out of hand.

The Act recognises that there are risks associated with managing hazardous substances, and with introducing new species. There may also be very substantial benefits. The HSNO Act contains explicit recognition of the fact that these risks and benefits exist and that they need to be managed. It's a balancing act with conflicting messages whispered into either ear: ``it's better to be safe than sorry'' on one side, and ``fortune favours the brave'' on the other.

HSNO seeks to manage risk on two levels.

It explicitly provides for thresholds to be set for hazardous substances below which the Act does not apply because the community does not need to explicitly regulate. This is a realistic and sensible approach not found in older New Zealand systems or in many other jurisdictions. It is a conscious decision to get past the ``all chemicals are bad'' syndrome and recognise that they are part of our everyday lives. These cut-offs or thresholds are part of the regulations development process about which I know chemical industry council members are providing active feedback.

The HSNO Act requires that a decision making methodology be developed, approved by the Government and consistently applied. This methodology will apply both to the assessment and setting of controls on hazardous substances and to decisions about new organisms. The Environmental Risk Management Authority has been given this task. A rigorous and consistent approach will be essential if the authority's determinations are to be authoritative.
New Zealand will become one of the first countries in the world to go about setting standards in fully public hearings and give members of the public the right to request reviews. The Act embodies the principles of transparency and public participation. In the past these "attitude to risk" factors have been buried deeply in the procedures used in the assessment or permitting of substances usually on the basis of their intended use.

The Act makes fairly heroic claims about our ability to debate complex issues. Accordingly, as one of the major industry groups affected by the reform, I strongly recommend you provide considered and specific comment on the discussion document which the ERMA members will be circulating for comment in the near future.

ERMA is an agency which will come to the forefront of public attention as a lightning rod for community concerns about hazardous substances. Making the most of your opportunity for input at this stage will ensure not only that your voice is heard but that the considerable expertise in your member organisations is applied to making the methodology workable in practice.

A well devised methodology is necessary to assist ERMA deal satisfactorily with the question of `risk'. No special weight is given by the Act to the three guiding considerations: environmental, cultural and economic. It is the methodology that will guide ERMA as to where to find the balance.

The management of risk is not a science: it is an art, involving value based on technical information that is frequently incomplete. At the bottom, it involves judgements about just how risk averse we are when it comes to the risks posed by hazardous substances or new organisms.

An absolutely libertarian, free-market approach would say that the State has no role in arriving at collective assessments of risk aversion - every citizen should apply his or her prudential standards and out of those millions of discreet judgements a socially derived norm will spontaneously emerge.

We have not taken that laissez faire approach. Rather, in promoting this legislation we have implicitly signalled the view that there is a minimum level of risk aversion in the community that means we do not want to expose ourselves to an unlimited range of risks, and that that sentiment is best captured through a regulatory system that imposes a uniform standard of acceptable risks.

Social attitudes to risk don't always appear to be rationally ordered. Indeed, they are developing in two contradictory directions. One the one hand, new materials and technologies (not to mention social insurance through the ACC), have made whole new worlds of risk taking possible. For instance, modern communication technologies have made possible solo feats in extremely remote and dangerous places that would, twenty years ago, have only been tackled with large heavily equipped parties. The worlds of skiing, yachting and mountaineering continue to press limits of human endurance that were technically unthinkable a generation ago.

On the other hand, the same technical wizardry that has increased opportunities for the voluntary assumption of risk has led to increasing paranoia when its application would expose individuals to involuntary risk. Through public pressure, substances used by chemical companies to combat unwanted plant and insect species are becoming more and more pest specific and less and less toxic. But never has opposition to anything remotely resembling a `chemical' been more all pervasive. Where personal hedonism or convenience is involved we are careless of risk (as with vehicle emissions or junk food); but where government agencies or companies (especially big ones) are involved, we are often extremely risk averse.

A recent example of this is the reaction of some to the spraying of the organic insecticide Btk in the White Spotted Tussock Moth eradication programme in Eastern Auckland.

Btk is the acronym used for Bacillus thuringiensis var. kurstaki, a bacteria which occurs naturally in the environment. For the White Spotted Tussock Moth programme the insecticide formulation of Btk used was Foray 48B. The Health Risk Assessment completed by Auckland Healthcare judged that the spray was not a recognised cause of human infection and was highly unlikely to cause illness through contamination of food. This conclusion about safety was supported by studies of actual human experience, including people with susceptibility to infection, and all ages in the community. All ingredients of the spray were rigorously tested, including the potential for long term effects. The ingredients were found in everyday foods and cosmetics. However, Foray 48B is very short lived in the environment, being affected by both rainfall and UV exposure.

Last week's report reviewing the operation noted the Ministry of Forestry's unwillingness to consider a more persistent substance. One suspects MoF were mindful of public resistance to widespread pesticide use and decided that the use of alternatives to Btk with more persistent insecticidal effects would be too difficult to manage from a public relations point of view.

Ironically, MoF put the more persistent chemical to one side, fearing it was a PR liability, and adopted the almost ephemeral Btk, that necessarily required frequent applications. And it was the frequency of the spraying that led to mounting protest from a small but vociferous group which attracted considerable media attention. (I've got no doubt, by the way, that had MoF chosen the more persistent substance, a whole new raft of concerns would have been ignited).

If something as benign as Btk causes public anxiety, then it raises the question: are any chemicals able to be used? Important tools available to those charged with protecting New Zealand's biosecurity could well be disabled through public concern. We are in danger of voluntarily binding our hands and leaving the country defenceless against pest incursions.

Meanwhile, of course, Aucklanders continue to expose themselves to far more dangerous compounds than the pesticides mentioned on a daily basis; in their homes and on the streets, where exhausts billow from cars and trucks in the last OECD economy without controls.

The episode reveals the sinking sands we get into when inviting public discussion. Deciding what constitutes an acceptable risk is fraught with difficulty and influenced frequently by contradictory attitudes. It highlights the necessity of having a clear methodology in place to form the basis on which ERMA can function.

The other major job to be done to bring the HSNO Act into force is completing the necessary regulations. I have already referred to the fact that the council is working closely with the Ministry for the Environment in developing these.

The HSNO Act is effects based so the regulations will be drafted in terms of managing the risk from substances with particular types of effect. They will not specify the technologies to be used to achieve the level of risk management acceptable to the community. That is the job of those like yourselves whose business depends on these substances.

Regulations will be the primary tool of the ERMA in setting those acceptable levels of risk management as the end result of an assessment.

So it is important that you continue to do two things;

actively assist in the design of the performance based regulation being developed under the Act,

continue to document your best practices so that they can be used to help in this design and in codes of practice developed under the Act (or statements of the technical means available to achieve the performance specified in regulation).
The Council's Responsible Care programme is an excellent case in point. The documentation is impressive. The programme has also begun to develop ways to ensure compliance with the standards of risk management expected.

One of my other responsibilities is in the Foreign Affairs and Trade area and it is clear to me that being able to verify what the claims we make will be a significant trading advantage. Here you can't ignore the voice of the market - it's no good merely claiming to be `clean and green'; you must be able to demonstrate that you are.

I am also aware that users of chemicals are at times less than willing to recognise that they have an interest in the management of these risks as they do not see themselves as part of the chemical industry. I would encourage you to keep the dialogue open so that the integrated and workable management of hazardous substances can be achieved.

I wish you well in your deliberations over the remainder of your annual meeting and conference.