Tuesday, 16 November 2010
Chemicals (Amendment) Bill 2010: Second Stage
Dara Calleary (Minister of State with special responsibility for Public Service Transformation and Labour Affairs, Department of Enterprise, Trade and Employment; Minister of State, Department of An Taoiseach; Minister of State, Department of Finance; Mayo, Fianna Fail)
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I am pleased to bring before the Seanad the Chemicals (Amendment) Bill 2010. The main purpose of the Bill is to meet EU obligations to implement and enforce certain EU regulations. These include the EU regulation on the classification, labelling and packaging of substances and mixtures, known as the CLP regulation, a replacement EU regulation on the export and import of dangerous chemicals implementing the Rotterdam Convention, and periodic technical amendments to these two EU regulations and to the EU REACH and detergents regulations. The Bill also includes some minor technical changes to the Safety, Health and Welfare at Work Act 2005.
It is important to be clear that this Bill is not about transposing EU directives. It is about providing an enforcement of framework for EU regulations. The provisions of those EU regulations, with which this Bill is concerned, are directly applicable in Ireland. We must comply with their provisions. We cannot change them by implementing legislation. The provisions of the Bill therefore relate only to measures necessary for enforcement.
Before considering the provisions of the Bill, it is worth considering the background to these new EU regulations. First, the EU CLP regulation was introduced into EU law on 20 January 2009. This had its origin in the UN globally harmonised system of classification, labelling and packaging of chemicals It is useful to understand the aims of this United Nations system.
Some chemicals, from their production right through to their ultimate use, can be a danger to human health and the environment. All classes and ages of people can be confronted frequently with potentially dangerous products. Given the global trade in chemicals and the need to develop programmes to ensure their safe use, transport and disposal, it was recognised that an internationally harmonised system for classification and labelling would be desirable. Such an approach would facilitate the creation of national frameworks to control chemical exposures and protect people.
The globally harmonised system of classification and labelling of chemicals, otherwise known as GHS,was created to meet this need. GHS classifies chemicals by types of hazard. It generates harmonised templates for communicating hazards, including labels and safety data sheets. GHS seeks to ensure information on physical hazards and toxicity from chemicals is available in order to enhance the protection of human health and the environment during the handling, transport and use of these chemicals. The GHS also provides a basis for harmonising rules and regulations on chemicals at national, regional and worldwide level, an important factor for trade facilitation.
The EU CLP regulation is the EU's expression of that global system. As with the global system, the main aims of the CLP regulation are to help protect human health and the environment by determining which properties of substances and mixtures lead to classification as hazardous and by correctly identifying and communicating hazards. The changeover to the new rules will be phased and will fully replace the existing body of EU law in this area from June 2015.
The first notable change will be the requirement on manufacturers and importers to reclassify their substances from 1 December this year. All substances placed on the market on or after 1 December will be required to be notified to the European Chemicals Agency within one month. I am informed that the European Chemicals Agency's feedback from industry predicts that the number of notifications could be 2 million or even more. Up to yesterday, the number already notified was 820,337.
It is very important for our industry to meet the CLP notification deadline. I reiterate that this means substances on the market on 1 December will have to be reclassified and notified to the European Chemicals Agency by 3 January 2011.
The European Chemicals Agency will maintain an inventory of all notified classifications. This inventory is one of the cornerstones of the CLP regulation. As well as the potential health and environmental benefits of the inventory, there should also be business benefits through improved trade flows throughout the European Union. The Health and Safety Authority has a dedicated help desk to provide information and assistance for manufacturers and importers in meeting their obligations.
It is worth noting the CLP regulation was intended to be incorporated in the enforcement framework of the Chemicals Act 2008, in line with the policy decision to streamline the regulatory framework for enforcement of certain European Union chemicals legislation. It was included within the scope of the regulatory impact assessment which was carried out in the context of the Chemicals Bill 2007. The public consultation undertaken at the time was positive on the inclusion of these EU regulations within the scope of the Chemicals Act. As the CLP regulation had not been adopted at EU level before the passing of the Chemicals Act 2008, it was not possible to include it within the scope of the Act. A further regulatory impact assessment was carried out in the context of the Chemicals (Amendment) Bill 2010. As the policy approach to the enforcement of such EU chemicals legislation has not changed in the meantime, the outcome of the 2007 consultation remains relevant.
The inclusion of the CLP regulation does not impose additional compliance costs on industry. The impact of the regulation was examined both at European Union and national level and by the then Joint Committee on Enterprise, Trade and Employment.
