Health hazard / DEREGULATION

The neoliberal drive to cut red tape is
costing lives. Ulli Diemer exposes the hidden
costs of deregulation and privatization.

Time to play outside if you’re a child. Time to relax if you’re an adult, do some housework, have a cup of coffee or a nice cold glass of water. Time, if you live in the small Canadian town of Walkerton, Ontario, to walk down Durham Street to join your neighbours and look at the surging Saugeen River, which has flooded its banks after unusually heavy rains. The local park, a couple of adjacent streets and several unlucky cars, are under water, but since everyone is safe the property damage doesn’t seem too tragic.

Time, if you live on the Tollensstraat in the Dutch town of Enschede, to stop what you’re doing and watch the fire engines race by, headed for the paper factory down the street where, it seems, a fire has broken out. Time, just enough time, to grab the children and run back into the house when two explosions at the burning factory rattle windows and send debris hurtling skyward. Five short minutes later, time runs out. The supposed paper factory is actually SE Fireworks and at 3.30pm 100 tons of explosives ignite in a third and devastating explosion. In the Tollensstraat, not one house is left standing. In the surrounding working-class neighbourhood of Mekkelholt, 400 houses are utterly destroyed and another 1,000 are damaged. At least 20 people lie dead, more than 900 others are injured.

In the days that follow, disbelief and shock give way to anger and a demand for answers. SE Fireworks, it turns out, has been operating for years in open violation of the most basic safety procedures, yet government inspectors routinely rubber-stamped operating permits, while local authorities and emergency services were not even informed that a fireworks company had been allowed to set up operations in the middle of a residential neighbourhood. The Dutch Government, it appears, has been criminally negligent.

At that same moment, several thousand kilometres away in Walkerton, the day is tranquil and seemingly ordinary. But invisibly, below the surface, something has changed, and though its citizens don’t know it yet, Walkerton will never be the same. Water contaminated with cattle manure has entered the poorly sealed wells from which Walkerton draws its water, passed through an inadequately maintained water treatment plant in which the chlorination system is malfunctioning, and is now being pumped into every home. Within days, seven people are dead and another 2,000, almost half the town’s population, have been taken violently ill.

In Walkerton too, in the days and weeks that follow, there is anger and a demand for answers. Residents learn that Ontario’s Conservative provincial government, responsible for drinking water safety in the province, has deliberately dismantled vital parts of the public-health infrastructure in the name of cutting ‘red tape’. The Government, it turns out, has knowingly ignored repeated warnings from its own experts and agencies that its ill-considered cutbacks in environmental and health protection are jeopardizing public health. Committed to a ‘free market’ agenda of ‘downsizing government’, it has laid the groundwork for a disaster by cutting inspection staff, shutting down testing labs and eliminating reporting and enforcement procedures.

Rolling back safety
The Enschede and Walkerton tragedies are ominous portents – deadly instances of a frightening trend in industrial nations. Governments are abdicating or ‘downsizing’ even those regulatory and protective functions essential for ensuring public safety, or abandoning them to unaccountable private interests. The results can be tragic.

In Turkey, the death toll in the August 1999 earthquake is far higher than it need have been because many buildings supposedly constructed to withstand an earthquake turn out to have been built in violation of building standards. Civic officials are revealed to have colluded with contractors to certify substandard buildings. There is outrage, but to little effect. A year later, no-one has been charged, and some of the contractors whose shoddy buildings collapsed have won contracts to build replacements.

In Belgium, huge quantities of food, including chickens, eggs, dairy products, pork, beef and baked goods are discovered to be contaminated with dioxin and PCBs in the summer of 1999. The chemicals had been mixed with animal fat, the fat then put into feed for livestock – a still-routine practice in modern farming, despite the public furor over ‘mad cow disease’ linked to cattle fed on meat byproducts. This contamination was kept secret for four weeks before the authorities bothered to inform the public. The official reason for the delay: more tests were needed before making producers destroy their products.

Heidi Bradner / Panos Pictures

Later in the summer, Belgium moves to raise permissible levels of dioxins in food, arguing that previous standards were too stringent and therefore too onerous for producers. The tactic of lowering health standards rather than make potentially expensive changes to meet them is popular with industry lobby groups. And governments are choosing to accommodate industry demands, even if it increases public risk.

