Business and the Precautionary Principle: From Divergent Perspectives to an Integrated Framework

Transcription

1 Business and the Precautionary Principle: From Divergent Perspectives to an Integrated Framework Prepared for presentation at The Open Meeting of the Global Environmental Change Research Community Montreal, Canada, October, Steve Maguire Faculty of Management McGill University 1001 Sherbrooke West Montreal, Canada, H3A 1G5 Tel: Fax: Amelia Clarke Faculty of Management McGill University 1001 Sherbrooke West Montreal, Canada, H3A 1G5 The authors acknowledge the generous financial support of the Social Sciences and Humanities Research Council of Canada (SSHRC), les Fonds pour la Formation des Chercheurs et l Aide à la Recherche of Quebec (FCAR), and the Faculty of Management at McGill University in carrying out this research. 1

2 SUMMARY Business and the Precautionary Principle: From Divergent Perspectives to an Integrated Framework An increasingly prominent feature of domestic and international environmental policymaking and law, the precautionary principle has important implications for business. Its application can lead to, for example, bans on firms products (e.g. chemicals) or activities (e.g. fishing). Yet, despite being endorsed almost universally (including by firms and industry associations), the precautionary principle has nevertheless emerged as one of the most contentious issues in contemporary discussions of business and environmental issues. Some argue that recourse to the precautionary principle can be a disguised form of protectionism, and offer the EC s ban on beef produced with growth-promoting hormones as an example. Business representatives have claimed that the principle is generating an undesirable climate of uncertainty and that it stifles innovation, pointing to what they see as unwarranted controversy over genetically modified crops as evidence. On the other hand, proponents of the principle argue that its application can provide significant benefits to firms, such as better risk management, improved stakeholder relations, and more innovation through the development of safer and cleaner products. Regardless of which of these divergent perspectives is favoured, it is clear that the precautionary principle is something with which managers, increasingly, will have to come to grips. Yet discussions of precaution are rare in management journals. This paper seeks to fill that gap. It introduces the precautionary principle, reviews the debates surrounding its application and discusses its implications for business. The paper brings together work from environmental studies and law with work from the organizational literatures on stakeholder management and risk management to develop an integrated framework for understanding the business implications of the precautionary principle. The argument behind the framework is as follows: (1) the precautionary principle lowers the threshold of scientific knowledge required to trigger deliberations about appropriate responses to potential environmental and health risks; (2) thus, application of the precautionary principle has the effect of legitimating and empowering more relevant involuntary stakeholders for any given firm; (3) because risks imposed on these stakeholders are now, with the precautionary principle, more easily and quickly translated back into business risks for the firms generating them, the application of a risk management logic means that stakeholder management processes of firms will become more important in the future. 2

3 Business and the Precautionary Principle: From Divergent Perspectives to an Integrated Framework Summary/Introduction An increasingly prominent feature of domestic and international environmental policymaking and law, the precautionary principle has important implications for business. Its application can lead to, for example, bans on firms products (e.g. chemicals) or activities (e.g. fishing). Yet, despite being endorsed almost universally (including by firms and industry associations), the precautionary principle has nevertheless emerged as one of the most contentious issues in contemporary discussions of business and environmental issues. Some argue that recourse to the precautionary principle can be a disguised form of protectionism, and offer the EC s ban on beef produced with growth-promoting hormones as an example. Business representatives have claimed that the principle is generating an undesirable climate of uncertainty and that it stifles innovation, pointing to what they see as unwarranted controversy over genetically modified crops as evidence. On the other hand, proponents of the principle argue that its application can provide significant benefits to firms, such as better risk management, improved stakeholder relations, and more innovation through the development of safer and cleaner products. Regardless of which of these divergent perspectives is favoured, it is clear that the precautionary principle is something with which managers, increasingly, will have to come to grips. Yet discussions of precaution are rare in management journals. This paper seeks to fill that gap. It introduces the precautionary principle, reviews the debates surrounding its application and discusses its implications for business. The paper brings together work from environmental studies and law with work from the organizational literatures on stakeholder management and risk management to develop an integrated framework for understanding the business implications of the precautionary principle. The argument behind the 3

