Evaluation of cumulative impact of safety, health and environmental regulation on various chemical s

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Evaluation of cumulative impact of safety, health
and environmental regulation on various chemical
sectors issues, challenges and lessons learned

• DTI/BRE Conference on the Evaluation of
  Regulation
•  Adding up the costs and benefits 
• 24th November 2006

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Agenda

• Objectives of project undertaken by LE/RPA
• The target sectors
• The target regulations
• Method
• Challenges
• Key elements of questionnaire
• Key results

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Objectives of the project

• Estimation of costs of compliance with current
  SHE regulations in excess of minimum costs
  necessary to ensure current levels of protection
  in 3 sub-sectors of chemical industry
• Industrial coatings
• Aerosols
• Specialty chemicals
• Proposals for reduction in costs of compliance
  with current SHE regulations while maintaining
  current levels of protection
• Toolkit for future studies

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The target sectors

• Industry Turnover (bn)
• Industrial/decorative coatings 1.4
• Specialty organics 8.7
• Specialty inorganics 2.9
• Specialty soaps 2.9
• Specialty other 1.7
• Aerosols 1.2
• Mixture of very large firms and SMEs

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The target regulations

• In total, package of 16 SHE regulations to be
  assessed jointly
• Hazardous waste classification and waste disposal
• COMAH
• Packaging and packaging waste regulations
• Carriage of dangerous goods including DGSA
• CHIP/Dangerous substances/ dangerous preparations
  Dir.
• Biocidal products directive/regulations
• IPPC/Pollution prevention and control regulations
• Solvent emissions regulations
• COSHH regulations
• Management of health and safety at work
  regulations
• Cosmetics regulations
• Food contact regulations
• General product safety regulations
• The reporting of injuries and dangerous
  occurrences RIDDOR
• Health and safety (first aid) regulations

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Method

• Primary data collection
• Face-to-face interviews with representatives of
  48 companies (different size), with opportunity
  by survey participant to review write-up of
  interview
• Estimation of total costs of compliance and
  excess cost of compliance
• Use of information from interviews and grossing
  up to generate sector-wide estimates

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Challenges

• Industry involvement and support
• Support of 3 trade associations (British Aerosol
  Manufacturers Association, British Coatings
  Federation, British Association of Chemical
  Specialities on steering group with DTI, Defra,
  Cabinet Office), Dti, Scottish Enterprise and
  DETI in NI
• but.
• Participation issues (90 names but only 48
  participants)
• Response issues (information available to
  respondents)

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Key elements of questionnaire

• Identification of entity to which response
  applies (plant, companys UK operation,
  world-wide operation)
• Questions about
• Overall cost of compliance, as of total
  turnover (multiple choice approach)
• Specific costs in absolute terms (staff salaries,
  other time commitments, equipment, other plant or
  process costs, external advice and testing,
  charges imposed by the regulator, fees for
  permits and inspections, foregone business,
  changes to products, changes to labelling, other)

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Key elements of questionnaire

• Also questions about
• Write-off period of one-off equipment costs
• Costs in anticipation of future changes
• Unnecessary costs (amounts, reasons)
• Scope for improvements and reductions in
  regulatory burden
• Benefits of regulation (qualitative, quantitative)

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Key results

• Average total cost of compliance with SHE
  regulations in 3 sectors 2.1 of turnover
  (range of 0.9 to 3.1 across 10 industry
  classifications)
• Average excess cost 0.6 of turnover (range of
  0 to 1)
• Compliance costs roughly constant across firm
  sizes within industry groups

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Key results

• Weighted cost of compliance 1.20 of turnover
• Weighted excess cost 0.4 of turnover

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Key results

• An important feature in interview process was
  asking companies to think of activities they
  would not undertake in the absence of regulations
  (issue of baseline)
• gt reduction in estimate of compliance costs
• Insurance, reputation important drivers

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Key benefits

• 5 main areas
• Better SHE performance
• Greater efficiency in handling waste
• Benefits of visits from regulators
• Improvement of companys reputation (consumers,
  general public)
• Forces companies to analyse production processes
  systematically
• Level playing field - no race to the bottom

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Key benefits

• Many proposals for
• Better implementation of current regulation
• Changes to regulation
• Changes to process of producing regulation
• Perhaps more interesting aspect but also source
  of tension with regulatory bodies