The head of the Environmental Protection Agency ruled yesterday that public advocacy groups do not have the right to hearings to challenge EPA decisions on use of pesticides.

The ruling by EPA Administrator Douglas Costle was based on an agency regulation granting hearing rights to those "adversely affected" by agency decisions. Costle held the provision applies only to those on whom EPA decisions have a direct economic impact.

The decision grew out an effort by the Environmental Defense Fund to challenge EPA restrictions on use of the pesticide chlorobenzilate. The EDF contends that the restriction does not go far enough, and had sought hearings to argue for a complete ban.

EDF attorney Jackie Warren said her group would file suit against the EPA today.

"The consequences of the decision are to exclude environmental and consumer and labor groups from meaningful challenges to EPA decision," she declared. "The result is that the chemicals will be used, and people will be exposed to dangers from them while we're fighting our way through the courts. It's a flagrant disregard of the rights of the public to be protected."

The AFL-CIO was also critical of the ruling. "I think it's a wrong decision. It forecloses any comments except by people who have an economic stake in the chemical, so it shuts us out," said George Taylor, director of the AFL-CIO Department of Occupational Safety and Health.

EPA General Counsel David E. Menotti argues that allowing public advocacy groups to demand hearings would hamstring the EPA in implementing decisions. EPA rulings ordinarily go into effect 30 days after being proposed in the Federal Register. If hearings are requested, action is delayed.

"The hearings are very expensive and time-consuming," Menotti said. "I think it's very important for this agency to be able to control the number of groups asking for hearings as far as we can."

Menotti said groups like the EDF retain the option of petitioning the EPA to consider broader restriction of a chemical. That would take much longer, but would not delay restriction or use of a chemical, he added.

Warren protested that the EPA has her recourse. "There's no reason why those restrictions proposed might not go into effect, whole the agency publishes an amended notice telling people they could be broadened," she argued.

Costle's ruling affirmed a decision early this year by an EPA administrative law judge in the chlorobenizilate case. The pesticide, manufactured by the Ciba-Geigy Corp. of North Carolina, had been shown to cause testicular cancer.

The EPA had published notice of its intent to halt certain uses of the pesticide, and the EDF protested the restriction did not go far enough.

"The EPA left chlorlbenzilate in use for citrus fruits. The citrus pulp is fed to cattle, and people are exposed to it through meat and dairy products," Warren said.

Costle yesterday ordered into effect the restrictions originally proposed for the insecticide. They prohibit use on apples, cherries, cotton, trees, ornamental plants and nuts. It may continue to be used on citrus fruit if workers use respirators and wear special clothing.

Costle also called for additional studies, and promised to invite the EDF and other groups to discuss the decision with him at a series of meetings "that will be scheduled shortly."