The second new European Union regulation concerns the export and import of dangerous chemicals. It replaces an EU regulation from 2003 and implements in the Union the Rotterdam Convention on prior informed consent. The aims of the convention are to promote shared responsibility and co-operative efforts in the international trade of certain hazardous chemicals, contribute to the environmentally sound use of these hazardous chemicals by facilitating information exchange on their characteristics and provide for a national decision making process on their import and export. The convention covers pesticides and industrial chemicals which have been banned or severely restricted for health or environmental reasons by parties to the convention. In the context of the EU regulation, this means dangerous chemicals and pesticides listed in the annexes may only be exported with the prior consent of the importer in the importing country. In addition to provisions relating to chemicals and pesticides listed in the annexes, the regulation also contains provisions that apply to all chemicals when exported. These provisions address, in particular, requirements on packaging and labelling as specified by EU legislation.
I will now outline the provisions of the Bill. The legislation, as published, was subject to one amendment by Dáil Éireann in section 4. Section 1 is a standard section and defines references to the "Principal Act" as meaning the Chemicals Act 2008. Section 2 contains technical amendments to definitions in section 2 of the principal Act. These changes reflect the new European Union regulations being brought within the enforcement framework of the Act.
Section 3 clarifies the regulation making powers of the Minister in section 5 of the principal Act in relation to classification, labelling and packaging of chemicals. It permits the Minister's power to amend the Act, by regulation, for the purpose of giving effect to a European Union Act relating to chemicals. This is an important amendment as it will mean there will not be unnecessary recourse to primary legislation for the purposes of implementing changes to EU Acts within the enforcement scope of the Chemicals Act. In considering this section it is also important to note that section 36 of the principal Act provides that all regulations made under the Act must be laid by the Minister before each House of the Oireachtas.
Section 4 amends section 8 of the principal Act by providing for the competent authorities for the purposes of the CLP regulation, namely, the Health and Safety Authority, the Minister for Agriculture, Fisheries and Food in respect of pesticides and Beaumont Hospital Board in respect of receiving information relating to emergency health response, and by substituting Beaumont Hospital Board for the Minister for Health and Children as the competent authority for the purposes of receiving information relating to emergency health response under the detergents regulation.
The amendment to the published Bill by Dáil Éireann concerned the substitution of Beaumont Hospital Board for the Minister for Health and Children as a competent authority for certain tasks under the CLP regulation and the detergents regulation. These allocations of responsibility reflect the existing divisions of responsibility.
Section 5 amends section 9 of the principal Act to ensure co-operation arrangements apply also to competent authorities for the CLP regulation. Co-operation between competent authorities is a very important feature of the legislation.
The IDA has highlighted the extent to which the pharmachem industry in general is regulated. In its recent report, Making it Happen — Growing Enterprise for Ireland, Forfás identifies regulation as one of the key elements to the mix that should provide a supportive business environment for business to grow. The degree of regulatory compliance is one of the key measures in determining the competitiveness of an economy. The Chemicals (Amendment) Bill 2010 is designed to achieve such a positive regulatory environment for business. Putting in place such co-operation arrangements should contribute to a clear regulatory framework for business and allow us to make optimum use of resources, avoiding unnecessary costs for both the competent authorities and industry.
Sections 6 and 7 amend sections 14 and 15, respectively, of the principal Act. The amendment seeks to rectify weaknesses in the provisions of the Act which deal with improvement notices. This came to light as a result of a High Court ruling on similar provisions of the Safety, Health and Welfare at Work Act 2005. The Bill makes it clear that an improvement plan or a revised improvement plan prepared by an operator and submitted to an inspector must be adequate in the view of the inspector and must be implemented by the operator. It is important to rectify this matter if the section is to retain its usefulness and avoid the need for competent authorities to use more stringent enforcement powers. A similar amendment to the Safety, Health and Welfare at Work Act 2005 is included in the technical amendments under section 12.
Section 8 amends section 16 of the principal Act to make it clear that the power to issue prohibition notices applies in relation to enforcing European Union rules for the control of major accident hazards relating to dangerous substances. Section 9 amends section 29 of the principal Act to create offences for breaches of the CLP regulation and allow the penalties under section 30 to apply. Section 10 amends section 30 of the principal Act to increase the maximum custodial sentence on summary conviction from six months to 12 following the advice of the Attorney General.
Section 11 has the effect of including within the enforcement framework of the Chemicals Act purely technical amendments to the four EU regulations within the scope of the Act, as amended, namely, REACH, CLP, detergents and Rotterdam. This will keep the regulatory framework simple, avoid gaps in the legal basis for enforcement activities and avoid unnecessary demands on resources normally required in the preparation of regulations.
Section 12 makes technical amendments to the Safety, Health and Welfare at Work Act 2005, including completing the transposition of Directive 91/383/EEC supplementing the measures to encourage improvements in the safety and health at work of workers with a fixed duration employment relationship or a temporary employment relationship of 25 June 1991; clarifying the position on ministerial obligations to consult in the making of certain regulations; clarifying the provisions relating to improvement plans and revised improvement plans, as I indicated; and increasing the maximum penalties on conviction for summary offences from a fine of €3,000 and-or six months imprisonment to a fine of €5,000 and-or 12 months imprisonment.
