The EU Regulation on GMOs, Multinational Biotechnology Companies and their lobby group, EuropaBio

- Dilek Demirbas BSc (Istanbul), MA (Istanbul), MA (Leicester) PhD (Leicester)

Dept. Economics, The Northumbria University, Newcastle Upon Tyne, NE1 8ST, UK
E-mail: Dilek.Demirbas@unn.ac.uk
Eubios Journal of Asian and International Bioethics 13 (2003), 11-15.
Abstract

Increasingly, as globalisation widens the democratic deficit, the important decisions made with respect to biotech products by the large multinational biotechnology companies are having a big impact at the national, regional and international level. Until recently, because of strong oppositions from civil society in Europe, a number of EU governments have found it increasingly difficult to pursue a policy of fostering food biotechnology. However, in 2001 and 2002, EU Parliament approved very important legislations on biotechnology and GMO products to foster these products in European zone after multinational biotech companies successfully conducted their lobbying activities. In this paper, I examine the EU regulatory process on GMOs and its fundamental institutions, the European Parliament and European Commission in relation to European Biotech companies' powerful lobby group, EuropaBio.

Key Words: Biotechnology, multinational biotech companies, the EU Regulation, Lobbying Activities, EuropaBio

*The early version of this paper has been presented at the TRT7, 15-17 February, 2002 meeting hold at the University of Tsukuba, Tsukuba Science City, Japan

1. Introduction

Although during the last ten years civil society in Western World has been claiming the right to information and a greater voice in determining the agenda developments in biotechnology, corporations and governments have continued to resist these pressures. Corporations and governments insisted that biotechnological developments are a 'scientific issue' and are best left to 'experts'. Meanwhile, civil society was expected to maintain a passive role even though its members are the consumers of biotechnology products. Increasingly, as globalisation widens the democratic deficit, the important decisions made with respect to biotech products by the large multinational biotechnology companies are having a big impact at the national, regional and international level.

Until recently, because of strong oppositions from civil society in Europe, genetically modified organisms (here after GMOs) and their derivative foods, a number of EU governments have found it increasingly difficult to pursue a policy of fostering food biotechnology proposed mostly by the USA based biotechnology companies. Recently, EU Parliament approved very important legislations on biotechnology and GMO products to foster these products in European zone after multinational biotech companies successfully conducted their lobbying activities. To achieve their target these multinationals used their governments to threaten the EU members with trade war if the EU members would create difficulties to the import of GMOs products from the USA. Increasingly frustrated US multinationals increase their pressure through their lobby group, EuropaBio, to force the USA government to put more pressure on the EC to lift the moratorium. Therefore, this case exhibits a very good example of how the voice of a majority of consumers and expertise on safety regulation is weakening day by day and the supremacy of governments is gradually declining as an outcome of counter attacks put by US government and big multinational biotechnology companies. In order to highlight the invisible war between the consumers and the multinational biotech companies, in section two, I concentrate on the EU regulatory system on GMOs starting from the late 1980s to today. Main aim of section 2 is to explore how the EU safety codes change in time in favour of multinationals even though 61% of the European still citizens considers GMOs products are unsafe. After that, section 3 examines the multinational biotech companies (after here MNBCs) and their lobby group, EuropaBio, to show why these companies established a lobby group and how they affect the EU institutions to change legislations. Then, section 4 concludes with a proposal to establish independent committees in order to protect citizens' health and safety issues.

2. EU Regulations on GMOs

In the late 1980s, there has been a public controversy over the risks of biotechnology in Europe. In particular, because of strong consumer opinions against GMOs and their derivative foods, a number of EU governments have found it increasingly difficult to pursue a policy of fostering food biotechnology proposed mostly by the USA based biotechnology companies.

In response to this legitimacy problem, in 1990, the EU adopted uncertainty-based legislation, which was the Directive 90/220/EEC, to have a common framework for regulating releases of GMOs, and to authorise experimental releases and placing on the market of (GMOs) in the Community. This regulatory framework has been further extended and refined to protect its citizens' health and the environment while simultaneously creating a unified market for biotechnology. Standing on this legislation, for example, at EU meeting in June 1999, several governments such as Germany, Austria, France, Belgium, Finland, the Netherlands and Sweden asked for even tougher regulations for GMOs products from the EU commission. It meant that no applications would be granted unless it is demonstrated that there is no adverse effect on the environment and human health. The common consensus of the meeting was to impose a kind of informal moratorium on GMOs foods in the European Union towards big MNCs of the USA (Problems and Obstacles in Food Biotechnology, http://www.psrast.org/probobstart.htm).

