EPA Toxics Information Program Badly Flawed, Study Says

Published March 1, 1999

A new report from the Reason Public Policy Institute (RPPI) finds numerous flaws in the federal government’s regulations governing information about the environmental impact of toxic chemicals. Among its several recommendations, the report urges greater privacy for chemical manufacturers and non-regulatory options for the dissemination of environmental information.

The two-part report, “Environmental Information: The Toxics Release Inventory, Stakeholder Participation, and the Right to Know,” was written by Alexander Volokh, Kenneth Green, and Lynn Scarlett. The authors are, respectively, a former RPPI policy analyst, director of the institute’s environmental program, and RPPI’s executive director.

The target of the RPPI report is the Emergency Planning Community Right-to-Know Act (EPCRA), signed into law in 1986 as the first federal law to mandate the reporting of certain activities to the public. By that year, forty-one states already had adopted right-to-know laws. According to the RPPI report, EPCRA “ushered in an age of ‘regulation by information’ and the involvement of local communities in the planning of industrial activity.”

EPCRA requires states and local governments to develop emergency plans for chemical accidents, and requires companies to notify government agencies if they accidently release a hazardous substance. It also requires companies that make, store, or use certain specified chemicals to submit data sheets about those chemicals to agencies of government. Finally, EPCRA also establishes the Toxics Release Inventory, which requires companies to report annually the amount of certain chemicals they release into the air, water, or land, or transfer off-site.

Consumer product labeling laws and other right-to-know initiatives also are addressed by the RPPI report.

Although environmental information laws are often characterized as “voluntary” or “market-based” programs–and thus generally considered more “benign” than coercive regulation–the RPPI report suggests they are anything but. According to the report, “mandatory information-disclosure laws have many characteristics of the now oft-criticized prescriptive regulations. Characterizing these information laws as voluntary and market-driven is incorrect.”

The top-down environmental-information system mandated by EPCRA and other laws suffers from four principal flaws:

  • Environmental-information programs typically label all chemical use as undesirable–even when chemical use per se poses no real risk to a company’s community or its customers.
  • Such programs often result in the distribution of misleading information. For example, EPA’s program ignores the well-established fact that “the dose makes the poison”–a chemical’s toxicity depends on its level in the environment. Under these programs, the potential hazards of a chemical are considered without balancing information about the benefits delivered by that chemical.
  • Environmental-information laws can threaten a company’s competitive edge by forcing it to reveal sensitive proprietary information to others in the field, and even threaten the safety of the company’s employees by exposing them to industrial sabotage.
  • Companies that are required to reveal environmental information may expose themselves to private lawsuits, even though there is no proof of actual harm or even the probability of harm.

To address the flaws they identify, the RPPI researchers recommend that the toxics program be modified to guard companies’ privacy with respect to their use of chemicals, except in such cases where information is needed prevent or alert people to actual risks or harms. When such information is required of companies, it should be kept confidential in the files of regulators. Moreover, the authors recommend that citizen-plaintiffs be required to prove that they have been injured, or face threats of actual harm, before they are permitted to sue a company.

RPPI likens the state of environmental-information systems today to the early days of business financial reporting. Though the reporting of corporate finances is by no means perfect, it has certainly evolved, and today provides “meaningful, reliable, understandable, verifiable, and comparable information.” That, the RPPI authors note, should be the goal of environmental-information systems as well.

As an alternative to the present “one-size-fits-all” environmental reporting requirements, RPPI recommends that “government . . . should allow and encourage the discovery process to continue, a process in which different reporting and participation mechanisms emerge and compete to provide useful information ad reasonable costs. Companies and communities are constantly experimenting with different instruments to determine which ones best serve their needs.”