Donald Trump is causing waves in the EHS community.
This not a surprise of course – what with it being such a high profile topic. In fact, I bet when Mr. Trump first inherited his father’s millions this was at the top of his list of life priorities (becoming President was only second).
Cheap jokes aside, if there is one of Trump’s many bellicose campaign promises that he is actively and aggressively pushing through, it is his apparent dismantling of the regulations and authorities aimed at protecting workers and the environment.
In the first 100 days of the new presidency, there have already been Executive Orders issued requiring reviews of regulations related to environment, health and safety. The stated aim is the so-called rollback or deregulation of laws around environmental and worker protection in the United States.
Alongside this there is a virtual decapitation of the EPA underway. Its budgets have been slashed and many EPA employees could lose their jobs.
All this is being done under the auspices of helping businesses thrive and grow without the regulatory burden hanging off their necks like medieval cast-iron torture shackles.
On the face of it, the argument for consolidating, simplifying and reducing the amount of regulation has some merit. There is a lot of regulation. In the United States in particular there is more than in most other countries around the world. It is highly prescriptive, voluminous and technical.
In fact, moves to consolidate the volume and density of laws (in general) have also been touted elsewhere, such as in the UK and the Netherlands. Let us be clear though – in these cases the focus is on simplifying and consolidating laws where possible – to reduce an administrative burden. There is no stated intention to remove or dilute the basic intention of the laws, much less reduce/discontinue enforcement of them.
But why does this amount of regulation exist in the U.S.A.?
It is not there to intentionally stifle business. It is there to stifle irresponsible business.
In fact, you could take this logic a step further and actually say that environmental regulations help businesses make money.
The pollution incidents and tragic worker accidents that have pock-marked history since the industrial revolution have not come cheap to business – BP infamously received a $5.5 billion dollar fine following Deepwater Horizon alone (not to count the additional economic fallout - BP lost half of its stock value and it has still not recovered).
It seems clear that if Trump had his way all of America’s unemployed would be sent to work in the coal mines of West Virginia, without PPE, and will be given a choice of McDonalds or healthcare vouchers at the end of each month and thank their lucky soot-covered stars that they have a job – even if it is one that will shorten their lifespan and ensure their children won’t be able to find their way to school due to the smog.
An exaggeration perhaps.
That being said - on one level at least - Trump’s policies make sense. There is a global backlash to the effects of rampant globalization and the changing nature of our economies due to “Uberization” and the energy transition. Change is in the air. People want (local) jobs, people want to work and want to hold on to ‘the way things were’. Sure, having local jobs is hugely important – and working, buying and producing locally are actually, ironically, central tenets of the sustainability movement.
However, where Trump is alone is in neglecting things that very much benefit people and businesses, and which will always need a global approach:
- Environmental pollution does not respect man-made borders. Climate Change is not a Chinese hoax.
- Workers continue to get injured and die in workplaces around the world – (albeit at a much lower rate than before the abundance of regulation).
- People around the world will simply not accept a regression in the protection of their natural environment, or their safety at work.
- Corporations will continue to operate around the world.
Furthermore, it may just be me – but I have yet to read a peer-reviewed article or study that has identified the economic argument for de-regulation. Will companies really save that much money and be that much more competitive if they have a few less permits; air emissions limits and water discharge levels to comply with?
On the contrary – there is study after study which finds that the management of EHS is a bottom-line issue. Invest in EHS and Sustainability. Manage and comply. Your business will benefit. The costs of not-complying are much much higher.
Despite the moves to deregulate there will be a lot of resistance– so whether or not Trump, Pruitt et al. will succeed is very much an open question. The following elements are likely to come into play:
- Rollback is thus far centered on the Federal level – there are many States in the US where there is a pro-active, progressive approach to tackling environmental and worker protection issues. Many State legislators are likely to resist attempts to scale back on enforcement and oversight.
- Responsible and sound management of EHS has made its way to the top level of many organizations. It is part of the strategic planning of most corporations that see it as an essential part of their business and even a competitive advantage. It would be economic suicide to go back on such commitments.
- Globally, regulation and policy around EHS issues continues to grow and be refined. In 2016 Enhesa covered in excess of 4,000 EHS regulatory and policy developments across more than 250 global jurisdictions. Many countries that traditionally did not have strong environmental or worker protection legislation are getting their act together, notably China and India.
- Enforcement actions are on the rise, globally. 2016 saw record levels of fines across many countries (including the USA). This is a trend that is expected to continue as outside of the USA countries will continue to bolster their regulations and pursuance of non-compliance.
- Enforcement by Federal authorities is one thing – but there are other likely avenues for legal action – such as cases brought by individuals and/or groups, NGOs and even corporations themselves.
- EHS is not just about regulation. Shareholders want to invest in companies that are being responsible and complying with laws. The best graduate talent will not be attracted to companies with a poor EHS management reputation. Worker and environmental Insurance premiums may increase.
- American companies – if they reduce their commitments to protecting the environment they could suffer a competitive disadvantage if consumers, clients and partners move for more responsible, sustainable alternatives.
It seems to be a fact that in the short-term there will be scale-back in EHS regulation and enforcement in the US. However, in my view the practical reality is that environmental and safety regulation has reached ‘the point of no return’ in the sense that there is a level of expectation from consumers, shareholders, the public and corporations themselves that these issues be taken seriously.