International Comparison of Cumulative Regulatory Costs for the Chemical Industry

International Comparison of Cumulative Regulatory Costs for the Chemical Industry

Chemical industry survey – Basic chemicals

Table of contents

• Introduction and overarching information
• Questionnaire A – Chemicals legislation
• Questionnaire B – Emissions and industrial process legislation
• Questionnaire C – Worker safety legislation

Introduction and overarching information

The overall objective of this study is to understand thedifferences in regulatory frameworksapplying to the chemical industry between countriesand how these affect the respective business sectors, under the format of case studies.

The following questions will feed into case studies on legislation in the USA for the basic chemicals sector. This document contains three separate questionnaires which will feed into three distinct case studies (hence the length of this document). The questionnaires separately cover:

A)Chemicals legislation

B)Emissions and industrial process legislation

C)Worker safety legislation

We would like your views and comments to feed into the development of all three case studies and as such would appreciate it if you could complete all questionnaires contained in this document.

The timeframe for your answers is 2014 to 2016, unless suggested otherwise under specific questions.

If you are not the person responsible for regulatory compliancefor chemicallegislation, please forward this survey to the right person(s).All questions related to the survey can be addressed to: David Birchby ()

Overarching section – Profile

Please provide the following information at plant level:

Name of the organisation/division:
Contact name: / I do not want to disclose my identity
Your role in the organisation:
Location of the plant:
Turnover of the plant in $(please specify the reference year):
No of employees of the plant in FTE (please specify the reference year):
Type of products manufactured in the plant:
Please indicate the main countries of exports for your products:

Questionnaire A – Chemicals legislation

The following questions will feed into a case study on chemical legislation in the USA for the basic chemicals sector. Chemical legislation includes legislation acts related to the management of risks and hazard of chemicals and plant protection products/biocides. For this specific assessment, please do not consider any piece of legislation related to energy, industrial processes and emissions, worker safety and product-specific.

SectionA1 – Selection of legislation

The following table presents an overview of the categories of legislation considered in this survey. Please select the legislative acts you are knowledgeable of related to chemical legislation in USA affecting the basic chemical sectors:

Topic / Legislative act
Risks and hazard of chemicals / The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
Risk and hazard of plant protection products and biocides / Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)
Other – please specify

SectionA2 - Cost section

Question on administrative and operating activities

1a.Please indicate the total time required (in man-days/year) for alladministrativeand operating/technical activities(excluding maintenance, which is in a next question) to support the chemical legislation between 2014 and 2016:

Man-days per
year / Average staff cost of people carrying out these tasks: monthly
salary ($)
The Toxic Substances Control Act (TSCA) / Admin:
Technical: / Admin:
Technical:
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act / Admin:
Technical: / Admin:
Technical:
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996) / Admin:
Technical: / Admin:
Technical:
Other – please specify: / Admin:
Technical: / Admin:
Technical:
In case the split is not applicable, please indicate the total costs of the above-mentioned legislations: / Admin:
Technical: / Admin:
Technical:

Note: administrative staff relates to all administrative activities, such as filing dossiers, while technical staff perform activities related to testing, engineering, etc.

1b.Please explain the main steps/requirements in terms of administrative and operating/technical activities undertakeninternallyto comply with the legislative actsbetween 2014 and 2016:

1c.Did you face any significant costin terms of administrative and operating/technical activities undertakeninternally to comply with the legislative actsbefore 2014? If yes, please describe:

1d.If any administrative and operating/technical activities(excluding maintenance, which is in a next question) on this legislation are outsourced/subcontracted, please indicate the average yearly outsourcing costs between 2014 and 2016:

Average yearly costs of
outsourced/contracted
activities ($)
The Toxic Substances Control Act (TSCA) / Admin:
Technical:
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act / Admin:
Technical:
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996) / Admin:
Technical:
Other – please specify: / Admin:
Technical:
In case the split is not applicable, please indicate the total costs of the above-mentioned legislations: / Admin:
Technical:

Note: administrative staff relates to all administrative activities, such as filing dossiers, while technical staff perform activities related to testing, engineering, etc.

1e.Please explain the main steps/requirements in terms of administrative and operating/technical activities undertakenexternallyto comply with the legislative acts between 2014 and 2016:

1f.Did you face any significant costin terms of administrative and operating/technical activities undertakenexternally to comply with the legislative actsbefore 2014? If yes, please describe:

Question on capital expenditures and maintenance

2a.If applicable, please provide an indication of the additional annual cost for machines, equipment, software/electronic system and databasesto comply with the legislation between 2014 and 2016:

Examples:

• For a one-off expenditure: for a machine of $500.000 with a service life of 20 years, please insert $500,000/20= 25.000 of average yearly costs;
• For a recurrent expenditure: for the annual purchase of equipment that costs $500, please insert $500 of average yearly costs;
• Please do not include expenditures that you would have made in the absence of legislation; or only include the additional amount that reflects the compliance with legislation.

