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Excessive regulation is not driving biotechnology companies out of Germany,
says a confidential report to the German parliament. This conclusion contradicts
the central argument in the industry’s campaign for the country’s laws on
altered genes to be relaxed.

The lower house of the German parliament last week approved revisions
to the 1990 law that was introduced to comply with European directives on
the use and release of genetically modified organisms. The changes will
speed approval for work on the least hazardous categories of organisms (This
Week, 5 June). The opposition Social Democrats threaten to defeat the bill
in the upper house.

Central to the debate is the claim by Germany’s Chemicals Industries
Federation that the law is too strict and forces biotechnology companies
to move their laboratories, investment and jobs to the US, where regulations
are not as tough. This view has been echoed by the industry across Europe.

But a confidential report prepared for the German parliamentary committee
on biotechnology contradicts this view. The report, from the Fraunhofer
Institute for Systems and Innovation Research in Karlsruhe, concludes that
regulations in Germany are no more of an obstacle for genetic engineers
than those in the US or Japan. ‘Industry tries to give the impression that
regulation in other countries is easy,’ says Olav Hohmayer, one of its authors.
‘This is just not the case.’

In the US, there is no federal law on genetic research, and firms have
to find their way through a labyrinth of state and municipal regulations.
‘If you want to plant altered potatoes of a type you’ve planted before,
then permission might take less time in the US than in Germany,’ says Hohmayer.

But for trials in areas ‘where scientific knowledge is limited’, the
demand for detailed information and testing is greater in the US than in
Germany. ‘If you’re trying to get permission for something new, you may
decide not to bother in the US,’ says Hohmayer.

In Japan, the regulations look less stringent because they are voluntary.
But Japanese firms are reluctant to do anything risky unless it is allowed
explicitly, says the report. This makes the guidelines ‘no less restrictive’
than the German law.

Martin Kallen, head of the European subsidiary of the US chemicals
firm Monsanto, said at a meeting of biotech-nology firms in Brussels last
month that biotechnology would benefit more from tax incentives and cheaper
labour than changes in regulation.

So far, the German government seems to have accepted the federation’s
point of view. Josef Rembser, head of biotechnology at the Ministry of Research
and Technology, says the government wants to relax both the German law and
the Community directive. At a meeting in Brussels last month, Rembser said:
‘The R&D emigration issue is alarming.’ German pharmaceuticals companies
invest three times as much outside Germany as inside it.

Hohmayer has a different explanation for this finding. ‘If you are a
European company, you have to keep in touch with the latest research developments
in the US,’ he says. That requires facilities ‘in the San Francisco and
Boston areas, because that is where the top research is done’.