July 25, 2001

The Honorable Christine Todd Whitman
Administrator
U.S. Environment Protection Agency
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, DC 20004

Dear Administrator Whitman:

The European Union has solicited comments on a Commission Green Paper on Integrated Product Policy (IPP), which proposes to integrate and expand a number of initiatives pertaining to environmental labeling, extended producer responsibility, waste minimization and life cycle assessment.  The United States Council for International Business (USCIB) would like to submit its views on IPP.

USCIB works to promote an open system of world trade, finance and investment in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Representing some 300 U.S. companies, professional services firms and associations, it is the American affiliate of the International Chamber of Commerce, the Business and Industry Advisory Committee to the OECD and the International Organization of Employers.  USCIB’s Environment Committee and Environmental Labeling Working Group work to promote sound policies that are transparent, scientifically-based and economically-justified.

The stated purpose of the Green Paper is to stimulate sustainable consumption, especially through the use of price mechanisms and other “market mechanisms” to create economic incentives for stakeholders to produce and buy greener products.  Following its consultative process, the Commission will issue a White Paper in the autumn as a proposal for E.U.-wide regulatory or other policy action.  We understand that the OECD is also considering undertaking a work project on IPP.

Most members of industry in both Europe and the U.S., including USCIB, support efforts to encourage product innovation to reduce environmental impact and minimize waste.  In this sense, the E.U.’s IPP programs may offer the opportunity to improve the consistency and cohesiveness of existing approaches, and streamline policy efforts to improve the environmental aspects of products in the marketplace.  In the development of product policy, all of the actors involved in a product’s life cycle play an important role in how the product affects the environment.  We therefore hope that the Commission will encourage and facilitate open communication between stakeholders, and include U.S. industry views in the development of their IPP proposal.

While we generally support the overarching goals of the E.U.’s Green Paper, U.S. industry believes it is vitally important to ensure that product policies are based on sound science and understanding of both the strengths and limitation of different policy instruments.  We are concerned that some of the proposed IPP policies are a retreading of programs that have been shown to be largely ineffective, and that could also disadvantage U.S. companies doing business in and trading with European Union member states.  Many of the Green Paper’s proposals have already had questionable benefit to the environment or consumers, and could further create market distortions, affecting the competitiveness of both U. S. and European companies, and limiting consumer choice.

The American Chamber of Commerce in Brussels has prepared an extensive commentary on the E.U. Green Paper, which we attach for your information.  USCIB would like to endorse the points in this paper, which stress both the potential strengths and weaknesses of the E.U.’s approach.  In particular, we would like to highlight the Chamber’s points that IPP should do the following:

* Recognize that IPP’s goal of promoting sustainable development should consider the economic and social value of products, not just focus on environmental issues.  This is stated at the outset of the Green Paper, but largely ignored in the E.U.’s discussion of specific policy instruments.
Ensure that efforts to stimulate Green Procurement adhere to the Government Procurement Agreement under the WTO.
* Ensure that there is a truly balanced consideration of a product’s environmental impacts throughout its entire lifecycle, rather than a selective focus on areas that are perceived, but not demonstrated, to be meaningful.
* Avoid discrimination against products that do not have environmental labels, or that fail to meet ecolabel criteria.  Ecolabeling is a voluntary program in Europe.  In many cases, products may not satisfy an existing label criteria, even though they are produced in an environmentally responsible (or even superior) manner, or companies simply choose not to apply for a label.  These companies should not be discriminated against in either procurement programs or in the public marketplace.
* Support the E.U.’s desire to broaden environmental labeling programs beyond existing “seal of approval” ecolabeling efforts into areas that provide consumers with factual information about products, then, like nutrition labels, let consumers decide what is relevant to them.
Avoid confusion of life cycle analysis (LCA) and risk assessment, and thus, the inappropriate use of LCA as the pre-eminent basis for policy decisions about products.

On the subject of environmental labeling, we also enclose the proceedings of USCIB’s October 2000 International Symposium on Environmental Labeling and Consumer Information.  These proceedings emphasize the need for science-based approaches to providing consumers with information about environmental impacts.  They also highlight the difficulties with multi-criteria environmental labels, the basis for some existing IPP-proposed policies. 

U.S. companies have made tremendous strides in innovation and openness in answering consumers’ demand for environmentally responsible products and services.  This leadership has been supported by free market oriented policies, voluntary measures and guidelines (such as those promulgated by EPA, FTC and other government agencies) and public-private sector partnership. 

We encourage you to communicate these concerns to appropriate officials in the European Union and OECD.   Please do not hesitate to contact us with any questions.  We look forward to working with you and your staff on these important issues.

Very truly yours,

Thomas M.T. Niles

cc:  The Honorable Donald L. Evans
The Honorable Colin L. Powell
The Honorable Robert B. Zoellick