Average yearly cost ($)
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)
Other – please specify:
In case the split is not applicable, please indicate the total costs of the above-mentioned legislations:

2b.Please explain the main steps/requirements in terms of machines, equipment, software/electronic system and databases to comply with the legislative acts between 2014 and 2016:

2c. Did you face any significant costin terms of machines, equipment, software/electronic system and databases to comply with the legislative actsbefore 2014? If yes, please describe:

2d.If applicable, please provide an indication of an average yearly cost for maintenance of such equipment, software/electronic system and databases to comply with the legislation between 2014 and 2016:

Average yearly cost ($)
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)
Other – please specify:
In case the split is not applicable, please indicate the total costs of the above-mentioned legislations:

2e. Please explain the main steps/requirements in terms of maintenance to comply with the legislative actsbetween 2014 and 2016:

2f.Did you face any significant costin terms of maintenance to comply with the legislative actsbefore 2014? If yes, please describe:

Question on regulatory charges (fees, taxes, etc.)

3a.Please indicate the annual average regulatory charges (e.g. fees, levies or taxes) to comply with chemical legislation between 2014 and 2016:

Average yearly cost ($)
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)
Other – please specify:
In case the split is not applicable, please indicate the total costs of the above-mentioned legislations:

3b.Please explain the main steps/requirements in terms of regulatory charges to comply with the legislative actsbetween 2014 and 2016:

3c.Did you face any significant costin terms of regulatory charges to comply with the legislative actsbefore 2014? If yes, please describe:

SectionA3 - Drivers section

4. For each of the sub-packages analysed, please indicate if the noted costs are driven by federal legislation or state/provincial/regional legislation?

Level / Comment
(specify which state/region and which legislative act)
The Toxic Substances Control Act (TSCA) / State/regional
Federal/national
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act / State/regional
Federal/national
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996) / State/regional
Federal/national
Other – please specify: / State/regional
Federal/national

5.What are the main factors driving regulatory costs in your company (e.g. complexity of regulation, number of actions required, etc.)?

6. To your knowledge, please locate the level of standards/ambition of legislation in your country with respect to comparable legislation covering the chemical industry in the rest of the world on a scale from 1 (= no standards/no ambition) to 10 (= the highest standards/the highest ambition):

Legislation / Scale / None
1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / The highest
10
Example / x
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)

Please elaborate on the level of standards in relation with the legislative acts in your country, relative to those faced by chemical industry in the rest of the world:

7. To your knowledge, please locate the level of enforcement of legislation in your country with respect to comparable legislation covering the chemical industry in the rest of the world on a scale from 1 (= no enforcement) to 10 (=the highest):

Legislation / Scale / None
1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / The highest
10
Example / x
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)

Please elaborate on the level of enforcement in relation with the legislative acts in your country relative to those faced by chemical industry in the rest of the world:

8. Please assess the level of guidance in implementation – help/support/direction received from authorities related to compliance:

Legislation / Scale / Insufficient / Somewhat
insufficient / Neither insufficient nor sufficient / Somewhat sufficient / Sufficient
Example / x
The Toxic Substances Control Act (TSCA)
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996)

Please elaborate on the level of guidance (help/support/direction received from authorities related to compliance) for implementation in relation with the legislative acts in your country relative to those faced by chemical industry in the rest of the world:

9. If you are not aware of the legislation in the EU, please skip this question: to your knowledge, how do these elements (standards, enforcement, guidance in implementation) in your country compare with the EU?

Level of standards / Level of enforcement / Level of guidance in implementation
The Toxic Substances Control Act (TSCA) / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU
The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU
The Federal Insecticide Fungicide and Rodenticide Act (FIFRA) (1996) / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU / Much higher in EU
Higher in EU
About the same in EU
Lower in EU
Much lower in EU

10. Has chemicals legislation in USAbeen changing frequently over time?

No Yes - If yes, specify the frequency and elaborate on the implications/consequences of such changes (i.e. pressure from short regulation cycles):

11. To what extent would the activities (and costs) mentioned in section 3occur in the absence of the regulation? In other words, would part of these activities be performed as good business practice (e.g. self-classification of chemicals, reputation, market opportunities, etc.)?

