22 August 2006 12:18 [Source: ICIS news]
LONDON (ICIS news)--Industry’s worst fears about the financial burden that Reach, the European Union's new chemical safety policy, will impose on smaller and medium-sized firms appeared to be justified, the British Chemical Distributors and Traders Association said on Tuesday.
The BCDTA’s statement followed the European Commission’s release of the draft budget for the European Chemicals Agency. The budget also provided a first insight into the cost increases arising from basing the agency in Helsinki, it added.
“Though the Commission is at pains to point out that the draft budget is "only one hypothesis and is therefore only provisional", the order of magnitude of the numbers involved will be of major concern to SMEs,” said Melvyn Whyte, chairman of BCDTA’s Reach Task Force.
The BCDTA said the Commission’s budget document admitted that there was an absence of suitably qualified specialist and administrative staff in Helsinki. It also recognised that many more staff would be required than originally thought and that their living costs in Helsinki would be higher than elsewhere.
Overall, the Commission’s document said these factors have "increased the overall staff costs substantially" – in fact, they have doubled, said the BCDTA.
“In addition, the Commission also admits that Helsinki represents the equivalent of a ‘green field’ site and that ‘no synergies are possible with existing institutions’. On balance, the decision to base the European Chemicals Agency in Helsinki appears to be a masterful piece of strategic planning,” said Whyte.
The difference between the Commission’s original budget for the central agency to administer Reach of €359m ($461m) and its current estimate of €1.19bn ($1.53bn) is an additional €829m – an increase of over 230%, said the BCDTA.
“The Commission maintains that many of the additional costs have resulted from the extra responsibilities imposed on the Agency by political decisions," said Whyte. "This may well be, but the fact of life remains that the chemical industry is being asked to pick up the tab for these decisions – which will only serve to erode the competitiveness of the sector and damage SMEs.”
The BCDTA said its analysis of fees payable to the Agency under Reach revealed some major increases.
“This level of cost increases is indefensible and make a nonsense of the pious noises made by politicians and Commission officials about preserving the competitiveness of one of Europe’s most successful industries and protecting SMEs from these damaging costs,” said Whyte.
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