The Multinational Monitor



The Costs of Harmonization

An Interview with John Beishon

John Beishon has been the director and chief executive of the British Consumers' Association, widely known for its publication of Which? magazine, since 1987. He became an executive member of the International Organization of Consumers' Unions at the 1987 Madrid Congress.

Multinational Monitor: How does the consumer regulatory structure in Britain compare to that in the United States?

John Beishon: It is our view that [the United States] has better and stronger regulatory agencies than we do, but it isn't so much, I suspect, that [U.S.] regulatory bodies are stronger. The key difference, which is absolutely crucial to this whole area, is the U.S. Freedom of Information Act. We just cannot get hold of information which [U.S.] citizens and agencies have the right to get.

We actually have quite the reverse in Britain. We don't have a Freedom of Information Act, we have an Official Secrets Act.

MM: Are there concrete examples of how not having a freedom of information act has hurt consumer interests?

Beishon: A lot of food [in Britain] is convenience food, cook chilled foods, where food is precooked and then chilled and kept in a chill cabinet in a supermarket. All you have to do is reheat it. They have become very popular.

But some of the manufacturers discovered that there were alarming signs of the presence of listeria in some of these cook chill foods. There is something about the actual process of cook chilling. No one knows exactly about it, but [something] makes it slightly more liable to be infected by listeria. The problem with listeria is that it grows in very low temperatures, so even if there's a very small contamination in cook chill food, it will gradually increase the contamination over time, even if it's held in a chill cabinet.

If the food is cooked properly and every part of it reaches 70 degrees centigrade, there's no problem. The listeria is killed....

Sometime last year, a couple of manufacturers of these cook chill foods discovered (a) that there was listeria, and (b) that microwave ovens were not always heating the food to 70 degrees centigrade. Now what they did was simply take the instructions about microwave cooking off the packages of these foods; they didn't say anything to anybody, they simply took the instructions off and said, "our hands are clean." ...

They did tell the government. The government's response was, first, not to tell anyone, and second, to run tests on some microwaves. After several months, the results of the first series of tests were pretty worrying....

The government still didn't tell anyone. They actually then called a meeting to which they invited consumer representatives to talk about a problem with microwave ovens, but we didn't know what it was. But they also made the point that if you went to the meeting you were bound by confidentiality, and no one was to disclose anything about this until the government had decided. We went along to this meeting and we listened. [Afterwards], we said to the government, "We are going to make this public if you won't do so." And the government said, "Well, we don't want to cause unnecessary panic. We haven't done all the necessary tests. We want to do a massive study, we want to get all the evidence in, we want to be sure of what we are saying. What's more, we want to have a solution before we make this public." We said, "Nonsense, if you don't announce this by this Friday it will be headlines from us." So the government reluctantly announced it, and we said, "Our advice is very straightforward-- do not use your microwave oven to reheat cook chill food until these tests have been done."

Now there was terrible reaction to that, and the sale of cook chill foods plummeted, just like that.

What the government then did was get the manufacturers to give them over 100 microwave ovens. They did very detailed tests. [Then] they held a press conference, and they said yes, something like between a quarter and a third of microwave ovens could not be relied onto heat a standard [cook chill] meat food to 70 degrees in the proper time. It was perfectly obvious that it was a serious problem but that also it was solvable. You just had to make sure the food was cooked through and through.

We said, "O.K., let's have the report. Which are the ovens?" They said, "We're not giving you that." ... The truth is when they arranged to do the tests, they got the manufacturers to give them the ovens for the testing, and, in return, they promised not to release the results without [the manufacturers'] permission. Of course, the manufacturers were not prepared to give that....

To this day we still do not know [which ovens are hazardous]. The government spent our money testing all these ovens, found quite a large number of them had question marks about them � to say the least � and still refuses to tell us. We cannot find out. They won't tell us, and they won't tell the public.

To take the story one step further, we want data on safety assessments [of pesticides] and we can't get it because the information is currently regarded as commercial and confidential. But the manufacturers supply the same pesticides [in the United States] as they do in the United Kingdom. We've been down to the Food and Drug Administration and to the Environmental Protection Agency and we've asked them "Can we have the data?" and they've said, "Sure you can have it." So we can get data in Washington about safety tests on pesticides which we can take back to the United Kingdom and publish.

