International Aspects of Biotechnology and Its Use in the Environment

Richard B. Stewart

Richard B. Stewart is Byrne Professor of Administrative Law and Associate Dean of the Harvard Law School.

I would like to analyze some of the international aspects of biotechnology and its regulation. To preface my discussion, I will note first some some general points.

First is the question of "technology assessment" for new technology. Although much has been said about technology assessment, most actual assessment has been of old or established technology. Biotechnology is brand new; it has grown up since the development of both environmental law and the notion of technology assessment. Therefore, it presents the question of whether and how one can perform technology assessment for a new technology.

Technology assessment can be defined as using a legal, regulatory, analytical process to examine the risks, benefits, and consequences of a new technology. How does one accomplish this without operational experience in the technology itself — isn't this something of a leap in the dark? Since we cannot assess a technology that has never been applied, natural experimentation is going to be inevitable.

A second point is whether we should evaluate only physical effects that harm humanhealth and the natural environment. The question of harm itself is somewhat vague, but biotechnology presents concerns that extend beyond physical effects on human health and the natural environment. Some people are concerned that altering established species in this powerful way is an illegitimate tampering with nature, a form of sacrilege. Biotechnology has indirect effects on our entire concept of nature: it forces us to consider the genetic implications of what it is to be human.

The legal and regulatory debate about biotechnology is fueled by concern about whether we can deal with its effects on humans and the environment through a technology assessment model. The ideological, emotional, value-laden aspects of biotechnology play an important role in public perception — even of biotechnology's physical effects.

We are just beginning to unravel special features of this technology. They may prove difficult to address even in the context of the regulatory system of one country. The problem is exacerbated in an international context.

Relying on academic experience with the international aspects of environmental regulation of other technologies, one can make sure predictions about the legal and policy implications of the international development of biotechnology. Many countries believe that biotechnology is a crucial factor in future industrial policy and international competitiveness; even developing countries are promoting the technology actively.

At present, the major international players are the established multinational chemical and pharmaceutical companies looking to move into the biotechnology arena. Some of the newer biotechnology companies, particularly in the United States, are also playing a role. We may see some linkages between those companies and pharmaceutical and chemical companies in the developing countries.

Biotechnology companies will seek the widest possible world markets for their products. Competition to develop biotechnology — among firms and among nations — will ensure the internationalization of the industry.

This international development raises three major issues. First, conflicting national regulations may hamper biotechnology's market development and new product development. Product regulations, testing requirements, and labeling requirements are particularly important. It is also conceivable that environmental regulations will be used to protect infant domestic biotechnology industries, especially in countries trying to develop their own domestic biotechnology capacity.

A second issue is whether regulation will be adequate in all nations. We are fairly optimistic that the U.S. regulatory system is capable of dealing with the risks associated with biotechnology. Many developing countries, however — India, Argentina, the Philippines, and even some African countries — are becoming involved in biotechnology. The staff of [19 ELR 10512] an agricultural ministry in a developing country is small, with few resources. How confident are we that such an operation can do the job?

We also have the potential spectre of product use and field-testing being driven overseas to countries where the regulatory system is far less developed. In fact, there has already been an incident in Argentina where a rabies vaccine for cattle was field-tested on behalf of an American company with essentially no controls. A proposal for a similar test in Italy, where there is no regulation at all, failed, but only because publicity leaked out. There is, therefore, legitimate concern that even if the U.S. regulatory system is adequate, companies will export hazardous field testing or hazardous products to other nations.

The third issue is the transfrontier consequences of biotechnology — will a release in one country spill over into another? I do not believe that this issue is any different for biotechnology than for conventional industrial processes, so I will not elaborate on it here.

Instead, I will sketch the state of international regulation of biotechnology. The first stage of regulation has addressed laboratory experimentation with recombinant DNA. The United States was the first to form an established legal regime for recombinant DNA; the National Institutes of Health (NIH) regulations¹ were emulated in Japan and Europe shortly thereafter. As the regulatory controls at NIH were gradually relaxed, other countries followed suit.

The second stage of regulation has covered the applications of biotechnology, including industrial processes, manufacturing facilities, field experiments, releases into the open environment, and use of products in the open environment. Following the U.S. example, countries are trying to fit biotechnology into the existing regulatory framework developed for non-biotechnology processes and products; I am not aware of any comprehensive new legislation on biotechnology in any country. As in the United States, pharmaceutical regulation and regulation of industrial processes is likely to fit into existing regulatory schemes with minor adjustment. The areas of difficulty and controversy are field experiments, field releases, and the use of biotechnology products in the open environment.

In Japan and most of Europe, the basic structure of regulatory systems is somewhat similar to that evolving here in the United States. But it is striking how differences in national attitudes and regulatory styles have become accentuated by the uncertainties of biotechnology.

Regulatory styles for technology can be placed on a spectrum, with the United States on one end as the most legalistic and having the greatest reliance on formal assessment — "paralysis by analysis." Britain is at the other end of the spectrum, relying on highly informal consultation between government and industry. Notwithstanding these differences, a number of studies have shown that for chemicals there has been a convergence in the effective degree of regulation in the two countries. Knowledge about risks and about the inherent nature of risk has driven the system in spite of differences in legal and regulatory styles.