Section 13 is a standard section, providing for the Short Title of the Bill, collective citations and commencement.
The chemicals sector is a key economic sector for Ireland and the European Union. In its recently published industrial policy document the European Commission notes that, as an intermediate goods industry and an integral part of the manufacturing value chain, the chemicals sector has an enormous potential impact on manufacturing industry as a whole. The sector can improve both the competitiveness and environmental performance of downstream industries through innovation in substances and materials. It is also key to finding solutions for the critical societal challenges facing us such as increasing use of renewable materials, increasing energy efficiency and reducing water usage. Given the central economic and societal importance of the sector, on the one hand, and its inclusion of substances that have the potential to cause serious and widespread damage to human health and the environment, on the other, it is vital that the regulatory framework for the sector is up to date.
The Chemicals (Amendment) Bill 2010 builds on the enforcement system of the Chemicals Act 2008. The purpose of the 2008 Act was to provide a clear regulatory framework for business aimed at ensuring high levels of compliance and increased co-operation between the various competent authorities involved in enforcement to optimise the use of State resources and alleviate unnecessary administrative costs to business. I commend the Bill to the House.
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.
I welcome the Minister of State back to the House. He certainly has been busy in bringing forward legislation or motions to this House. The Chemicals (Amendment) Bill 2010 is important because its main purpose is to meet European Union obligations to implement and enforce certain European Union regulations. These include the European Union regulation on the classification, labelling and packaging of substances and mixtures known as the CLP regulation, a replacement European Union regulation on the export and import of dangerous chemicals implementing the Rotterdam Convention, as well as other technical amendments to these two EU regulations and to the EU REACH and detergent regulations. There also are some minor technical changes to the Safety, Health and Welfare at Work Act 2005.
The Government is anxious, and it is of importance for our industry, to meet the CLP notification deadline. Many companies in Ireland employ graduates and manufacture a wide range of chemical and pharmaceutical products. Eight of the top ten companies in the world have operations in Ireland. They have spent much capital investment during the past year alone. Ten of the top-selling drugs are manufactured in Ireland. A total of €44 billion worth of product was exported in 2009, which constitutes more than half of total national exports and Ireland is the largest exporter of medicines in the world. A total of 25,000 people is employed by the Irish pharmaceutical and chemical industry, while another 25,000 are employed in the provision of services to the sector. As a huge proportion of those employed are third level graduates, it is of great importance to our economy.
The Minister of State is aware, coming from County Mayo, that "regulation" has become a dirty word in Ireland. When people hear the word, it means more red tape, bureaucracy and paperwork for companies. In future, both Houses should have ample opportunity to discuss the regulations and perhaps point a way towards employing more common sense, rather then reams of paperwork that have little meaning but great cost to business and industry. I acknowledge and realise there must be stringent rules where chemicals are involved. Coming from Ballina, the Minister of State is aware of the importance of regulating the manufacture and transportation of chemicals.
While I commend the Bill, I have one or two reservations about it. I note that the Health and Safety Authority will have a dedicated help desk to provide information and assistance for manufacturers and importers in meeting their obligations. I welcome this. With regard to section 4, will the Minister of State provide more detail about the responsibility of the Minister for Agriculture, Fisheries and Food for pesticide and detergent regulations?
I welcome the Minister of State who seems to have got into the habit of coming to the Seanad recently. I listened to his words, understand his view and support what he is trying to do. I hope the Bill which will implement EU regulations on the classification, labelling and packaging of substances, as well as other parts of the REACH directive, will bring legislation up to date and thus have the potential to create new business opportunities.
I am pleased the Minister of State has indicated that the legislation will not impose additional obligations on industry. I listened to Senator Phelan and agree that we should do our utmost to avoid placing unnecessary burdens on businesses, particularly in the areas of red tape and regulation. This stifles business in general and entrepreneurship, in particular. We talk a great deal about avoiding regulation but doing it is difficult because every time something goes wrong people call for more regulation. This has happened in the banking sector and one can understand why, but more regulation means stifling the entrepreneurship we must encourage.
I understand the Minister of State is committed to reducing the regulatory burden on business by 25% by 2012. I visited Panama a number of years ago and people there told me they had set themselves a target of being a country that would encourage new businesses to set up. The countries with which they were competing were Singapore, Hong Kong and one or two others and they set about having the shortest time period for someone who wanted to set up a new business and they achieved it. It now takes only seven hours to complete the paperwork to set up a new business in Panama. While I am sure they have put regulations aside in some areas, they have achieved their target. What does the Minister of State think of introducing a sustainable employment test to block new regulations that would cost jobs? We may be more constrained when it comes to EU regulations, to which Panama would not be subject, but all new proposals should be subjected to a rigorous audit, a matter to which Senator Phelan also referred.
