John Paul Phelan (Fine Gael)

No more than the Minister of State I suspect, I am not an expert on the chemicals industry as such. However, its contribution to the economy is highly significant as it is worth almost 60% of our overall exports figure for goods each year. Members all are familiar with the significant role that many pharmaceutical companies in particular play in sustaining employment nationwide and as such this legislation is significant. Although Fine Gael will not oppose this Bill, I wish to make a couple of points not so much of a chemical nature but that relate to comments made by the Minister of State in the final paragraph of his statement in which he spoke of the regulatory burden. A couple of years ago, the Government of which he is part made a series of commitments to reduce the burden of regulation on businesses. Certain sectors of the economy in particular are subjected to a series of audits and inspections and the fear for certain businesses is that this measure has the potential for the addition of a new layer of inspection on top of them, which would be a costly enterprise for most of the industries concerned.

As I noted, the chemicals sector in its most general sense contributes a significant amount to the economy annually and has potential for huge expansion and the Minister of State noted correctly that it is significant across the European Union. However, I am somewhat surprised by a point also raised in the other House by Deputy Bruton, namely, there does not appear to have been any regulatory impact assessment attached to the new regulations imposed both by the principal Act and this amending legislation. The Minister of State mentioned that the new classification, labelling and packaging, CLP, regulation that forms part of this Bill will not impose any additional costs on the Exchequer. However, there are and will be significant costs for those businesses that are involved in implementing these particular regulations. Fine Gael will not oppose the Bill because it makes sense to have a set of European standards and measures across the European Union that apply to chemicals. Everyone will agree this makes sense. In addition, and at this juncture in particular, one must ensure that everything possible is done to ensure the competitiveness of the chemical industry, in its widest possible interpretation, in Ireland. I am not satisfied that the Government through this Bill have done anything in that regard.

As I stated, a series of Government agencies and Departments is involved in inspecting different businesses, including the Departments of Agriculture, Fisheries and Food and Health and Children, HIQA and the Health and Safety Authority that the Minister of State mentioned. There is an element of overlap between all these inspections and they impose certain costs on the businesses concerned. If Ireland is to be competitive in future, one must ensure that unnecessary burdens are not being placed in some cases on industry here. I am not satisfied that the Government has given serious thought to that particular potential difficulty which is raised by this Bill. In his concluding remarks, the Minister of State might mention the lack of regulatory impact assessment in this legislation. A couple of years ago, the Government proposed a reduction of almost €500 million in the cost to business of compliance with both national and European regulation in Ireland. To date, approximately €20 million of that reduction in costs has been passed on to businesses. The Minister of State should indicate how the Government proposes to implement its stated position in order that businesses really see a significant reduction in the costs associated with reaching those particular targets as set out in this legislation or other legislative items.

The Minister of State mentioned in the original Act which was introduced a number of months ago in the Seanad. It dealt with the implementation measures for the Rotterdam regulation, which concerned the export and import of dangerous chemicals, the detergents regulation, which imposed a two-tier testing regime on the biodegradability of the active ingredients of detergent, as well as the REACH regulation that the Minister of State mentioned, which has the aim of protecting human health and the environment. While these all are highly laudable measures, they all are costly. They are not simply costly for the producer but on those who might ultimately be the receivers of these products. I do not believe that "consumer" is the correct word to use in this regard but I refer to those who purchase these products. Consequently, although the Minister of State has put on the record that the CLP regulation will not impose any cost on the State, it would be incorrect to interpret that to mean that it will not cost anything to implement, as it will. My difficulty is not so much that those costs are unjustifiable, because they may be so, but that the Government has not engaged in any way in explaining the justification for them. As I stated at the outset, there has been no regulatory impact assessment for the new impositions this Bill will place on highly important businesses within a sector that will be of great significance to our economic recovery, if we are to have one, over the next few years.

Fine Gael will not oppose the Bill. In his concluding remarks, the Minister of State might refer to the absence of a regulatory impact statement and on how the Government proposes to reach its target of reducing costs associated with regulation to business by €500 million when, half way through the allotted period, it only has reached a target of a reduction in costs to date of €20 million.