We live in unprecedented times for global innovation. Advancements in science and technology touch every sphere of our lives, from the consumer goods we use to our medicines, transportation, and the way we work.
This often presents challenges for our governments and regulators. Consumers must be protected from health, safety and environmental risks that new products carry as they come to market. They also deserve the confidence of knowing that smart regulations protect them from becoming the victims of dodgy manufacturers keen to cut corners to boost their profit margins.
Conversely however, burdensome regulations or overregulation itself presents a problem. It deters innovation and investment in the goods and services of tomorrow by making products more expensive and difficult to research and produce. It means that products, including potentially life-saving medical technology and medicines, take longer to come to market and are less affordable for ordinary families when they do. Naturally, this not only lowers our living standards and impedes progress – it also quite literally puts lives at risk. And lowers our international competitiveness against nations who take a more sensible and liberal approach.
Australian governments and regulators have often been renown for taking an overly risk-averse approach. A notable example is the ongoing prohibition on vaping with nicotine liquids- the only prohibition of its kind in the western, developed world. Premised on unsubstantiated claims about the unknown theoretical risks of vaping- still estimated to be at least 95% less harmful than legal tobacco smoking and likely to be even less harmful, this prohibition is backed by agencies such as our Therapeutic Goods Administration even though it is literally putting smokers lives at risk by denying them convenient and regulated access to proven safer ways to obtain nicotine. This could partially explain why Australia’s smoking cessation rate has stagnated since 2013 with nations where vaping nicotine is allowed, such as the United Kingdom and United States, experiencing freefalling quit rates over this period.
But we don’t always get it wrong. Australian regulators took a smarter ‘risk-proportionate’ approach to regulation when it came to more commonly used products that use silicone compounds. Silicone compounds are used in a range of machinery and manufactured goods including airbags, prosthetic limbs, medicines, cosmetics, solar panels, wind turbines, computers and smartphones. The regulators followed the lead of their Canadian counterparts by subjecting three key silicone compounds- D4, D5 and D6, to rigorous field testing in real-world conditions. They arrived at the same conclusion- that these compounds carry a negligible material risk for consumers. This has been a win for innovation and product development, including in the energy space and in life-saving medical technology.
Contrary to this approach, the European Union has taken a different tack. The European Chemicals Agency (ECHA) adopts the precautionary principle for regulatory action. In other words, products and compounds should be regulated based on harms which are merely possible in theory- even if there is no real-world evidence to support this view. In July 2018, they ruled that D4, D5 and D6 should be banned or strictly regulated- rules that will take effect in February 2020.
Normally, only European consumers and businesses would stand to lose from this ruling. Concerningly however, the Europeans have attempted to apply this standard to the rest of the world by attempting to nominate D4, D5 and D6 for listing as ‘Persistent Organic Pollutants’ (or POPs) under the Stockholm Convention. If successful, this would require all signatories of that international agreement to ban or harshly regulate these silicone compounds even if our own democratically elected lawmakers and regulatory agencies have determined otherwise.
Giving into the dictates of unelected foreign bureaucrats with an agenda that is not based on scientific reality is a scary prospect and this wouldn’t be the first time that it has harmed people across the world. In 2001, the Stockholm Convention harshly restricted the use of the pesticide DDT- making it significantly more difficult for developing nations to fight Malaria. This decision was reversed partially only in 2011 – an implicit acknowledgment of the damage that had been done by making the wrong decision regardless of good intentions.
Subjecting D4, D5 and D6 to the same harsh restrictions then will make everyday goods more expensive for Australian businesses and consumers. It could also result in lower quality or less durable products as businesses and manufacturers try to replace these compounds with substitutes. Given the role of these compounds in the medical technology and medicines sector, it could not only make life-saving medicine and machinery more expensive or less effective. It could also put a speed bump on important innovation and research in this space.
Since silicone compounds are also important in the energy sector, harsh restrictions could not only affect the companies who operate in this space, but could also affect families and businesses in Australia who are already struggling with some of the highest electricity bills in the world.
A win for the European Union in harshly restricting silicone compounds would not only be misguided. It would also lower our living standards while denigrating our national sovereignty and power to make responsible and science-based decisions over our own regulations. It will only harm the very consumers that it claims it wants to protect by making our lives more difficult.