We should give businesses a chance to highlight where regulation has been poorly designed and suggest ways to improve it. In that regard, there was a recent Government initiative to get rid of legislation more than 100 years old. What about legislation passed in more recent times? Perhaps we need a system to reconsider all legislation hindering business and job creation. A number of years ago it was suggested all legislation should be reviewed after five or ten years. Is there a chance this will happen?
Some countries are much more emphatic about encouraging entrepreneurship and new businesses. I was interested to note that although the French Government had announced a carbon tax and was ready to impose it, the plan was dropped because it would have made French business uncompetitive if competing countries did not also have such a tax. As the proposed French tax did not arise from a European regulation, it was possible to drop it. However, we must be careful. We want to be good Europeans and adhere to EU regulations, but we must be aware of the challenges to businesses, particularly entrepreneurial and innovative businesses. Businesses must be aware of the new regulations. This month it was reported that it was estimated that a significant number of French manufacturers ran the risk of missing the 30 November deadline for companies to register substances of which they produced or imported more than 1,000 tonnes per year and all hazardous products, as they were unaware that the law applied to them. We may have this problem when it comes to the next deadline of 31 May 2013 for registration of substances of which companies produce or import more than 100 tonnes per year. Does the Minister foresee any problems with compliance with the REACH directive on that basis?
My experience is in the retail business, about which I will talk for a few minutes. The REACH directive is designed to gradually phase out potentially damaging chemicals from public use. However, it may often be forgotten that it also sets out transparency requirements to give customers the right to know if a hazardous chemical is actually contained in a product. A report published last month by the European Environmental Bureau, EEB, found that major European retailers such as Carrefour and Tesco were exposing their shoppers to harmful chemicals in consumer products such as children's pencil cases and shoes. The study found that many products contained high concentrations of chemicals listed as "substances of very high concern", SVHC, which are highly dangerous to human health as they have been proved to be carcinogenic and toxic. The report also states other retailers are breaching the law by failing to provide basic information on hazardous chemical content. Since 2008, consumers should have been able to get the name of a listed substance, with information on how to use it safely, within 45 days of the request and free of charge. However, half of the 158 information requests sent to European retailers by the EEB between April and August this year received no response. The report wanted to test the willingness of retailers to provide information. It also discovered that only 22% of the requests had received satisfactory answers that met the minimum legal requirements under the REACH regulations. The EEB states all citizens ought to be given full information on the properties of chemicals in the products they buy. A parent, for instance, should automatically be informed whether a pencil case for his or her child contains phthalates which can impair sexual development. Estimates suggest at least 2,000 substances currently fulfil the "substances of very high concern" criteria. However, nine years since the first evaluation and more than three years after implementation of the REACH directive, only 38 substances are officially considered as SVHC. The report warns that "the right to know is, therefore, severely limited in practice due to absence of political initiative".
Can the Government do more to protect the citizen and the customer from harmful chemical substances? Should companies have a process in place for staff to respond to information requests and should there be a grater effort to track harmful chemicals in the supply chain? I would like to hear the Minister of State's view on this aspect of the REACH directive.
The steps the Minister of State has taken are the correct ones. The Bill seems to be very involved when one first reads it but not when one gets into it and realises the steps we have taken. The Bill shows how necessary it is for us to be kept up to date and keep up to date if we are to adhere to the regulations which are very worthy but present problems on occasions. Regulations can make it less attractive for European manufacturers to compete on the world stage. Let us make sure that in trying to protect citizens we do not make ourselves uncompetitive.
I welcome the Minister of State. South Tipperary is rich in industries that have chemicals as their basis. These industries are big employers.
The Bill is, by its nature, technical. Its intention is to amend the Chemicals Act 2008 and meet certain EU obligations to implement and enforce certain EU regulations. These include the EU regulation on the classification, labelling and packaging of substances and mixtures; the replacement EU regulation on the export and import of dangerous chemicals, implementing the Rotterdam Convention; and periodic technical amendments to these two EU regulations and the EU REACH and detergents regulations.
Chemicals are important in areas such as medicine in which they are used to treat and reduce the number of diseases and agriculture in which they are used to increase crop yields. However, their use must be regulated and they should not be overused. Their toxicity should be tested and their impact on human health and the environment monitored. Therefore, it makes sense to have just one enforcement framework in place. I welcome the initiative in this regard.
The Bill proposes a number of minor amendments to the Safety, Health and Welfare at Work Act 2005 which include improving the display of notices in the workplace. This arose following a High Court case.
