Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 180 - 199)



  Q180  Dr Turner: Do you think you are going to succeed in getting the legislation finalised and passed by 2006 or do you think the European Parliament is going to deal with it and its progress?

  Commissioner Liikanen: That is a very interesting question because what has happened with this legislation differs essentially from other pieces of legislation which are environment related. Because the Council has taken the decision that this will be led by competitiveness council for the first time. Others, like Kyoto, emission trading, end of life vehicles, whatever, they are all environment council. It is a big change of focus. It will be co-operation but the lead is in the competitiveness council (which happens to be my council). In the European Parliament, many people expect that at least there it will be run only by environment committee. No. It will be run jointly by the industry, environment and legal affairs committees. Conclusive of this all is that there is a clear understanding that to get it passed it must be bi-partisan—I mean, you know, the balance must be right—and I think that is very, very good news. Very, very good news. It gives you some certainty also that we can get the balance right. Whether it will be done by 2006, it is difficult to know, but I think it is not totally unrealistic. Of course we have now the problem of elections in the European Parliament, change of the Commission, changes of legislation may take time, but for me the quality of the output is more important than the time it takes.

  Q181  Dr Turner: What sort of amendment do you expect the European Parliament to make?

  Commissioner Liikanen: Council and Parliament—because we must remember that Council has the lead. I am sure that the question about prioritisation will be properly discussed. Prioritisation is interesting, because, for instance, when I was in one of those tens of public hearings in which I have participated, a green vice-chairman of the European Parliament said that he is strongly in favour of more prioritisation. So that is from their side. Animal welfare groups, which normally are supporting the same issues with the greens, in this issue are on the opposite position. So you see that from that territory. Prioritisation also will be favoured by some parts of the industry. So I am sure that will be one of the cornerstones. The second cornerstone will be the role of the European Agency and how to build the processes up. There the European Agency, of course, will start from a very small number of people, so we cannot overload it, but there seems to be strong interest from the industry and from Member States that we must guarantee the coherence of the internal market, and not fragment it less and less. Everything pushes for a stronger agency. The third point—which is more or less our internal affair, but we will be ready—is how to build this all up before you get the agency functioning, because in principal you cannot apply the law before it has been adopted. But if you go out to prepare it then, when it is adopted, it is too late. How we build up this preparation, I think there will be very detailed questions on that.

  Q182  Mr Key: Commissioner, can we move on and look at the future and how you are going to apply the new legislation. Retailers in the UK have said that they have very little idea how this legislation is going to apply to them, what they are going to have to do. How are you going to communicate that with retailers right across the Union?

  Commissioner Liikanen: I think a little bit more detailed question would be easier. Retailers concern everything but . . . The key question of course is that the major emphasis is on the original producers of chemicals—in that area. That is the issue. Unless we are discussing intended use—intended use, that they do not tell what are the chemicals—then there is an issue, but in principle we took away the obligation to make this chemicals safety assessment for the final products. So the retailers and downstream users do not need to do it. Now—I mean, after the proposal is studied—we have started a major process of consulting the stakeholders on the implementation. We have had a couple of workshops in this area. Both my services and the Joint Research Centre, close to Milan, are organising a workshop from 11 to 13 February—which means next week—in Ispra, to get the process started. The Commission have taken the position that we take a very open approach in this consultation. We hope to set up a few particular targeted, let's say, partnerships there—one is the textile industry, which is a very good example, just to see how it applies to textiles, another one is automotive and the third one is paper and so forth—just to go through every single concrete issue which may emerge.

  Q183  Mr Key: Textiles is a very good example, because there is a new principle here, is there not, that importers will have to take on the same responsibilities as manufacturers? Is that a realistic objective?

  Commissioner Liikanen: Yes.

  Q184  Mr Key: You are confident that it will be enforced?

  Commissioner Liikanen: Of course we need to enforce it, but the objective must be, of course, that in principle, let's say, domestic producers and exporters/importers are dealt with in the same way.

  Q185  Mr Key: I wonder if you could say what countries outside the European Union you are talking to about REACH and the extent to which you are seeking to extend the principles of REACH to countries outside the European Union—principally, of course, our major trading partners.

  Commissioner Liikanen: Let's say the question is that if we were to import chemical substances to Europe, these laws apply in the same way for internal producers and external. Whether they in their national legislation would impost the same trade principles, of course, is up to them. But could Mr Burge tell how we would treat with the importers in the field of, let's say, textile and the clothing.

  Q186  Mr Key: That would be very helpful.

  Commissioner Liikanen: It is, by the way, not the simplest piece of legislation, so I always want to give credit to my great experts in the field.