MM: Are there any ways the economic unification of Europe in 1992 is going to benefit consumers?

Beishon: I think the answer to that is that the jury is still out. The impetus for the European Community was entirely a trade emphasis. When, two or three years ago, we began to put the pressure on the European, particularly the British, Commissioners, we got the answer: what has it got to do with you? The Community has nothing to do with consumers, it is entirely a free trade zone, designed to reduce the barriers to trade. It is there for manufacturers; it will lead to more economic manufacturing because you have much larger markets, and there will be benefits to the consumer in the long run �more efficient production of goods, free flow of goods across boundaries. The European consumer will benefit � but that's not the purpose of the exercise. The purpose of the exercise is to encourage trade against the major threat, which is of course Japan and the Far East and to some extent the dominance of the United States....

Where you've got the harmonization of standards, you've got some rather quirky things happening. There is the possibility in some cases the powerful countries of Europe will not relax their standards, which they fought very hard for in certain respects. They may even see a competitive advantage in bringing out a car with a higher standard of safety built into it. And they are not going to be very happy if Spanish or Greek manufacturers suddenly start producing substandard products and flooding their domestic markets. So to that extent there has been pressure for [positive] harmonization where it has suited the major manufacturers and particularly the multinationals. There has been a lot of pressure from the big and powerful countries that the cheaper producers not be allowed to undermine standards; they have used standards there for preserving their own manufacturing.

MM: But you see the potential for negative effects as well?

Beishon: At the other end of the stream, you've got the situation where nobody has a particular vested interest other than the consumer, or where there is a preponderance of low standards.

Furniture is an example. Britain is the only country in Europe which has banned polyurethane foam, which burns and produces toxic cyanide gas. We had a 20 year battle to get it banned in the United Kingdom, which [we won] a year ago. Now other furniture manufacturers across Europe are rubbing their hands at the prospect of opening the British market to their products.... We think that if it came to the crunch and the British government tried to exclude polyurethane foam on the grounds of safety, that it might be very hard, that it might be over-ruled and, at the end of the day, the country might again be flooded with extremely dangerous furniture.

The problem we have there is that large manufacturers, particularly ones like Ford, can spread their manufacturing plants across Europe; they can act with one voice. They can lobby their local governments and they have very significant power in the European Commission. The consumer groups are weak, divided, often much more subject to their own government's control than anyone would like. So we don't have a countervailing force of a strong, united consumer movement in Europe which can represent the interests of all European consumers against both the Commission and the manufacturers....

We don't yet know what the overall effect is going to be, but one thing I can say is that it sure as hell was never designed as a mechanism for improving the lot of the consumer in any sense at all. It was designed as a mechanism for commercial manufacturing.

MM: Will 1992 create particular problems with food safety?

Beishon: The same problem applies to food. We have widely varying levels of pesticide use permitted through-out Europe. Some countries, particularly the less developed countries, have less powerful enforcement agencies, Spain and Greece in particular. They are countries where practices in pesticides will be permitted which are banned elsewhere in Europe. And we're in some considerable difficulty knowing how to try to regulate that situation.... At the moment these things are the subject of an enormous amount of argument. The fear is always that regulation, examination and testing is expensive, and that no European nation really is prepared to spend enormous sums of money protecting its citizens' safety....

MM: Is the European-wide regulatory apparatus going to be able to adequately police multinational corporations?

Beishon: There's no question [regulating a multinational region] is going to make it more difficult. The language difficulty itself is totally underestimated. The whole point of language is that if reflects cultural and psychological and philosophical differences. So the real problem that we face is going tobe in the interpretation of many of these things. We already find that what is a strong, asserted statement in English comes across really quite differently in French. To try to get an exact translation, particularly in areas of regulation [involving] discretionary judgment, is going to be a nightmare.

We fear, too, that there is a strong likelihood that the powerful groups in Europe will use the diffusion of the system, the diffusion of responsibility, to make regulation more difficult. You can see how it could happen. If you were required by the Community to keep a dossier on the safety of your product, and you don't particularly want the mass markets of Britain and Germany and France to have access to that, [you could put it] on the tip of some island off of Sicily.

