Social Management of the Risks of New Technology in the U.S.

1. Social Management of the Risks of New Technology in the U.S. Christopher T. Hill Professor of Public Policy and Technology George Mason University Arlington VA 22201 First International Workshop on Secure Materials for Social Safety and Security Tokyo Institute of Technology Tokyo Japan March 22, 2007 Copyright Christopher T. Hill 2007

2. American Attitudes Toward New Technologies • Americans are, in general, enthusiastic about the possibilities of new technologies • America also has experienced many of the risks of the use of new technologies • Americans view technological risks as creating problems to be solved, rather than conditions to be endured • America has evolved an array of mechanisms to manage such risks

3. Major Goals of Modern Societies Like the U.S. and Japan • Ensuring national security • Solving important societal problems • Improving democratic participation • Realizing human potential • Strengthening understanding of the natural world • Looking out for the unfortunate

4. A Society Employs New Technology to Help Achieve Its Goals Using Three Strategies • Encouragement • Guidance • Control These all involve the “management” of technology and of its risks

5. Some Societal Benefits of New Technology • Economic • Security • Health and Medicine • Communications • Etc, etc, etc

6. Some Societal Risks of New Technology • Security • Health and the Environment • Distribution of Power • Equity • Etc, etc, etc

7. Categories of Social Institutions for the Management of Technology and Risks • Marketplace • Government • Non-governmental organizations The U.S. has a complex ecology of purposes, organizations, functions, programs, activities, etc, to manage technological risks

8. Social Institutions to Encourage Technology DevelopmentI – The Marketplace • Profit-making enterprises • Industrial R&D • Inventors • Entrepreneurs • Advertising and marketing • Banks • Stock markets • Venture capital

9. Social Institutions to Encourage Technology DevelopmentII – Governments • Maintenance of private property – real and intellectual • Support of general social stability • Money for R&D and education • “Rules of the Game” • Incentives and disincentives • Infrastructure

10. Social Institutions to Encourage Technology DevelopmentIII - Non-governmental Organizations • Scientific and technical societies • Colleges, universities and training institutes • Enthusiast clubs • Learned organizations

11. Technical Progress Yields Both Benefits and Risks • Development and application of new technologies brings many benefits to society AND • Brings many risks as well WE WANT TO ENJOY THE BENEFITS AND AVOID THE RISKS

12. Use of New Technology Poses Many Different Kinds of Risks • Physical • environmental, health and safety • Financial • challenges established market positions • Cultural • devalues and threatens old ways • Political • substitutes expertise for connection • shifts power and influence among groups • redistributes resources

13. The Distribution of the Benefits and Risks of New Technology • From the viewpoint of economic efficiency, one should balance risks against benefits • From the viewpoint of real-world politics and equity, the risks and benefits often fall on different groups of people • Therefore, U.S. public policy toward technological risk management features a tension between efficiency and equity

14. Managing the Risks of New Technology Involves Many Kinds of Institutions Once again: • Marketplace • Government • Non-governmental organizations Each has limitations / all have roles

15. Marketplace Mechanisms for Managing Technological Risks • Producer firm integrity • Consumer preferences and demands • Competitive pressures • Producer industry self-regulation • Insurance • News media, journalists, book authors, public intellectuals

16. NGO Mechanisms for Managing Technological Risks • Professional norms and standards • Research and inquiry • Environmental organizations • Consumer organizations • Worker organizations • Civic and community organizations

17. Governmental Mechanisms for Managing Technological Risks • Bans and prohibitions • Regulations and standards • Incentives and disincentives • Information disclosure and sharing • R&D funding and execution • Maintaining system of tort liability

18. The U.S. Constitution and Technological Risk Management • The U.S. Constitution is “pre-industrial” and was designed for a society of agriculture and trade • It did not contemplate the need to manage the risks of new technology • U.S. Constitution gives Congress power to “make all laws” • But, the scope of the power of Congress to make law is limited by the Constitution • States have the power to make laws in areas not delegated to Congress by the Constitution • Congress can make law affecting “interstate commerce” • The “interstate commerce” clause underlies most U.S. government risk management activity

19. U.S. Constitution and Risk Management • Most risks are managed using regulations promulgated by federal agencies • Regulations have the force of law • Authority to make regulations is delegated by Congress to the federal agencies • Such delegation must meet strict requirements: • A statement of general public policy • A “standard” for agency decision • Clear identification of who is to make the policy • Administrative Procedure Act of 1946 (APA) guides how agencies make and enforce regulations

20. Role of the Courts in Risk Management • This role has varied over time • Courts react to challenges to agency decisions, or to agency failure to act • Many legal challenges to regulations are on “procedural” grounds (e.g., failure to follow APA) • Some challenges are based on substantive grounds (e.g., agency set “incorrect” regulations) • Result is that agencies have to base regulations on best available scientific knowledge and understanding, as reflected in a public written record

21. Some Limitations on Agency Powers to Regulate Risks • Must have an acceptable delegation of authority from Congress • Must follow APA • Must make decisions based on a public record • Creates a demand for “good science” • Limits use of the “precautionary principle” • Often means “harm” must happen before action can be taken to regulate • Makes the process open to intervention • NOTE: Congress is not bound by these limitations, so it can regulate directly by law