  Mr Burge: You were asking who we have contact with and who we are speaking to. We have had a great deal of contact with the US. The Commissioner was over in the US in the autumn and I think has been over on a number of occasions. We have had people from both the US authorities and also from the chemicals industry that we have discussed a number of these issues with throughout last year and we are continuing that dialogue. With Japan, also, we have had a series of discussions. China has become very interested in this legislation. And there are many others as well—the Koreans, for example. So there is quite a dialogue with major trading partners on REACH and what its effects are going to be. Obviously, as the Commissioner said, it is not possible to impose the requirements that are in REACH which apply to manufacturers, to overseas manufacturers. Quite obviously. But we can make sure, so that the legislation is WTO compatible, that we have equivalent and proportionate application of the legislation to importers and manufacturers. We have tried—and a lot of the legislation and a lot of the proposal is about balance—to find a balance in dealing with what we call in the terminology the "substances in articles"; meaning therefore, as far as textiles are concerned, dyestuffs in textiles, for example. We have tried to find a way to make sure that the EU manufacture of textiles or the EU importer of textiles are treated very much in the same way, in that we recognised, in looking at the concerns we have from the health and environmental perspective for textiles, that we are really concerned where substances are released either deliberately or not deliberately. For textiles, they would not normally be released deliberately, but it could be there is a problem that arises from that, so we focused the legislation to pick up those sorts of cases. In both cases, the issue is to ensure that the importer of textiles or the EU producer of textiles takes responsibilities for the substances that they are using and the effects that they have.

  Commissioner Liikanen: If I may perhaps add, on these dialogues, how it takes place. I was taking part in the Transatlantic Business Outlook in Chicago, that particular workshop of half a day on chemicals legislation, participated in by the industry and authorities from the other side. I visited China, where they want to raise this issue to create an open dialogue. We did that by videoconference contacts with the Chinese, which were very helpful. In this rare case, many authorities have given high credit, even in written form, on the openness and transparency we have had on the issue. So there is no criticism of that sort we get from the UK, from the United States, nor China, because it is open, it is all available. It is all available. One must make the effort, of course.

  Q187  Chairman: Is there any evidence that the chemicals industry might set up manufacturing plants outside the EU?

  Commissioner Liikanen: Of course that is the issue we must be terribly careful with. I must say, this challenge of Asia has been a healthy warning inside this House also. We try to get the balance right, so that unless you take care of the competitors you lose out. Of course the imported chemicals must comply with the same legislation, so that they cannot have the benefit if they do it outside, but still we must be careful, especially if we guarantee that, this question about the cost of registration, the facilities to innovate remain intact in Europe.

  Q188  Dr Iddon: Commissioner, as I understand it, the European Chemicals Agency will be entirely responsible for all the registrations and presumably also the authorisations at the end of the process. But the evaluations are going to be carried out throughout the Member States. There is a concern there that has been expressed by the Chemicals Industry Association in Britain and also by CEFIC who we met this morning, that, for example, a Member State could suspect that a chemical is very damaging to the environment and recommend to the agency that it be evaluated just to prevent another state in the competition process from proceeding to market that chemical, and also concern that the evaluation process might not be finite. Would you like to comment on why we have what could be an extremely bureaucratic competitive process in the evaluation of the chemicals between Member States.

  Commissioner Liikanen: I have three comments. The first comment is that this is a case which shows that industry wants to have strong European-level decision-making. It is very often—in UK debate, for instance—that people think that whenever you move something to Europe it is more costly than doing it at home. In this area there is unanimous opinion throughout industry: it will be a cost-effective method to fund the whole process run on a European level. The second point is that we have reinforced the agency essentially since the internet service consultation. The objective problem today is that the resources are mostly in the Member States. Before you set it up and build it up, it takes time, so we cannot start from zero and say we have a final form. We need time for that. The third issue is that we have given powers to the Agency to intervene in the requests of the Member States' authorities on these proposals, so they are in a strong position to intervene and say, "That is not possible, that is not proportionate" on day-to-day decisions. I am sure that my compatriots in Finland are all happy to make it stronger and stronger every day, this Agency, so, even though we have no national interest in this file, I will not be criticised if I give in on that point in the process! That was not a very correct comment, but in the end of the Commission I must go back home anyhow!

  Q189  Dr Iddon: Again as I understand it, in the proposed legislation the risks will be evaluated by one committee and the potential socio-economic benefits by another.

  Commissioner Liikanen: Yes.

  Q190  Dr Iddon: Could you explain the reasoning for that?

