Chemical Business Association (CBA) complains about scale of proposed Reach fees - some of which increase by several hundred per cent over the figures originally proposed by the European Commission
The Chemical Business Association (CBA) says that the Reach fees to be charged by the European Chemicals Agency are 'out of control'.
"This is the second time that proposed Reach fees have escalated and they have now achieved a level where they are completely unacceptable and will inflict significant damage to the competitiveness of the industry," said Melvyn Whyte, chairman of CBA's Reach task force.
The base fee for a joint submission to register a substance in the 1-10tonnes category was originally budgeted by the Commission to be 400euro.
In July 2006, this figure was revised to 804euros.
In the latest commission proposal, the fee has increased to 1200euro.
Overall, these fees have increased by 200% on the original budget.
Similar increases apply at the other end of the tonnage scale.
The base fee for a joint submission for a substance manufactured or imported in volumes of more than 1000 tonnes per year was initially budgeted at 8000euro.
In July 2006, this figure was more than doubled to 16080euro.
In the latest commission proposal, the fee has risen to 23,250euro - an increase of 191% on the original budget.
"And these examples are some of the more modest increases.
"There are many others which represent increases of well over 500% on the original budget," said Melvyn Whyte.
"There are only two possible explanations for these figures.
"Either they represent an unacceptable level of incompetence in framing the initial budget or, which is more likely, the level of the original budget was deliberately manipulated as a means of deflecting industry's concerns about the costs of the Reach system.
"In any case, the commission is now behaving like a state monopoly by forcing industry to fund its grandiose regulatory ambitions," he said.
The CBA welcomed the introduction of reduced fee scales for medium, small and micro-sized companies which make up 97% of the European industry.
But these reductions are financed by massive fee increases elsewhere.
CBA's analysis reveals that, even allowing for reductions in fees for the smallest firms, the Commission's fee proposals represent an overall increase of more than 40% on the revised proposals of July 2006 and well over 100% on the Commission's original budget.
The CBA also has broader concerns about the proposed Reach fee scales.
The agency has increased the complexity of the fees by introducing no fewer than eight separate annexes, each containing tables relating to fees and introducing new fees.
"The agency intends to milk every last euro out of the industry," said Melvyn Whyte.
"Take just two examples.
"In previous budgets, the fee to lodge an appeal was fixed at 1500euro.
"Now the fee ranges from 2000 to 6000euros with no justification whatsoever.
"The agency is also making exorbitant charges for minor administrative changes.
"If a company wants to change simple information on the agency's database, such as its address, it must now pay a fee of 1500euro," he said.
The CBA is also concerned about the terms of trading which the Agency is unilaterally seeking to impose.
"The proposals say that the agency expects its invoices for fees to be paid within either seven or 14 days," explained Whyte.
"The standard terms of trade throughout Europe are 30 days - which is also the figure in the European Union's late payment directive.
"But the reality in most European countries is that the average payment period for invoices is 50 days.
"CBA believe that the agency should accept a 30-day payment period.
"Commercially, this places it in exactly the same position as the businesses which it is seeking to regulate.
"Industry does not accept that the agency should have the right to grant itself more favourable terms," he added.
The CBA is also against the agency's proposals for an annual review of its fees and the implication that they will increase each year in line with inflation.
"Industry is not in a position to issue a blank cheque to the agency for year-on-year fee increases.
"We expect it to have to justify any increases and also be obliged to make annual efficiency savings to hold its fees at an acceptable level.
"Industry is concerned about the absence of transparent budget and the apparent lack of accountability to its major stakeholder," he said.