22. The Tort System and Management of Risks of Technology in the U.S. • Under English and American common law, individuals have the right to sue others for damages (“torts”) that their actions cause • Such suits in the U.S. are heard in state courts • Such rights do not require passage of a law to exist; they arise historically through court actions to protect individual interests • So, people can sue other people if they are harmed by risks imposed by use of new technology • Usually there must be evidence of real harm before a suit can be successfully brought • So, tort liability has only limited effectiveness in preventing harm • Liability can be very hard to prove if there is doubt about the linkage of the technology to an alleged harm

23. Attitudes Toward Government Management of Technological Risks in the U.S. • We try to manage the physical risks through regulation and the tort system • We only manage the risks to cultural values if they are deeply held • E.g. stem cells, pornography, free speech • We view risks to established financial and political interests as the “price of progress” and don’t generally use government to manage them • But, individual interests seek favorable action • We typically address the distributional issues through a (relatively weak) system of social insurance and through political action

24. Major U.S. Regulatory Statues Affecting Risks from Advanced Materials • Hazardous Substances Act (1960) • Sale of certain kinds of hazardous materials • Occupational Safety and Health Act (1970) • Hazards to workers’ health from exposure to materials • Resource Conservation and Recovery Act (1976) • Hazards from disposal of materials • Food, Drug and Cosmetic Act (1906, 1938, 1963) • Materials in foods, drugs or medical devices including food and medical packaging • Toxic Substances Control Act (1976) • All hazards of materials not regulated otherwise • Other environmental laws (clean air/water, safe drinking water)

25. Significant Aspects of U.S. Tort Law Affecting Management of Risks of Materials Technologies • Strict liability • Manufacturers can be held liable for harm caused by use of materials even if used in ways not intended by manufacture • Punitive damages • In tort cases where harm is proved to have occurred, juries can “award damages” (make liable parties pay) that exceed the value of a harm in order to punish unsafe actions harming others • Class action suits • Persons who are damaged may be able to convince a court to allow their suit to take into account the possible claims of an entire group, or “class,” of possible plaintiffs • Venue shopping • Persons claiming to be injured may bring their suits in court jurisdictions known to be “friendly” to plaintiffs • Standards of proof • Plaintiffs must show that their injury was “caused” by use of the material by a “preponderance of the evidence,” and this can be difficult

26. Some Examples of Societal Management of the Risks of Materials Technologies • Asbestos • PCBs (polychlorinated biphenyls) • Nanotechnology

27. Asbestos – Managing the Risks • Asbestos has been used for milenia • Heat resistant building materials and fabrics • Strengthening additive for brittle materials • Now known to cause asbestosis and cancers • These diseases take years to develop • Thousands of workers and millions of consumers have been exposed, and many have died • Workers, consumers and families have sued asbestos product manufacturers • Asbestos product manufacturers have faced ruinous claims; some have gone out of business • Congressional action has been considered to limit producers’ liability and provide modest financial payments to victims and families • No satisfactory resolution yet agreed on

28. PCBs – Managing the Risks • PCBs were manufactured in the U.S. only by Monsanto • Have wonderful chemical properties • Thermally stable, fire retardant, and resistant to degradation • Excellent electrical insulators • Good solvents for aromatic polymers such as polystyrene • Properties such as viscosity can be tailored over a wide range by varying the number and type of halogen moieties • Known to cause a strong skin reaction (chloracne) since the 1930s, and suspected of harming avian and mammalian reproductive systems since the 1960s; may be carcinogenic • They “bio-accumulate” in living things • Became the “poster child” for hazardous chemicals in the environment, leading to passage of the Toxic Substances Control Act in 1976 (PCBs have their own section of the law directing an early phase-out of their manufacture and sale) • Not produced in the U.S. since 1977, but PCBs continue to persist in the environment

29. NanotechnologyManaging the Risks - I • Nanotechnology is a broad family of materials and methods, whose value typically is derived from the extremely small size of their functional elements • At nano-scale, materials typically exhibit properties that are substantially different from those in macroscopic quantities • These properties make them useful and may pose unique risks • Nanotech is being rapidly and widely commercialized • Just as we have a limited understanding of how to use nanotechnology, we have a limited understanding of its risks

30. NanotechnologyManaging the Risks - II • Advocates of nanotech have recognized and advocated for management of its risks • 21st Century Nanotechnology R&D Act of 2003 created a framework for research on nanotech and on its risks • The regulatory framework is existing statutory and tort law • Unresolved is whether existing law is sufficient • E.g., are rules developed for bulk materials good enough for their nano-scale use? • Are current test methods sufficient? • So far, no catastrophes related to nanotech have occurred • Warnings have been sounded, but some seem “overwrought” and may not have helped serious policy debate • Major public concern has not been articulated, but some experts are worried

31. Some Possible Future Directions in U.S. Management of the Risks of New Materials Technologies • Trends in Materials Technology • We are now proliferating “tailored” materials, composites, functional materials, and nano-materials • These pose unique and potentially sophisticated risks not encountered with more traditional materials • Trends in Government Regulation • The U.S. is near the end of three decades of political hostility toward regulation and toward tort law application • Possible election in 2008 of a Democratic President with a strong congressional majority (support greater regulation) • But, many in the new generation of national leaders know only technological optimism and de-regulatory government

32. What Will the U.S. Do? • We will continue to take advantage of the incredible benefits of modern materials technology • We will continue to do research on the risks of new materials, and may expand such work • We may consider amending the Toxic Substances Control Act to address the challenges of nanotechnologies • As is usual in the U.S. policy-making process, we will not take vigorous action to impose new forms of social management on modern materials unless and until a significant crisis occurs

33. Thank you!