Memorandum submitted by the Chemical Industries
Association
1. CURRENT DEVELOPMENTS
What are the implications of recent economic developments
for the design and delivery of the regulatory reform agenda, including
risk-based regulation?
The current economic situation makes the Better
Regulation agenda even more important. The more Government can
do to improve the regulatory burden on businesses within the next
year the better chance you give industry to reverse the current
down turn.
The economic circumstances also highlight stress
areas in regulations, such problems and costs for companies in
the UK who want to avoid redundancies by using short term working.
How does the Government balance the need for an
effective regulatory framework—providing the necessary benefits
and protections—with the commitment to improve the conditions
for business success?
Government needs to make sure it always applies
proper risk based analysis when it is formulating new policy.
We have been alarmed by the apparent move in Europe away from
risk to hazard based policy making.
Recent changes to draft EU pesticides legislation
resulted in the basis of the legislation being changed from risk-based
criteria to hazard based ones. To deny approval of pesticide products
using intrinsic properties of a chemical based on hazard cut-off
criteria or classification categories is scientifically questionable.
Risk assessments must be based on rigorous science and weight
of evidence.
In the case of pesticides, the legislative process
failed to take a holistic approach to regulation, based on a clear
understanding of the consequences for agricultural productivity,
resistance management, food prices, food security and trade, as
well as potential consequences for the wider environment before
the criteria were adopted.
When assessing safety, the optimum scientific
approach is to consider harmful properties and their potency (hazard)
and to understand their occurrence or in-use scenarios relative
to humans or the environment (exposure). These two elements can
then be used to determine the level of risk and it's acceptability
in relation to either humans or the environment. Risk = hazard
x exposure. This approach is predicated on the concept that there
is a threshold for a biological/toxicological effect, ie the "dose
makes the poison".
How might a proportionate and targeted response
to improving the regulatory framework in the wake of the financial
crisis be made? What lessons are there for the wide regulatory
reform agenda?
The Chemical Industries Association seeks an
improvement in the quality and application of regulations rather
than deregulation. High hazard industry does and should meet tough
regulatory standard to protect the health and safety of employees
and the public.
How could the Government improve its capability
to regulate in a proportionate and effective manner?
An open dialogue with stakeholders is important
right through the policy development process. Government must
seek input from stakeholders on the broad theme and objectives
of policy and then on the detail to ensure it is workable. Whether
this requires formal consultation will depend on the nature of
the policy work.
Consultations should be set within broader frameworks
and each proposed piece of legislation should be evaluated against
Better Regulation principles established by the Hampton and Macrory
reviews. In particular, it would be useful for consultations on
legislation to show how the legislation interacts with other regulatory
frameworks.
It may also be relevant to begin using standard
templates for certain types of consultation. This would include:
best-case and worst-case scenarios of implementation, accuracy,
or relevance of the information presented in the consultation;
an analysis of key variables (ie sensitivity analysis); a simple
presentation of advantages and drawbacks of different in a table;
and the mechanisms in place to ensure relevant monitoring and
review takes place.
We feel that Regulatory Impact Assessments are
often of poor quality because of false assumptions that stakeholders
could have highlighted if given the opportunity. We would welcome
more rigorous consultations to ensure RIAs are consistently of
high quality.
We give a cautious welcome to the idea of regulatory
budgets. Rigorous assessment of the net benefit, and in particular
the accurate specification of not only one-off but also recurring
costs, should be central to the whole regulatory process. Regulatory
budgets should not preclude revision/abolition of past regulation.
The ultimate objective should be to prevent the net cost of the
aggregate regulatory burden increasing. Ideally any new regulation
should be balanced by repeal, or administrative simplification,
of existing legislation.
Whether there is a coherent package of regulatory
measures for improving the conditions for business success; and
how regulatory reform initiatives fit into wider Government support.
2. DESIGN OF
NEW REGULATIONS
Does Government understand businesses sufficiently
to design effective regulations? Is sufficient emphasis given
to small businesses and competition issues?
The role of the business relation function in
the Department of Business, Enterprise and Regulatory Reform is
essential for Government understanding business when designing
regulations. The Chemical Unit helps to ensure that the business
voice is represented to other Government departments. We would
welcome further moves to improve the understanding of business
across Whitehall.
We would like to see more emphasis placed on
competition issues as the chemical industry exports 60% of its
products. We have to compete against countries with lower labour
costs and energy prices so it is vital that exporters are not
further hampered by poorly conceived or implemented regulations.
Is there sufficient consideration of how regulations
will be implemented, including an appropriate focus on compliance
and enforcement issues?
Consideration to how regulations will be implemented
needs to be given more attention. For instance REACH regulations
have already been adopted into UK law but we are not yet clear
how the EU and Member States will ensure that products imported
into the EU comply with the REACH regulations. If imports are
not properly regulated this has significant implications for the
competitiveness of EU manufacturers.
Before Government rushes to regulate it must
do more to determine if current failings lie within the regulations
or with enforcement. For example we believe that the current recast
of the EU Integrated Pollution Prevention and Control Directive
is unnecessary. The UK has successfully implemented the IPPC and
before the imposition of more regulations on compliant member
states there should be a concerted effort to enforce the existing
regulations across all Member States.
March 2009
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