In the United States, new legislation regulating pesticides was recently revealed to have been actually written by an industry lobby group. The new law is almost a word-for-word copy of the lobbyist’s submission to friendly legislators. It makes it more difficult for regulators to restrict existing pesticides, and easier for companies to bring new chemicals to market. Before, it was necessary to provide evidence that a pesticide was safe for use. The new legislation reverses the onus of proof. A new pesticide can now be put on the market unless government regulators provide conclusive evidence it is not safe. Since pesticide-linked illnesses can take years to surface, the dangers of this approach are clear.

What we are witnessing is a drastic rolling back of the systems and structures which Western societies developed over the past century or more to safeguard public health and safety. A new generation of politicians and business leaders, permeated with free-market ideology, is jettisoning them, with little thought or understanding of the consequences. This apparatus has been built up by previous generations, piece by piece, to mitigate the most dangerous aspects of industrial civilization.

What we are losing are not only specific protective and regulatory mechanisms, important as they are, but the understanding of why they exist, why they were even created in the first place. The hard-won experiences of the past, the disasters that our ancestors learned from at great cost, are disappearing down the memory hole.

Quick returns, short memory
Allen Kennedy in The End of Shareholder Value argues that large corporations have undergone a major change in the last two decades – largely abandoning traditional strategies of long-term corporate growth in favour of maximizing immediate returns. Executives whose main form of remuneration is now their stock option not their salary, and shareholders who want quick and large gains on their stocks, are both concerned with very short-term profitability. Even the corporation’s own long-term interests are commonly sacrificed. Kennedy cites examples of large companies selling off assets and slashing research and development to drive up stock prices. The model for getting rich is now the high-tech startup, whose Initial Public Offerings (IPOs) put fortunes into the pockets of their founders, although the company may never produce a profit or even bring a product to market. Kennedy quotes one top Chief Executive Officer who brushes aside questions about the shortsightedness of his approach. ‘Why... should I care? I’ll be long gone before anyone finds out.’

Governments, infused with the same free-market ideology, have made it an article of faith that the private sector is the most efficient provider of most products and services. If a service absolutely has to be provided by the public sector, it should be modeled on the private sector or provided in partnership with that sector. Social-democratic and ‘third way’ politicians share this unquestioning faith in the private sector with their conservative rivals. The result, all too often, is that responsibility for ensuring public safety is left in the hands of companies in a grave conflict of interest: the less they spend on maintenance, safety equipment and staff, the higher their profits.

The potential cost of this conflict of interest was revealed by the inquiry into the Paddington train disaster in England, in which 31 people died when a train went through a red signal. Thames Trains, the privatized company which owned the fatal train, had made a decision the previous year not to equip its entire fleet with Automatic Train Protection (ATP) systems which stop trains that pass through red signals and could have prevented the crash. The decision was taken despite the occurrence of a similar rail crash in Southall in 1997, and despite repeated incidents in which trains were passing through red lights, narrowly avoiding collisions. Thames Trains considered the $7.46 million cost of the system too expensive – yet the company paid a $6.00 million dividend to shareholders in the year it decided not to proceed with ATP, and another $4.60 million dividend the following year.

The same narrow logic may be behind the tread-separation scandal involving Ford Explorers with Firestone tires. More than 150 deaths in various countries have been linked to tread separations. Exposés by investigative journalists revealed that Ford and Firestone failed to inform regulatory authorities in the US that a problem existed. This despite the fact they had already ordered the recall of problem tires in Saudi Arabia and Venezuela, and were engaged in settling lawsuits from victims or their families. As a condition of settling lawsuits, Ford and Firestone demanded evidence revealed be kept confidential. Had the defect become public knowledge earlier, there is little doubt lives would have been saved.

‘Those who cannot remember the past,’ said George Santayana, ‘are condemned to repeat it.’ Industrial societies learned over the course of decades that private interests cannot be trusted to safeguard the public interest when it conflicts with their own self-interest. It was a hard lesson, learned at the cost of many lives, but the result was that gradually, piece by piece, country by country, a public infrastructure of regulations and agencies and procedures was brought into being to protect public health and safety. That infrastructure is now being undermined, not only from without, but from within government itself.

We may have to relearn our ancestors’ bitter lessons, with our own lives.

Ulli Diemer is a Toronto-based writer and editor of the press briefing annual Sources. [email protected]