With this type of technical legislation which incorporates EU legislation into Irish law we are very dependent on departmental experts to get the detail right and cover all of the legal requirements adequately. As a result, we must ensure a support framework is put in place for businesses to examine the legislative framework and what it means for them and at the same time ensure the REACH guidelines do not impose unnecessary costs on the businesses concerned. I have every confidence that our officials will do a proper job in this regard.
Let me comment on sections 6 and 12. The former states improvement plans and revised improvement plans must be considered to be adequate and implemented. This makes obvious sense, given the subject matter of the legislation. Section 12 which is to be welcomed deals with measures to encourage improvements in the health and safety at work of workers with a fixed duration or temporary employment relationship. I welcome the Bill.
I welcome the Minister of State. I noted and agreed with Senator Phelan's comment that it was important in these difficult times that competitiveness remained a priority. While the explanatory memorandum to the Bill acknowledges there is no cost to the Exchequer, it is important that the burden on business is kept to a minimum.
It is important to recognise that, when talking about chemicals, we are talking about materials that are extremely useful to us but which are also very powerful in the natural environment. If mixed with other substances in unrestricted circumstances, there can be a range of pollution effects and damage to wildlife and water tables.
Pollution effects have been legislated for through various directives, including the water framework directive. However, many of the legislative instruments are still mismatched against the REACH legislation. While the latter outlines the 1,000 or so chemicals that are available in Europe and the very hazardous chemicals available to industry and in domestic settings, there has been no proper assessment of the time it would take to phase them out. Chemical substitution is proceeding at too slow a pace. The announcement in May by the EU Commissioner for the Environment, with the EU Commissioner for Industry and Entrepreneurship, Mr. Antonio Tajani, agrees to the potential phasing out of over 100 chemicals. However, the timeframes are not tight enough and the intent is not expressed seriously enough. The substitution of many chemicals is possible and this is where the drive needs to occur at European level. In the meantime we need to legislate for the chemicals on the market which number well over 1,000. The Bill largely updates the Chemicals Act 2008. The Minister of State has outlined the various updates and did so in a perfectly clear way. The Bill comprises an important legislative tool to control the use, storage, labelling, identification and classification of chemicals.
There is a wider picture to be addressed. It concerns how we deal with the most hazardous chemicals in the longer term. Some such chemicals are still released into the environment, sometimes through agricultural use and sometimes through the control of aquatic lice, for example. Many such chemicals have unestablished and unproven long-term consequences. Given the commitment to the precautionary principle throughout European Union legislation, we need to treat some of the more serious and hazardous chemicals as substances that ought to be substituted or phased out completely. I understand from Greenpeace that, if we proceed along the current trajectory, it could take up to 100 years to phase out the use of hazardous chemicals, in spite of the possibility of substitution if there were sufficient will and research in this area.
I welcome the Bill and regard it as helpful in the management of the substances in question, most of which are critical to production processes in modern Irish industry and for domestic and small business uses. I do not wish to increase the burden on businesses but believe it is important to put down a marker that points to the fact that managing the most hazardous chemicals is only a first step and that phasing them out is ultimately desirable. We need to pursue the aim of complete substitution of the most toxic and noxious chemicals over time.
I welcome the Minister of State and the legislation which I consider to be progressive, forward thinking and extraordinarily necessary. I take issue with some of the views expressed to the effect that the legislation might present a difficulty for producers or industry. People, especially politicians, should recognise that the chemicals industry employs almost 30,000 people. The Minister and Senator Carty realise the importance of the industry to their county.
The reason the chemicals industry continues to grow in this country and is responsible for approximately 10% of gross domestic product is there is confidence therein because of regulation. With respect to my friend and colleague, Senator Quinn, he should note that the running of the industry in Panama is such that there would not be the same market for its products outside the country as in it. This is a very important point to remember. Far from coming in the way of entrepreneurship, properly organised regulation enhances confidence in the industry, makes entrepreneurship more effective and the industry more acceptable. It becomes more acceptable on many levels, which points to the importance of the REACH regulation. Regulation is important to those living in the area of production. They want to know that all of the work is being done to the highest level of safety in laboratory conditions.
I am sure the Minister of State and Senator Carty know exactly what goes on in the chemicals industry. Every chemicals industry I know of in Ireland has its own reservoir and, where it is making medicines, it uses its own filtered, treated and distilled water in laboratory conditions. No conditions are accepted other than laboratory conditions. That is the effect of regulation. Were it not for regulation, we would not be able to sell our products. Not only would we not be able to sell them in Irish pharmacies and veterinary suppliers and to the Irish food industry, we would not be able to sell them in any other country.