Then, powerful MNCs did not delay to put more pressure on the European Commission and European Parliament to lift the moratorium. The real impact of this pressure shaped in February 2001 when the Council ministers and the European Parliament adopted revised regulation, Directive 2001/18/EEC, on deliberate release on the deliberate release of GMOs, which replaced Directive 90/220/EEC, and became more visible when it entered into force on 17 October 2002. The policy makers of this revised regulation claimed that current legislation put in place a step-by-step approval process on a case-by-case assessment of the risks to human health, animal health and the environment before any GMO or product consisting or containing GMOs can be released into the environment or commercialised on the market. In addition, it was stated that the revised Directive updates and strengthens the existing rules of the risk assessment and the decision-making process on the release of GMOs into the environment.

In particular that Directive introduces mandatory information to the public and general rules on mandatory labeling and tractability at all stages of the placing on the market. The new Directive also foresees mandatory monitoring requirements of long-term effects associated with the interaction with other GMOs and the environment. Such effects will also to be taken into account in the risk assessment carried out prior to authorization. First approvals for the release of GMOs will be limited to a maximum of ten years, and consultation of the Scientific Committee(s) becomes obligatory. The new Directive also introduces an obligation to consult the European Parliament on decisions to authorize the release of GMOs and the possibility for Council of Ministers to adopt or reject a Commission proposal for authorization of a GMO by qualified majority.

However, it is a fact that the revised regulation, Directive 2001/18/EEC, does not contain direct provisions any longer to enable Member States to declare genetically engineered (GE) free zones. It means that a respective amendment introduced by the Parliament to give national authorities the unqualified power to take action to protect environmentally sensitive areas was almost lost. The safeguard clause on health and environmental protection derived from the EU Treaty, known in the existing 90/220 as Article 16, still exists on the surface as a mechanism for national protection, but is intended to be only a short-term measure pending arbitration at EU level.

Effectively, a few days after the Directive 2001/18/EEC was approved, people from different countries expressed their worries about the future of the Europe and health issues of the citizens. As European citizens and NGOs (Non Government Organisations) protested this decision, Italy, France, Greece, Denmark, Luxembourg and Austria have released a statement that they will not lift moratorium without any enforcement measures being taken by the Commission to repeal the bans. Even though the majority of consumers in Europe objected GM products on the basis of health and safety, the USA government threatened the EU with a trade complaint in the World Trade Organization without even consulting the European consumers. Then, the government forced the Commission to take action by claiming that last two years US's powerful multinational biotech companies lost out on sales of $200 million worth of corn exports to the EU because few member states did not approved the corn comes from GMO seeds.

It is clear that multinational biotech companies in concern desperate to expand their market shares in Europe to increase their profit levels and to sustain their sales. For example, although some multinationals, like Monsanto, Novartis, Zeneca, Seminis, Pionner, Bayer, Adventa, etc. are less than 50% of the European market oriented (see Figure 1), but they express their interest in every occasion to increase their shares from 50% to higher levels. Therefore, establishing a lobby group and spending a fortune on lobbying in order to put pressure on European governments and institutions to eliminate all the barriers have became the main goal for many multinational biotech companies in the 1990s.

Figure 1 shows
European share of top multinational biotech companies' sales and activity fields such as the pesticide sector. As can be seen from the figure, for the companies with a mainly internal growth of the seed business (KWS, Pioneer, Limagrain, Danisco, Cebeco), around 70% of the sales are made in the region of origin. Conversely, the companies, which result from acquisitions and/or mergers (Advanta, Novartis, and Seminis) the distribution, are much more widespread. Compared to the pesticide sector, it is important to emphasize that the multinational biotech companies in European market mostly concentrated on food and seed, but companies, which were previously specialized on pesticide, also push their boundaries to enter European market through their lobby group, EuropaBio, to deal with regulatory issues professionally and efficiently. In the next section, the lobby group, EuropaBio will be examined in more detail.

3. Biotechnology, MNBCs and EuropaBio

Biotechnology is a powerful new technology that poses substantial and often unique threats to the biological diversity, human health, communities and economies. Many researches have explored these threats. For Altieri (2000) biotechnology is fundamentally different from other technologies since it concerns food, our health and environment.

