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Protecting your future - the SEA is on the case

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9 December 2013

REACH, the regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals, is a very demanding system for any business either large or small and in particular for the surface engineering industry with its large proportion of SMEs. So significant is its impact that we make no apology for devoting another large section of this issue to the subject. It has been difficult to get politicians (with a few honourable exceptions) or the media enthusiastic about taking up the cause – the very title itself is off putting and to the layman probably sounds like a good thing. However, undeterred the SEA has been very active on behalf of members in alerting our lawmakers to the potentially serious implications for UK SMEs.

Our briefing lunches this year for MPs and peers have been largely devoted to it and follow up letters written to ministers, MPs and MEPs. Lord Hoyle has raised a question in the House of Lords on the impact of REACH on SMEs and overseas competitiveness. In November SEA chief executive Dave Elliott who is also President of the European Committee for Surface Treatment addressed the European parliament at SME week on the matter. The following is an extract from his speech:

“Surface engineering techniques are used across all sectors – automotive, aerospace, power, electronic, biomedical, textile, petrochemical, chemical, steel, power and construction – to name but a few. Just think of some of the major technological advances of the last few decades – mobile phones, laptops, computer hard drives, improvements in fuel efficiency in the automotive sector, solar panels, wind turbines – all of these would not be possible without surface engineering.

“Without surface engineering, sustainable component manufacture is not possible – surface engineering and manufacturing go hand in hand. However, the surface engineering industries are suffering from mounting environmental legislation that always assumes the worst case scenario, such as REACH, and this threatens the very survival of many surface engineering companies and reduces the global competitiveness of the EU manufacturing sector as a whole.

“Why is REACH such a burden for SMEs? For a start, one thing that is lacking is clarity. Ninety-nine per cent of all European businesses are in fact SMEs so why is REACH so difficult to understand? The official regulation is 849 pages long and then there are numerous guidance documents amounting to many thousands of pages. How on earth are SMEs supposed to firstly read all of that and then understand what they have to do to comply? And often the guidance is in a foreign language.

“Then there is the lack of certainty – will I still have a business in the future? Here is an example. Imagine I am the manufacturer of equipment for the construction sector and I use chromium plated cylinders for the hydraulics. I use chromium plating because it meets all my technical requirements, it is a proven technique and guarantees quality performance in the very arduous operating environments and there are no SVHCs in the final product. A functional chromium plating coating is produced using chromium trioxide, which is a SVHC and subject to authorization with a sunset date of 21 September 2017. So what do I do? Do I hope that the chemical suppliers will get the authorization? Do I get involved with a consortium for authorization? Or do I do nothing? Or do I remove the uncertainty by getting the chromium plating done outside the EU? As I explained, surface engineering and manufacturing go hand in hand so I’ll get the hydraulics made outside the EU as well. This is already happening – businesses do not like uncertainty so they are already moving business out of the EU and limiting their inward investment.

“To quote another example. A UK company has been cultivating a prospective customer in Russia for the hard chromium plating of equipment for oil and gas exploration and extraction. The company was close to getting the order when the customer stated that they would need a guarantee of supply through until at least 2020. The company could not give this guarantee – why? Because of the authorisation of chromium trioxide under the REACH regulation. There is no guarantee that an authorization will be granted and if it is, it is likely to be time limited, then there is the astronomical costs associated with the authorisation process itself, so because of the uncertainty, the order was lost.

“We are pleased to see that at the forefront of the Commission’s REFIT programme is the action to reduce the regulatory burden on SMEs and that action has already been taken with six legislative measures identified in the Top-10 consultation. This does not include the REACH regulation unfortunately which was top of the list. Yes, fees have been reduced for SMEs but that is meaningless if the uncertainty surrounding REACH is not addressed as a matter of urgency.”

It is not merely the regulation itself that is a cause for concern. It is also the implementation and monitoring across EU members. Lord Jones of Birmingham, former CBI chief Digby Jones, writes in The Times that Britain ought to be asking for independent enforcement of regulation and ‘massive’ reform of technical establishments and stripping out of Brussels bureaucracy. “In some rival countries within the EU, compliance with uncompetitive standards is almost voluntary. There is no EU-wide inspection and compliance structure. The good guys comply and become uncompetitive.”

In other words a level playing field.

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