CBA express concerns re REACH

22nd October 2007
Posted By : ES Admin
REACH in Europe represents the most significant influence on chemical regulation. The Chemical Business Association, the principle UK trade association continue to speak out for common sense.
The Chemical Business Association (CBA) said today that the REACH fees to be charged by the European Chemicals Agency were ‘out of control’. The CBA was commenting on a new scale of proposed REACH fees – some of which represent an increase of several hundred per cent over the figures originally proposed by the European Commission.

“This is the second time that proposed REACH fees have escalated and they have now achieved a level where they are completely unacceptable and will inflict significant damage to the competitiveness of the industry,” said Melvyn Whyte, Chairman of CBA’s REACH Task Force.

The base fee for a joint submission to register a substance in the 1-10 tonnes category was originally budgeted by the Commission to be 400 euros. In July 2006, this figure was revised to 804 euros. In the latest Commission proposal, the fee has increased to 1,200 euros. Overall, these fees have increased by 200% on the original budget.

Similar increases apply at the other end of the tonnage scale. The base fee for a joint submission for a substance manufactured or imported in volumes of more than 1,000 tonnes per year was initially budgeted at 8,000 euros. In July 2006, this figure was more than doubled to 16,080 euros. In the latest Commission proposal, the fee has risen to 23,250 euros – an increase of 191% on the original budget.

“And these examples are some of the more modest increases. There are many others which represent increases of well over 500% on the original budget,” said Melvyn Whyte.

“There are only two possible explanations for these figures. Either they represent an unacceptable level of incompetence in framing the initial budget or, which is more likely, the level of the original budget was deliberately manipulated as a means of deflecting industry’s concerns about the costs of the REACH system. In any case, the Commission is now behaving like a state monopoly by forcing industry to fund its grandiose regulatory ambitions,” he said.

The CBA welcomed the introduction of reduced fee scales for Medium, Small and Micro-sized companies which make up 97% of the European industry. But these reductions are financed by massive fee increases elsewhere. CBA’s analysis reveals that, even allowing for reductions in fees for the smallest firms, the Commission’s fee proposals represent an overall increase of more than 40% on the revised proposals of July 2006 and well over 100% on the Commission’s original budget.

The CBA also has broader concerns about the proposed REACH fee scales. The Agency has increased the complexity of the fees by introducing no fewer than eight separate annexes, each containing tables relating to fees and introducing new fees.

“The Agency intends to milk every last euro out of the industry,” said Melvyn Whyte. “Take just two examples. In previous budgets, the fee to lodge an appeal was fixed at 1,500 euros. Now the fee ranges from 2,000 to 6,000 euros with no justification whatsoever. The Agency is also making exorbitant charges for minor administrative changes. If a company wants to change simple information on the Agency’s database, such as its address, it must now pay a fee of 1,500 euros,” he said.

The CBA is also concerned about the terms of trading which the Agency is unilaterally seeking to impose. “The proposals say that the Agency expects its invoices for fees to be paid within either seven or 14 days,” explained Melvyn Whyte. “The standard terms of trade throughout Europe are 30 days – which is also the figure in the European Union’s Late Payment Directive. But the reality in most European countries is that the average payment period for invoices is 50 days. CBA believe that the Agency should accept a 30-day payment period. Commercially, this places it in exactly the same position as the businesses which it is seeking to regulate. Industry does not accept that the Agency should have the right to grant itself more favourable terms,” he added.

The CBA is also against the Agency’s proposals for an annual review of its fees and the implication that they will increase each year in line with inflation. “Industry is not in a position to issue a blank cheque to the Agency for year-on-year fee increases. We expect it to have to justify any increases and also be obliged to make annual efficiency savings to hold its fees at an acceptable level. Industry is concerned about the absence of transparent budget and the apparent lack of accountability to its major stakeholder,” he said

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