Even as we are debating this Bill, there are those in the chemical industry who are extremely conscious of the fact their premises could be visited by an official from the Department as early as tomorrow or that they could be contacted by telephone and informed that an audit of their companies will be carried out on Tuesday next or whenever. Those to whom I refer are also aware that this could lead to their factories being closed, all staff being laid off and production brought to a halt as a result of the proper procedures not being observed. That is the pressure which exists on both sides. However, the procedures that apply are in place to ensure that everyone, including end-users and — if another industry is involved — those in the middle of the chain, is protected. They also ensure protection for Irish products which are sold abroad. The audit regulation, which incorporates the REACH directive and other directives, is acceptable throughout the global marketplace.
I become extremely bothered when I am obliged to listen to a debate in which people state that legislation such as that which we are discussing is something of a nuisance. Such individuals inquire as to whether this type of legislation gets in the way and whether a regulatory impact assessment is really required. I suspect the reason there is no such assessment is because provisions in the Bill go far beyond anything that would normally be required in the context of a regulatory impact assessment. I read the previous Government's White Paper on this matter, which I welcomed at the time and which I still welcome, some five, six or seven years ago. People should recognise how the chemical industry functions. They should also recognise the risks, gains and requirements involved. They must be aware that establishing operations in this industry is not similar to setting up a corner shop. Huge demands are placed on those involved.
Some of those in the industry and certain commentators and consultants have stated that the problem with the EU's REACH directive is that it will add between 4% to 15% to the cost of production. Let us place that matter to one side and state that it is a pity. However, if one considers the other aspect, one realises that with the directive those in the industry might not be in a position to sell their products. One difficulty with a product from this country could cast a doubt over 10% of our gross domestic product. That is the scale of what we are discussing. It would be a pity if politicians, above all others, did not realise that. Most people in this House do not see the connection between that and employment, unemployment, marketing, exports and economic growth.
Our focus must be on ensuring we get the type of legislation that is before us right. I compliment the Minister of State and the Department on drawing up the Chemicals (Amendment) Bill 2010. It is a complex and awkward measure. The Minister of State and the Department received little encouragement from those in the industry who should have been providing leadership in respect of this matter. Industry leaders and commentators should always be the first to consider issues of this sort.
It is worth remembering that we have been listening to people refer to regulation stifling development for ten years. In the context of the banks, it is this type of argument that got us into the position in which we now find ourselves. What we need is to develop regulation that is correct and that is properly weighted and costed. Such regulation should be costed not just in financial but also economic terms. Do people realise the importance of the chemical industry to the country? We discovered at the weekend that if people want to take a shot at us, they will do so if it suits them. If the Germans are the major holders of Irish bonds and if they want money to be obtained in order that they can be paid off quickly, surely there is a conflict of interest. The position is the same in respect of the matter under discussion. If, despite the fact that their are our European friends and colleagues, those in the German chemical industry were of the view that they could put one over on us by stating that their regulation is more transparent, effective and acceptable, they would do so and we would then be in trouble.
Ireland must be a global leader in respect of this issue. That brings me to the point that we are above suspicion in that regard. Members might not believe it from what I have said to date but I am no great supporter of the chemical industry. All I have done is provide a hard, practical view on how I, as a public representative, a politician, a trade unionist and someone who is interested in protecting employment, perceive this matter. I wish we could live in a world where certain chemicals did not exist but it is not possible to do so. In the context of issues such as health, however, chemicals allow people to live longer, more safely and free of certain illnesses. The agriculture industry has also been assisted — in many and ever-changing ways — by the use of particular chemicals. The pesticide DDT is no longer used in agriculture but a replacement for this product have been developed. The fact that the agriculture industry is well regulated is the reason DDT is no longer in use. The product which replaced DDT is not a carcinogenic and is, therefore, safe to use. We must welcome developments of this nature.
I welcome the provisions in the Bill which relate to the biodegradability of detergents. However, I would go the whole hog in respect of this matter. Detergents can be the cause of major difficulties. They give rise to greater problems than any other products. We tend to become worked up when we discuss sewage outlets and the damage they can cause. When I hear people discuss this matter, I often wonder whether they were ever obliged to use rods to unblock pipes. I am of the view that unblocking a sewage outlet is far less likely to encourage one to vomit than trying to unblock a pipe through which the residue from detergents flows. The waste which emerges from the latter kind of pipe is an absolute pollutant.
Of all the towns in Ireland, that in which the Minister of State lives is dependent on a clean river. The salmon fishing industry which operates out of that town is dependent on that river being clean. I have stated on many occasions that retail outlets located within five miles of the Shannon or any other decent river should only be allowed to sell domestic detergents such as washing up liquid, bathroom detergents, washing powder etc. that are biodegradable. There should be no detergents on sale throughout the entire country other than those which are biodegradable. I acknowledge that such detergents are marginally more expensive to buy. If, however, people used only products of the kind to which I refer, it would do a great deal to improve water purity etc.
