The politicians and think tank wonks espousing ‘regulatory divergence’ from Europe to facilitate trade deals with the United States and other free market centres claim to be acting in the interests of British businesses, including chemicals companies. But when I reached out to the directors of those companies and the associations that represent them, the response was emphatic.
British companies want to stay within REACH, and Brexit is already creating market uncertainty that is damaging business and threatens a future regulatory environment that is confused, duplicated, complex and expensive. It is estimated UK companies have already spent £250 million complying with REACH in time for last year’s 31st May deadline – money wasted if the country opts to become ‘out-of-REACH’.
Peter Newport, chief executive of the Chemical Business Association (CBA), told openDemocracy: “The CBA does not want to see divergence from REACH, and the overwhelming majority of our members want to stay in REACH. A survey a year ago revealed 20 percent of CBA members wanted divergence from REACH, but this has reduced dramatically as companies understand the implications.”
Newport confirmed that the CBA has met with government across departments at ministerial level and discussed Brexit, presenting that the majority of members want to stay in REACH for business reasons. Most UK companies will want to comply with REACH even after Brexit because they want to import into the EU, he explained. “Some smaller companies hoped there would be an opportunity to produce chemicals outside REACH but now feel the returns will be too small.”
One CBA member had been asked by customers to store 1,500 shipping containers worth of chemicals by 29 March 2019 to secure supplies. However, they cannot get the permissions from government in time and this is likely to be an impossible task.
The Chemicals Industries Association (CIA) agrees. Steve Elliott, its chief executive, has stated on the record that “regulatory consistency” is one of three priorities. Silvia Segna, of the CIA, confirmed in an email that it could not identify any businesses that were lobbying to leave the EU chemicals regulation regime: “To the best of our knowledge, CIA members wish to remain within REACH and therefore we are unable to provide you with any alternate views.”
Businesses leaving the UK?
A parliamentary committee on the future of chemicals regulation found that “both the Chemical Industries Association and the Chemical Business Association indicated that a sizable proportion of their members are already considering moving operations out of the UK in order to preserve their European business, with 20 percent of the 126 companies represented by the Chemical Business Association investigating moves into EU countries such as Ireland.”
The companies themselves are speaking publicly – in favour of REACH. Karsten Mueller, from BASF, told me: “Akin to other chemical businesses, downstream-users of chemicals and NGO’s, BASF’s favours continuity and consistency with the current EU chemicals management regulatory framework. Our position is very much aligned to the CEFIC [European Chemical Industry Council] statement. Our main arguments are based on the avoidance of additional regulatory complexity, the continued validity of REACH compliance efforts/expenditure and the avoidance of replicating studies, primarily animal studies.
BASF also believes that a new UK regulation will not enhance either human safety or environmental protection, further to EU regulation.”
David Bolton, from the British Retail Consortium (BRC), is a member of the UK Chemicals Stakeholder Forum (UKCSF) – which advises the government on managing risks to human health and the environment from chemical production and use. He suggested all the members of the forum favoured staying within REACH and supported the European Chemicals Agency (ECHA), which is responsible for managing the REACH regulation.
“The chemical industry has spoken in a single voice against leaving ECHA and REACH. Most UK Chemical business do not just supply the UK market, the EU being a big part of their business. They do not want the burden of additional costs. The BRC is not in favour of divergence but would prefer the continued compliance with REACH and its management through ECHA. “Like you, I also am not aware of a business who is in favour of divergence. Certainly no-one at the UKCSF has shared this position, everyone making it clear to DEFRA and Thérèse Coffey [the minister responsible] that the business preference is that the UK should stay within ECHA.”
Data sharing and common rulebook
He added: “REACH registration relies on a great deal of data sharing between registrants for the purposes of making and maintaining a registration. Registrants’ data sharing arrangements might not be sufficiently flexible to allow data sourced from pre-Brexit EU REACH registration activities to be used for a company’s ongoing compliance with the UK REACH regime.”
I searched far and wide for any chemical company, or any association, that would publicly put the case for divergence from REACH. David Ashworth of the British Association for Chemical Specialities said: “Personally I also find little evidence of people seriously advocating divergence.” Roz Bulleid from the manufacturers’ association EEF (formally the Engineering Employers’ Federation) added: “We’re keen to see continued alignment with REACH too.”
