The White House Office of Science and Technology Policy and Council on Environmental Quality have issued a memo to federal agencies titled, "Principles for Nanotechnology Environmental, Health, and Safety Oversight."

Nanotechnology involves manipulating matter the size of one-billionth of a meter or 100,000 times smaller than the width of a human hair. Nanotechnology has the potential to impact countless aspects of our lives, and many consider it the next great boon to society. However, early studies indicate it may also pose health, safety and environmental risks. Governments around the world have been grappling with how they should respond.

In a statement of the purpose of the memo, the White House lays out why government needs to be involved in the emerging field of nanotechnology:

Federal oversight approaches should be cognizant of the potential benefits of nanotechnology, including health, economic and environmental benefits, while recognizing uncertainties surrounding the evolving science and technology. The purpose of considering environmental, health and safety oversight approaches in the context of nanotechnology is to protect human health and the environment.

That sounds great, proving the White House can talk the talk. But when it comes time to walk the walk, the White House stumbles. In a section called "regulatory path forward," the memo outlines how federal agencies should go about addressing nanotechnology policy. Among other things, the memo states:

• Decisions should be based on the best reasonably obtainable scientific, technical, economic, and other information;
• Where possible, regulatory approaches should enable rather than hinder innovation;
• Regulatory approaches should be performance based to the extent feasible and provide predictability and flexibility in the face of evolving science and technology;
• Benefits of regulation should justify their costs;

The memo sends the wrong message. "Aggressive efforts to close information gaps and increased research funding" should replace "reasonably obtainable" science, and "ensuring public health" should supplant mentions of cost-benefit analysis. Government should play a proactive role in a field with such significant uncertainty and potential impact.

A recent statement of principles — signed by more than 40 labor, environmental and public interest groups from around the world — called for a more sensible approach to nanotechnology regulation. In the statement, those groups urge a precautionary approach and "a committed focus on critical risk research and immediate action to mitigate potential exposures until safety is demonstrated."

Every two weeks, in OMB Watch's e-newsletter The Watcher, we analyze a few recent issues in regulatory policy. Here are the articles from the November 20 issue:

More of the Same: Import Safety Panel Leaves Business in Charge
The Bush administration's cabinet-level Interagency Working Group on Import Safety released its final report Nov. 6 on ways to improve the safety of food and consumer products imported into the U.S. The report calls for limited increases in some federal agencies' responsibilities but does little to change the current voluntary regulatory scheme for imports. Read more...

Bush Fuel Economy Measure Rejected by Court
A U.S. court of appeals has overturned a recent National Highway Traffic and Safety Administration (NHTSA) rule that revised a national standard for fuel economy. Environmentalists hailed the ruling as a victory and framed it as condemnation of the Bush administration's record on fuel economy and global warming. Read more...

OSHA Issues Personal Protective Equipment Rule
Eight years after proposing it, the Occupational Safety and Health Administration (OSHA) has finalized a worker safety rule. The final rule mandates employers pay for worker personal protective equipment (PPE). Read more...

White House Rejects Krill Protection Rule
The White House has rejected an effort by the National Oceanic and Atmospheric Administration (NOAA) to protect krill, an important marine species abundant in the Pacific Ocean. NOAA's proposed rule is a precautionary measure aimed at protecting krill in the future but was rejected by White House officials for failing to identify a need for the regulation. Read more...

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The European Commission and the White House Office of Management and Budget have released a joint draft report titled, "Review of the application of EU and US regulatory impact assessment guidelines on the analysis of impacts on international trade and investment."

The report describes the system by which the European Union (EU) and the U.S. examine proposed regulations for their potential impacts on foreign parties and/or international trade.

The report shows the EU's system for assessing the international impacts of regulation is more developed than that of the U.S. and recommends more thoughtful consideration of such impacts in future policy-making efforts.

In its discussion of the U.S. system for assessing international impact, the report almost exclusively examines Circular A-4, OMB's guidance for the preparation of cost-benefit analyses for proposed and final regulations. According to the report, "Circular A-4 does not offer clear guidance on how to consider the international trade and investment effects of US regulation." However, "In practice, US Regulatory Impact Analyses often acknowledge that many direct impacts on foreign entities are passed on to the U.S. economy."

The report also hints OMB may issue an executive directive on the subject or at least amend Circular A-4 to more explicitly include international impact assessment.

Reg•Watch has two initial concerns with requiring this type of assessment. First, the assessment would add an additional layer of study to a regulatory process already thick with analytical requirements. That could mean more delay in the issuance of regulations.

Second, couching an international impact assessment in terms of cost-benefit analysis may skew the quantified effects toward the cost side of the ledger, something OMB has been prone to do during the Bush administration. In an increasingly global society, assessing international impacts is useful; but the impacts are not solely economic. As we have seen with the seemingly endless stories of dangerous Chinese imports, a regulatory system can impact health, welfare and peace of mind.

Stay tuned to Reg•Watch for updates on this issue.

Yesterday, Reg•Watch blogged about a National Oceanic and Atmospheric Administration (NOAA) rule which would expand protections for krill (a shrimp-like creature that serves as an important food source for larger marine animals) and how White House officials are blocking it.

NOAA proposed the policy even though krill is not currently fished in U.S. waters. However, NOAA experts recognized an opportunity to take a proactive step toward maintaining a sustainable marine ecosystem. In its proposal, NOAA's Pacific Fishery Management Council states, "The Council has agreed it is critical to take preventive action at this time to ensure that a krill fishery will not develop that could potentially harm krill stocks, and in turn harm other fish and non-fish stocks."

