According to ECHA, there is no clear evidence for any significant increase in only representative appointments in the EU27 by UK-based chemical companies. Nevertheless, Brexit related inquiries are increasing, and ECHA is preparing further instructions for companies. According to ECHA’s registration statistics, the UK’s role in the supply chain of chemicals is significant, involving 5,508 importers and/or manufacturers of chemicals and 4,912 only representatives appointed by non-EEA countries in order to import substances to the single market.
(30 January 2019) Academics and legal professionals were questioned on the draft Environment Bill by the UK’s Parliament Environment, Food and Rural Affairs Committee. The draft Bill sets out how the UK will maintain environmental standards after Brexit.
The expert
witnesses agreed the draft needs significant improvement. The issue of
enforcement mechanisms was highlighted unanimously, and is considered to
prove a difficult test after Brexit. Other criticism was raised with
regard to the independence of the Office for Environmental Protection
(OEP) and a failure to bring across all the existing acquis
communautaire. According to Professor Maria Lee, the provisions on
environmental principles fall short on what has been promised: they are
set to have a weak status (policy instead of legal), will be binding
only to ministers of the crown (not all public authorities) and will not
apply in all their functions (instead only to high level policies).
(30/01/2019) With only two months left until Brexit day, the Executive Director of Cefic, René van Sloten, identified a no-deal Brexit as the only relevant planning scenario for chemicals businesses at a Brussels event. What this entails in practice has been outlined by CEFIC and the CIA in a newly published briefing. After 29 March all chemical registrations held by UK entities will be invalid, which means that they will not be able to import into the EU unless they have appointed an EU entity which holds a registration. The UK’s role in the supply chain of chemicals is significant, involving 5,508 importers and/or manufacturers of chemicals and 4,912 only representatives appointed by non-EEA countries in order to import substances, according to ECHA registration statistics. No transition period to allow continuity would take place in this no-deal scenario. EU based companies thus need to identify their UK supply chain exposure and take measures including switching to EU based suppliers.
The head
of UK’s Chemical Industries Association (CIA), Ian Cranshaw, warned
about of the negative impact on UK jobs in regions with economic decline
and the extra costs of registering chemicals twice, both in the EU and
the UK.
Campaigner Kate Young, from the
environmental NGO CHEM Trust, raised the UK government’s announcement to
subject all ex-EU law to its target to cut regulatory costs for
business by 9 billion GBP. So far EU law has been exempt from this
target. She also voiced concerns of regulatory divergence on chemical
protection standards in the UK post-Brexit.
(29/01/2019) The ECJ’s advocate general finds in an opinion that the Investor State Dispute Settlement (ISDS) mechanism, part of the EU-Canada trade agreement CETA, is compatible with EU law given that the ISDS mechanism would only decide on compensations in case of breaches, while it would be bound by the ECJ’s interpretation of EU law. The ISDS mechanism is accused by campaigns across Europe for putting business above people’s interest. It was also challenged by Belgium over whether it interferes with the exclusive jurisdiction of the ECJ and giving preferential treatment to investors.
(30/01/2019) Labour leader Jeremy Corbyn has revived his proposal for a customs union in a meeting with Theresa May, while UK’s Trade Union Congress is pushing for a dynamic alignment on labour standards.
A customs union holds less guarantees for an environmental level playing field compared to the rejected Withdrawal Agreement. Taking the example of Turkey’s customs union and the proposals for its modernisation (similar to CETA provisions), one could expect rather weak environmental provisions: ratification and implementation of Multilateral Environmental Agreements, and a commitment to a high level of environmental protection, but with uncertain procedures for effective implementation. The backstop was a customs union as well, but with a non-regression clause for the whole UK and more specific environmental legislation requirements for the Northern Ireland. These environmental guarantees would then be the base for a future trade relationship negotiation, according to EU officials.
(10/01/2019) The European Commission has set out preparedness issues and measures covering climate change, environment and energy. An area of concern is the environmental integrity of the EU-ETS in the scenario that the UK leaves without a deal. UK operators would not be required to surrender allowances for 2018 emissions, although they received them for free. Concerning the environment, import and export controls have to be applied to movements from and to UK, which requires building up technical expertise, reviewing the database and ensuring stakeholders are informed. In particular, waste flows will be impacted as EU Member States will no longer be able to export waste for disposal and mixed municipal waste for recovery to the UK. UK waste exports to the EU will fall under the rules of the Basel Convention. Cooperation for Multilateral Environmental Agreements and COPs will also be impacted. The EU must use EU legislation on best efforts of cooperation with third parties and notify them before COPs or other international meetings. The UK’s exit from the internal electricity market could have serious impacts on neighbouring countries. While interconnectors can still be used, the trading platforms will not be accessible for the UK and certification of the operators will become a national matter. In particular, Ireland is concerned and will require fall-back arrangements.
According to the
Institute for Government, the environment is the area where the UK is brought
most often before the European Court of Justice (ECJ). In most cases, it is not
a problem of transposition, but of implementation. Even though the UK will copy
across the EU environmental acquis,
the real issue is therefore the actual application, due to be monitored and
enforced ensured by the Office for Environmental protection. Nevertheless, the
office is already the target of critiques for lack of independence,
specifically on its ability to take action against the government.
Furthermore, NGOs and
British citizens could well be dissuaded to initiate litigations, as the
judicial costs are lower within the ECJ than in UK national courts.
(21/01/2019) Within the framework of presenting a ‘Plan B’ to Parliament, Prime Minister May pledged that environmental and social rights will not be reduced as a result of Brexit, and instead that the same level of protection will be retained and even improved. She also added that Parliament should be able to consider any modifications made by the EU in these areas, in which case legislation could even be reviewed if necessary. It follows the promise of Environment Secretary Michael Gove of a Green Brexit, which has been challenged by environmental organisations for the lack of substance and the appearance of a governance gap in the draft Environment Bill presented in December last year (see Brexit Watch nr. 5).
The UK plans to copy across most of the EU’s environmental legislation, including the chemical safety regulation REACH. This means that companies doing business in the UK and in the EU will have to comply with two sets of rules.
In the case of REACH,
this means that companies doing business in the UK will have to
register chemicals under the UK system. “If we spent €5 billion on
establishing the EU’s REACH, what is there to suggest it is going to be
much less for UK-REACH?” asks Peter Newport from the UK’s chemical
business association. As a third country the UK will no longer have
access to the EU’s REACH database and needs to set up its own REACH
registration system. It is difficult to see how the UK could cut costs
without sacrificing environmental and public health standards.
EU
chemical industry association CEFIC voiced its fears about supply chain
disruptions in the absence of agreements between the EU and UK. Given
the REACH data sharing and only representative requirements, UK
registrants will need to acquire access and rights to using safety data,
which will require lengthy data sharing negotiations involving multiple
owners.
The UK Government published before Christmas the Draft Environmental Bill which sets the base of an Environmental Bill (due to be published in 2019), meant to maintain and even “surpass” EU legislation.
This piece of law creates the Office for Environmental Protection (OEP), due to be in charge of monitoring and reporting on environmental laws. It can also take action in case public authorities fail to comply with environmental norms. The OEP’s mandate seems to have addressed a series of concerns previously expressed by stakeholders (Bar Council, UK Environmental Law Association): the possibility of submitting individual complaints and the power of the OEP to bring the Government to court. Nevertheless, one crucial issue remains controversial: its independence. The clauses mention that non-executive members are appointed by the Secretary of State, their remuneration or compensation for “special circumstances” being also set by him/her. The Secretary of State also holds responsibility for establishing the reasonable sufficient budgets for the OEP’s functioning.
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