4 framework is as follows: (1) the precautionary principle lowers the threshold of scientific knowledge required to trigger deliberations about appropriate responses to potential environmental and health risks; (2) thus, application of the precautionary principle has the effect of legitimating and empowering more relevant involuntary stakeholders for any given firm; (3) because risks imposed on these stakeholders are now, with the precautionary principle, more easily and quickly translated back into business risks for the firms generating them, the application of a risk management logic means that stakeholder management processes of firms will become more important in the future. Introducing the Precautionary Principle A new source of uncertainty for business? The Vorsorgeprinzip of West German national environmental law in the 1970 s and 1980 s is commonly cited as containing the conceptual origins of the precautionary principle (Freestone, 1991; O Riordan & Jordan, 1995; McIntyre & Mosedale, 1997; Adams, 2002). Originally invoked to justify aggressive German domestic policies addressing North Sea pollution, acid rain and global warming (O Riordan & Jordan, 1995), the principle first appeared formally in an international context in the Declarations of the International Conferences on the Protection of the North Sea of 1984 and 1987 (Freestone, 1991; McIntyre & Mosedale, 1997). Since then, the precautionary principle has been explicity endorsed in a wide range of international fora with significant consequences for business. Heralded as the most important new policy approach in international environmental cooperation (Freestone, 1991: 36) as early as 1991, it was, for example, enshrined into the Rio Declaration on Environment and Development as Principle 15 the following year: 4

5 In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation (UNCED, 1992). Subsequently, it has been incorporated into numerous international instruments of both hard and soft law addressing issues such as marine pollution, global climate change, ozone depletion, biodiversity conservation and toxic chemicals, among others. With its progressive consolidation in international law, the precautionary principle has, arguably, become a fullfledged and general principle of international law (EC, 2000: 10) and crystallized into a norm of customary law (McIntyre & Mosedale, 1997: 241). As yet another sign of its successful institutionalization, the precautionary principle is endorsed almost universally by state and nonstate actors on the global stage, including industry associations and other representatives of business interests. Nevertheless, the precautionary principle has proved to be one of the most problematic developments in the field of international environmental law and the literature devoted to defining the principle is enormous and divisive (MacDonald, 1995: 276). Many have expressed concern about the uncritical accumulation of meanings, often contradictory and impractical that have become associated with the precautionary concept (O Riordan & Jordan, 1995: 192). Indeed, Lofstedt (2002: 285) argues that it would be fair to say that the use of the precautionary principle for regulatory purposes is highly controversial. Even legal scholars have drawn attention to uncertainty generated by the precautionary principle, claiming that [t]he assertion and codification in international agreements and instruments of an ill-defined, ambiguous principle has created uncertainty in international law (Hickey & Walker, 1995: 423). And business representatives have generally concurred, complaining, for instance, that the many 5

6 opinions on the meaning and implementation of the precautionary principle as an element of environmental and public-health policy have led to an undesirable climate of uncertainty (Diriwaechter, 2000: 8). Discussions in the popular press often reinforce this view and characterize the precautionary principle as disruptive force with major social and economic consequences. For example, Pollan (2001: 92) informed readers of the New York Times Magazine that, in fact, the precautionary principle poses a radical challenge to business as usual in modern, capitalistic, technological civilization, while more right leaning commentators have written extensively about the perils of precaution (Miller & Conko, 2001). There is no denying that application of the principle can generate policy uncertainty. Within a given jurisdiction, the policy uncertainty associated with precaution can take two forms depending upon the technologies and risks contemplated, old or new: (1) uncertainty surrounding policies affecting the timing and pacing of exits of old incumbent technologies from the economy, as when governments deliberate the adoption of such measures as bans on firms products (e.g. chemicals) or activities (e.g. fishing); and (2) uncertainty surrounding policies affecting the entry of new innovative technologies into the economy, as when governments deliberate the withholding of permission to commercialize new products (e.g. genetically modified organisms). This latter possibility has led some to argue that the precautionary principle stifles innovation. For example, Miller & Conko (2001) point to the European Union s (EU) 1999 moratorium on approvals of new genetically modified crop varieties, justified with explicit reference to the precautionary principle, as just such an instance of a lopsided process that is inherently biased against change and therefore against innovation. 6

7 When more than one jurisdiction is involved, the question of whether there will be policy homogeneity or heterogeneity across jurisdictions can be another important source of uncertainty for business. This is because banning or withholding permission to commercialize products in one jurisdiction but not in others can make trade flows uncertain. This has led critics, as well as some states, to argue that recourse to the precautionary principle can be a disguised form of protectionism. For example, in January 1989 the EU banned beef that had been fed certain growth-promoting hormones, citing the precautionary principle, which prompted the US to increase duties on selected European products and, some years later, to initiate along with Canada a formal dispute resolution procedure. After reviewing available evidence of potential harms to humans from hormone-fed beef, the WTO Dispute Panel ruled against the EU in August 1997, a decision upheld by the WTO Appellate Body in January The EU has since opted to pay penalties rather than to lift the ban and continues to defend its position that the growth-promoting hormones are potentially harmful to humans. The potential for more cases like this one has caused concern among business and governments alike, with the result that questions of whether and how precaution can be reconciled with GATT/WTO rules are receiving substantial attention in legal and policy circles (see, for example, Priess & Pitschas, 2000; Gehring & Cordonier-Segger, 2003). On the other hand, proponents of the precautionary principle argue that its application can be a source of significant benefits to firms, such as better risk management, improved stakeholder relations, and more innovation through the development of safer and cleaner products (Tickner & Raffensperger, 1998). They link precaution to concepts such as pollution prevention and eco-efficiency, well-accepted in environmental management. 7

