The Multinational Monitor

WINTER 19878-79 - VOLUME 1 - NUMBER 1


Industries Export Hazards

U.S. Companies Locate in Non-Regulating Havens in the Third World

by Barry Castleman

In the next decade, the export of hazards from the U.S. to Third World countries is likely to increase. Banning of unsafe consumer products, foods, drugs, and pesticides often leads to the subsequent export of these products. Similarly, the costs imposed on manufacturers by new U.S. pollution control laws and occupational health standards may lead to a wholesale exodus in major industries.

Typically, several years elapse from the discovery that a high volume chemical causes serious disease at low levels of exposure until appropriate regulations are implemented to protect workers and communities. Yet many of the existing plants in some of the most polluting and hazardous industries are very old and incapable of being made safe by adding control devices; these plants need to be redesigned and rebuilt, not just fitted with exhaust fans. Faced with this reality, some manufacturers find it economically attractive to move hazardous plants to less-restrictive locales rather than stay where they are and meet tough regulations. Today, "runaway hazardous shops" are fleeing the United States, whereas in the past they only crossed state boundaries. To date, the asbestos industry exhibits the strongest pattern in the flight from regulation.


Occupational and environmental exposure to asbestos in this century has been the cause of a monumental tragedy whose full extent is not yet known. In the U.S., the number of people now living who worked with asbestos and will someday develop cancer as a result has been conservatively estimated at 400,000. In the 'past-5 years, the asbestos industry has faced increasing regulation of workplace exposure and pollution. Moreover, the regulations show no signs of abating, following as they do a steadily growing body of knowledge about the effects and prevalence of "low-level exposure."

The period of federal regulation for the manufacture of asbestos began with the passage of the Occupational Safety and Health Act and the Clean Air Amendments of 1970. The current U.S. workplace asbestos standard took effect on July 1, 1976. However, it was a scheduled reduction in the standard issued on June 7, 1972; in other words, the Occupational Safety and Health Administration (OSHA) gave U.S. manufacturers four years to lower the asbestos levels in their plants from 5 million to 2 million fibers per cubic meter of air. Perceiving that lower standards were necessary to reduce asbestos workers' cancer risk, OSHA proposed lower levels, 500,000 fibers per cubic meter, in October 1975.

The asbestos industries responded to OSHA's proposals with studies showing how the proposed regulations would not be feasible for 65% of the asbestos textile manufacturing steps and that greater competition from foreign imports would cause many firms to go under. In fact, U.S. imports of asbestos products have soared since 1970. Prior to 1970, over 99% of U.S. asbestos textile imports came from Canada, Europe, and Japan. From 1970 to 1976, imports from these regulating countries stayed at around 3 million pounds per year, while total imports from Mexico, Taiwan, and Brazil shot up to nearly 4.5 million pounds in 1976.

Some U.S. producers of asbestos textiles reacted to the increased pressure from foreign imports by closing their U.S. plants. In 1973, Amatex, a firm based in Norristown, Pennsylvania, closed a new (opened 1967) yarn mill in Milford Square, Pennsylvania. Since 1969, Amatex has operated an asbestos textile plant in Agua Prieta, a small town across the border from Douglas, Arizona. The company also owns another asbestos textile plant in Ciudad Juarez, across the border from El Paso, Texas. Amatex "imported" about 2 million pounds of asbestos textiles from its Mexican border plants in 1975, about one-fourth of U.S. imports from the entire world in that year.

In March 1977, a reporter from the Arizona Daily Star and a prominent industrial health specialist, Dr. William Johnson, visited Amatex's Agua Prieta plant. The reporter gave the following account of conditions: "Asbestos waste clings to the fence that encloses the brick plant and is strewn across the dirt road behind the plant where children walk to school. Inside, machinery that weaves yarn into industrial fabric is caked with asbestos and the floor covered with debris. Workers in part of the factory do not wear respirators that could reduce their exposure to asbestos dust."

The Arizona Daily Star story was reprinted in Spanish in an Agua Prieta newspaper. The workers in the plant called for an investigation, which was started by Sonora (state) health officials. Workers must now wear uniforms to cover their street clothes and leave them at the plant so their families will not be endangered. However, due to the scarcity of jobs (even at this minimum wage level) none of the workers have quit. Moreover, the union, which is known for its alliance with management, has threatened workers with loss of their jobs if the complaints continue.

