SPEECH/02/217
Margot Wallström
Member of the European Commission, responsible for
Environment
Business Impact of the New Chemical
Policy
Conference on the Business Impact of the New Chemicals Policy
Brussels, 21 May 2002
Ladies and gentlemen,
I would like to start my intervention by telling you about a discussion I had a few
days ago with a group of CEOs from the chemical industry. They were concerned
that their sector suffers from a negative image. They complained that ever fewer
students today consider a career in chemicals as promising and that the
industry has difficulties in recruiting talented engineers.
I would like to stress that one important objective of the new EU chemicals
policy is precisely to increase confidence in chemicals through greater
knowledge about their safety and potential toxicity. I dare to claim that in the longer
term this will encourage Europe’s talented youth to reconsider chemicals as a
career worthwhile embarking on.
The need for a reform of chemicals policy
It is good to sometimes remind ourselves in this debate on the reform of chemicals
policy why we need a major overhaul of the current system. I want to start by
this before I focus on some considerations on the costs and benefits of reforming
our current chemicals policy in the remainder of my speech.
Firstly, we have insufficient knowledge on the properties and risks of
chemicals on the market. There are potentially 100,000 chemicals produced and
used in the EU that existed before new assessment procedures came into force in
1981. For only a very limited number of these do we have adequate information
about the risks they pose to human health and the environment. Despite this scant
amount of information, these substances have remained on the market.
One related problem from a regulator's point of view is that the current
assessment procedures for existing chemicals are proving to be too
cumbersome and slow.
In addition, most of the effort and costs of doing the risk assessments fall on the
authorities in the Member States and the Commission. We believe that the “burden
of proof” needs to be reversed so that the producers, manufacturers and downstream users are responsible for proving the safety of the chemicals they want to
place on the market.
Why should we treat chemicals differently for example from cars? Before putting a
new model into the showrooms, a car manufacturer has to prove its safety. I see no
reason why this should not also apply to a new chemical substance.
These, in short, are the reasons behind the Commission's initiative to reform our
chemicals legislation.
Environment and health
But of course it is not abstract policy arguments that motivate us most. We expect
concrete environmental and health benefits to result from the new policy.
Some of the deterioration that we have observed in the environment has been
clearly linked to the increasing use of chemicals. We cannot close our eyes to this
damage.
Let me remind you of some of the concerns.
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Reproductive and developmental effects associated with chemicals pollution
have been observed in fish, birds and mammals on all continents. Studies have
shown that the highest doses of some chemicals are absorbed at an early stage of
human development, in particular by the foetus and the breast-feeding child. Most
of these effects were linked to chemicals, in particular PCBs, related bioaccumulative chemicals and endocrine disrupters.
We recognise that with our present state of knowledge, these negative impacts
cannot be quantified, let alone monetised. How do we value the loss of a species?
And what are the true costs of disease for society?
Some benefits however can be monetised - for example those of improved health
and safety at work. Injuries and occupational diseases do not only impair the wellbeing of employees - they are also expensive for society. In the United Kingdom
alone, between 1,500 and 3,000 new cases of chemical-related occupational
asthma are reported every year. Over 10 years, the total cost to British society is
estimated at 0.8 to 1.6 billion Euros.
Even a small reduction in the incidence of allergies in the European Union will
offset the cost of our new chemicals strategy, as shown in a German study on
the socio-economic costs of allergies conducted in 1999.
It therefore makes economic sense for society to improve the control of
chemicals.
What is in it for the chemical industry?
Clearly, we should not disregard the costs that higher information
requirements on chemical safety will impose on the industry in particular over
the next few years. We are sensitive to these impacts. We also all know that the
chemicals industry is one of the leading sectors and the third largest employer in
Europe.
I therefore hope that this conference will yield some new and well-considered
insights into the business impact of our chemicals reform.
There are some chemical manufacturers and associations and others who have
claimed that the new EU chemicals strategy will jeopardise employment in
Europe. I have yet to see the arguments and figures to prove this case. In their
absence, I tend to find such accusations implausible. On the contrary, the new
strategy should create new jobs in the chemicals sector for which employment
actually fell over the last few years.
When discussing the impact of the planned overhaul of our chemicals control, I find
it important to keep a few general considerations in mind.
First, the new chemicals system will undoubtedly encourage the replacement of
potentially hazardous substances by safer alternatives. This will stimulate
innovation. Our proposals in the White Paper specifically encourage innovation by
more favourable conditions for research and development. Innovation means
higher competitiveness and new markets. It should mean more jobs and not less
jobs.