8 Which of these divergent perspectives is to be favoured? Should business be concerned? How should business understand the precautionary principle? We address these questions here, beginning with a review of the emergence and essential elements of the precautionary principle. Interpreting the emergence and rise of precaution Prior to the emergence and ascension of the precautionary principle, the prevailing assumption guiding policy-making was that the environment was capable of absorbing pollutants, exploitation of resources and other forms of interference up to some knowable capacity (Hey, 1992). Take chemicals policy, for instance, where historically it was thought that mere decrease of concentration of a substance in a particular medium would be sufficient to mitigate its ultimate impact. This practice and the underlying thinking was sometimes summarised as dilution is the solution to pollution (Anastas & Warner, 2000: 6). The public s historical experience of scientific fallibility in numerous issue areas, from fisheries management to the regulation of toxic substances, has meant that these assumptions have been shaken. It has become apparent to policy-makers and citizens alike that scientists may not be capable of identifying safe levels of resource exploitation or pollution. For instance, MacDonald (1995: 273) writes that the emergence of the precautionary principle in fisheries management is in part a response to the increased frustration within the international community at past failures of fisheries management, and claims that perhaps the greatest of these failures was the inability to act in the face of uncertainty. Because it acknowledges and foregrounds the limitations and uncertainty of scientific knowledge, the precautionary concept stands in direct contrast to the assimilative capacity concept. Hey s (1992: 308, footnotes omitted) comparison of the world before and after the institutionalization of precaution is instructive: 8

9 The assimilative capacity concept emphasizes: 1) the carrying capacity of the environment; 2) the ability of science to accurately predict threats to the environment and the measures needed to prevent such threats; 3) the availability of technical possibilities to mitigate threats once they have been accurately predicted; and 4) the reliance on short-term economic considerations, while emphasizing the unreliability of long-term economic considerations and the uncertainties involved in determining the present value of future environmental degradation. This stands in contrast to precaution: The precautionary concept advocates a shift away from the primacy of scientific proof and traditional economic analyses that do not account for environmental degradation. Instead, emphasis is placed on: 1) the vulnerability of the environment; 2) the limitations of science to accurately predict threats to the environment, and the measures required to prevent such threats; 3) the availability of alternatives (both methods of production and products) which permit the termination or minimization of inputs into the environment; and 4) the need for long-term, holistic economic considerations, accounting for, among other things, environmental degradation and the costs of waste treatment. The precautionary principle thus highlights the limits and shortcomings of science; it fills the vacuum created by a science that continually searches for certainty but which continually fails to deliver (Adams, 2002: 311) In addition to changing views of science, there is little doubt that the success of the precautionary principle has also coincided with a shift in societal values regarding the environment. Scholars have argued that the principle may represent a shift to a more ecocentric outlook, although it is important to note that this does not mean that damage to the environment may not be sanctioned when applying the principle (McIntyre & Mosedale, 1997: 240). Capturing precisely this shift in values, MacDonald (1995) characterizes the principle itself as ethical evolution, marked by explicit recognition and incorporation into decisionmaking of ethical ideals from both utilitarian and natural rights philosophies. The changes in societal values reflected in the precautionary principle and therefore the principle itself are of course linked to politics and political struggle around environmental 9

10 issues. Indeed, among the principle s most ardent and tireless promoters, are environmentalist and public health organizations, whose contributions to discussions of precaution have often served to structure the debate. For example, a 1998 conference hosted by the Science and Environmental Health Network, which brought together academics, NGOs, and government officials from North America and Europe to discuss the precautionary principle, produced a Wingspread formulation of the precautionary principle (Raffensperger & Tickner, 1999: 353) which, despite having little or no apparent impact in international law, has nevertheless come to be widely cited by both the strongest proponents and opponents of precaution, especially in the US: When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically. In this context the proponent of the activity, rather than the public, should bear the burden of proof. The process of applying the Precautionary Principle must be open, informed, and democratic and must include potentially affected parties. In must also involve an examination of the full range of alternatives, including no action. That this definition differs from that found in the Rio Declaration, cited above, is not only obvious but significant as well; it evidences how the precautionary principle itself has become a site for political struggle. Indeed, some researchers argue that the precautionary principle has become the repository for a jumble of adventurous beliefs that challenge the status quo of political power, ideology and civil rights, and that its coherence stems from the challenge it poses to the authority of science, the hegemony of cost-benefit analysis, the powerlessness of victims of environmental abuse, and the unimplemented ethics of intrinsic natural rights and inter-generational equity (O Riordan & Jordan, 1995: 191). Perhaps unsurprisingly, therefore, some of the principle s most vocal critics come from the political right and are identified with think-tanks which promote free markets, such as the Cato Institute (see Goklany, 2001), the 10