In September 1977, a Texas television team visited the 3-year old Amatex plant in Juarez. A worker, whose identity was concealed, said that he had not been warned that he could develop a fatal disease from breathing asbestos. He went on to describe the plant as having no dust controls in the dustiest parts, and said that the management failed to provide workers with functioning respiratory protection or a change of clothes for work. Dust levels in the plant were not monitored; since 1972 in its U.S. plants, Amatex had been required to monitor fiber levels in the workplace air at least twice a year and make the data available to workers. Despite repeated attempts, the television reporter was unable to interview Amatex President and principal stockholder, John Rainey.

Mexico does not have specific regulations to protect workers from asbestos. The 1945 Regulations on Work Health have general provisions that workplaces using toxic or suffocating substances must display posters warning workers of the dangers to which they are exposed, and they must provide adequate protective means to the workers. The fine for not having warning posters and protective equipment m,92 be no more than 1.000 pesos ($45) up to 2,000 pesos for a failure to take corrective action within the specific timetable. Furthermore, Mexico does not specify regulations for control of asbestos air and water pollution. By contrast, the State of California began this year to implement its Occupational Carcinogens Control Act of 1976, which provides fines of $1,000 for violations and $5,000 for repeated violations of carcinogen standards at least as stringent as OSHA's. California also authorized $1 million for the first 6 months of 1977 to assure that the law would be enforced.

Brazil is the other country that supplies large quantities of asbestos to the U.S. There, a 1965 law established a scheme of hazard-pay increments for various industries. The law provides for three levels of wage premiums to be paid in a number of industries, determined by the official hazard class for each industry. The maximum hazard-pay increment is 40% of the minimum wage, which might be a 20% increase over base pay for a typical worker. If labor courts find that the hazard has been eliminated or controlled, the pay increases are discontinued accordingly.

By making hazardous work economically attractive and by making workers suffer pay cuts in exchange for improving work conditions, the Brazilian law undermines all efforts to improve working conditions in hazardous industries. Management has the choice of taking steps to protect workers or paying them extra for losing their health, and presumably does whichever costs less. The concerned worker has little choice but to accept management's terms or look elsewhere for a job. This law is fertile ground for the growth of hazardous industries.

Other Industries

Many industries are potentially hazard exporters; some have already begun to ship abroad dangerous products or processes. A few examples may serve to illustrate the scope of this problem.

Pesticides. The manufacture of pesticides by U.S.-based firms has generally been done in the U.S. New government policies, however, may have the effect of displacing pesticide manufacture from the U.S. to developing nations.

The United States is a leading exporter of pesticides, but approximately 15% of the pesticides shipped abroad in 1975 were banned or otherwise unregistered in the United States. An example of this "double standard" is leptophos, an insecticide produced and sold only for export by the Velsicol Chemical Corp. Use of leptophos in Egypt resulted in the deaths of hundreds of water buffalo and injuries to farmers. An investigation by U.S. government health officials revealed that workers in Velsicol's Texas plant had suffered severe neurological damage from exposure to leptophos. Moreover, residues of leptophos were found on Mexican tomatoes shipped into the United States.

In 1975, a coalition of environmental groups sued the U.S. Agency for International Development (AID) for sending tons of leptophos and other banned or restricted pesticides to developing countries. AID announced in early 1976 that it would no longer sponsor the export of pesticides that are not allowed to be used in the U.S. for health or environmental reasons.

Benzidine dyes. A number of countries, including England, Sweden, Italy, and Japan, have banned the manufacture of dyes from benzidine due to the extremely high risk of bladder cancer among benzidine workers. In the U.S. only one small firm. Fabricolor, still makes benzidine dyes. Following the closure of the major U.S. producer of benzidine dyes, Allied ' Chemical, there was a rise in imports of these dyes from Romania, Poland, and India (1976). However, coincident with discoveries that the dyes themselves are carcinogenic, imports plunged in 1977.

In 1965, Dr. R.A.M. Case of England noted that England had stopped making benzidine but was importing it instead. He proposed that benzidine be manufactured in extremely well-designed plants under international agreements. England still imports textiles colored with benzidine dyes and most likely imports the dyes themselves as well.

