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The Chemical Industry: Challenges, Risks, and Rewards EDWIN C. HOLMER The chemical industry is strong, branching out in many directions, supported by an Effective arm growing research establishment arid by tried aru1 true manufacturing and marketing organizations. Along with these positives, however, have come a number of negatives, many of which can be ascribed to the public 'sfear of toxic chemicals. Technology is the life blood of the chemical industry, and I am pleased to be a representative of the industry in this volume. I would like to touch briefly on some of the challenges, risks, and rewards that are part of chemicals technology today. The U.S. chemical industry is big, progressive, and very important to the nation. Annual sales total about $200 billion. Its products are critical to just about every other industry and to the population at large, affecting just about every facet of modern life, from cars and airplanes and aerospace to home building and furnishings, from the clothes we wear to Me crops we grow and the medicines we take to combat all kinds of illnesses. The industry employs more than a million Americans and accounts for far more jobs downstream of its own operations. It has been generating a fa- vorable trade balance in excess of $10 billion a year, and in these days of the strong dollar, it is almost unique among U.S. industries in being able to outcompete other countries in international trade. The chemical industry's past and present successes are due in very large part to the commitment of chemical companies of all sizes to seek competitive advantage through technological advancement. In recent years research ex- penditures have been increased substantially. For 15 large companies, R&D 417

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418 EDWIN C. HOLMER expenditures increased from $1.5 billion in 1979 to $2.7 billion in 1984, a 73 percent increase in 5 years. After adjustment for inflation, the increase was approximately 25 percent. The nature of chemicals research has been changing. Growth rates of major chemical commodity products have slowed as a result of attaining a high-percentage penetration into the economy, and so research is being increasingly focused on new and improved specialty products as opposed to new and improved processes, although process research remains very important. Another effect of the maturity of commodity chemicals is greatly increased emphasis on areas previously outside the nonnal scope of tra- ditional chemical companies, such as drugs, biosciences, and electronic materials. The chemical industry, moreover, is Me leader in industry-sponsored basic research. Preliminary National Science Foundation figures for 1983 show that, of a total of $2 billion of industry-sponsored basic research, the chemical industry accounted for $510 million, or more than 25 percent, well ahead of the second-place electrical equipment industry. Also, of obvious importance to the ~ndusey is We research being camed out in universities, which account for the bulk of basic research conducted in this country. For 5 years now Me academic and industry members of the Council for Chemical Research have been working to increase mutual cm operation and Hereby to stimulate innovation. So here we have a strong industry, branching out in many directions as its traditional commodity products mature, supported by a large, effective, and growing research establishment as well as by tried and true manufacturing and marketing organizations. Along with the positives, however, have come a number of negatives, many of which can be ascribed to one fundamental factor, Me public's fear of toxic chemicals. Although this fear may be exaggerated, it is nonetheless very real. And as long as it persists, it can have very real economic impacts. It can be translated into laws and regulations so punitive and so excessive as to make the industry's operations prohibitively expensive, new products difficult to develop and commercialize, and the industry noncompetitive in the international made arena. How did this fear develop? What are He reasons for He enonnous gap between what we know about the products and practices of the chemical industry and what the public perceives? The fear of toxic chemicals developed during the very period Hat Harvey Brooks describes in his chapter, when technology in general was under attackroughly He period from the mid-1960s to He late 1970s. In hind- sight, the emergence of this fear is very understandable. How were people supposed to react when, for more than 10 years running, the news media reported in a sensational manner statements of prominent politicians that "up to 90% [of all cancers] are caused by contaminants placed

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THE CHEMICAL INDUSTRY: CHANGES. RISKS. AD NEWTS 419 in the environment by man"? Then, in 1978 an authorless National Cancer Institute "scientific paper" was released to the press that attributed up to 38 percent of total cancer incidence in the United States to worker exposure to just nine substances! This startling conclusion was immediately comrnuni- cated by the Secretary of Health, Education, and Welfare, and it frightened not only workers but a good part of the nation as well. ~ Today many policymakers and scientists have a different view, thanks to the studies of two Oxford epidemiologists, Sir Richard Doll and Richard Peto. Analyzing American cancer modality rates for the congressional Office of Technology Assessment, they concluded that fully two-thirds of all cancer deaths are due to smoking and dietary habits. Various other causes were given for the remaining one-third. They concluded that carcinogens in the workplace, in the environment, in food additives, and in industrial products all taken together cause less than ~ percent of American cancer deaths. In the few years since their work, according to the New York Times, these figures are generally accepted by responsible authorities and experts.2 Quite a dramatic contrast to that widely publicized 90 percent. Although the real facts have been emerging, there is a long time la:, in the public's perception of those facts. And as long as there is any degree of cancer incidence that is attributable by experts to toxic chemicals, it is in- cumbent on the industry and the government to identify the chemicals and to minimize exposure to them. Other major negatives have emerged to bedevil the chemical industry. One is the existence of numerous hazardous waste dump sites scattered across the nation. There has been growing concern that a number of those sites may pose health hazards to nearby residents, primarily by contamination of groundwater. It is clear from examination of Environmental Protection Agency (EPA) lists of potentially responsible parties that thousands of companies representing essentially every manufacturing industry in the country have contributed to this problem through decades of dumping, but the public relates it mainly to the chemical industry. Now the industry has a major new negativethat involving the danger of catastrophic major releases of substances that might cause numerous in- junes and deaths. Of course I am referring to the Bhopal tragedy. What is the industry doing about these negatives? Individually and through its trade association, the Chemical Manufacturers Association (CMA), it is doing a lot. The CMA has 180 member companies that represent 90 percent of all basic chemical-manufacturing capacity in the United States. Since a major issue is the toxicity of chemicals, it was immediately obvious that a great amount of toxicity testing would be required. The larger com- panies built and staffed major laboratories devoted to health-effects testing. In addition, a number of companies joined forces to create the Chemical Lndustry Institute of Toxicology (CIIT). Through innovative basic research programs In many aspects of toxicity,

