InterviewReach consortia bad news for Europe SMEs - lawyer

19 December 2008 12:22  [Source: ICIS news]

By Will Beacham

LONDON (ICIS news)--Smaller companies may have little influence and lose out financially when they join consortia in the next phase of the EU's Reach chemical regulation, a lawyer said on Friday.

Peter Snaith, partner and head of chemicals at UK law firm Dickinson Dees, told ICIS news that small to medium sized enterprises (SMEs) would struggle to make their voices heard against large, multinational companies which will have far more time and resources to devote to Reach.

Now that pre-registration has ended, companies producing the same substances form consortia where they will be obliged to share test data and costs for the next stages of Reach – registration and authorisation. 

Snaith said: “If an SME is part of a large consortium, the time needed to deal with it will be a full time job. SME’s just won’t have the time or expertise to devote to it. There is a danger they won’t able to make their case, but will just have to go with the flow.”

One of Snaith’s key concerns is that some consortia members may see substance testing for registration and authorisation as a good opportunity to make money from other participants.

“I can imagine a big secondary market developing for information relating to products. Someone could do all the studies and then the other members would be obliged to purchase these,” he said, adding that this could prove particularly costly if a small consortium contained one dominant producer plus a few SMEs.

“There could be a lot of arguments over how much should be paid for access to study data. For example a supplier could argue that for one test they needed the time of seven staff plus overheads to produce the data.”

All these variables will need to be agreed for each substance consortia, creating a potential “nightmare for compliance and sharing,” said Snaith.

“My concern is that it may be an impossible task to participate in consortia. From a lawyers perspective it is difficult enough drafting a joint-venture between two or three people. If only 4% of an 800-strong consortium want to debate an issue, the system could break down leaving a lot of unhappy people,” he said.

SME’s without the time to participate actively will lose out, he said: “The debate will be between active members – those who don’t confirm a decision will be deemed to have agreed.”

Meanwhile, Snaith said he could foresee that companies who have missed the pre-registration deadline of 30 November will find loopholes around the legislation.

Manufacturers who missed the deadline must now either stop producing the substance or go through full registration straight away. Only brand new producers after the deadline will be allowed to delay full registration.

Snaith suggested producers might simply create a new legal entity and claim to be brand new producers.

To discuss issues facing the chemical industry go to ICIS connect

By: Will Beacham
+44 20 8652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly