The “better regulation” lobby typically claims that its only aim is to cut red tape. And who could argue with that? The United States is the most advanced test bed for it, but experience there belies the claim. Far from reducing the form-filling, the build-up of measures over the past quarter century has spawned a singular bureaucracy in the form of officials working principally to hold back new legislation in areas ranging across health and safety at work, public health, environmental and consumer protection. They are distributed between different bodies that usually lack any substantive powers over the matters concerned. They simply check compliance with the increasing reams of red tape demanded by business. The Office of Management and Budget (OMB) sits at the hub of this stultifying new bureaucracy. As long ago as 1983, a former head of the federal environmental agency, the EPA, observed that the OMB’s technical arguments were being crafted by industry. Also, as each stage of the administrative procedure is open to appeal, industry and its packs of lawyers are quick to exploit every technicality in the legal book to hold up the decisions.

The US federal health and safety at work agency - OSHA - is a “poster case” for this. OSHA is finding that these bureaucratic requirements make it increasingly hard to issue rules on health and safety at the workplace. There is a dramatic crisis in new regulation. I had occasion to meet with an OSHA official in 2006, who told me that he calculated the time needed to set a binding occupational exposure limit value as follows: for each day’s work spent looking at the scientific data and their regulatory implications, ten days had to be spent filling in countless economic impact assessment forms for the measure and putting together legal case files because of the many avenues of legal redress available to industry. The obstacles created are highly off-putting.

The main hurdles that any OSHA proposed regulations must overcome are shown in the table.

Six exposure limits issued in 28 years

OSHA has only managed to issue six binding occupational exposure limit values for carcinogens in 28 years, even though workers are exposed to hundreds of cancer-causing chemicals. Some chemicals that thousands of workers have been exposed to, like crystalline silica, are not among these six. The very few exposure limits issued had to go through a maze of procedures and appeals that can stretch over decades and have been set at levels that do not give effective protection to all workers. The exposure limit for formaldehyde - to which more than 2.1 million US workers are exposed - recommended by the National Institute of Occupational Safety and Health (NIOSH) on the basis of health criteria is 0.016 ppm. The binding occupational exposure limit value adopted by OSHA is almost five times higher at 0.75 ppm, leaving workers at a significant risk of cancer.

Hexavalent chromium is a good case in point. Right from the early 1950s, suggestive evidence was available that it is a carcinogen which causes lung cancers. It is also a toxin and causes irritation to the eyes, nose and skin. In 1975, NIOSH recommended an exposure limit of 1 μg/m3 based on a long list of scientific studies. NIOSH has no regulatory powers, and it is up to OSHA to issue binding rules. At the time, the binding occupational exposure limit value was 52 μg/m3, issued in 1943 by the American National Standards Institute based on reports dating from the 1920s. OSHA had its hands tied for 30 years, partly because of direct pressure from industry, and partly because of the bureaucratic yoke of the US version of “better regulation”. Labour unions were forced into legal action over OSHA’s inaction, and it was through the courts that a binding exposure limit of 5 μg/m3 was finally issued in 2006.

Things in the European Union (EU) have not - or not yet? - reached such a pitch. The most hard-line deregulationists take what happened in the United States as a model. Boyden Gray, the US representative to the EU from 2006 to 2008, made no attempt to hide his enthusiastic support for DG Enterprise’s initiatives under the “better regulation” campaign. In a speech given in 2006, Mr Gray said, “In the case of the United States, we established a widely accepted model for using cost/benefit analysis in a very rigorous way. The benefits should always exceed the costs. (...)We don’t expect the EU to adopt the exact approach, but during the dialogue that has been occurring between the EU and the Commission, they have developed an approach that, 

although not exactly the same, is very, very similar in principle, and I’m happy to say that the regulatory impact analysis is alive and well in the EU. The second important issue was to have an enforcement mechanism to see that the principles were adhered to. (...) In the United States that’s been done very effectively by the Office of Management and Budget (OMB), and OMB has been, I think, successful, I’m glad to say, in persuading Europe to try to mimic some sort of enforcement mechanism. It can’t do it exactly the same way, but I’m happy to say that the Commission has recently increased the authority of Commissioner Verheugen and the Commission General Secretariat to monitor regulations. This is a welcome development” (US Mission, 2006).

In point of fact, just as elements within the Commission are giving the US model flavour of the month status, the OMB is beset by a rising tide of criticism at home. The scientific community believes that the OMB’s interference is stopping health and environmental protection criteria being given meaningful weight. Packaged as an objective and transparent exercise, cost-benefit calculations are actually consistently skewed in favour of the industrial lobbies. The OMB Watch observatory believes that the new Obama Administration could reform the way the OMB operates. New York University School of Law’s Institute for Policy Integrity has called on the new Administration to get rid of the antiregulatory bias.

Special report - Discounting the workers: conditions in the retail sector

Table of contents

OSHA: America’s deregulation test bed