REGULATION AGITATION

ALISON MAXWELL

WASHINGTON -- With only one year remaining in President Clinton's tumultuous term, next year's presidential race is already heating up.

And when it comes to several regulatory issues still floating around, relations between industry and government are also heated. Issues likely to spark a flame include: the Occupational Safety and Health Administration's proposed ergonomics rule, the Food Safety and Inspection Services' irradiation proposals, federal blacklisting and hours-of-service rules.

"The Clinton administration has been a trial and tribulation for our industry," said John Motley, senior vice president for government and public affairs at the Food Marketing Institute here. "They've increased regulations and plan to increase other regulations that we believe will hurt. It's one where we have been in opposition rather than cooperation and that's unfortunate."

"Things that we don't even imagine will be the worst things that will come out of this last year," said John Block, president of Food Distributors International, Falls Church, Va. "This administration has a very wild imagination as to what it can impose on industry as far as regulations go."

"This is an election year and we anticipate that Clinton is going to try to push as many regulatory issues through the system as possible," said Tom Wenning, senior vice president and general counsel at the National Grocers Association, Reston, Va.

At the top of Clinton's regulatory to-do list is completing the Occupational Safety and Health Administration's ergonomics proposal, which requires companies to adopt effective programs to prevent serious injuries related to overexertion and repetitive motion on the job.

Supermarket retailers and wholesalers supported a measure in Congress that would have delayed the release of the regulations until the National Academy of Sciences completed a study on whether on-the-job injuries can be caused by repetitive tasks or ill-fitting equipment. The House passed the bill, known as the Workplace Preservation Act, but the Senate defeated it.

The OSHA estimates injuries related to ergonomics cost employers $15 billion to $20 billion annually in worker compensation. The agency has been designing ergonomic guidelines for almost a decade and all facets of business have been fighting them since day one.

With most roadblocks removed now, the OSHA plans to publish the proposed rule this fall, after which a comment and hearing period would ensue. A final rule is expected next year.

Industry officials said the administration failed to realize that the impending regulations would prove extremely expensive and burdensome to business.

"I think this is an impossible task, and it will be very costly for a lot of companies," Block said. "It's our view that you can't put a one-size-fits-all on the issue of ergonomics. There isn't any sound science to say this rule is necessary."

In an attempt to ward off the ergonomics regulations, FDI commissioned a study to "provide hard data to OSHA as it considers this proposal." The results, released Nov. 1, found that wholesaler and food-service distributors could be hit with costs of up to $26 billion in the first year and $6 billion annually thereafter if the proposal is completed.

Still, opponents said Clinton is determined to complete the rule. "It doesn't matter if you have legitimate opposition. They have a political agenda," said Wenning, describing his association's relationship with OSHA headquarters as "contentious and adversarial."

Brian Sansoni, a spokesman for the Grocery Manufacturers of America here, said his members are primarily concerned with scientific justification for the rules.

"It's important to have very sound data on ergonomics rules before you're arbitrarily putting new rules into place," he said.

Other contentious regulations that could sprout up in the next year include updated hours-of-service rules from the Transportation Department and Labor Department rules that would exclude companies from government contracts if they are found to have "unsatisfactory" labor and employment practices.

According to a Transportation Department spokeswoman, current hours-of-service regulations are under review. She said the department plans to release a proposed rule within the next year.

Under current regulations, drivers may not drive more than 10 hours following eight consecutive hours off duty, or for any period after being on duty for 15 hours following eight consecutive hours off duty. The Federal Highway Administration announced in November 1996 that it was revamping the rules and requested comments and relevant research to consider in the effort.

"We're considering all comments and keeping in mind the fatigue factors," the spokeswoman said.

"Our concern is that these rules will be written by a federal regulator with little concern for the intricate transportation network involved in the logistics of our industry," Block said.

FDI is particularly concerned with what it calls the "blacklisting" regulations. The rules, proposed June 9 with a comment period closing Nov. 8, seek to give federal contracting officers "guidance" to ensure the United States "does business only with high-performing and successful companies that work to maintain a good record of compliance with applicable laws."

Specifically, the proposal would mandate that procurement officers, who control about $170 billion in federal contracts annually, review companies' compliance with federal labor laws like the Fair Labor Standards Act.

Industry officials contend the rules are politically charged and redundant. They said the rules could result in businesses being excluded from preferred vendor lists and eligibility for contracts and subcontracts. Ongoing contracts might be suspended, they noted, and in some cases contractors could face debarment.

