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OCR for page 417
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
attack—roughly 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
OCR for page 419
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 negative—that 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-
- , . _, ~
OCR for page 421
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.
Representative terms from entire chapter:
toxic chemicals
