Tuesday 30 September 2003

The report, by a world-leading research unit, critiques industry-backed studies into the supposed impacts of the proposed new EU Chemicals Regulation - known as REACH.

These were found to vastly inflate costs to industry and ignore the potential for innovation and for wider societal benefits such as reduced health care costs and increased productivity. Many of their more dire predictions of impacts on competitiveness and employment overstate the sensitivity, and understate the adaptive capacity of industry.

Two reports by the Federation of German Industries (BDI) typify the propaganda created and peddled by industry. The first report, released in September 2002, and welcomed by the UK's Chemical Industries Association, estimated that the Regulation would cause the loss of up to 2.35 million jobs in Germany. However, the methodology used is described by the independent critique as extremely weak to the point of being untenable. Furthermore, despite being heavily criticised at the time by leading German economists, the BDI have released a second report using the same flawed methodology.

Many of the main provisions of REACH will actually promote innovation. For example, by providing a clear timetable for implementation and establishing a strong independent regulatory agency the regulation will provide industry with greater clarity and certainty than the current system.

"Industry reports have clearly cooked the books on estimating the costs of improved chemicals regulation," said Justin Woolford, WWF Chemicals and Health Campaign Leader. "A robust regulation that requires the replacement of hazardous chemicals with safer alternatives will stimulate innovation which goes beyond simply filling the pockets of industry and actually safeguards the health of people and wildlife."

"The Co-operative Bank is calling for the phase out of persistent and bioaccumulative chemicals. We're convinced by the case for strong chemical legislation, one that will drive both innovation and the substitution of these hazardous man-made chemicals with safer alternatives," said Kate Daley, Campaigns Manager, Co-operative Bank.

Making a revealing comparison with the pharmaceuticals sector, the report finds that UK and US companies have responded well to strict regulation by developing skills and capabilities enabling them to compete successfully in world markets. Far from stifling innovation, the regulation should in fact stimulate and steer innovation in a more sustainable direction.