11 Competitive Enterprise Institute (see Miller & Conko, 2001) and the Institute of Economic Affairs (see Bate, 1998; Morris, 2000). In light of this ongoing contestation, we argue, like Adams (2002), that it is useful to conceptualize the application of the precautionary principle from a sociological perspective as a boundary object (Star & Griesemer, 1989) a phenomenon which brings together actors whose social worlds are quite different and whose understandings of the very phenomenon which links them can vary in significant ways. For business, what is important to note is that there is no single, objective precautionary principle to be discovered or revealed through discussion and debate. Rather, the precautionary principle should be seen as a contested concept that is the focus of ongoing discursive struggle (Hardy & Phillips, 1999), continually negotiated or constructed and not revealed, it is important to note through discourse. Of significance to business, discourse and discursive struggle determine the success and failure of innovations and technological artifacts (Maguire, 2002), because discourses and technologies coevolve (Maguire, 2004). Research has demonstrated how changes to any of four artifact-constituting discourses marketing, technical, popular and policy discourses can cause a particular technology to exit, or to not be allowed to enter, the economy (Maguire, 2004). Policy discourse consists of texts which frame technologies as a problem and which are produced with the explicit purpose of changing (or fighting changes to) the legal or regulatory framework (Maguire, 2004), and within which the idea that applying the precautionary principle is an appropriate response to technologies perceived to pose environmental or health risks about which there is scientific uncertainty is quickly becoming institutionalized. 11

12 Understanding the Precautionary Principle Essential yet contested features A multidimensional continuum of precaution Some of the uncertainty surrounding the precautionary principle stems from the fact that there is considerable disagreement as to what the precautionary principle means (Sandin et al, 2002: 288). For example, 14 different versions have been identified in treaties and nontreaty declarations (Vanderzwaag, 1999), while, looking at texts produced by non-state as well as state actors, Sandin (1999) has catalogued 19 different interpretations. In other words, there is no singular objective precautionary principle ; its definition, essence, range of application, operationalization and implications have been and continue to be vigourously contested and negotiated. Ironically, the elusive, ambiguous and undefined nature of the precautionary principle is likely responsible for its widespread popularity in international instruments and discourse (MacDonald, 1995; O Riordan & Jordan, 1995). Indeed, its ambiguous nature gives it staying power as a symbol, because successful symbols are typically vague, multivocal, and open to different meanings (Spooner, 1984). Ambiguity is also politically useful; it is the glue of tenuous coalitions, allowing actors with quite different objectives and views to act collectively without reconciling their beliefs and values. Much effort has been devoted to mapping various formulations and definitions of the principle and identifying key differences and similarities in order to distill its essential features. There is general agreement that it is useful to distinguish between weak and strong precaution (O Riordan & Jordan, 1995) or, phrased slightly differently, between modest as compared to aggressive formulations of the precautionary principle (Graham & Hsia, 2002). 12

13 Table 1, adapted from Maguire and Ellis (2003), highlights the two ends of the spectrum, contrasting weak and strong precaution along dimensions identified through the following qualitative method: (1) reviewing the literature on precaution in order to identify those papers, books and book chapters which contained a decomposition of the principle into a set of essential features or key elements (see O Riordan & Jordan, 1995; Graham & Hsia, 2002; Sandin, 1999; Sandin et al, 2002; Raffensperger & Tickner, 1999), then (2) coding and clustering the features or elements from all these works until a concise yet reasonably comprehensive set of categories emerged. In reviewing the literature on precaution, it quickly becomes clear that not all authors decompose the precautionary principle into the same set of essential features. For example, Raffensperger & Tickner (1999), proponents of the Wingspread Statement, identify four essential components of the precautionary principle that can be used as the basis of its implementation: (1) prompt action even in the face of scientific uncertainly; (2) burden of proof and persuasion on proponents of potentially hazardous technologies; (3) assessment of alternatives; and (4) transparency. On the other hand, by drawing from the general debate about precaution rather than a single formulation of the principle, Jordan and O Riordan (1999: 24) identify seven commonly occurring themes: (1) a willingness to take action in advance of formal justification of proof; (2) proportionality of response; (3) a preparedness to provide ecological space and margins for error; (4) a recognition of the well-being interests of nonhuman entities; (5) a shift in the onus of proof onto those who propose change; (6) a greater concern for intergenerational impacts on future generations; and (7) a recognition of the need to address ecological debts. Importantly, they also clarify that by no means are all of these dimensions formally approved of in existing law and common practice. Finally, opting for yet another 13

