John Graham and OSHA Regulation of Hexavalent Chromium
Chromium Is a Known Carcinogen,
Yet OSHA Has Failed to Address Risks to Workers

As the government’s regulatory czar, John Graham, President Bush’s nominee to head the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB), would have the power to delay, weaken or block critical new worker safety protections. It is not possible to predict with certainty how Graham would wield his considerable authority over critical health and safety agencies. But based on his previous writings and congressional testimony, one can make a good educated guess as to how Graham will use his authority to limit the development of an OSHA standard on hexavalent chromium. The numerous tools at his disposal are described below.

Background

Chromium is a metal used in the production of metal alloys, such as stainless steel, chrome plating and pigments. It is also used in various chemical processes and is a component of cement used to manufacture refractory bricks.

The first case of cancer caused by chromium was reported in 1890. Since then, evidence that it causes cancer continued to grow. Chromium has been declared a carcinogen by the Environmental Protection Agency (EPA), National Toxicology Program and the International Agency for Research on Cancer.

In the early 1980s, it was estimated that 200,000 to 390,000 workers were exposed to hexavalent chromium in the workplace. Lung cancer rates among factory workers exposed to hexavalent chromium are almost double the expected cancer rate for unexposed workers.

The Occupational Safety and Health Administration (OSHA) has known of the risks associated with exposure to this dangerous carcinogen since its inception, but has failed to act. In 1993, Public Citizen petitioned OSHA to regulate workplace chromium exposures. Despite repeated promises to do so, OSHA has yet to propose a rule. On April 24, 2000, OSHA published its semi-annual Regulatory Agenda, which anticipated that a notice of proposed rulemaking would be published in June 2001, six years later than its original promise. It is now July 2001 and a proposed rule on chromium has again failed to materialize.

Risk Assessments Confirm A High Cancer Risk for Workers

Public Citizen’s petition included a risk assessment that estimated that 22 percent of workers exposed for a working lifetime to chromium levels at the current level would develop lung cancer.

OSHA has also contracted for its own risk assessment, conducted by K.S. Crump Division of ICF Kaiser. That risk assessment estimated that between 9 percent and 34 percent of workers exposed at half the legal limit for a working lifetime would contract lung cancer as a result of hexavalent chromium exposure.

At OMB, Graham Could Create Further Needless Delay, Costing Additional Lives

If confirmed as OIRA Administrator, Graham’s actions could affect OSHA’s stated willingness to undertake a proposed rule this year, as the agency has promised and as is urgently needed. Here are some examples of how Graham could negatively impact the process:

  1. Reduce OSHA’s Ability to Collect Information in Support of a New Standard
  2. To develop a new hexavalent chromium standard, OSHA would likely need to survey scores of businesses for information about their use of the chemical and about workplace exposures. During the Governmental Affairs Committee hearing on his nomination in May, Graham said that he supports requiring the federal agencies to do cost-benefit analyses of information requests sent to industry in preparation for a rulemaking. Under the Paperwork Reduction Act, before an information request can be sent to ten entities or more, it must be approved by OMB. Because it is very difficult to judge the value of the information being collected prior to receiving it, Graham could use the paperwork clearance requirement to tangle up the agency in justifying any information requests needed to support a new rule on chromium.

  3. Insist Upon a New Risk Assessment, Despite Compelling Evidence that Chromium Poses a Cancer Risk
  4. OSHA has conducted its own risk assessment of chromium and reviewed numerous studies documenting that workers working with or around the chemical face considerable increased risk of lung cancer. But it is probable that Graham would exercise his power at OMB to require a new risk assessment of hexavalent chromium, which could delay the issuance of a rule by a year or more.

    Graham has supported requiring every risk-related inquiry by the federal government to be vetted by a panel of peer-review scientists prior to its public release. Such a requirement is likely to put industry-sponsored scientists in a position to pass judgment on a proposed regulation or at least cause much further delays in the development of a new regulation. Graham has argued that the risk assessments done by federal agency experts are flawed, and that OMB or the White House, should develop its own risk assessment oversight process. This would allow Graham and the economists at OIRA to review and possibly invalidate the findings of scientists and public health experts in the agencies.

  5. Flunk Any Rule that Fails a Stringent Cost-Benefit Test

Graham is a supporter of strict cost-efficiency measures, even in matters of public health. Because he views regulatory choices as best driven by cost-based decision making, the worthiness of a rule is determined at least partly by the cost to industry of fixing the problem. This is the opposite of an approach that recognizes that workers have a right to a safe workplace environment. The OSHA mission statement is "to send every worker home whole and healthy every day."

