An environmental group sued the federal government yesterday seeking to block all experiments involving the release of genetically altered living organisms unless the researchers are covered by liability insurance.
The Foundation on Economic Trends, a Washington environmental research organization, asked the U.S. District Court for the District of Columbia to order the Environmental Protection Agency to require insurance coverage before approving any such experiments.
The requirement would create an obstacle to several companies and universities that have asked the government for permission to conduct such experiments as a way of testing new crops and pesticides developed through biotechnology, the manipulation of genes and other components of living cells to produce innovative products.
Jeremy Rifkin, president of the foundation, said the insurance crisis could threaten the growth of the young biotech industry. "The insurance industry won't touch genetic engineering," he said. "If there's no insurance, that means no investment. And no investment means no biotechnology."
Al Heier, an EPA spokesman, said the agency has no statutory authority to require insurance coverage for the kind of tests discussed in the lawsuit. He noted, however, that Congress has required insurance for some activities that pose environmental risks, such as hauling hazardous materials or disposing of toxic waste. Requiring insurance for outdoor biotech experiments is "a social question for Congress to address," he said.
Spokesmen for the two major biotech associations called Rifkin's suit weak but agreed the industry faces an insurance crisis.
"The mere filing of a claim -- whether valid or not -- could have devastating effects" on a young biotech company, said Bruce F. Mackler, general counsel for the Association of Biotechnology Companies, which is trying to organize an insurance company for its members.
Most biotech companies are less than a decade old and only a handful have products on the market, making it difficult to obtain liability insurance to protect them in the event of a lawsuit. Mackler's group found in a recent survey that many of its 150 members lacked liability coverage for products, processes and directors. Mackler said one member faced a $400,000 premium for a $1 million policy.
"It's a serious concern," said Richard D. Godown, executive director of the Industrial Biotechnology Association. "But we are confident that we are going to prove that biotechnology does not represent a unique hazard."
The lawsuit alleges that EPA lacks the scientific tools to judge the hazards posed by releasing genetically altered microbes into the environment where they could migrate, reproduce and cause widespread ecological harm. Therefore, "measures must be taken to assure that those releasing such mutant organisms have the financial capability to provide redress and remedy for such harm," the court document says.
EPA has approved two experiments that would involve outdoor testing of bacteria that has been genetically altered to inhibit frost formation on plants. Both experiments faced insurance problems but have been delayed for other reasons.
Advanced Genetic Sciences Inc. faced local opposition to its test in the California community where it was planned after disclosing that it lacked general liability coverage, but EPA suspended the firm's permit after learning that the company tested the microbe outdoors before it had received permission. And the University of California said last month that as of July 1 it would lose its liability insurance covering the experiment, but that it could buy new policies and self-insure part of the exposure. The experiment has not yet been scheduled.
The lawsuit asks the court to nullify both EPA permits because the agency did not consider insurance coverage when weighing the risks of the experiments.