14 decomposition of the principle, Sandin (1999: 889) shows how most prescriptive versions of the precautionary principle share four common dimensions and can be recast into the following ifclause: if there is (1) a threat, which is (2) uncertain, then (3) some kind of action (4) is mandatory. This leads Sandin et al (2002: 290) to argue that in order to make the principle operational, the following four specifications have to be made as a first step: (1) To what types of hazards does the principle apply?; (2) Which level of evidence (lower than that of full scientific certainty) should be required?; (3) What types of measures against potential hazards does the principle refer to?; and (4) With what force are these measures recommended (mandatory, merely permitted, etc.)?. Sandin (1999: 889) show how, when this set of questions is answered as the principle is articulated within particular policy or legal settings, the phrases expressing these dimensions can vary in (a) precision and (b) strength and that it is the dimension containing the weakest phrase that determines the strength of the entire principle. The essential features identified through our own analysis, highlighted in Table 1, capture all of these decompositions but also have the added advantage, in our view, of emphasizing the precautionary deliberations which precede and from which flow the precautionary actions upon which others have placed so much emphasis. As Maguire and Ellis (2002: 257) point out: The precautionary principle does not require that precautionary action be taken in the face of scientific uncertainty, even when a certain threshold level of risk is involved. Rather, the principle facilitates and speeds the process through which, in situations of scientific uncertainty about threats of serious or irreversible damage to human health or the environment, the questions of whether and what measures should be taken are put on the table. Certainly, precautionary action, such as a ban on some activity (e.g. fishing, to preserve fish stocks) or product (e.g. toxic chemical, to protect wildlife), can be an outcome of precautionary deliberations, but so equally can a decision not to act, a possibility foreseen by even the most 14

15 commited advocates of the principle (see, for example, the Wingspread Statement, above). In other words, application of the precautionary principle triggers policy deliberations rather than actions. Our emergent dimensions can also be sequenced logically, from formulating the precautionary principle, to invoking it, to engaging in precautionary deliberations, to taking precautionary actions and coming to grips with implications of the precautionary principle, and each of these is addressed below. As O Riordan & Jordan (1995 : 197) argue, precaution works through a continuum within each distinct element from very weak formulations that are relatively protective of the status quo through to very strong formulations that predicate the need for much greater social and institutional change. Thus it is instructive to view precaution as a multidimensional continuum. Formulating the precautionary principle Different formulations of the precautionary principle lead to different levels of precaution, which can be characterized as varying from weak to strong. By reviewing the scholarly literature on precaution as well as references to precaution in formal agreements, one can distinguish between argumentative and prescriptive formulations (Sandin et al, 2002) or, put another way, deliberation-guiding and action-guiding formulations (Dickson, 1999), with the latter of each of these pairs resulting in stronger precaution. An example of an argumentative formulation is Principle 15 of the Rio Declaration, stated above. The Rio formulation is a principle of dialogue and valid argumentation when discussing appropriate responses to environmental threats. It directly implies only a ban on particular types of arguments (i.e. scientific uncertainty justifies inaction), not particular types of technologies, and can be paraphrased as uncertainty does not justify inaction (Wiener & Rogers, 2002). By 15

16 merely restricting a certain form of discourse, argumentative formulations place very few demands on policy-makers. This is one reason why it is to such modest formulations, and Principle 15 of the Rio Declaration in particular, that the widest and most diverse set of interests subscribe, including business as well as most governments. On the other hand, advocates and proponents of precaution have typically advanced prescriptive or action-guiding versions of the principle, and it is to these therefore that the most ardent opponents of the principle have targeted much of their criticism. Uncertainty justifies action captures the essence of strong formulations of the precautionary principle (Weiner & Rogers, 2002), and a good example, widely cited, is the Wingspread Declaration, stated above. Invoking the precautionary principle The precautionary principle is invoked when there is uncertainty about some threat. Strong and weak precaution differ in terms of how they conceptualize the aims or policy goals of precaution, the nature of threats covered, as well as the nature and level of uncertainty that justify invoking the principle. Strong precaution is premised on more eco-centric goals, a wider range of threats to be covered, and a lower hurdle of certainty. For example, tha aims of Principle 15 of the Rio Declaration are to protect the environment and to avoid environmental degradation, whereas stronger formulations implicitly or explicitly include more ecocentric policy goals, the attainment of which may justify invoking the precautionary principle, such as: to provide ecological space and margins for error; to recognize the wellbeing interests of nonhuman entities; to address concerns for intergenerational impacts on future generations; or to address ecological debts (Jordan & O Riordan, 1999). And whereas Principle 15 refers to only specific types of threats to the 16

