Flemmich Webb talks to the Chemical Industry Association's director general about the future of the chemical industry
Like a teenager approaching adulthood, the chemical industry has been going through a lot of changes recently. Stung by accusations of a poor reputation among its stakeholders and a bunker mentality towards change, the industry has been forced to look at how it operates in a way it has never done before.
Holding the hand of its members through the beginning of this transition period has been the Chemical Industries Association (CIA), one of about 20 trade organisations that represent the chemical industry. Judith Hackitt, the CIA’s director-general, has been instrumental in making sure that the association shows leadership on the issues that need to be tackled if the industry is to prosper in the future.
Having taken over from Elliot Finer on 1 April 2002, she soon realised that in order to change attitudes within the chemical industry, the CIA would have to change too. “It needed to get back on an even keel,” she says. “I didn’t take the job to keep the ship sailing in the same direction.” Hackitt started refining the organisation in July, and by November the changes were complete.
She then turned her attention to the industry itself. Although the CIA’s Responsible Care Programme – a voluntary code of self-improvement for the industry – has been running in the UK since 1989, a recent report from the Chemicals Innovation & Growth Team (CIGT) was highly critical of the sector. Among other things, it highlighted poor reputation among the public and the City, an absence of leadership within the industry, a lack of research and development investment, and current and future skill shortages.
This, Hackitt says, was the kick up the backside the industry needed. “I am very pleased with the report because it is a refreshing way of looking at the sector. The fact that it is qualitative rather than quantitative and talks about behaviours, leadership and culture is very challenging.”
As a response to some of the criticisms in the report, the CIA recently launched its Responsible Care Performance Goals (see EBM 82) which set a number of targets to do with health, safety and the environment to be achieved by 2010. This will feed into the CIA’s aim of creating a full set of sustainable development goals by the end of 2007.
It is a positive move for an industry not generally associated with upholding the values of sustainable development, but it has already attracted its critics, most of who argue that the targets are not challenging enough.
In its defence, Hackitt says that the CIA had to be pragmatic when setting the targets. “This is a process of getting the whole industry to commit to setting goals that they will be measured against. If we had set goals that are clearly beyond the reach of our members, we would not have been able to convince them to sign up to it. It is a compromise.”
She admits that the system may need fine-tuning. “If, as companies go through the IPPC application process there is a much greater aggregated improvement, we will assess our progress,” she says. “We will review the targets around 2006/7 when we have points on the graph.”
It is a more carrot than stick approach – Hackitt shudders at the idea of name and shame league tables comparing individual companies’ performance against the targets – but for an industry wearing new clothes for the first time, she feels it pays to be sensitive.
“Just about every member is trying to do their best, but life is complicated for them right now and they may not all be improving at the same rate. We are trying to move everyone along by pointing them to best practice.”
From the outside though, this approach can look like a case of soft industry self-regulation. Indeed, NGOs have continually sniped away at the Responsible Care Programme, not believing that the industry is capable of robust self-regulation. Meanwhile, the public has grown more wary of the industry and science in general, as stories of endocrine disrupters and
bio-accumulative chemicals fill the newspapers.
Part of this, says Hackitt, is down to perception. The industry actually has a very positive impact on people’s lives, through everyday products like soap and shampoo, but often doesn’t get the credit for it. “People struggle to make the connection between the everyday items they use and the chemicals industry that makes them,” she says. “If they want these products, there has to be a chemicals industry.”
The reason that they don’t make the connection is because the industry is not good at interacting with stakeholders, she says. “The NGOs are doing a very good job of campaigning against us. We aren’t very good at communicating in a language that is understandable or at listening to the public’s concerns.
“Somehow we have to find a balance between
acknowledging that there are risks and that the industry is trying to deal with them, and highlighting the huge benefits that the chemical industry offers society. Until we recognise the need to change the way we communicate and align ourselves more closely with societal values, it will be quite difficult for us to improve our reputation.”
Work is also under way to ensure that third party verification is more widespread, which should help improve the credibility of the self-regulatory approach of the industry.
Waiting for Europe
With all the self-analysis going on in the industry in the UK, Hackitt has had to be careful not to take her eye off what is going on externally. Lurking in a dusty folder somewhere in the corridors of Brussels lies a draft of the European Chemicals Directive, a paper that could have profound implications for the chemical industry.
At its heart lies the desire to improve the process of assessing chemicals by introducing a rigorous and faster system of registration, evaluation and authorisation. This is vital for an industry that is perceived as knowing relatively little about some of its 30,000 existing products – a fact that hardly fills the public or NGOs with confidence.
Hackitt says that the chemical industry supports the broad aims of the directive but points out that as always, the devil will lie in the detail. What she wants is a proportionate and workable scheme that allows a consistent evaluation of chemicals. “Leaving administration to individual member states – allowing different countries to come to different conclusions – will not be any help,” she says.
Describing herself as “seriously bothered” about the delay to the paper – it should have been out this month, but could now be as late as September 2003 – Hackitt fears that it is being produced in a very bureaucratic way. “There is a danger that it will replace one set of regulations that don’t work with another set that don’t work either.”
As with all European legislation, there is not much the industry can do except wait until the directive is published, although it has been lobbying MEPs strongly to get its views across.
In the meantime, groups like Friends of the Earth, say why wait? Why not phase out chemicals that are deemed risky and end the release of hazardous substances? A proactive industry approach could solve many of its reputational and performance problems in one move, the NGO argues.
But Hackitt doesn’t believe that such drastic measures are the answer. “Phase out is one option, but so is effective risk management,” she responds. As for stopping the release of hazardous substances, she says the industry believes in basing its decisions on risk rather than hazard-related criteria and that the idea is not practical. “There is no point in UK or European chemical producers taking preemptive action to phase out production unless there is a commitment from downstream users to phase out use.”
An upward curve
While there do appear to be maany challenges for the CIA and its members, the key point about its recent work is that the issues facing the industry have been identified. It knows it must rehabilitate its reputation, communicate better with stakeholders, continue to improve production efficiency, and attract the right calibre of people to its workforce.
Encouragingly, the change in attitude appears to be filtering through. The industry, together with the DTI, has just published a report that sets out its trends in research priorities. This represents a shift in thinking for the industry. “One of the things that the CITG report says is that it is hard to know what the chemical industry wants, because it’s not very clear about saying it,” explains Hackitt. “So for us to publish a document that describes what our priorities are and the areas that we would like to see developed is an important step forward.”
It is these signs that convince Hackitt that the industry has reached a turning point, and can, if the CIA and its members keep momentum up, adapt successfully to the changing commercial landscape. “The real challenge is for the industry to define its own future, and I’m pretty confident that if we take the lead, it will be able to go there,” she says. The CIA, and with it the chemical industry, is coming of age.