New and increasingly stringent regulations, combined with disruption from Covid, Brexit and the Ukraine crisis, are causing ongoing issues for the industry. Tim Doggett, Chief Executive of the Chemical Business Association (CBA), discusses their impact and explains how trade associations can help companies in the sector deal with change and disruption.
Chemicals play a fundamental role in society. Used in virtually all sectors and industries, they have a direct impact on everything from agriculture to technology, and practically every aspect of our daily lives. Without them, our way of life would be impossible, which is why the chemical supply chain is so important. When issues arise, great swathes of industry are affected, as are the countless end-users who rely on their products and services.
The undisrupted transport of chemicals is vital if companies are to have the raw materials they need. To reduce risk and find solutions to problems that arise, companies need a thorough understanding of the complexities and issues faced in transporting chemicals to, from and within the UK, EU, and rest of world. Trade associations offer guidance, training, and practical support on bureaucracy and paperwork, changes to import and export rules, regulation and compliance, security (site, transport, and personnel), and best practice.
The carriage of dangerous goods by road is regulated by the ‘International Carriage of Dangerous Goods by Road’ (ADR) and may require the appointment of at least one ‘Dangerous Goods Safety Adviser’ (DGSA)
Trade associations may also provide this service through their own teams of qualified DGSAs, who offer support on many ADR related enquiries, such as the preparation of documents, classification, labelling or carriage requirements.
Trade associations also have years, in some circumstances decades, of experience providing chemical businesses with representation and consultancy for overseas security and government agencies. They can provide advocacy not just within Westminster and Whitehall, but also in Brussels, where they can have effective working relationships with legislators, policymakers and regulators.
With all the noise of government, chemical businesses must engage with organisations that have a voice at the top table and which can provide direct advice, evidence, and feedback to all levels of the government, including ministers and departments such as the DfT and DIT.
Lobbying on behalf of the industry, trade associations have gained some significant and important outcomes. Most recently, these include the introduction of various short and medium-term remedies for the HGV driver shortage and the announcement by DEFRA that it would consult on extending the deadlines for UK REACH and explore the possibility of a new data model that would deliver the appropriate levels of data to support UK REACH registrations.
Organisations like the Chemical Business Association (CBA), the Chemical Industries Association (CIA) and the British Coatings Federation (BCF) work independently to support their members, but also collaborate when there is appropriate mutual interest. All three are members of ‘The Alliance of Chemical Associations’ (ACA) which consists of trade associations representing companies operating in many sectors of the industry’s supply chain. The ACA member trade associations represent some 1,400 companies, the majority of which are SMEs in the UK. These companies have a combined annual turnover of £45 billion and employ 170,000 people.
The impact of Covid and Brexit
Two of the most critical challenges thrown up in the past two years have been supply chain disruption and regulation changes.
Brexit and Covid have exacerbated what has been a growing problem for many years: the lack of HGV drivers. While demand for transport has continually increased, the number of qualified HGV drivers has dwindled, with those retiring not being replaced by newer recruits and others leaving the industry completely.
Prior to the last two years, low pay, lack of facilities, difficult working conditions and a generally poor perception of an HGV career have undermined efforts to retain and recruit drivers. With Brexit, the situation deteriorated even further as the number of EU drivers working in the UK plummeted. Meanwhile, those drivers still delivering chemicals have faced additional disruption through Covid infections, isolation requirements, lockdowns and travel restrictions.
Brexit has caused additional issues with the trading and transport of bulk chemicals between the EU and UK. Aside from more paperwork and bureaucracy, there are also regulatory changes – with UK REACH, for example – that will continue to arise as EU and UK regulations begin to diversify over time. As a result, some of the chemicals that many UK companies rely on today may be prohibited or become commercially unviable in the future. It is a scenario that could lead to significant manufacturing challenges and even mean some products are no longer available.
Dealing with the unknown
Covid and Brexit highlight the fact that the chemical industry must develop the agility and resilience to deal with ongoing change and unexpected disruption. The latest example of this is the Ukraine crisis. With its industry grinding to a halt – and likely to take many years to recover — as well as the unprecedented sanctions imposed on Russia, yet more havoc has been wreaked on the supply chain.
Ukraine, for example, is the largest supplier of noble gases used in the production of semiconductors, while Russia plays a vital role in the production of commodities such as urea as well as metals including palladium, titanium, phosphate rock and scandium, which are essential in numerous production processes.
While trade associations can do nothing to stop the conflict in Ukraine, they do assist companies at the sharp end of the disruption by providing evidence or expertise to government on specific issues, or in assisting in facilitating the opening of potential new trade networks. One UK chemical trade association, for example, is currently in discussion with the German Embassy and Indian High Commission to promote trade with the UK. These organisations also provide ongoing support to individual businesses while representing the interests of the chemical supply industry to governments at home and abroad.
More details at chemical.org.uk.