But the NOAA policy was rejected by the Office of Information and Regulatory Affairs (OIRA) — the White House office in charge of reviewing federal rules and regulations. OIRA's administrator, Susan Dudley, found fault with NOAA's rationale for pursuing the policy.

In a letter returning the rule to NOAA for reconsideration, Dudley complained NOAA did not adequately identify the need for regulation since krill is "completely unexploited" and "there are no known plans for exploitation." Apparently, Dudley believes, short of outright exploitation, the need for natural resource management does not exist.

The issue highlights a larger debate over the proper role for government. On one side is NOAA, looking ahead and making strategic judgments, then taking action to prevent any negative impact on the economy or the environment. NOAA's policy is an attempt to sort of head crisis off at the pass.

On the other side is OIRA, playing the waiting game. OIRA would prefer to let problems emerge and develop fully and then see if the market sorts it all out. If the market fails, only then would government intervention be justified. Meanwhile, as months and years pass, fishers whose stocks rely on krill would suffer, and a fragile ecosystem may fracture beyond repair.

It seems NOAA's strategy of prevention and precaution is exactly the role we would want government to play. (Imagine if government officials had approached greenhouse gas emissions with such foresight.) As a nation, we cannot afford to stand idly by and hope that certain problems will resolve themselves.

The White House Office of Management and Budget (OMB) has rejected a National Oceanic and Atmospheric Administration (NOAA) proposed rule intended to protect krill. According to NOAA's proposal, "As the principal food source for many fish and non-fish species, krill are a critical component of the marine ecosystem."

The rule would have prohibited krill harvesting off the west coast of the United States. NOAA began the rulemaking at the recommendation of the Pacific Fishery Management Council (Council), one of several independent regional advisory panels comprised of fishery management experts and local government officials.

According to NOAA, krill is not currently fished in U.S. waters. However, because of krill's importance in the food chain, "The Council has agreed it is critical to take preventive action at this time to ensure that a krill fishery will not develop that could potentially harm krill stocks, and in turn harm other fish and non-fish stocks."

On Oct. 30, OMB's Office of Information and Regulatory Affairs (OIRA) rejected the proposed rule. In a letter, OIRA Administrator Susan Dudley identified why her office is rejecting the rule. Among other things, Dudley accuses NOAA of failing to identify the rationale for the rulemaking and scolds the agency for not including measurable performance objectives.

Under Executive Order 12866, Regulatory Planning and Review, OIRA reviews agency proposed and final regulations before they are released to the public. Usually, OIRA reviews "economically significant" rules (those expected to have an economic impact of $100 million or more) and "other significant" rules (those that interfere with the actions of other agencies, materially alter budgetary impacts, or raise novel legal or policy issues).

The krill rule does not meet any of those criteria. In fact, because krill is not currently fished in the U.S., NOAA believes no economic impact would result. It appears OIRA chose to review this rule for other reasons.

The rejection of the rule comes at the end of a long-delayed White House review period. NOAA submitted the proposal to OIRA on May 29. Under E.O. 12866, OIRA is to complete its review within 90 days of receiving the rule from the agency. In consultation with the agency, OIRA may extend the review period once for 30 days. Since OIRA did not complete its review until Oct. 30, the office had exceeded its time limit by more than a month.

NOAA may go forward with a revised rule if the agency addresses Dudley's concerns.

Reg•Watch Update: "A Proactive NOAA Vs. a Reactive White House"

Every two weeks, in OMB Watch's e-newsletter The Watcher, we analyze a few recent issues in regulatory policy. Here are the articles from the November 6 issue:

Vice President Reemerging in Regulatory Review Meetings
Representatives from the office of Vice President Richard Cheney have been involved in three current administration rulemakings. Their presence is indicative of a recent trend in which Cheney has involved his office in high-profile regulations. OIRA has held more than 540 regulatory review meetings since February 2002. A representative from OVP has been present at only 11, about two percent. However, eight of those 11 meetings have occurred since February. Read more...

Congress Told of FDA's Lax Inspection of Foreign Drug Makers — Again
The Government Accountability Office (GAO) recently told Congress that the U.S. Food and Drug Administration (FDA) inspects an estimated seven percent of foreign drug manufacturing facilities. Read more...

CPSC Reform Efforts Progress as Agency Woes Continue
On Oct. 30, the Senate Commerce Committee approved by voice vote the CPSC Reform Act of 2007 (S. 2045). Recent high-profile regulatory failures have highlighted the need for expansion of CPSC's authority and resources. Read more...

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Sen. Barbara Boxer (D-CA) has requested from the White House documents related to the Office of Management and Budget's editing of testimony on climate change given by the head of the CDC. White House Counsel Fred Fielding responded with a letter on Tuesday. Here's an excerpt:

I note that the request by its very nature seeks communications involving pre-decisional deliberative materials relating to an inter-agency review process. … It is clear that the request implicates core Executive Branch interests and raises separation of powers concerns as well. For that reason … it will be necessary to discuss…the possibility of reaching an accommodation that balances Executive Branch prerogatives with the committee's legitimate oversight needs.

Translation: "Yeah right, we're never showing you any documents ever. Nice try."

Boxer wrote back yesterday saying she is "stunned" the White House would consider claiming executive privilege or separation of powers in this case. Boxer must be feeling hyperbolic this week, because one could not possibly be "stunned" the Bush White House is withholding information.

Seriously though, the controversy surrounding OMB's edits of the climate change testimony brings to light a serious point of opacity in the executive branch's policy of information disclosure. OMB officials should not be editing the congressional testimonies of public health officers simply to serve an intended political objective.

The best way to prevent future occurrences is to make the process transparent and ensure the public can see how its government is communicating.