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Then I am coming back to what I said at the beginning - the importance of
confidence in an industry. It concerns both the down-stream users of chemical
compounds and the general public. At present, the toxicity of most chemicals is
either not known or does not have to be communicated to the authorities and the
general public. It is no wonder that this lack of knowledge triggers
uncertainties and fears. In an area as sensitive as chemicals, transparency is key
to building trust, and an industry will only flourish in the longer term if it enjoys
the confidence of its customers and of the general public.
We have not yet looked into the draft Business Impact Study in detail of course.
However, there was one figure that struck us right away. It is that 88% of the
estimated costs of the new REACH system are due to the expected collection
of data, including testing. How does this and the industry's call for extending the
deadlines for providing the data under the new system square with the industry's
claim that it markets its chemicals only on the basis of sufficient tests? How can the
users of chemicals and citizens be confident in chemicals if they hear about
such gaps in knowledge?
The chemicals industry has to be seen as contributing to the preservation of our
environment and health and as responding to consumer demands for chemicals to
be safe.
In sum, chemicals reform is, as I see it, an investment into the future - not
only for the environment and public health, but also for the industry itself.
Minimising the costs of the new system
Again, this does not mean that we are insensitive to cost arguments. Of course we
need to reduce the costs where possible. Cost-effective measures are essential
to the success of our new policy.
In particular, the White Paper envisages a phased approach towards data
submission and testing requirements.
It also foresees higher thresholds than at present before a new substance has
to undergo certain requirements. No registration will be required for substances
produced below 1 tonne per year per manufacturer. The first results of the
Business Impact study show that this clause will create a favourable environment
for innovation through the development of speciality chemicals. The primary
beneficiaries will be SMEs, which in turn are the most likely to create new jobs.
For substances produced between 1 and 10 tonnes per year per manufacturer,
mandatory testing will be less demanding than under the current legislation.
Generally, the requirements will be restricted to in vitro tests. Since the vast majority
of existing chemicals - 20,000 out of a total of 30,000 - fall under this category, the
impact of the new chemicals policy on the industry will be reduced.
Due to their potential impact on the environment, a full data set will be required for
those chemicals whose production exceeds 100 tonnes per year per
manufacturer. However, several measures are foreseen in the White Paper to
avoid unnecessary tests, to save animal lives and to reduce cost to the Industry.
For example, available data will be accepted to avoid performing new tests, and the
establishment of consortia for data sharing will be strongly encouraged. Through
these measures and others, duplication of tests will be avoided, which will result in
savings for all those concerned.
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Lastly, a “tailor-made” approach will be applied to data requirements. Only
those tests that are necessary to assess the safety of a particular compound will be
required.
Next steps
Where do we go from here?
This conference will give you and the Commission a good opportunity to once more
discuss the necessary changes to the current system. The Commission attaches
great importance to involving stakeholders in this process, as is clear from the
previous stakeholders’ meetings in 1999 and last year in April, and the fruitful
discussions in the Commission's various Technical Working Groups recently.
We will now continue to draft the legislation to implement the new policy,
taking into account your input. We intend to present the proposal in the summer or
shortly afterwards. Once we have presented it, the Commission intends to
organise another stakeholder event to explain its proposal to you and learn about
your reactions.
Ladies and gentlemen,
I am sure that you will all agree that business growth and profitability cannot be
built at the expense of human health and the environment. We cannot allow
chemicals to accumulate in the environment and leave the bill to future generations.
I hope you will bear this in mind in the discussion today.
However, chemicals reform is based on more than a moral appeal. There is a good
business case for it as well. It can be summarised in two keywords: "innovation
and competitiveness", and "public trust in the industry." Everyone who aims
for the industry's long-term prosperity will keep these arguments for an overhaul of
the EU's chemicals regulation in mind.
And let us not forget - it is not only us in Europe who are in the process of
strengthening chemicals safety. Chemicals management is also stepped up in
the United States, Canada and Japan.
Let me conclude by saying that I am convinced that the new policy will provide a
sound and workable regulatory structure, which recognises the needs of
business and offers citizens the level of protection they quite rightly expect. I
am also convinced that the benefits of the new chemicals policy largely outweigh
the cost.
I hope that your work in this conference will contribute to a better understanding of
the costs and benefits of a new chemicals policy.
Thank you for your attention.
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