For Lane, 1996, as well as promises, biotechnology poses unique and considerable risks. This includes: i) the potential for GMOs to invade ecosystems as destructive weeds; ii) the possibility of gene flow to related species; iii) the encouragement of the pollutive use of chemical herbicides and pesticides, iv) excessive consumption of water, v) creation of tolerances to 'bio-pesticides' in target populations, and vi) unpredictable and deleterious effects on soil and soil ecosystems. The principle of familiarity with closely related natural species cannot be applied to GMOs and cannot previously known previously nonexistent-trait-organism combinations and their expression in different circumstances

According to Levidow and Carr (1996, 1997, 2000), biotechnology, where the alliance of reductionists science and a multinationals monopolistic industry which jointly perceive agricultural problems as genetic deficiencies of organisms and treat nature as a commodity, will take agriculture further down a misguided route.

Krimsky and Wrubel (1996) also consider that because biotechnology is capital intensive they will continue to deepen the pattern of change in US agriculture, increasing concentration of agricultural production in the hands of multinational corporate firms. Since they use mostly labor saving technology, they force out of business a significant number of farmers, especially small-scale. The example of bovine growth hormone confirms the hypothesis that biotechnology will accelerate the foreclosure of small dairy farms.

Sinai (2001) claimed that developing a GMO costs $200-400m to the US multinationals and takes 7 to 10 years. Therefore, it is vital for the multinationals to expect a return on this massive investment by imposing pressures on governments to regulate the market to block entry and to protect their property rights. All varieties containing GMOs are becoming to be patent-protected, which means that the farmer will have to buy a license. This is a big risk that the powerful seed producers will be able to monopolize the world's genetic heritage and take control completely and irreversibly.

Aventis used to market the transgenic maize Starlink, which can cause allergies in humans. Although it was initially intended only for the use of animals feed, the maize used on a large scale in US consumers' crisps and cornflakes and in Homemade Baking brand cakes sold in Japan. When Syngenta developed so-called Golden Rice, the officials of the company posed the ethical view that third world children will not suffer any more blindness because of beta-carotene deficiency once they consume this golden rice. However, Greenpeace stated that a third-world child would have to eat 3.7kg of boiled golden rice a day to be able to ingest an adequate daily dose of vitamin A, whereas two carrots, a mango and a bowl of ordinary rice would provide same amount daily necessity (Sinai, 2001).

These multinationals also use cleverly developing countries to impose their biotechniques to gain a hold over the least demanding markets and potentially most dependent ones. For instance, in Thailand, 70 patents had to be waived to make Syngenta's golden rice available free of charge. In India, cow's milk was laced with Monsanto's Posilac, a hormone banned in the EU. Especially in the case of genetic pollution, conventional fields can be contaminated with GM articles and this can be happening even in the developed countries such as, France and US. Unfortunately this accidental contamination is becoming very frequent and in wider areas. In March 2000, several batches of Advanta conventional spring rapeseed sown in Europe turned out to be contaminated with another company's GM seed. The plants in question were of course, destroyed but the damage behind was left as it is. In August 2000, it has been found out those varieties of winter rape checked by the French authorities proved to be contaminated with GM seed (Sinai, 2001).

Figure 1. Coupling Europe share of company sales and main activity field (1999)


 Assouline, G., P. B. Joly and S.Lemariˇ (2001)

Table 1 Biotechnology Companies in EU between 1996-2001

(Euro millions)

1996

 1997

1998

1999

2000

2001

Total Companies

716

1035

1178

1351

1734

1879

Listed Companies

49

61

68

75

 -

 -

Personnel

27500

39045

45823

53511

61445

87182

Turnover

1721

2725

3709

5368

9872

13733

R&D input

1508

1910

2334

3164

5524

7485

Net Loss

1113

2020

2107

1189

1812

1522

Financing (equity,

~1600

~2000

 

 

 

 

Source: Ernst and Young: European Biotech 97, European

 

Life Sciences, 1998, 1999, 2000, and 2002 Ernst and Young Report

 

Figure 2 European Biotechnology Firms by Year of Foundation

European Biotechnology Firms:

Firms per year

 

Today, multinationals are facing real grassroots opposition in the world, especially over agro-chemicals and GMOs. Nevertheless, many of them follow diversionary tactics by either issuing codes of conduct and ethical charters to conceal their real objective of creating value for their shareholders, or by promoting their products as cures for their third world hunger and disease and as an alternative to the dangers of pesticides (Sinai, 2001) or uniting to deal with all these negative publicity. For instance, the European Multinational Biotech companies made up more than 600 companies were united in a lobby group, EuropaBio, in 1996 (see Table 1), through the merger of the Senior Advisory Group on Biotechnology (SAGB, a working group of the chemical industry federation (CEFIC) and the European Secretariat for National Bioindustry Association (ESNBA), http://www.europabio.org). In 2001, their number increased to 1879 and their turnover to 13,733 Euro millions from 1721 Euro millions in 1996.