17 environment, those that are serious or irreversible, the Wingspread Statement refers to all threats of harm to the environment and to, additionally, human health. Obviously, the latter applies to a much wider range of possible hazards and thus envisions a world in which the precautionary principle is invoked much more often. The precise level of evidence of harm, below full scientific certainty, that is required in order to justify invoking the precautionary principle continues to be vigourously contested: clear guidelines are still lacking for the weight of evidence needed to trigger the principle (Foster, Vecchia & Repacholi, 2000: 981). Advocates of strong precaution envision a lower hurdle of evidence of harm required before precautionary deliberations are triggered, as compared to those who support weak precaution. In addition, there are important differences between advocates of weak and strong precaution in terms of the nature of the scientific uncertainty that can trigger the principle. Whereas those who endorse weak precaution typically refer to uncertainty due to data unavailability, those promoting stronger formulations of the principle argue that the principle should also be invoked in situations of: uncertainty due to indeterminacy, because the phenomenon or system being studied may be too complex to permit a thorough understanding of the relationships, balances and interactions, actual or potential, that would permit reliable predictions; or uncertainty as ignorance, when scientists are unsure of the right questions to ask, let alone how to find the right answer (O Riordan & Jordan, 1995). Disagreement among scientists can also be a source of uncertainty justifying recourse to the principle, according to the European Commission (EC, 2000: 14): Scientific uncertainty can also arise from a controversy on existing data or lack of some relevant data. Importantly, the threat and uncertainty dimensions which determine if and when the precautionary principle is invoked are not independent. As Freestone (1991: 33) writes, some sort of balancing test is 17

18 implicit ; the greater the possible risk to the environment, the greater the level of scientific uncertainty which may be acceptable for the precautionary principle to become engaged. Precautionary deliberations Invoking the precautionary principle triggers precautionary deliberations, which are comprised of the decision whether or not to act and, if the latter, decisions about the nature of the action ultimately taken, to borrow the EC s (2000: 15) decomposition and phrasing. Specific answers to questions of whether and what measures should be taken will of course depend upon the particular issue being considered as well as the decision-making process through which the consequences of pursuing possible courses of action are considered. Weak and strong precaution differ in terms of the impact of invoking the principle on the burden of proof. Because the precautionary principle implies that action be taken before harms are obvious, before the environment s assimilative capacity is exceeded, and before full scientific certainty is achieved, it necessarily shifts the burden of proof towards polluters and away from protectors of the environment, even when applying weaker versions of the principle. It removes the burden of proving risk from the shoulders of those who would regulate an activity in the interest of environmental protection or human health, enhancing the power of scientific data pointing to the potential for harm. This then creates an incentive for polluters to respond to charges against their activities by producing and deploying evidence of safety or by discrediting evidence of potential harm. In its stronger formulations, such as the Wingspread Statement for example, the precautionary principle reverses the burden of proof, placing the onus of demonstrating safety with those who benefit from potentially risky products and processes. The Wingspread Statement further characterizes precautionary deliberations: they are to be open, democratic and transparent, and the full range of alternative actions should be 18

19 evaluated, including no action. The Rio Declaration, on the other hand, provides no explicit guidance to decision-makers for the questions of who should be involved in precautionary deliberations, nor which alternative courses of action should be evaluated. Certainly, the precautionary principle can lead to and legitimize very different forms of action, according to scholars: it can promote basic research and technological research and development; it can force the setting up of liability and compensation regimes; it can require the immediate investment in cleaner technologies through regulation; it can employ the use of economic measures such as state subsidies or taxation to internalize externalities (Adams, 2002: 303). State actors have generally concurred. For example, the EC (2000: 15) highlighted and endorsed a broad continuum of precautionary policy responses to scientific uncertainty including relatively weak measures such as the decision to fund a research programme or even the decision to inform the public, and stated explicitly that recourse to the precautionary principle does not necessarily mean adopting final instruments designed to produce legal effects. Even the Wingspread Declaration is explicit that application of the precautionary principle must involve an examination of the full range of alternatives, including no action (Raffensperger & Tickner, 1999: 354). The question of whether and how the cost-effectiveness of alternative measures should affect precautionary deliberations and choosing is another one on which there are significant differences of opinion. For instance, the requirement that precautionary actions be cost-effective is a prominent feature of the Rio Declaration (and one which has been attributed to the insistence of U.S. negotiators at Rio: see Graham & Hsia, 2002) whereas it is absent from the Wingspread formulation. Sometimes this issue of cost-effectiveness is expressed in terms of proportionality precautionary measures should be proportional to the desired level of 19

