JUNE 1990 - VOLUME 11 - NUMBER 6
T H E F R O N T
Stopping Poison Exports
Although over 300 national and international environmental, labor, consumer, farm and religious groups are hailing the effort, new attempts at pesticide export reform legislation in the U.S. Congress will fail to stop the "circle of poison." The insidious trade scenario entails the export of pesticides banned or severely restricted in the United States to developing countries. The countries then return to U.S. consumers in the form of residues on imported fruits, vegetables and meats. Jay Feldman, executive director of the National Coalition Against the Misuse of Pesticides (NCAMP), says that although bills under consideration in both houses of Congress are a "step in the right direction," neither "should be a measure for what ought to be done."
Reports documenting hazardous exports being sold to Third World countries despite U.S. government bans on domestic use first appeared in the U.S. press in the late 1970s. In 1981, David Weir and Mark Schapiro in their landmark book, Circle of Poison, documented the often grisly consequences of the export of these highly toxic chemicals to countries with little or no pesticide-control laws.
A loophole in the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the federal law regulating pesticides, permits the production and export of a pesticide even if its use is restricted or banned in the United States. Several legislative attempts since the 1978 passage of FIFRA to close the loophole have failed. And although former President Jimmy Carter issued an executive order five days before leaving office restricting the export of products banned in the United States, former President Ronald Reagan rescinded that order just 36 days later. Congress is once again considering legislation to close or at least narrow the FIFRA loophole.
According to Rick Hind, environmental lobbyist for the U.S. Public Interest Research Group (U.S. PIRG) "We wanted to begin to establish a sense of morality concerning the hazards of all pesticides around the world." But with the U.S. pesticide industry pushing instead for greater control of imported foods, the legislation focuses more on protection of the U.S. consumer than on worldwide protection of workers and the environment. However, the "Pesticide Export Reform Act of 1990" (H.R. 4219), introduced in the House by Mike Synar, D-OK, Leon Panetta, D-CA, and Dan Glickman, D-KS, more comprehensively addresses the issues surrounding the full "circle of poison" than the revised Senate version. In fact, Sandra Marquardt, pesticide information coordinator at Greenpeace, calls the House bill "the most significant piece of export legislation introduced anywhere in the world."
The House bill, which sponsors would like to see attached to the 1990 Farm Bill, would prohibit the export of all banned pesticides as well as unregistered pesticides that lack U.S. food tolerances; would proscribe the export for agricultural use of pesticides not registered for that purpose in the United States; and would restrict export of pesticides in a category of "particularly hazardous chemicals" by establishing a Prior Informed Consent (PIC) system.
The particularly hazardous category contains restricted-use pesticides, pesticides which are the subject of special review, suspension or cancellation proceedings, or a conditional registration, and pesticides on the World Health Organization's list of Class IA "extremely hazardous" and IB "highly hazardous" pesticides. The notorious pesticide DDT, for example, still permitted for domestic use under specific conditions, would fall into this category.
Under the PIC system, U.S. manufacturers must fully inform the importing country of the restricted status of the pesticide and obtain that country's consent, as well as provide information concerning alternatives to the pesticide, prior to shipping the chemicals. PIC permits export of pesticides in this category only to countries with adequate pesticide regulatory programs and requires the exporter to print instructions regarding safe use on the container labels in the language of the importing country.
H.R. 4219 would also reform provisions of the Food, Drug and Cosmetic Act (FDCA) and the separate Federal Inspection Acts for Meat, Poultry and Egg Products, which regulate the presence of pesticides in imported foods. These changes would make it illegal to import into the United States any food that has been treated with a pesticide that cannot be legally used in the United States and would require imported produce to be accompanied by a list of pesticides used in their production.
In the Senate, Patrick Leahy, D-VT, introduced similar legislation (S. 2227) that went through significant changes before being attached to the 1990 Farm Bill. And although Marquardt says Greenpeace has "no problems" with the modified Senate version, other environmental groups, including U.S.PIRG and NCAMP, are critical. U.S.PIRG's Hind says that although the new Senate version would be a "net gain," the export provisions "went from PIC to IC [Informed Consent]."
Hind is referring to changes in the Senate version's PIC provisions. The revised Senate bill would still require U.S. exporters to notify importing countries of the pesticide's U.S. status but would allow shipment to proceed after a certain period of time, with or without the consent of the importing country's government.
Further changes in Leahy's bill were applauded by the National Agricultural Chemicals Association (NACA), an industry trade group comprised of manufacturers, formulators and distributors of agricultural pesticides, whose export sales totalled $2.2 billion last year. In a June 8 statement, NACA President Jay Vroom said, "We were successful in removing most of U.S. agriculture's obvious problems with S.2227 as to potential amendments to the Federal Food, Drug and Cosmetic Act." Vroom referred to the "deletion of requirements on foreign food exporters to disclose pesticide use; revision of the requirement for automatic tolerance revocation when U.S. registrations are lost; and modification of the prerequisite for granting tolerances contingent upon a multi-residue method of detection."
Opponents of both bills also contend that they would force some pesticide production out of the United States, costing jobs and reducing the U.S. government's controls over pesticides. Vroom maintains that "restricting U.S. pesticide export only means that foreign agricultural producers will buy needed crop chemicals from other world manufacturers."
But Marquardt counters that the restrictions will "level the playing field for U.S. farmers by banning the overseas use of U.S. pesticides that our own farmers cannot use for health and safety reasons."
Vroom argues that the revised Senate bill "still does not ensure food safety, as it is intended. NACA will continue to strive for increased funding of monitoring programs and import inspection staff to adequately address the real food safety issue."
The White House has sided with NACA in opposing the Synar and Leahy bills and instead supports the "Pesticide Safety Improvement Act of 1990" (S. 2490), introduced by Sen. Richard Lugar, R-IN. With less stringent export provisions, S.2490 would focus on monitoring imports by amending FIFRA and FDCA provisions.
But a focus on imports cannot guarantee safe food for U.S. consumers. Says Senator Leahy, "Because FDA waives through virtually all imported food without inspection, these chemicals often end up on America's dinner tables. It makes no sense to allow American companies to dump unsafe chemicals abroad, only to have them show up here in imported foods."
A recent General Accounting Office (GAO) report released in April 1990 found that in the five countries responsible for more than half of U.S. fruit and vegetable imports--Chile, Costa Rica, the Dominican Republic, Guatemala and Mexico--pesticide monitoring activities are limited. And, the foreign governments are not notified, as is currently required by FIFRA, of 90 percent of U.S. pesticides exports to their countries. The GAO also identified 110 pesticides used overseas which have no U.S.established tolerance levels.
An emphasis on imports also ignores hazards associated with U.S. production and with pesticide use in developing countries. Two pesticides targeted by the export legislation are chlordane and heptachlor, produced exclusively by Velsicol Chemical Corporation. Velsicol has exported 5 million pounds of the chemicals to 25 countries in the last two years even though they were banned for most agricultural uses by the EPA in 1978 because both industry and independent studies showed that they were carcinogenic in lab animals, highly persistent in the environment and cumulative in the food chain.
Moreover, in many developing countries importing the pesticides, safety precautions, training and medical facilities are rare. Says Jay Feldman of NCAMP, "It is disingenuous to assume a focus on self-interest given the impossibility to guarantee monitoring" in many importing countries.
Some of the corporations which would be affected by the legislation, according to Greenpeace, are those exporting pesticides that have never been allowed for use in the U.S.: Monsanto's herbicide Machete, Dow Chemical Company's herbicide Gallant, Dow-Elanco's fungicide Gauntlet and Mobay Corporation's insecticide Tokuthion.
- Katherine Isaac
Laying Down the Law
The United States Sentencing Commission, established by Congress in 1984 to promulgate uniform sentencing policies for the federal courts, is considering amending its guidelines for sentencing criminals. The amendments, contained in its draft proposal of November 1, 1989, would also govern the sentencing of organizations such as corporations, unions and associations. Current guidelines are limited to the sentencing of individuals and generally do not apply to organizations.
If a court finds that an organization was operating primarily for criminal purposes, the amendments call for a fine that would "divest the organization of its assets."
The more common circumstance, however, involves organizations that commit crimes in addition to their lawful activities. In this case, the Commission is offering two options for imposing fines. The first one proposes a guideline fine range based either on the pecuniary loss to the victim, the pecuniary gain to the defendant or on an amount specified according to the appropriate offense level, whichever is greatest. (The last of these three fines involves an offense level which is determined by the seriousness of the offense. For example, level one, the least serious offense level, imposes a fine of only $500; level 40, which includes the most serious crimes, imposes a fine of $25 million.) A fine imposed under option one would increase by 20 percent if "high-level management aided or abetted, knowingly encouraged, or condoned the offense..."
Option two proposes larger fines by considering only the applicable offense level, ignoring the pecuniary loss or gain caused by the offense. The fine levels are listed as ranges. For example, level one ranges from $250 to $500 while level 32, the most serious offense level, ranges from $200 million to $374 million.
The fine would increase or decrease by one or two levels, depending on applicable "aggravating" or "mitigating" factors. For example, high-level company officials obstructing an investigation of the offense or bribery of a government official would increase the offense level by one. Mitigating factors, including steps taken by an organization to prevent the offense from occurring again or prompt disclosure of the offense to the government, would decrease the offense level by one.
The guidelines also propose additional types of punishment. Attorneys and public interest groups, for example, have praised the Commission's amendments that call for the sentencing of organizations to community service work and probation. The proposed amendments prescribe community service sentences in circumstances "where such community service provides an expeditious way of repairing the harm caused by the offense." An example of this would be a sole producer of a product, for instance a defense contractor, producing an item free of charge for a given period or amount. According to the Commission, "An organization can perform community service only by paying its employees or others to do so."
