At the recent Annual General Meeting, Dr. Peter M. Sandman, an American consultant on risk communication, challenged CCPA with his controversial views on such subjects as social responsibility, capitalism versus altruism, voluntary initiatives versus regulatory enforcement, and dealing with eco-fanatics.
Creator of the “Risk = Hazard + Outrage” formula for risk communication, Dr. Sandman is the preeminent risk communication speaker and consultant in the United States today. His unique and effective approach to managing risk controversies has made him much in demand in the field of “reputation management.”
Dr. Sandman has helped his clients through a wide range of public controversies that threatened corporate reputation – from oil spills to the siting of hazardous waste facilities. He also helps companies to deal with the problem of sabotage and to persuade employees to take safety rules seriously. Whatever their perspective, his clients learn the dynamics of “outrage” – how to reduce it, how to prevent it and how to provoke it.
A Rutgers University professor since 1977, Dr. Sandman founded the Environmental Communication Research Program (ECRP) at Rutgers in 1986, and was its director until 1992. Now a full-time consultant, Dr. Sandman retains his academic affiliations as professor of Human Ecology at Rutgers and as professor of Environmental and Community Medicine at the Robert Wood Johnson Medical School in Piscataway, New Jersey. He received his PhD in Communication from Stanford University in 1971.
“The normal state of humankind vis-à-vis risk is apathy,” Dr. Sandman argues. “Whenever people are overly concerned about a risk, there has to be a reason – and by far the most common reason is outrage. I help industry reduce that outrage. I help reduce outrage when the hazard is small, and I help increase the outrage when the hazard is big.”
On June 20, Dr. Sandman addressed CCPA’s Annual General Meeting at Niagara-on-the-Lake, Ontario. He also chaired a session with a panel of community activists and critics to discuss how they viewed the chemical industry.
CCPA interviewed the outspoken Dr. Sandman about the failure of Responsible Care to make the chemical industry “loved by all.”
CCPA: Are more companies using security as an excuse to back away from Responsible Care transparency?
Dr. Sandman: I think the companies that were disinclined to be candid in the first place, that were dragged into candour against their better judgement and against their will, are likely to use security as an excuse to go backward. The companies that are least willing to be candid are of course the ones that are least likely to hire me.
It seems to me that a lot of my chemical industry clients went into Responsible Care and transparency thinking that, if they did that, they would be more loved. There has been real progress in the direction of improved transparency and risk mitigation. Yet chemical companies are no more loved now than they were 10 years ago. They are still very mistrusted by the general public. I’m not talking about environmentalists here. I’m talking about John Q. Public.
A lot of companies are feeling their own outrage. They spent a lot of money, time and effort being responsive to public concerns and yet the public is ungrateful. Company officials ask, “what is the point of it all if we’re still frowned at at cocktail parties when we say we work for a chemical company?” One of the most interesting things I’m encountering these days is outrage on the part of chemical industry people at the public’s unresponsiveness to their responsiveness. Company managers say, “Well, we’ve been doing this for a while. Now what?” And the implication is, “The Responsible Care ethic didn’t seem to solve our problems. Have we done it wrong? Have we not done it enough? Are we wasting our time? Should we stop doing it? Is there something different we need to do?”
Some companies are becoming more pessimistic and cynical, thinking that Responsible Care is a crock, that it’s not terribly useful. Some companies think it’s just not enough not to do harm. Perhaps they should be out there being more socially responsible, running literacy programs and feeding the poor and “doing good.” Maybe not doing harm doesn’t do the trick. There is scepticism inside the industry about Responsible Care that is an important new development.
It’s a very interesting paradox. If you ask most people to judge what the chemical industry does better – protect the public’s health or protect its reputation, they would say the industry works very hard on its reputation and is ignoring the public’s health. In fact, almost the opposite is the truth. The chemical industry has made massive strides (albeit under pressure at first) in reducing emissions and improving safety, real improvements in health and environment, but practically no improvement whatever in reputation. Most people think the chemical industry has massaged its reputation without improving its performance. Actually, the industry has massaged its performance without improving its reputation.
CCPA: What prompted your observations on the failure of Responsible Care to make the chemical industry “loved” by the public?
Dr. Sandman: I frankly never expected Responsible Care to make the chemical industry loved by the public. I thought it was an unrealistic goal to begin with. But I did have hopes and to some extent still have hopes that Responsible Care can lead to, if not more trust, at least more accountability and more perception on the part of the community that chemical companies are accountable.
My bottom-line goal for a chemical plant’s relationship with its neighbours is not to have the neighbours think that plant managers do a terrific job all by themselves, that we can leave everything in their hands, because they know what they’re doing. I would look rather for a relationship in which the neighbours say to themselves – “Well, those bastards might not be dotting the i’s and crossing the t’s if they didn’t have to, but they have to.” So that’s the difference between trust and accountability. Trust says, “I can rely on them to do it on their own” and accountability says, “I can rely on them to do it, because people are watching.” I always saw Responsible Care not as a route to trust, but as a route to accountability.