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420 EDWIN C. HOLMER through comprehensive testing of suspected problem chemicals, and through a strong commitment to training scientists of the future in the specialized requirements of toxicology, CIIT has earned the reputation of independence and complete objectivity, as well as professional excellence. It recently cel- ebrated its tenth anniversary. On the subject of hazardous waste sites, the Superfund law obviously should be reauthorized at increased levels of funding, and the chemical industry came out in support of this position early in the debate in 1984. The industry is concerned that the size of the fund should fit with EPA's ability to spend at an effective rate, and it wants the funding system devised fairly and in a manner that does not deal it an excessive economic blow, particularly in the area of international trade. Fundamentally, the industry wants those sites cleaned up, and the sooner the better. A major deterrent to speedy cleanup of abandoned waste sites has been lengthy litigation between the potentially responsible parties who are the generators (but usually not the dumpers) of the waste and the government. The industry has been urging its member companies to get together at multi- party sites to undertake more cleanups voluntarily, and we have been en- couraged by recent EPA policy actions designed to expedite such voluntary cleanups. Speaking of voluntaIy actions, a new nonprofit organization, Clean Sites, Inc., became operational recently. Clean Sites is the result of the imaginative cooperation of a group of industry people, environmentalists, and former government officials. I was privileged to serve on the steering committee Cat conceived this approach. Clean Sites will be able to enlist the vast technical and project management resources of private industry directly to accelerate the cleanup of waste sites. It has the full support of EPA, has already recruited an outstanding corps of talented people, and has a highly respected board of directors, including two former EPA directors and Donald Kennedy, the president of Stanford University. It is currently being funded almost exclusively by We chemical industry. and it is attemDhna to Bet other industries to participate. While pushing to get the sites cleaned up, the industry is also exerting effort to determine the extent of the health effects associated with them. This is important, because there is a strong tendency in the Congress to solve a problem before it is defined There have already been initiatives in the Congress to establish broad-based, so-called victims compensation funds to compensate alleged victims outside the nonnal tort system. The needs would have to be major indeed to justify such a radical step. The Chemical Manufacturers Association detained that despite all the concern, there were no programs in progress to define the scope of the health problems effectively. We joined in a suit filed by an environ- mental organization to force the government to implement a 1980 Super- - , . _, ~

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THE CHEMICAL INDUSTRY: CHALLENGES, RISKS, AND NEWTS 421 fund~provision that mandated studies to determine the health effects of dump sites. As a result, an appropu ate agency was identified and studies are under way. Not satisfied with this minimal effort, the CMA contracted with the pathology departments of 15 leading universities to undertake a million- dollar study to compile and evaluate scientific inflation on the effect of waste sites on nearby residents. Several other organizations, including the World Health Organization, also sponsored this work. The conclusions recently became public.3 The study indicated there Is little evidence to support the claim that there have been detectable health effects on people living near waste sites. It indicated that there is a large gap between public perception and demonstrated incidence of health effects. However, the study team recognized Hat we need to learn much more about potential hazards, and it recommended much additional research on the subject. The latest preoccupation of CMA is to determine what initiatives should be taken as a result of Bhopal. We know that we should not sit back and merely say that it can't happen here. We know that we cannot take refuge in the statistical evidence of the National Safety Council, which shows that workers in the chemical industry have the best safety record of all 42 principal U.S. industries. In fact, the chemical industry rated 0.53 cases of lost-time injury per 100 full-hme employees. Compared with the average incidence rate of 2.2 for all 42 industries, chemical workers have more than four times fewer accidents than the average industrial employee.4 Notwithstanding this fine record, in the wake of Bhopal, essentially every one of our member companies directed that all of their worldwide plant locations conduct immediate reviews of their safety and emergency-response procedures to be sure they are well understood and thoroughly up to date. On an indust~ywide level, the CMA recently announced further initiatives that the industry will take. These include improved emergency- response procedures and more effective involvement of community leaders ~ . . and response organizations. In summary, the chemical industry is a great, technologically driven industry whose products have been critically important throughout the economy. So pervasive are chemicals in our lives that we could not reverse this condition even if we wanted to. While this growth and propagation of products through technology has its negative as well as its positive sides, I am optimistic that our powerful science and technology base, combined with enlightened management, will cope with the negatives effectively. We are taking many steps to define the problems carefully and to take positive initiatives, in some cases quite bold, to solve them. We intend to restore public confidence in the chemical industry by results, not by rhetoric.

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422 EDWIN C. HO=ER NOTES 1. Edith Efron, The Apocalyptics (New York: Simon & Schuster, 1984). pp. 68-70, 438-440, 449~52. 2. New York Times, March 2, 1981, pp. C1, C12-C13. 3. Universities Associated for Research and Education in Pathology, Health Aspects of the Disposal of Waste Chemicals (New York: Pergamon Press? 1985). 4. National Safety Council, Chicago' 1984 data.