I will be supporting the legislation. I accept that I may not have discussed the detail of the Bill to the degree to which I should have done. My main point in respect of it is that this industry is of crucial importance to Ireland. Colleagues in this and the Lower House have failed to get that message. The Bill is not merely a mechanism for the transposition of an EU regulation, it relates to protecting jobs, developing exports and underpinning the 10% of GDP for which the chemical industry is directly responsible. The latter is what is at stake here and that is why the legislation is important. People should not wonder whether we are wasting our time dealing with matters of this nature. There is a need to introduce even more legislation such as that before the House.
I welcome the Minister of State with responsibility for labour affairs and public service transformation, Deputy Calleary. I also welcome the introduction of the Chemicals (Amendment) Bill 2010. The Minister of State has been extremely active in ensuring that European directives are transposed into Irish law. It is important that we should comply in the context of such transposition, particularly as the issue of Ireland's stance in respect of EU legislation often arises at European Council meetings. Today is particularly important as far as Europe is concerned.
While the Bill is not long, it is certainly important and we should give due consideration to it. As the Minister of State indicated, the Bill's main purpose is to amend the Chemicals Act 2008 to ensure it meets certain criteria regarding European Union regulations on the classification, labelling and packaging of substances and mixtures, a replacement EU regulation on the export and import of dangerous chemicals implementing the Rotterdam Convention and periodic technical amendments to these two EU regulations and to the EU REACH and detergents regulations.
It is important to highlight why EU directives are being transposed into Irish law. The directives represent the EU's attempt to implement the United Nations globally harmonised system of classification, labelling and packaging of chemicals. Given the global trade in chemicals and the need to develop programs to ensure their safe use, transport and disposal, it was recognised that an internationally-harmonised system for classification and labelling would be desirable. Such an approach would facilitate the creation of national frameworks to control chemical exposures and, ultimately, protect the people we aim to serve. Ireland's acceptance of these changes is essential and I believe in supporting the pharmaceutical industries which operate from Ireland and which are helping us drive exports. Our exports must be in line with European Union and global standards and the Chemical (Amendment) Bill 2010 allows us do this.
I welcome a number of measures contained in this Bill. In particular, I welcome the creation of offences in section 9 which amends the original section 29 of the Chemicals Act 2008 for the breaches of the classification, labelling and packaging regulations. This section also allows for penalties to be imposed. The maximum custodial sentence has now been raised to 12 months. This is a justifiable increase in the sentence, especially given the seriousness of the issues concerned. Anyone who endangers society through the misclassification or fraudulent packaging of chemicals should face a period in prison, and it is important the matter is policed effectively. I welcome this development.
I note from the Minister of State's contribution in the other House in mid-October that the Health and Safety Authority has set up a dedicated help desk to provide information and assistance to manufacturers and importers to ensure they comply with the new regulations. That is a positive move. This is an important service and I urge companies with concerns to make use of it.
Another aspect of this Bill is the European Union regulation concerning the export and import of highly dangerous chemicals. It allows for the implementation of the Rotterdam Convention which aims to promote shared responsibility and co-operative efforts in the international trade of certain hazardous chemicals to contribute to their environmentally sound use by facilitating information exchange about their characteristics and to provide for a national decision-making process in their import and export. These are important regulations.
The transportation of acrylic nitrate from Dublin Port across Ireland to Ballina would have affected the Minister of State's area at one time when the Asahi plant was in that area. We tolerated that situation because of the importance of jobs in his area and the same reciprocal arrangement should be made in the case of the distribution of our much needed gas off the west coast. We were prepared to co-operate fully with the Asahi plant in Ballina and I hope those on the west coast in the Minister of State's constituency of Mayo will ensure gas flows as quickly as possible. We need it very badly indeed. The protests put forward are legitimate, but I can assure the House that if the train carrying the acrylic nitrate product had blown up or crashed, the town of Roscommon would have been wiped out. That is how dangerous the chemical was and that is why this Bill is particularly important. It is an indication of how times have changed. As far as I am aware, we were not in support of the Asahi plant in Killala. It probably would have been better had the product been imported by sea to that plant but, nevertheless, I make the point that these regulations would cover that type of transportation of hazardous materials. The Bill is bringing them up to date. As Senator O'Toole stated, all of these chemicals involve certain dangers.
This Bill brings us in line with European Union thinking and European Union regulations. That is why the Minister of State has given the matter priority in the Department to ensure these regulations are brought in to legislation. It is something that has been criticised here, that we, not only Ireland but most of the 27 countries, are not moving. There are quite a number of European Union regulations that have been agreed by the Commission and the Parliament but have not been brought into Irish and other law. The Minister of State is doing an excellent job in bringing this forward today. I commend the Bill to the House and I hope it is unanimously adopted.
