09 October 2008 16:32 [Source: ICB]
The UK's Chemical Business Association voices the concerns of many in the industry about the European Chemicals Agency's fees structure. Will we be forced to fund any shortfall?
REACH AGENCY NEEDS TRANSPARENT FUNDING
Like many other members of the European chemical industry, I was surprised to read your interview "Bringing Funding within Reach" (ICIS Chemical Business, September 22) with the head of the new European Chemicals Agency (ECHA), Geert Dancet, in which he expressed concern about serious underfunding in 2009.
As the ECHA has only two paymasters, the European Commission (30%) and industry (70%), any budget shortfall is very likely to increase the cost of Reach compliance for business through higher fees.
The Chemical Business Association (CBA) has called repeatedly for greater transparency in relation to the ECHA's budget and the assumptions on which it is based. Your readers will recall that, before Reach came into force, the fees payable by industry were the subject of a number of massive increases, with some being raised by 200-500%. At the time, CBA called the fees "out of control" and based on speculative assumptions.
CBA's calls for greater budget transparency and those of other industry organizations were ignored. Reach came into force with fees being set at a level that could inflict significant damage to the competitiveness of the industry. Since then, of course, the significance of the downturn being faced by the industry has become all too clear. Mr. Dancet's timing in alerting the industry to a potential budget shortfall could hardly be worse.
The ECHA is apparently concerned that higher-than-expected levels of preregistrations may not translate into fee income. This is a fairly basic scenario that should have been taken into account by the agency's budgetary planning. Before the preregistration period started, the ECHA was advised that there would be companies that would consider it to be in their strategic and commercial interests to engage in speculative preregistrations. The fact that this may have introduced an unexpected level of uncertainty into the ECHA's budget planning is not guaranteed to generate a great deal of sympathy from industry - which has to live with continual levels of uncertainty in own revenue streams.
As the agency's major paymaster, industry has every right to be concerned about its budget - unless, of course, the Commission agrees to underwrite any potential budget shortfall. In any event, the agency's budget should be transparent.
The ECHA has thrown the media spotlight onto two companies that have preregistered the full European Commission inventory of chemicals - around 100,000 substances. These companies have done nothing wrong. The Reach regulations do not prohibit or prevent this approach.
Chemical Business Association
Crewe, Cheshire, UK
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