Archived press release

Exposing the Red Tape Myth

8 November 2004

Business opposition to red tape and regulations is damaging society and the wider environment, according to a new report launched today (Monday 8^th November) [1] by CORE, a coalition of NGOs, trade unions and academic institutions who are calling for greater corporate responsibility [2].

The report, "From Red Tape to Road Signs" claims that business has created a myth of red tape as the big bogeyman threatening profit and productivity in reaction to new regulations. But in reality, the report argues, regulation does not represent a barrier to business but an opportunity to improve the way in which business operates. By looking at past examples of environmental and social regulation, the report demonstrates that so-called red-tape can improve productivity, rather than harm it.

"The Government has mistakenly heeded business warnings about recent regulations, such as the EU Emissions Trading Scheme, and the introduction of the Operating and Financial Review, accepting the presumption that they will impede productivity. But not only are they holding back environmental progress by cow-towing to business, they actually pose a significant risk to UK competitiveness," said Deborah Doane, Chair of the CORE Coalition and the report's author.

Lobby groups such as the CBI and Institute of Directors frequently claim that regulation costs business billions of pounds, and will impede productivity and competitiveness. But the report finds that those countries which have high levels of competitiveness also tend to have high levels of social and environmental regulation, including Sweden, Denmark and Canada. In spite of this, business in the UK continues to argue in favour of promoting voluntary standards. The CORE report shows that such claims are frequently exaggerated, and that voluntary standards actually lead to fewer improvements, while the cost is usually borne by those least able to afford it.

So-called "Red Tape" is responsible for:

• Reductions in emissions of air pollutants, with sulphur dioxide emissions reduced by 75 per cent since 1990.

• Reduced water pollution - with a drop of 65 per cent since 2001.

• A national minimum wage

• Maternity rights for women

• Health and Safety legislation

Indeed without regulation, the report points out, existing consumer and employee protection would not exist. Rather than posing a barrier, red tape is responsible for some of the greatest advances in social conditions in modern times, often spurring business to innovate and improve.

Friends of the Earth Corporate Accountability campaigner Craig Bennett said:

"Business has created a mythical monster out of the idea of regulation and red tape - but in doing so they have created a barrier to their own progress. The CORE Coalition's research shows that a thought through regulatory regime can improve the way business operates, not just for the benefit of the workforce and the environment, but also for the efficiency of the business. Business needs to cut its knee jerk red tape response and look at constructively meeting the challenges faced."

Notes

[1] From Red Tape to Road Signs, CORE, November 2004 . See www.corporate-responsibility.org

[2] The CORE Coalition's steering group is made up of Amnesty International, Friends of the Earth, Action Aid, New Economics Foundation, Christian Aid, WWF and Traidcraft. The Coalition itself includes over 100 charities, faith-based groups, unions and academic institutions. CORE was formed after the Government's failure in the Modernising Company Law White Paper to specify rules requiring companies to be more transparent and accountable to the environment and communities in which they operate.

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Published by Friends of the Earth Trust