Under the law as it now stands, OSHA is prohibited from using cost-benefit analysis to establish new health standards. Instead, OSHA must set health standards for significant risks to workers at the maximum level that the regulated industry, as a whole, can feasibly achieve and afford. This policy, set into law by the OSH Act, recognizes the rights of workers to safe and healthful workplaces, and provides far more protection to workers than would be provided by standards generated under a cost-benefit test.

Putting John Graham in the regulatory gatekeeper post would create a grave risk that OSHA protections, such as the hexavalent chromium standard, will not be set at the most protective level that regulated industry can feasibly achieve. We know from his own statements that John Graham will require OSHA to produce economic analyses that will use assumptions that are biased against protective regulations in order to show that those regulations fail the cost-benefit tests. It is true that OSHA is technically authorized to issue standards that fail the cost-benefit test. However, it will be politically nearly impossible for an agency to issue a standard that has been shown, using dubious methodologies required by a White House office, to have more costs than benefits for society.

The following are examples of assumptions used by John Graham and other cost-benefit analysis supporters that make reasonable, protective regulations appear unreasonably costly:

Graham has endorsed the practice of discounting, or reducing the dollar value of benefits like cleaner air and water or improved public health that are received in the future. In these calculations, the benefits that happen 40 years out are worth far less than if they happened today. The numbers are based on the future value of money, as though someone could put health in a bank and let it earn interest.

The chief problem with Graham’s discounting method is that it greatly exaggerates the costs to industry of a regulation compared to the benefits for society. The costs to industry for a new regulation usually occur in the first few years after a regulation goes into place. For instance, to protect workers against exposure to hexavalent chromium new equipment might be needed or manufacturing processes might need to be adjusted. These costs could be substantial in the first few years. On the other hand, few benefits would be derived in the early years from reduced chromium exposure because lung cancer has a long latency period.

A worker’s life that might be "calculated" as being worth $2.5 million today when the regulation would go into effect would be worth less than $600,000 30 years from now using Graham’s discount rate. Under the cost benefit test that Graham is likely to require should he become OIRA Administrator, the up-front and extensive costs to business would be measured against the long-range discounted benefits to the worker. If workers don’t get lung cancer from the chromium exposure for a number of years, the benefits of the rule will be only some small fraction of what they should be — not because it’s not a cost-effective or just rule, but just because lung cancer takes a while to show up.

Under such a discriminatory scenario it would be difficult to prove that the benefits of any new regulation are worth the costs to industry. This is a perverse result. Surely we have more concern for workers’ health than this.

Another reason why basing decisions primarily on cost factors is a poor idea is because industry costs to comply with a rule are often inflated by the industry as they argue with regulators about the need for the proposed rule. For example, a 1995 study by Congress’ Office of Technology Assessment found that the actual, after-the-fact costs of industry complying with OSHA’s vinyl chloride rule were only one quarter of OSHA’s original estimate, which was based on the cost estimates from regulated industry.

Use of cost-benefit is also a problem because so-called "secondary" benefits, such as the benefit to a family of a healthy breadwinner, or the joy of intact and healthy families, are not included in the benefits calculation because OMB admits it cannot translate them into dollar amounts.

  1. Potential Conflict of Interest with Graham Funders

The Harvard Center for Risk Analysis (HCRA), which Graham founded and runs, raises at least 40 percent of its budget in unrestricted funds from corporations and trade associations (additional substantial restricted funds also are raised from corporations and trade associations). Many of these companies, or the companies they represent, are sure to have regulatory issues before OIRA in coming years, such as a hexavalent chromium rule. A review of HCRA’s funders indicates that the following companies might use chromium in their manufacturing practices:

Alcoa
American Automobile Manufacturers Association
Asarco
BASF
Bethlehem Steel Corporation
Cabot Corporation Foundation
CIBA-GEIGY Corporation
Eastman Kodak Company
Ford
GE Fund
GM
Inland Steel Industries
Lyondell Chemical Company
National Steel
Nippon Yakin Kogyo
North American Insulation Manufacturers Association
Reynolds Metals Company Foundation
USX

If Graham is confirmed as Administrator a fundamental question arises as to whether he will be able to remain independent of the pleadings from his HCRA benefactors to weaken or block a proposed chromium rule.



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