To the full extent

To a high extent

To some extent

To a limited extent

Not at all

Do not know (NA)

Please elaborate on the incentives to perform these activities in the absence of such a regulatory framework in your country:

12. Are pieces of legislation being harmonised (e.g. across US states)? YesNo

Please explain which were the implications for your business, whether they are/are not harmonised:

If they are harmonised, please explain to which extent:

13. Are there exemptions for some products or company size?

Section A4 - Benefits section

14. Does the compliance withlegislation triggerthe following elements?

Not at all
1 / 2 / 3 / 4 / To a great extent
5
Improved characteristics of the product allowing firms to raise prices
Improved characteristics of the product allowing firms to access new markets / gain greater share of existing markets
Legislation driving new product lines/innovation.
Betteraccess to finance (attracting new inward investments or reduced borrowing rates).
Other – please specify:

Explain:

15. Does compliance with legislation trigger environmentalbenefits?

No Yes - If yes, elaborate on the benefit and indicate if this triggered any cost savings:

16. Does compliance with legislation trigger healthbenefits?

No Yes - If yes, elaborate on the benefit and indicate if this triggered any cost savings:

17. Please elaborate on any other type of benefit from complying with legislation:

SectionA5 - Impacts and forward-looking section

18. Please assess the main sources of competitive advantage for products in your sectorinthe US:

Not at all a competitive advantage
1 / 2 / 3 / 4 / 5 / 6 / To a great extent
7
Lower cost of materials
Lower cost of energy
Lower cost of labour
Lower cost of regulation
Other:

19. Do technical barriers occur that have an impact on the trade of your products?

Note: technical barriers = mandatory technical regulations and/or voluntary standards that define specific characteristics that a product should have, such as its size, shape, design, labelling / marking / packaging, functionality or performance.

No Yes - If yes, please elaborate:

20. Do you feel there is a lack of legislation in your sectoron specific aspects (e.g. leading to lack of environmentally-sensitive practices, to occupational hazards, to conflicts in international trade, etc.)?

No Yes - If yes, please elaborate on which aspects:

21a. Has the regulation(and its respective costs) had any effect on theprice competitiveness of the business compared to producers in competitor countries?

(Note: Price competitiveness = differences in relative unit costs between producers)

It highly increases the price competitiveness

It increases the price competitiveness

It does not affect the price competitiveness

It decreases the price competitiveness

It highly decreases the price competitiveness

Explain:

21b. If yes, are/haveprices paid by the consumers likely to increase/increased?

No Yes – If yes, what are the likely major factors that will cause prices to rise:

21c. If the regulation (and its respective costs) had any effect on the price competitiveness of the firm compared to competitor countries, could you indicate whether and how this had any effect on trade? Please quantify the effect (best estimate is enough).

21d. If the regulation (and its respective costs) had any effect on the price competitiveness of the firm compared to competitor countries, could you indicate whether and how this had any effect on investments and profitability?Please quantify the effect (best estimate is enough).

22a. Has the regulation (and its respective costs) had any effect on thenon-price competitiveness of the business compared to competitor countries?

(Note:Non-price competitiveness encompasses technical factors such as product quality, design, reliability and performance, choice, after-sales services, marketing, access to markets, ability to produce certain products, branding and the availability and cost of replacement parts)

It highly increases the non-price competitiveness

It increases the non-price competitiveness

It does not affect the non-price competitiveness

It decreases the non-price competitiveness

It highly decreases the non-price competitiveness

Explain:

22b. More specifically, does legislation affect the quality and variety of products and consumer choice?

No Yes - If yes, please elaborate:

22c. If the regulation (and its respective costs) had any effect on the non-price competitiveness of the firm compared to competitor countries, could you indicate whether and how this had any effect on trade?

22d. If the regulation (and its respective costs) had any effect on the non-price competitiveness of the firm compared to competitor countries, could you indicate whether and how this had any effect on investments and profitability? Please quantify the effect (best estimate is enough).

23. Please select the impacts of regulation that apply to your business:

Positive impact / Negative impact / Neutral impact
Incentives for innovation
Business expansion
Job creation
Access to resources
Other – please specify:

Please elaborate on the impacts selected and explain whether these have already happened or are expected to happen:

24. Do you expect the current situation to change in the future? If so, how/why:

New legislation to come

Revision of legislation

New priorities

Other – please specify:

Explain:

Questionnaire B – Emissions and industrial process legislation

The following questions will feed into a case study on emissions and industrial processes legislation in the USA for the basic chemical sectors. Emissions and industrial processes legislation includes legislation acts related to global warming, waste regulations, and industrial pollution. For this specific assessment, please do not consider any piece of legislation related to chemicals, energy, worker safety and product-specific.