Urgent action is required by government to provide clarity on the UK's plans for chemicals regulation after Brexit, according to a report by the House of Commons' Environmental Audit Committee (EAC). In the report of the findings of its inquiry, published on 29 April 2017, the EAC stresses that a lack of clarity has a significant detrimental impact on businesses operating in the UK and puts UK jobs at risk.
Background
On 21 December 2016, the EAC launched its inquiry to examine the potential future of chemicals regulation in the UK after the Brexit result. The focus of the inquiry was to examine the impact of leaving the EU on chemicals regulation, given that the UK's current chemicals management regime is the European REACH Regulation. The terms of reference of the inquiry also included considering possible impacts on environmental protection, public safety and the UK chemicals industry. Burges Salmon looked at the significance of the inquiry in a recent article.
Findings of the EAC inquiry
Given the recent announcement of a general election in June 2017, the EAC has not published a full report, but the following key points are made:
- UK companies will have spent an estimated £250 million to comply with the next REACH registration deadline in May 2018, yet have no guarantee that their REACH registrations will remain valid once the UK leaves the EU.
- As a minimum the EAC urges the government to negotiate to remain a participant in the REACH registration process, to avoid creating a two-tier system.
- The EU REACH chemicals regulation framework would be difficult to transpose directly into UK law because of how it is written and operates (e.g. it assumes participants are within the EU and that member states will co-operate).
- If the UK was to establish a separate standalone system to regulate chemicals, this is likely to be expensive for both the taxpayer and industry.
- Inspiration might be gained from the US experience of TSCA reform (if the UK decides to establish its own system).
What happens next?
The UK chemicals industry faces significant uncertainty leading up to REACH 2018 and beyond, and clarity for future-investment planning is urgently needed. Burges Salmon is closely monitoring developments in this area and will be tracking whether the EAC’s messages are taken on board by the government in due course. To discuss any of the issues arising in this article please contact Michael Barlow or your usual Burges Salmon contact.