Industry needs to swim with the tide of regulation

Controls on chemical use and manufacture are increasingly global in nature, says Mike Spear, editor at large, in this month's End Point column.

By Mike Spear, editor at large

For those of us of a certain age in the U.K., the news last month that the once great chemical company ICI has agreed to a $16.2 billion takeover bid by the Dutch group Akzo Nobel spoke volumes about the increasingly global nature of the chemical industry. We have become so accustomed to production being moved around the world to meet competitive and cost challenges that yet another takeover shouldn’t be that surprising. Sad, certainly for anyone who remembers the ICI of old, but no longer a surprise. Thirty years ago, of course, it would have had the shock value of, say, Dow or DuPont falling to BASF today — or vice versa.

But the industry, not just ICI, has changed dramatically. And now with the globalization of production and ownership comes a new phenomenon — the globalization of regulation and control. We all know about the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) directive — or, at least, you ought to, since it came into force in June — and other EU regulations such as the Restrictions of the use of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEE) directives. Although applicable primarily to EU member states, these regulations pose problems for any global manufacturer importing into the EU and their impact goes far beyond Europe’s borders.

An even wider global view is presented by two United Nations’ programs, Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and Strategic Approach to International Chemicals Management (SAICM). Expected to be fully operational by 2008, the GHS aims to promote the safe use, transport and disposal of chemicals around the world through an internationally recognized system of pictogram-based labels and a coherent approach to defining and classifying chemical hazards. Taking a longer-term view, SAICM’s goal is “ensuring that, by 2020, chemicals are produced and used in ways that minimize significant adverse impacts on the environment and human health.”

This alphabet soup of regulations prompted last month’s conference in Baltimore, Md., hosted by the American National Standards Institute (ANSI). Dubbed “Action and Reaction: Developing a sustainable approach to emerging chemical issues,” the conference engaged participants from government and industry to develop ways to balance the economic impact of regulation with activities that promote safety, health and the quality of life.

Drawn from across a wide range of industry sectors, participants were left in no doubt about the ubiquity of chemicals — and the impact of domestic and global controls on their use and manufacture. In her opening address, Dr. Nina McClelland, chair of the conference planning committee and former chair of the board of the American Chemical Society, said: “Chemicals have become — and perhaps always were — a feedstock industry.

They are the basis of successful global commerce for virtually all U.S. manufacturers and their supply chains. For U.S. industry to continue to be globally competitive, we need the assurance of early, informed and active scientific and technical input to regulatory mandates that frequently emerge outside of the United States. Over the past several years, regulations and directives from Europe and the United Nations have had no U.S. scientific input during their development, and have brought both confusion and staggering costs to our industrial community.”

McClelland argues that, by collaborating across sectors and across national borders, U.S. technical experts and scientists can keep an ear to the ground, calling attention to future issues with adequate time to develop new standards and compliance programs that will complement existing regulations. “Our industry and technical experts can provide valuable input to the legislative and regulatory process,” she says, “bringing their industry knowledge to the table and ensuring the proper balance among health, safety and environmental concerns.”

All this, she says, calls for a different perspective. “To solve our current host of problems and prepare ourselves for future challenges, we all need to be in a more proactive state of mind,” she suggests. As ICI has just found, it may be too late to turn back the tide of progress, but learning to swim with the tide is a good lesson for an industry in danger of drowning under a sea of regulation.