They already do [this] in manufacturing terms; they already move products around Europe to take advantage of where the safety laws are slackest, where they can get away with lower standards of safe manufacturing. The manufacturers say that's perfectly [good] business practice. "Why should I manufacture in Britain or Germany, where you have relatively high health and safety work standards, when I can make the product in Greece and I don't have all these restrictive legislative practices?" That's what they're going to say.

MM: Is there any way that you are able to have input into the regulatory process?

Beishon: Yes, though not terribly successfully. The European Commission does allow some funding of consumer organizations through a consultative consumer commit-tee. There is a commissioner who's responsible for consumer affairs. This consultative committee consists of trade union representatives, representatives of cooperatives, representatives of consumer organizations, but it has no decision-making power; it is purely an advisory committee. The Commission pays for it to meet, to listen to the views that it puts forward, but it's under no obligation to [follow its recommendations]. ... The Commission also funds some consumer activities through the European consumer groups that have been formed, or some-times directly through an individual consumer body. But the total amount they're talking about is pathetic, peanuts in [terms of] European expenditures. There's no real attempt to seek consumer views. It's lip service, no more than that.

Our problem is that we, as one of the largest and more successful of the groups, have to put in a large amount of money to try and build a large, countervailing force. But even if you assemble all the consumer groups in Europe, even if you put all the money of those groups together, it doesn't even look remotely like the cost of maintaining one pharmaceutical representative. A couple of years ago a survey was done; there were approximately 3,000 lobbyists on behalf of industry in Brussels. These are full-time paid people. If you were to ask the Commission, [it would say] each national consumer organization can make an input to its own ministers, and there is some truth in that. We in the National Consumer Council in Britain do have some access to our minister. And we can put forth consumer points of view which the British government will occasionally incorporate into its stance that it's taking in Europe, but it's a very weak way in. ... At the end of the day, national governments represent the interests primarily of manufacturers and producers ...

MM: Do you think this is going to be a generalized problem of countries simply deciding not to adhere to EC standards?

Beishon: There's no question about it. They're already evading the laws in every conceivable way they can.

The United Kingdom is one of the biggest offenders of this, for example, on water purity and air pollution. The government must spend millions of pounds on lawyers and advisors trying to find ways around EC directives rather than going on and sorting the problem out. Other countries [do the same thing].

MM: What's supposed to be the sanction for this?

Beishon: You go to the European court. But you then have got to find some institution, some individual to raise the issue. The Commission will sometimes do it. Someone's got to make the formal complaint.

MM: Does it make sense for consumer organizations to try to strive for power in the European Parliament?

Beishon: Parliament is never going to act decisively; you're always going to have shifting coalitions of hundreds of different types of groups there.

We're in the real game. The real game is we have to increase consumer power. We have to give consumers a sense of a consciousness of being a party to the conflicts that go on, in the same way that the manufacturers never have any difficulties sinking their differences and getting together. They may be fighting viciously over markets, but at the end of the day, they close ranks as manufacturers, in the same way trade unions do.

Now those groups are very powerful, and the consumers are very powerful individually, but unless they coordinate and focus it's useless. So the two steps in the process are to get consumers represented by bodies which understand that and can pull together the common denominator of consumer interests, and then to organize those into a European and counterbalancing force which is strong enough that when it speaks, other interests will have to listen. [We don't need] a situation where it will necessarily override all other views, but it should be so powerful that it has to be taken into account....

What's going on is iniquitous. For example, there are a lot of cases of small children getting badly burned be-cause the outside of an ordinary cooker or ordinary oven can get very hot. Now we have quite high standards in Britain where the outside temperature is not allowed to go above a certain point. What has happened is that in the revision of these standards across Europe, these are being devalued to the point where the ovens are going to get too hot and the kids are going to get burned. [Preventing burns] is [a burden] to manufacturers � they've got to spend more money on insulation. They have forced through lower standards purely on economic grounds. If you go to individual manufacturers and go to individual ministers, nobody is going to say, "Yes it's quite right that we get to do this and if kids get burned, too bad." So [why does it happen]? The answer is we just don't have the power.

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