20 protection. But regardless of whether or not cost-effectiveness or proportionality is considered essential to the precautionary principle or not, in practical terms, the application of some sort of cost-benefit analysis or proportionality rule does apply (O Riordan & Jordan, 1995: 195). Indeed, practically, precaution can be expected to come at some cost to some actor because, as Goldstein argues (1999: 1, cited in Graham & Hsia, 2002: 375): It is axiomatic that the precautionary action imposes a significant economic or social cost on at least some segment of society; if there were not a significant cost, the precautionary action would be taken without the need to invoke a special principle to justify the action. It is important to note that answers to the question of whether the benefits of precaution justify its costs is unlikely to generate consensus. This is because these sorts of analyses must make assumptions about how resilient or vulnerable are the earth s life support systems, meaning that, as O Riordan & Jordan (1995: 202) argue, any cost-benefit decision rule therefore is likely to be intensely political, not purely financial. And even if stakeholders could agree on estimates for costs and benefits, it is highly unlikely that precautionary deliberations would become depoliticized, technical or so-called rational exercises in decision-making because they deal inevitably with distributive issues; decisions about the appropriate course of precautionary action in the face of risks, like all other risk management decisions, have allocative consequences (Maguire & Ellis, 2003). Unfortunately, at least from the perspective of business and other actors who seek certainty, the link between the precautionary principle and policy uncertainty may be unavoidable. This is because an important function of the precautionary principle is the redistribution of the burden of scientific uncertainty (Maguire & Ellis, 2002). When the precautionary principle is applied, uncertainty about impacts on human health and the 20

21 environment is initially translated into uncertainty about the value of industrial/economic assets linked to the potential harms that triggered precautionary deliberations or, in other words, scientific uncertainty is translated into policy uncertainty (Maguire & Ellis, 2002: 263). In addition to speeding the process through which, in situations of scientific uncertainty about threats of serious or irreversible damage to human health or the environment, the questions of whether and what measures should be taken are put on the table (Maguire & Ellis, 2002: 257) and triggering precautionary deliberations, the precautionary principle also has a framing role. Ellis (2001: 293) argues that the precautionary principle can be seen as an interpretive device : A principle such as precaution cannot tell actors precisely what result they are to achieve, make distinctions between legal and illegal behaviour, or identify paticular equilibrium points between competing sets of interests. This principle is rather a framework that helps actors to articulate the problems with which they are faced and that lends normative support to particular resolutions. Of course, the particular resolutions to which the principle lends normative support depend upon whether the regime of precaution is a weak or strong one, and thus these too, we argue, are usefully seen as objects of discursive struggle between stakeholders brought together for precautionary deliberations over appropriate responses to environmental threats. In other words, even if a single definition of the precautionary principle could be agreed upon, its application would nevertheless give rise to debates and struggle over what would constitute an appropriate action to take, if any. Because it triggers deliberations around which political struggles are inevitable, and because the outcomes of these struggles are difficult to predict, it is unsurprising that application of the precautionary principle is experienced by business as uncertainty. Precautionary actions Policy uncertainty is resolved if and when precautionary action (or an explicit decision not to act) is taken. As compared to actions taken in regimes of weak precaution, actions in 21

22 regimes of strong precaution are taken earlier and are more restrictive of the activity that produces the harm in question. They are also more likely to be recommended with greater force, even mandated. Capturing the continuum of precaution nicely, Wiener & Rogers (2002: 320) argue that precaution can be conceptualized as a continuous variable where on the time path over which a risk is forecast to become manifest, a regulation is more precautionary the earlier it takes effect and the more stringently it restricts the suspected source of the risk. Of course, the precise nature and form of precautionary measures will depend upon the particular issue area under consideration, but actors have nevertheless advanced their own visions of appropriate precautionary actions. For example, it is the view of the EC (2000: 3) that: Where action is deemed necessary, measures based on the precautionary principle should be, inter alia: proportional to the chosen level of protection, non-discriminatory in their application, consistent with similar measures already taken, based on an examination of the potential benefits and costs of action or lack of action (including, where appropriate and feasible, an economic cost/benefit analysis), subject to review, in the light of new scientific data, and capable of assigning responsibility for the scientific evidence necessary for a more comprehensive risk assessment. Finally, that a wide range of alternative measures including no action are valid outcomes of precautionary deliberations is worth underlining; although advocates of precaution may call for bans on particular activities or technologies during debates over specific hazards or issue areas, the precautionary principle in and of itself does not necessitate nor mandate such dramatic actions. 22