"This is a political issue Gore began years ago when he promised AFL-CIO he would make sure through federal regulations that government contracts are given to unionized companies," Block said. "There are already regulations in place that allow the government to get rid of those violating the Federal Workplace Standards Act. This is a political deal."

He added: "This regulation gives tremendous power to an administration that might want to say 'well, you're not dealing with the labor issues quite right,' so you're out. Once again it's back to throwing the bone to organized labor."

Administration officials have denied any political motivation, saying the rules merely present a framework for contracting officers to ensure the government does business with law-abiding companies.

"We're not sitting on the edge of our seats waiting for regulations to be promulgated," Motley said adamantly. "We tend to feel that we have enough regulations already."

Still, industry officials hope Clinton's last year will spur agencies to action on issues like irradiation, genetically modified foods and supermarket mergers.

"We'd like to see the government act expeditiously on irradiation petitions," the GMA's Sansoni said. "We would certainly look for action on that in the next year or six months. This is a very important step forward for food safety."

In February the Food Safety Inspection Service began soliciting comments about amending meat-inspection regulations to permit the use of ionizing radiation for treating refrigerated or frozen uncooked meat, meat byproducts, and certain other meat food products to reduce levels of foodborne pathogens and to extend shelf-life.

The FDA green-lighted the procedure in December 1997.

Due to a huge influx of comments, the agency extended the comment period from the end of April to mid-June. A spokeswoman for the FSIS said the agency is in the process of drafting the final rule, which will be published by year's end.

Industry officials want the process sped up.

"We don't understand why this is taking so long," Motley said. "We've filed petitions to move this process quicker. It's important to get it done because it's important to the consumer."

Supermarket retailers, food distributors and manufacturers are also hoping that the Food and Drug Administration will play a bigger role in assuring consumers that genetically modified foods are safe.

"The customer needs to be comfortable and assured that the foods are safe," Motley said. "FDA plays a big role in that. There is a lot of confidence in the government."

"We think it's important for the FDA to continue to explain their biotech policy," Sansoni said. "As questions are raised we think it's important for FDA and USDA to explain the answers. The FDA has to work to clarify any misconceptions."

The GMA has filed comments with the FDA on proposed program priorities for the agency's Center for Food Safety and Applied Nutrition. In response to a question on what issues are not being adequately addressed by the CFSAN, the GMA said the FDA needs to be an available information resource on biotechnology.

At the NGA, officials said they are "encouraging manufacturers to be open with consumers."

"We do applaud the regulatory authority for not inappropriately reacting to consumer advocacy groups," Wenning said.

During the National Summit on the Hazards of Genetically Engineered Foods here in June, scientists, public-policy experts and industry and religious leaders presented a petition to the White House, Congress, the U.S. Department of Agriculture, the Food and Drug Administration and the Environmental Protection Agency demanding mandatory labeling of all foods derived from, processed with, containing or consisting of genetically engineered organisms. The petition contained 500,000 signatures from across the country.

Still, there are currently no regulatory proposals calling for the labeling of genetically modified foods.

USDA Secretary Dan Glickman in July, however, called for an independent scientific review of the U.S. Department of Agriculture's biotech approval process.

More recently, the FDA announced that it would hold meetings around the country this fall to hear what Americans think about bioengineered foods. Meetings will be held in Chicago, Washington and Oakland, Calif., throughout November.

With the spate of mergers and acquisitions, industry officials are also calling on the Federal Trade Commission to speed up its merger-and-acquisition process. "We're just asking them not to keep people on pins and needles forever," Motley said.

"We're encouraging them to be more vigilant," Wenning said. "And they've been open to our input."

At FDI, officials are taking their request one step further. "When two supermarket chains merge and they say you have to divest X number of stores to maintain competition, then the question is who gets the stores? We want the FTC to give preference to independent retailers," Block said.

Indeed, FDI launched a special effort to gain equitable treatment of wholesalers and independent retailers by federal antitrust officials when divestitures occur or are ordered as part of a merger agreement. FDI president John R. Block met with James A. Fishkin, an attorney with the Federal Trade Commission, to discuss the issue.

Other issues on the regulatory radar screen include: whether the USDA will lend its support to electronic benefits transfer, the outcome of President Clinton's series of nationwide food-safety hearings and EPA's push to eliminate commonly used pesticides.