The Future

The fundamental objection to the idea of controlling hazard exports is the claim that very poor people are better off with hazardous factories and goods than they would be without these things. It is the right of the people and their government to decide what is best; in some cases they may choose - with full knowledge - recognized mortal risks. Thus, it would follow, hazard export is justified as long as all parties involved are told and are able to understand what is at stake.

In today's world, the assumption that the recipients of hazard export would be fully informed is highly questionable. However, the notion that hazard export with informed consent is a legitimate way to do business raises other disturbing issues. For example, a starving man might accept a polluting factory even at greater peril to future generations of man and other living things. He could hardly be blamed for that, but can the same be said for those who wish to profit from his misery to the extent that they will offer him no better bargain for putting food in his mouth?

Accepting hazard export as a legitimate way to do business entails ominous prospects for the future. Industrial nations are increasingly confronted with discoveries that existing technologies are far more hazardous to workers and the environment than was ever imagined. If industry is to be expected to finance a new generation of technologies, something will have to make exporting the hazards of current technology less attractive. As long as hazardous processes can operate without the expense of controls, their products will be cheap to" manufacture and will remain competitive with other products made by safer processes. Demand for the hazardously--manufactured products will remain high rather than declining in favor of safer alternatives. The resulting pollution and worker disease will be concentrated in the hazard importing countries.

The United States is in a good position to provide conditions for the development of safe, clean technologies. The U.S. can improve its import-export and securities record-keeping so that hazard export components of its economy can be monitored. The U.S. can see to it that its direct foreign assistance programs do not export workplace and environmental hazards to other nations. The U.S. can, through its representatives, insist that thorough environmental assessments be made by international organizations that finance development projects with U.S. aid. The U.S. can provide sanctions to make the hazard export business less attractive to the directors of U.S. firms. Finally, the U.S. can also play a leading role in setting up a world information service on hazard export and in seeking international solutions such as the one suggested 12 years ago by Dr. Case for the manufacture of benzidine dyes.

We are at a crossroads. At this time, some manufacturers are trying to hold on to established markets and develop improved technologies. Other manufacturers have gotten out of certain hazardous businesses because they cannot compete with plants using hazardous technologies in non-regulating countries. Still others have essentially gone into the hazard export business, recognizing that there is money to be made by exploiting the disparity in pollution and worker health regulations around the world. Meanwhile, developing countries are seeking ways to utilize their resources and choose technologies that will provide their people with needed goods, employment, education, and a healthful environment. The class of problems called hazard export constitutes a growing threat to the world's environment, health and international relations.

Barry Castleman, an environmental engineer and consultant, holds a B.S.E. in Chemical Engineering and a M.S.E. in Environmental Engineering from Johns Hopkins University. He has worked for a number of public interest groups and government agencies including the Council for Environmental Quality, the Environmental Defense Fund, and the Center for Science in the Public Interest. His article in the Multinational Monitor is taken from his extensive report, "The Export of Hazardous Factories to Developing Nations, " available from the Natural Resources Defense Council, 917 15th Street, NW, Washington, D.C. 20005.

Needless Catastrophes

Some extremely dangerous materials can be completely abandoned in favor of safer substitutes.

Asbestos molded and sprayed insulation has been banned in the U.S. and other countries over the past few years. Non-fibrous calcium silicate and vermiculite substitutes have been introduced that are believed to be far safer than asbestos. Unfortunately, hundreds of thousands of people in the U.S. have already been exposed to asbestos insulation dust in previous years, in construction and ship repair, and are fated to develop cancer as a result. The dangers are not confined to asbestos workers but extend to all other trades that worked alongside of the insulators.

Despite the fact that this catastrophe has been very well documented world-wide, the Novex Foreign Trade Company of Hungary announced in 1977 that it was going to market an asbestos-containing material for use in spray, molded, and sheet form. This material is called Asket and vividly illustrates how a marginal byproduct (short-fiber asbestos) can be converted into a major cancer hazard.

Beta-naphthylamine has been recognized as a cause of bladder cancer among dye workers since the turn of the century. Its use was abandoned in Switzerland in 1938 and safer substitute routes of dye synthesi were developed. Yet dyes are still made from "Beta" in India, despite laws that forbid the manufacture and importation of the notorious dye intermediate.

- Barry Castleman

Table of Contents