The proposed amendments allow for probation of organizations during the period of community service or until full restitution or fines have been paid or the threat of future harm has been reduced or eliminated. The amendment would also provide for probation if the court finds that "the organization or a member of its high-level management had a criminal conviction within the previous five years for conduct similar to that involved in the instant offense..."
Critics charge that a five-year period is too restricted, allowing courts to ignore crimes committed after five years. Carl Mayer, assistant professor of law at Hofstra University, points out that General Electric was convicted in February 1990 for defrauding the government of $10 million worth of defense equipment. "By the time this conviction is upheld," said Mayer, "it will be more than five years since GE's last criminal incident when it pled guilty on May 19, 1985 to charges of fraud and falsifying 108 claims on a missile contract." Mayer argues that the courts should consider crimes committed up to 20 years prior to the present offense.
General Electric, a corporation with a long history of breaking the law, clearly has a stake in the final outcome of the commission's guidelines. In a prepared statement sent to the commission, Philip Lacovara, GE vice president and senior counsel, argued for reduced fines if higher management is found not responsible for or cognizant of the criminal acts of its employees. He emphasized that "Liability may flow not only for the criminal acts of officers, directors and managers, but also for the acts of employees far removed from supervisory positions ... such as salespersons, clerical workers, truck drivers and manual laborers." Lacovara also argued for reduced fines on corporations that cooperate during a criminal investigation, take disciplinary action against culpable employees and voluntarily disclose an offense. He was troubled by proposed probationary restrictions that require court approval before a corporation could pay dividends, issue new debt, stock or commercial paper, or enter into a merger, bankruptcy or any other major transaction. It "seems to permit enormously restrictive regulation of ordinary business affairs," Lacovara said.
Critics argue, however, that external oversight of recidivist offenders like GE can ensure that crimes are not repeated during the probation. According to Richard Gruner, professor of law at Whittier College, "The loss of some managerial autonomy to insure public protection from repeat offenses is a necessary and proper price for a firm's illegal conduct."
Earlyn Church, a director of the National Association of Manufacturers, harshly criticized the Commission's proposals, because they would "place many businesses on the threshold of insolvency." She argued that the proposals are too stringent because "[c]ompliance with our laws is not always a simple and precise task." Church claimed that the proposed probationary restrictions "would have an absolutely devastating impact on the continued viability of a company."
John Fery, CEO of Boise Cascade Corporation, urged the Commission to withdraw the proposed amendments. Fery argued that they are unnecessary because few corporations are convicted in federal courts. The guidelines "fail to recognize that many, if not most, organizations are composed of morally and ethically honorable people who genuinely try to comply with the law," he said.
A study by Amitai Etzioni, director of the Center for Policy Research, however, shows that between 1975 and 1984 nearly two thirds of Fortune 500 companies were "involved in significant illegalities," from price fixing to dumping of hazardous waste. Etzioni attributes this to the lack of deterrence and prosecutor reluctance to go after corporate crime.
Mayer argues for even tougher sanctions, including suspending corporate criminals from receiving federal subsidies such as tax abatements, tax credits, government contracts or federal investment. He calls for a publicity sanction, whereby a convicted corporation would be required to advertise its conviction in the large media outlets. "[S]haming can serve an important deterrent function," Mayer said. He also proposed that the charter of recidivist corporations be revoked. Mayer said that "although [corporate criminals] are not devoted exclusively to crime, they engage in price fixing and other predatory practices in ongoing fashion."
The commission's proposals were to be submitted to Congress for approval by May 1,1990. Days before the deadline, however, President Bush's chief counsel, C. Boyden Gray, met with representatives of the Business Roundtable, a business lobbying group. Shortly thereafter, the Bush administration and the Justice Department withdrew their support for the proposals. Attorney General Dick Thornburgh told a hearing of the Senate Judiciary Committee that support for the proposals was withdrawn "for further study."
Sen. Edward Kennedy, D-MA, expressed concern that the Bush administration's surrender to big business pressure may lead the Justice Department "to go soft on whitecollar crime." Sen. Howard Metzenbaum, D-Ohio, argued that under Thornburgh the Justice Department is already soft on white-collar crime. Thornburgh responded that penalties against corporate criminals are adequate and promised the committee that he would provide a list of offenders who have received tough penalties. "I will hope to disabuse you of what is obviously a mistaken view," said Thornburgh.
But criminologists argue that increasing rates of corporate crime are a consequence of lax enforcement and small penalties that offer little deterrence. "Clearly, past penalties were set much too low," says Etzioni. "Evidence shows, beyond reasonable doubt, that the level of illegal conduct by major American corporations is high; that there are clear indications of under- prosecution and underdeterrence."
- Jim Donahue