You need some bar of rigor they aim to clear that confers protection from damages. Whether that's field trials, drug trials, peer review, etc.
You're saying this like it's a bad thing.
We need to impress upon corporations to look at the long term condequences and any executive looking to keep living the good life to prioritize environmental/social matters with a high level of awareness and scrutiny before any machinations relating to increasing topline growth (figuring things like this out is why C-Suite execs get paid more than the presidents of most states)
To that we need a harsh route and I reckon the need for high profits will apply enough pressure for proper investment in R&D and allows new entrants to get a piece of the pie. Raising the bar will never stop progress -if it did we'd still be boarding some suspect aeroplanes amd driving ridiculous death traps we might call cars.
This is the reality under the current regulatory frameworks. Which is I'm advocating for a firm hand just as in the aerospace/motor industry.
Ofcourse there will be concessions as there will be non-obvious oversight and/or employees hiding bad information if it might damage their career. Regulators and civil organizations will have to figure out the meta information before proceeding to trial.
Your arms race argument is valid, but I think there's a lot of progress to be made before that negative effect dominates. I don't think we're currently at the optimum equilibrium of regulation vs. evasion. If the punishment for murder causes murderers to evade capture, society matches their efforts; it doesn't just give up.
With liability limits, you can do the math on whether a chemical is worth the risk because while some things are unknowable, your maximum liability is already established.
That's why I favor a "due diligence" regulatory arrangement.
New technology is always a gamble. It's just a matter of who pays -- the people who profited, or the bystanders who had nothing to do with it? If you want to do business and protect yourself against downside risk, take out insurance and do enough due diligence to satisfy the insurance provider. Passing off the risks to third parties just because currently there is no accountability system in place is not a just system.
I agree the person you responded to shouldn't have written "Or", but that doesn't change that individual actions and systemic change aren't exclusive but additive.