23 Implications of the precautionary principle Obviously, the implications of weak precaution differ from those of strong precaution. In general, the former is compatible with risk management as traditionally practised (Maguire & Ellis, 2003) and is protective of the status quo whereas the latter predicates the need for greater social and institutional change (O Riordan & Jordan, 1995). Business should take heart in the fact that, empirically, it is to weaker formulations, and to Principle 15 in particular, that international treaties commonly refer. Using the Stockholm Convention on POPs as an example, Maguire & Ellis (2003) demonstrate how the precautionary principle is compatible with and can be indeed, is being reconciled with risk management as traditionally practised. Invoking the precautionary principle can be seen as simply making more work for those charged with risk management decision-making in society. In other words, because it lowers the threshold of evidence of serious or irreversible damage to human health or the environment necessary to trigger precautionary deliberations, the precautionary principle challenges and generates work for policy-makers (Maguire & Ellis, 2003). Implications for business Policy convergence is not guaranteed Policy implies politics, and there is no gurantee that policy-makers in different regions will reach the same consensus; it is up to each society to decide the appropriate levels and distributions of risks (and benefits) it finds appropriate and is willing to tolerate. So yet another reason why policy uncertainty associated with the precautionary principle has attracted the attention of business is a growing sense that, increasingly, the two most important policy-making entities in the global economy, the European Union (EU) and the United States (US), are 23

24 disagreeing on issues related to the regulation of environmental and health risks. That the EU s environmental policy shall be based on the precautionary principle is explicitly stated in that trading bloc s constituting treaties, whereas the US has not officially adopted the principle as a general basis for decision-making about the regulation of risks, although precaution does implicitly inform certain aspects of US law (Wiener & Rogers, 2002). As the list of issues where the EU has adopted a stronger position on precaution has grown, the precautionary principle has emerged as a source of trans-atlantic tension. This list includes growth-promoting hormones for beef, genetically modified organisms, climate change and chemicals. For example, during recent negotiations leading to the 2001 Stockholm Convention on Persistent Organic Pollutants (POPs), the precautionary principle was hotly debated. There, the EU, along with environmental, public health and consumer NGOs, advocated a more precautionary position that included explicit mention of the principle in key clauses of the Convention, while the US, along with business interests, wanted to limit reference to precaution to only the Convention s preamble. A compromise was eventually reached, but only after much discussion and division. Indeed, transatlantic tensions and confusion over the principle were among the reasons that led the European Commission (EC) to issue a Communication on the Precautionary Principle in February 2000, in part to enhance public confidence in the EC, in part to give the principle more legitimacy in international settings, and in part to combat the perception that precaution was being used mischievously for protectionist purposes (Graham & Hsia, 2002: 373). The Communication is generally recognized as an important contribution to official discussions of precaution. Some policy-making insiders believe that cultural and political differences are behind the divergence of views between Europe and the United States on environmental policy, particularly 24

25 with respect to the precautionary principle. For example, the European Union s Environment Commissioner recently explained that the environment is higher on the list of voters concerns in Europe as compared to the US, and that Europeans have less faith in technological advances than US citizens, not to mention the fact that within the EU there are several coalition governments within which Green parties play prominent roles or even govern (Wallstrom, 2002). In a world of increasing economic interdependence and globalization, these differences could prove to be problematic for business in its quest for common, global standards. This is because reaching international agreement on precautionary global standards, such as those developed for POPs for instance, implies that signatories identify a common level of risk aversion (Maguire & Ellis, 2002: 264). This may not be as easy or even possible in all environmental issue areas. Stakeholders matter On the other hand, some researchers argue that, despite their very different public stances and rhetorics on the precautionary principle and its role in the regulation of environmental and health risks, neither the EU nor the US can credibly claim to be consistently more precautionary in practice. By contrasting regulators responses on both sides of the Atlantic to outbreaks of mad cow disease (Bovine Spongiform Encephalopathy, or BSE) and to the health risks associated with unpasteurized cheeses, Wiener & Rogers (2002: 342) make a convincing case that there is much variation and even inconsistency in the relative precaution exhibited by US and European regulatory policies over time as each actor has been more precautionary than the other as to some risks and less precautionary as to others. Seeking to explain these results, they argue that the degree of precaution exhibited appears to depend less on some overarching national regulatory posture, and more on the context of the specific case: the risk, the technology, the location, the era, the politics, the public, the agency, the legal system. Similarly, Busch 25