After establishing their lobbying group, the number of biotech companies reached the peak time in 1998 (see Figure 2, http://www.europabio.org). This corporate coalition can be considered as one of the most important examples for the interest group formation theory that explains why these companies needed to have a close relationship with the European Parliament.

The EuropaBio has successfully used its financial resources, skills in dealing through very effective lobbying activities with the regulatory process and superior marketing

expertise to secure access to developments in the new biotechnology. After EuropaBio have spent £15 million for lobbying campaign and worked closely with the European Commission in promoting biotechnology in Europe in 1997 and 1998, the European Parliament granted the biotech industry with the permission to patent of life forms (Balanya et al., 2000), and approved a revised legislation in 2001. To do that, this lobby group set up a working group in Brussels to focus on the European Parliament's activities as an advisory and monitoring group.

Conclusions

In this paper I tried to examine the MNBCs and their lobbying activities from an economic perspective. As their strategy is to create a broad international seed market for a single product and to expand their limits into Europe (MacDonalds, 1991), to achieve what they need, multinationals have established very close links with the EU institutions last two decades to be involved in decision-making process. . Financing election campaigns, supporting education systems, distributing free GMO seeds to poor farmers have been (and still are) some of the examples to gain the recognition for marketing their products. When governments, farmers and institutions in Europe have weakened with the powerful MNBCs and their lobbying activities, the need for an independent global business regulation (Braithwaite and Drahos, 2000) or ethical committees has became much more obvious (Marcer, 2000) . An establishment of committees at national and international levels that cannot be conducted by the MNBCs might be the only answer to control those powers. For that, these ethics committees with full community and ethnic representation, for the purpose of reviewing research proposals, and monitoring the impact of science and technology, should be recognized and protect their independencies. Without having a comprehensive international regulation system and its control mechanism, the European institutions will continue to be subject to pressure from multinational companies. As a result, the widespread use of biotechnological products without any control might result in ecological and socio-economic destruction. As Lane (1995) claimed the biotechnological activities carried out by one country do not cause damage to other countries or areas beyond its jurisdiction. Each country will affect another. Therefore, we have to develop high, legally binding global standards for national and regional regulation, which ensure the safety of citizens and environment without any delay.

References

1.Altieri, M. A. (2000). The Myths of Agricultural Biotechnology: Some Ethical Questions, http://www.cnr.berkeley.edu/|aroeco3/the_myts.html.

2.Balanya, B. A. Doberty, O. Hoedeman, A. Ma'anit and E. Wesselius (2001). Europe Inc: Regional and Global Restructuring and the Rise of Corporate Power, London: Pluto Press

3.Braithwaite, J., and P. Drahos (2000). Global Business Regulation, Cambridge, Cambridge University Press.

4.Assouline, G., P. B. Joly and S. Lemariˇ (2001). Interactions between public policies and company innovation strategies: Overview of the company monographs' PITA Project: Policy Influences on Technology for Agriculture: Chemicals, Biotechnology and Seeds, Annex C1, TSER Programme European Commission-DG XII Project No. PL 97/1280 Contract No. SOE1-CT97-1068

5.Krimsky, S. and R. P. Wrubel (1996). Agricultural biotechnology and the environment; science, policy and social issues, University of Illinois Press, Urbane

6.Lane, M. (1995). Invention or contrivance? Biotechnology, Intellectual Property Rights and Regulation", (www.acephale.org/bio-safety/Ioc-index.htm).

7.Levidow, L. and S. Carr. (2000) 'Precautionary Regulation: GM Crops in the European Union', special issue of the Journal of Risk Research, 3(3): 187-285

8.Levidow, L. and S. Carr (1997) 'How biotechnology regulation sets a risk/ethics boundary', Agriculture and Human Values, 14(1): 29-43.

9.Levidow, L. and S. Carr (1996) 'Biotechnology Risk Regulation in Europe',
Special issue of Science & Public Policy
, 23(3): 133-200.

10.      MacDonalds, J. F. (1991). Agricultural Biotechnology at the Crossroads. NABC Report 3, Union Press of Binghamton.

11.      Macer, D. (2002). Eubios Declaration for International Bioethics, The Eubios Ethics Institute and the Tsukuba Bioethics Roundtable Declaration on International Bioethics.

12.      Sinai, A. (2001). New Monsanto and GMO Propaganda: Seeds of Irreversible Change. Le Monde Diplomatique,

13.      http://www.europabio.org).

14.      http://www.psrast.org/gefree.htm March 2001

15.      Ermst and Young (1998, 1999, 2000, 2002). European Biotech 97 and Ernst and Young Report.


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