Dara Calleary (Minister of State with special responsibility for Public Service Transformation and Labour Affairs, Department of Enterprise, Trade and Employment; Minister of State, Department of An Taoiseach; Minister of State, Department of Finance; Mayo, Fianna Fail)
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I thank the Senators for their welcome. I want to update the House on what has been happening since the enactment of the Chemicals Act 2008 and I will deal with the various queries that have been raised.
Since the Government designated the Health and Safety Authority, HSA, as the lead authority for REACH in Ireland, it has created an incredibly professional operation. It recruited a team of 33 staff embodying a range of scarce and technical expertise. That team has assisted Irish industry to meet the demands of the new REACH framework as well as setting up an inspection and monitoring regime required by that framework. The HSA chemicals operation has earned widespread respect from industry as well as the respect of its peers across Europe.
The first deadline for REACH was what was called pre-registration, and that occurred in December 2008. Under the initial REACH pre-registration process, there were more than 2.7 million pre-registrations of in excess of 143,000 substances by more than 65,000 entities across the EU. The maximum number of pre-registrations that had been anticipated originally was about 300,000. In Ireland, in excess of 97,000 substances were pre-registered for REACH by more than 3,200 legal entities representing approximately 240 companies.
In the chemicals area, in 2009 the HSA completed 1,513 inspections, including almost 1,200 specific REACH inspections, and 472 inspections of all major accident hazards sites covered by the 2006 Seveso regulations and other high-risk workplaces storing and using large quantities of dangerous chemicals. EU obligations also require the HSA to inspect all 86 Seveso — major accident hazards — sites in Ireland, which it achieved. A memoranda of understanding was progressed between the HSA and other agencies, including the Environmental Protection Agency, An Bord Pleanála, the Department of Agriculture, Fisheries and Food, and Customs and Excise. Support for industry, through the dedicated REACH and CLP help desk, answered 470 detailed queries in 2009 and hosted of two seminars and presentations at several conferences and industry meetings on the requirements of REACH and CLP. I give the House these figures to show the engagement of the HSA and its chemical section, and the officials of my Department, with industry on this much regulated area. There is a willingness to engage to assist them to implement this EU legislation.
On the concerns raised by Senators Phelan and Quinn about the regulatory impact assessment, RIA, I again emphasise that as far as classification, labelling and packaging, CLP, is concerned, the legal basis for the enforcement of the CLP regulation was the 2008 Act. That is why the CLP was addressed in a regulatory impact assessment for the draft heads of the Chemicals Bill 2007. The CLP regulation was not included in the Act as it had not yet been adopted at EU level. None the less, the Attorney General advised at that time that the Chemicals Act 2008 needed to be amended to accommodate the new regulations and a further RIA was carried out. The RIA is published on the Department's website. The inclusion of CLP and the new Rotterdam regulation does not impose any additional compliance costs on industry. It is also important to note that separate impact assessments were carried out on the content of the EU regulations directly applicable, and the then draft EU regulations were considered at various stages, including by the relevant committee.
Senators Phelan and Quinn spoke about reducing red tape, and we are committed to doing that in the Department. We are specifically focusing on health and safety law, unemployment law and company law. In health and safety law, last week I chaired a seminar of all interested groups, from industry to worker representative groups, on how we can do so without undermining the basis of the protection offered by that legislation. We are also doing much work on employment law and company law. Simplification plans are being prepared for each of the areas involved. As I stated, there is a series of workshops in place and we hope to bring forward specific proposals early next year.
Senator Quinn raised concerns about substances of high concern in articles. This was also raised by Senator Leyden. The REACH regulation sets out the rules relating to giving consumers information. If there are gaps in compliance in that information, the Health and Safety Authority is equipped to deal with them and they should be brought to its attention.
Senator Carty asked about the role of the Department of Agriculture, Fisheries and Food. The naming of the pesticide control services in the Department reinforces its existing role in this area. It has maintained this role and it is an area on which it is particularly focused, with the Minister being designated as the national authority for the purposes of the Rotterdam regulation.
Senator Dearey spoke about a range of substances. More than 100 substances were identified earlier this year by the Commission for consideration as candidates for authorisation under REACH. These will be subject to appropriate scrutiny by the European Chemicals Agency experts who will involve the Health and Safety Authority in this process. The risk assessment and economic perspectives will be considered.
There were many queries and concerns about regulation. I appreciate Senator O'Toole's comments and I am certainly interested in pursuing further with Senator Quinn his proposals on employment impact assessments. The last thing we want to do in implementing regulations is to cause unemployment.
I thank Senators for their attention. It is proposed to take Committee and Remaining Stages on Thursday.