Tim Bowtell, from the British Coatings Federation, said: “Our membership, both large and small members, UK or foreign owned, are not in favour of divergence from EU regulations after Brexit. We believe in maintaining EU environmental standards, and our position would be to conform with EU regulations, ideally staying in ECHA, REACH, CLP and BPR.
“We support the ‘common rulebook’ approach in the Chequers proposal, and we think whatever is agreed politically, our members will manufacture paints, coatings and printing inks to EU standards, due to the need to trade. I believe this a pretty typical view cross the supply chain.”
Susanne Baker from techUK, which represents 900 tech companies, said: “We are indeed in favour or retaining REACH in full, and our preference is in fact to remain in the European system so fully support the Government’s position to negotiate for associate membership of ECHA. You are indeed right: most businesses are fully supportive of retaining REACH. This is because companies have invested heavily against REACH and have spent time and effort to understand how it functions. For those trading with Europe, they would have to be compliant with REACH at the point of sale anyway so divergence offers no benefits.
“Further, for the membership of techUK, products are generally designed to global standards, we really would prefer one standard for chemical regulation rather than lots of individual regimes which would create manufacturing complexity and difficulties for companies to track and manage. With REACH being increasingly adopted by other regions of the World, REACH is rapidly is becoming that standard.”
She added: “I’ve also not met or heard of any company arguing in favour of divergence. Yes, industry had voiced concerns in the past and campaigned for minor changes to help small businesses in particular deal with them, but that by no means translates to a desire to get rid of it altogether.”
Andrew Poole from the Federation of Small Business argued that continued trade with the EU after Brexit would far outweigh any benefit from leaving REACH. “Some of our members have clearly struggled with REACH and many of those would I’m sure welcome the opportunity, post Brexit, to avoid what they would argue is an overly burdensome REACH registration process (which is essentially a ban on certain chemicals). The prevailing advice to smaller users requiring registration has very much been to ‘find an alternative’. From a broader corporate point of view, FSB wants initial stability and continuity after Brexit, with the rules for businesses the same the day after Brexit as the day before. Longer term we do believe Brexit offers an opportunity to review regulations across the board, REACH included. But with the caveat that continued trade with the EU – including through supply chain – may be paramount for those affected. That said, I think it’s important to acknowledge the good intent of REACH, which is to prevent dangerous and harmful chemicals entering our environment. Whether it is balanced and proportionate in all cases (based on the likelihood of an individual chemical causing harm), or targeted in the best way, is another matter for debate.”
There have been claims that REACH had resulted in more animal testing, and therefore some animal welfare charities were in fact in favour of divergence from EU regulation. Perhaps there was a counter-intuitive avenue to finding someone engaged in the issue who did support Boris in his anti-REACH bandwagon? Well, yet again, no.
Bad for business, bad for animals?
Katy Taylor from Cruelty Free International told me: “With specific regard to REACH, we are very concerned that UK withdrawal could lead to duplicate testing and to UK companies being unable to access existing safety data. That must be avoided. We are not at all reassured by the government’s recent Brexit paper on the chemicals industry nor by ministerial statements, and this must be tackled urgently.”
The chemicals industry is united in fearing the costs and complexity of abandoning REACH. This message has been received by the politicians closest to the use. Mary Creagh, a Labour MP, is a member of the Environmental Audit Committee and spoke at the committee meeting, Leaving the EU: Chemicals Regulation. She said: “UK companies want to stay in REACH and warned “Brexit is a business-killing issue”.
UK companies, she explained, will have to reregister with REACH to continue selling chemicals into the European market. “That is the height of absurdity. It is a huge duplication of costs, and it risks making UK chemicals and manufacturing uncompetitive…How will we stop our country from becoming a chemical dumping ground?”
The Conservatives are – to supporters and critics alike – the party of industry and commerce. It is supposed to represent the interests of the chemical companies, and other ‘entrepreneurs’. The free market advocates on the right wing – Johnson, Davis, Rees-Mogg – are supposed to support business. This is the ideological underpinning of deregulatory free market economics. But all the evidence suggests that they are not representing British business – they are ignoring and even endangering the chemicals industry.
So when it comes to Brexit, when it comes to the attack on REACH and EU regulation who do they really represent? Who on this planet actually wants to undermine European chemicals regulation? That is the subject of the final part of this three part series.