I remember when the United States was considering Responsible Care. I proposed the slogan “track us, don’t trust us,” which was actually used for a while. It captured my sense that you shouldn’t ask people to trust you or to believe that you’re going to do the right thing just because you say you will. That’s too much to expect. You should ask them to come to meetings, read your annual report, look at your TRI (Toxics Release Inventory) Program data and emissions numbers. You should ask them to track you, and to notice not that you’re doing the right thing on your own, but that the system is working and you’re obliged to do the right thing, and are therefore doing so. I thought Responsible Care would be an important tool for people to see the chemical industry as accountable. Chemical plants are in fact much more accountable than they used to be, because of Responsible Care. They’ll lose their certification if they don’t meet the various codes.
So, in terms of making a particular plant more accountable, Responsible Care works. I’m not sure whether it has worked in terms of making people in the community think it’s accountable or not. I haven’t seen any survey data that answers that question, but it certainly hasn’t made community people think that the chemical company can be trusted, that we can afford to shrug them off and ignore them, leave them alone, because they’ll do it on their own. That was probably an unrealistic goal to begin with and it certainly hasn’t been achieved.
CCPA: Is it really so important that the chemical industry be loved – or at least viewed more benevolently or as less of a threat – by John Q. Public?
Dr. Sandman: Being disliked and mistrusted adds a significant cost to doing business. When communities don’t like you, they are more suspicious. Events that might not be hazardous are more likely to be interpreted as hazardous. Anything unusual (such as a flare or a loud noise) is much likelier to be seen through a suspicious veil that makes people think they are dangerous occurrences. If you think plant managers are doing a good job and will tell you if there is a problem, you won’t bother them as much as if you suspect they’re doing a bad job and won’t tell you if there is a problem.
Plants that have bad community relations tend to have more regulatory trouble, because regulators are attentive to communities, and if the community is anxious and angry, the regulator is likely to be more punctilious and demanding, to look more negatively on an occasional violation. So you wind up in more trouble with regulators if the community is actively against you. As a result, morale goes down and recruitment of first-rate engineers gets harder and costs go up.
If a chemical company gets a reputation for being hated and distrusted, that becomes a competitive disadvantage. So there are very good business reasons for wanting not to be hated. I might add that it’s much less clear that there are good business reasons for wanting to be loved.
The evidence, as I see it, indicates that companies that are hated pay a very substantial price vis-à-vis companies about which people feel neutral. It is less clear that being loved is an advantage for a chemical company. There may even be a financial penalty to being loved, because it makes you more visible, more salient. People have higher expectations and if those expectations are not met, if you can’t be as perfect as the loving public expects you to be, then you risk encountering a boomerang effect.
So, neutrality is best. What you want people to think is – you’re okay, you’re doing a good job, you’re responsive. You don’t want them to think you’re wonderful, because if something goes wrong, they’re going to think you betrayed them. And you certainly don’t want them to think you’re awful, because then they will punish you and make the government punish you. They’ll make the cost of business very high.
As for government intervention, let’s divide chemical companies into three categories: superb, average and awful. The superb ones are unaffected by government regulation and Responsible Care, because they are better than both. They are cutting-edge, state-of-the-art. They’re leading the pack. They’re the ones pushing to make Responsible Care tougher. They’re the ones that exceed the Responsible Care standards. The very best chemical companies don’t do anything differently because of Responsible Care. They were ahead of Responsible Care demands even before those demands were made!
Responsible Care improves the middle companies. They’re where Responsible Care has had the biggest impact – on ordinary, average, run-of-the-mill companies that want to be members in good standing of the community and have to work hard at it.
Responsible Care doesn’t affect the worst companies. They aren’t members and don’t want to be members. They couldn’t be members, because they’d have to change a lot of things they have no intention of changing. So for them, the only hammer is government. They’re not worried about looking good or even average. They’re worried about getting shut down. CCPA can’t shut down a company. All it can do is take away its seal. Government can shut down a company. So, to think that just because we have Responsible Care, we don’t need government regulation is just plain nuts.
One of the things Responsible Care has done by improving a lot of companies’ game is made it possible for government standards to get tighter and lift the bottom. Essentially, CCPA’s job is to lift the middle. Government’s job is to lift the bottom. The top lifts itself.
Government regulations impact mostly the bottom, stopping illegal practices. Enforcement is much more political and dominated by outrage, and regulators have to do their enforcement action where public anger is high. That often is directed at very big companies whose performance is generally pretty good.
CCPA: Where do you think the chemical industry should go from here, now that it feels so skeptical about Responsible Care?
Dr. Sandman: To me, the most important word is “responsive.” I wish it had been called “Responsive Care.” I’m not looking for the chemical industry to persuade people that it is good, but that it is paying attention, listening and responding. It may be that in some communities, responsiveness will mean better process control and lower emissions. In other communities, responsiveness will mean better disaster protection and anti-terrorism action or helping out in the community’s anti-drug program or sending plant engineers to teach science in the schools. I don’t think responsiveness is going to mean the same thing everywhere, but I think where the chemical industry needs to go is to be seen by its communities as responding to the demands those communities are making on it, rather than as inventing virtue on its own.
Copyright © 2002 by Peter M. Sandman
