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DEVELOPMENT: Red Tape Can Be a Green Signal

Sanjay Suri

LONDON, Nov 8 2004 (IPS) - Business opposition to red tape and regulations is damaging society and the wider environment, says a new report.

The report by CORE, a coalition of non-governmental organisations, trade unions and academic institutions including Amnesty International, Friends of the Earth, Action Aid, New Economics Foundation, Christian Aid and WWF says ‘red tape’ is often an illusory obstacle raised by business to get its way.

The report, ‘From Red Tape to Road Signs’ says ”business has created a myth of red tape as the big bogeyman threatening profit and productivity in reaction to new regulations.” But the report argues that regulation ”does not represent a barrier to business but an opportunity to improve the way in which business operates.”

The report, launched Monday, looks at red tape in Britain and also in China and in other countries. The damage done by business objections to regulation ”is even more exacerbated in developing countries,” Deborah Doane, chair of the CORE Coalition and author of the report told IPS. ”They need foreign exchange and investment, and they have no power to enforce regulations in the North.”

An example of different regulations in North and South is over tobacco and obesity-related illnesses, Doane said. Tobacco use has been limited by strong regulation and taxation in the north, but the tobacco market is growing in the South where business resists any regulation.

”Any time a government wants to regulate, the universal response from business is that this is red tape, and they resist it at all costs,” she said. ”Some governments tell business to do it yourself, but that presents its own problems.”

Doane acknowledged there are two kinds of red tape; those arising from bureaucratic procedures, and regulation seen as red tape. ”But it is business that lumps the two together.”

In Britain, she said business groups had complained that introduction of the minimum wage would cost businesses 10 billion dollars. ”But that is really the benefit of the minimum wage,” she said.

Business groups managed mostly to prevail with their objections, she said. ”They have the resources, the might, and they are very effective at promoting their ideas. One reason we have produced this report is to debunk their ideas about red tape.”

The Government (in Britain) has mistakenly heeded business warnings about recent regulations, such as the EU Emissions Trading Scheme, and the introduction of the Operating and Financial Review, accepting the presumption that they will impede productivity, Doane said. ”But not only are they holding back environmental progress by cow-towing to business, they actually pose a significant risk to UK competitiveness.”

The report finds that countries that have high levels of competitiveness such as Sweden, Denmark and Canada also tend to have high levels of social and environmental regulation.

The report says that what is condemned by British businesses as red tape is responsible for reductions in emissions of air pollutants, with sulphur dioxide emissions reduced by 75 per cent since 1990, reduced water pollution with a drop of 65 per cent since 2001, a national minimum wage, maternity rights for women, and health and safety legislation.

Without regulation existing consumer and employee protection would not exist, the report says. ”Rather than posing a barrier, red tape is responsible for some of the greatest advances in social conditions in modern times, often spurring business to innovate and improve,” the report says.

”Business has created a mythical monster out of the idea of regulation and red tape – but in doing so they have created a barrier to their own progress,” says Friends of the Earth corporate accountability campaigner Craig Bennett. ”The CORE coalition’s research shows that a thought through regulatory regime can improve the way business operates, not just for the benefit of the workforce and the environment, but also for the efficiency of the business.” (END/IPS/EU/WD/EN/DV/SS/RAJ/04)