  Commissioner Liikanen: Okay. That is a very important question. Let's say you have studied gasoline—which we all know as a product. If there will be a scientific committee evaluating the risks of gasoline, it is a pretty dangerous product, but then, before you decide whether you can take some measures, there should be a parallel socio-economic committee on whether measures are necessary anyhow for socio-economic reasons. Of course, they say, "Yes, it is terribly important, so let's do risk management in the way that there is no danger to the environment or to citizens." So, to get this balance right, I think it is better for us that the two aspects are done separately, and then it goes to the Commission to do the arbitrage. To me, I am, for example, responsible for competitiveness. It gives an obligatory dose of common sense.

  Q191  Dr Iddon: Could we just get clear this point to which I referred a moment ago? The authorisations, will they come from the Commission or the Agency in Helsinki or wherever?

  Mr Burge: The decisions on whether or not to authorise will be the Commission's.

  Commissioner Liikanen: Always signed by the Commission, yes.

  Q192  Dr Iddon: Forgive me, this is a bit of a cheeky question, but you have referred to Finland, your home country—

  Commissioner Liikanen: I am sorry about that, but I just came from there last night.

  Q193  Dr Iddon: The decision has been taken to centre the agency in Finland. Could you give us the reasoning for that. Is it, as you just hinted, because you are central to the chemicals debate?

  Commissioner Liikanen: I think it is better for you to turn to Prime Minister Blair and ask it, because I'm not round the table.

  Chairman: We will hold you to that, Brian.

  Q194  Dr Iddon: Well, you can ask him tomorrow.

  Commissioner Liikanen: Being totally objective, Finland has a very good record in implementing community legislation. I am sure they are well equipped to make it run properly.

  Q195  Dr Iddon: Was it a very difficult decision to make?

  Commissioner Liikanen: I think it was . . . but it was really done in the European Council. We proposed it should be put to Ispra in Milan, close to Milan. But the European Council makes the decision on this. The Italian Government opted for the Food Authority, and they could not have two, of course, and then they had to make one concession to Finland.

  Dr Iddon: Thank you very much.

  Q196  Dr Harris: Do you think the proposition, in terms of how we organise the testing, that something will "reduce the workload and simplify the system for industry and authorities," applies to the straightforward testing regime or the one substance/one registration? Do you think, in other words, that the one substance/one registration proposal is easier?

  Commissioner Liikanen: That is a very good question. At the outset, one has got sympathy for this one substance/one registration scheme, but when you get a little deeper, you get in some trouble. We had discussion a lot about, let's say, for instance there will be mandatory consortia when you present a dossier for registration. It sounds fine. What is the problem? The problem is that then you have all commercially sensitive information at the table at the same time. I must say that when I saw some opinions from Chinese participants in our internet consultations, they welcomed all the inputs in that direction, they said that finally we can finish this endless European strength in the field of the chemicals industry, because then all the data is available on the same day. So we had a long discussion, because that proposal was on the table: obligatory consortia. I know Lord Sainsbury has spoken at length on the matter but, in the end, if the industry has to pay, we are strongly against it. Especially for some companies, they say it means that then we will have open books in our research work. Secondly, Mr Spink put the question about protecting innovation. Here we have tried to be careful. All the data concerning health and safety is available on the internet, but we tried to protect the commercial information, so that business can continue to develop. But, I mean to say, my position is not final-final, but this issue must be on the table. The second issue—which has created legal questions—is on the competition law. What kind of approach should be proper for the competition? Can we be sure that consortium will treat equally all participants, like SMEs? Fourth issue: Can we impose this duty in the same way for internal and external companies ? The fourth matter is a question about the costs. I just want to reply to you that, let's say, my sympathy and intuition was more positive to this proposal, and I had to talk about that to the industry players, when they say that obligatory sharing of the sensitive data at that phase would be negative for innovation.

  Q197  Dr Harris: You are saying that obligatory, mandatory consortium is a dead duck.

  Commissioner Liikanen: Yes.

  Q198  Dr Harris: What about voluntarily, if it turns out it is quite clear that industry, for the reasons you have given and because they think it is just easier to get on with it, in particular the bigger players, and do it themselves, their own registration? If that does not happen, and they are happy, do you say fine or do you start counting the mice and rats?

  Commissioner Liikanen: In that area, it is my colleague Mario Monti, who will follow it. There will be competition councils, that all the marketplace should have the same possibilities. In that area we must remember that sharing the animal testing data is obligatory.

  Q199  Dr Harris: It is obligatory.

  Commissioner Liikanen: Yes, because there is a strong public interest. For other data it is not obligatory. In our final assessment we said that to put the obligation to share sensitive data in areas where the public interest is not necessarily evident, should be disastrous or negative. It is perhaps not possible. But then, of course, there is the question about competition law. We encourage full cooperation but of course it should be done in a way that the competition law principles are covered.

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