There seems, however, to be a much greater regulatory variance in the biotechnology field, at least at present. Uncertainty, differences in social attitudes, and differences in emotional and moral perceptions have aggravated the disparity in regulatory styles. For example, field releases have been essentially prohibited in Denmark, but in Britain a number of releases have occurred through their very informal mechanisms of consultation and review. In France, a pattern of releases has occurred. In the southern tier — Spain, Portugal, Italy, Greece — there is no regulation at all. There is thus quite a variation in the efficacy of biotechnology regulation; the danger is that companies may exploit the absence of regulation in some countries to carry out field tests without any supervision or regulation.

It will be a challenge to harmonize national regulations to eliminate unnecessary trade barriers, and to reduce the use of environmental regulations for protectionist purposes. The United States and the Europeans have achieved a substantial degree of harmonization in the chemical products area, but the task is far from complete; the regulatory system in the United States under the Toxic Substances Control Act (TSCA)² still has a different spin than the European Economic Community's (EEC's) Sixth Amendment.³ We are just beginning to harmonize the regulation of biotechnology products, particularly in the case of non-pharmaceutical products that are to be used in the open environment.

There have been some proposals within the EEC for a directive on biotechnology from the European Commission to harmonize the divergent national approaches to biotechnology among the member states of the Community. This will prove a difficult task. How can we achieve harmonization among Europe, Western Europe, Eastern Europe, Japan, the United States, and the developing countries? Given the uncertainty about biotechnology's effects and the absence of real testing experience, the obstacles to harmonization and the associated trade barriers are substantial.

Concern about shifting testing and products to developing countries without adequate regulatory supervision or control has already arisen in the pesticide and drug industries: There is fear that pesticides or drugs that cannot qualify for regulatory clearance in the developed countries will be shifted to developing countries, with adverse effects on people and the environment. The competing view is that developed countries should not be paternalistic — the tradeoff between risk and benefits in developing countries may be different than for developed countries. The mere fact that a product cannot receive regulatory clearance in the developed countries does not mean it should necessarily be precluded in the developing countries.

One example is drug testing. Drug tests which cannot be carried out in the developed countries are often undertaken elsewhere, including, surprisingly, New Zealand. New Zealand abolished tort liability by adopting a system of social insurance for accidents and injuries. The result is that multinational drug companies are conducting a good deal of drug testing in New Zealand.

Will this same pattern develop for biotechnology products? The incidents in Italy and Argentina suggest that it may. Therefore, an issue in the U.S. and in the EEC will be how to regulate technologies or products that are exported [19 ELR 10513] from the United States to be used or tested elsewhere without adequate controls.

A number of regulatory options are available to address this concern. One is the notification or disclosure option: to ensure that the authorities in the importing country are aware of the regulatory status of the product or process in the United States, the authorities receive whatever information is available on the risk of the product or process.

The second option is an outright ban: if it cannot be carried out in the United States, it cannot be shipped abroad for that purpose. A third, intermediate, approach is the so-called informed consent option: not only must there be notification to the importing country, but the requisite authorities in the country must indicate that they have read the information and consent to have the product shipped to them.

Fourth, there are a variety of multinational approaches, based on the belief that this problem cannot be solved by the exporting country alone. These methods rely on information exchange and the development of quasi-voluntary codes of conduct for multinational companies. The multilateral approaches are designed to supplement controls by the exporting countries.

International biotechnology issues are addressed under existing United States regulatory law in a variety of ways, depending on which statute is used to regulate the biotechnology product. Pesticides have been subject to a type of notification approach under the Federal Insecticide, Fungicide and Rodenticide Act.⁴ Although substantial restrictions were imposed initially for certain drugs, drug products, and intermediaries, they were later modified because of concerns that they were hampering biotechnology. No notification requirement exists for products regulated under TSCA.⁵

Given these different legal regimes, a question that arises is whether the United States should have a more coordinated policy on export of potential hazards. President Carter set up such a system under Executive Order 12114;⁶ President Reagan dismantled it. The issue of reliance on existing statutes as opposed to a more coordinated approach to biotechnology regulation thus arises in the international export context as well as in the domestic context.

At this fledgling stage, we cannot make many predictions about international regulation of biotechnology. Nonetheless, it is clear that it will be far more difficult to achieve international harmonization for biotechnology than it has been for established chemicals. Harmonization has not always been easy even for conventional chemicals, and the issue of the exported hazards of biotechnology is of serious concern.

A degree of confusion, decentralization, and variation in regulatory approaches may not be such a bad thing. Since we are unsure of the right answers or the best way to regulate biotechnology, regulatory experimentation may be the best way to approach technology assessment. This assumes, of course, that we are fortunate enough to avoid experiments with serious adverse consequences.

Finally, a question that arises in the domestic context is how to circulate risk information in a way that will be useful for future policy-making. Industry is concerned about trade secret protection. In the United States, regulatory authority is already fragmented, and biotechnology adds an international dimension. It therefore will be crucial to find ways, in a global context, to draw on the information generated by biotechnology experiments. This is an urgent priority.

1. Department of Health and Human Services, Guidelines for Research Involving Recombinant DNA Molecules, 51 Fed. Reg. 16,958 et seq. (May 7, 1986).

2. Toxic Substances Control Act, 15 U.S.C. §§ 2601-2654, ELR STAT. TSCA 001.

3. Council of European Communities, Directive on Classification, Packaging, and Labelling of Dangerous Substances, 79/831/EEC.

4. 7 U.S.C. 36-136y, ELR STAT. FIFRA 001.

5. 15 U.S.C. 601-2654, ELR STAT. TSCA 001.

6. Executive Order No. 12,114, 44 Fed. Reg. 1957 (1979) [Environmental Effects Abroad of Major Federal Actions].