Lawrence D. Sloan, President& CEO, SOCMA
GlobalChem Conference & Expo
Wednesday, February 27, 2013
National Harbor, MD
Good morning everyone, and welcome to day two of this year’s Global Chemical Regulations Conference. It is a pleasure to be with you and open today’s proceedings. I am also pleased to share the stage this morning with our distinguished guest, Geert Dancet, to whom we are grateful for joining us once again from Helsinki. Geert, I look forward to your remarks in a few short moments.
As some of you know, I began my career as a chemical engineer at Air Products & Chemicals and later worked at Nalco Chemical Company. However, before this, during a summer job in college, I worked at FMC Corporation, where I was first introduced to the regulations facing our industry. It was the year of the terrible Bhopal, India, incident and the chemical industry had a black eye. That summer, I learned what Superfund and CERCLA meant, as I was tasked with developing a database of their brownfield sites around the country. At Air Products following college, I clearly remember being trained in EPA’s Right-to-Know program. Later, at Nalco in the early 1990s, I was involved in developing procedures for how their re-usable totes were being handled as part of the ISO 9001 certification process.
Today, we face new challenges that make conferences like GlobalChem all the more important. Although our nation’s laws originate just a few miles from this spot, I know through my experience working inside chemical facilities that the real work takes place where you all reside, not in Washington. Fairly or unfairly, you are the ones held most responsible by the public for the efficacy of our chemical control laws—not those of us in our nation’s capital—because your companies are the ones that implement them. Your presence here today demonstrates you and your company’s commitment to understanding and staying ahead of regulatory developments that impact all of us, as industry representatives, as family members, and as consumers.
So, on behalf of SOCMA and ACC, our partner for this yearly event, I thank you for taking time to join us here at National Harbor this week.
It is also important for us to recognize the tremendous partnership we enjoy with EPA again this year. Thanks to their participation, GlobalChem is more than a conference hosted by associations but a dialogue held between stakeholders. So, please join me in applauding their continued support and involvement.
Most of you know that SOCMA is the voice of America’s specialty chemical industry. U.S. specialty manufacturers are among the world’s most innovative and entrepreneurial companies, whose products are valued at $24 billion annually. Using complex chemistries and sophisticated process technologies, specialty manufacturers today are leading the development of sustainable solutions of tomorrow. For more than 90 years, SOCMA has represented a diverse membership comprised of companies of all sizes that develop chemistries used in virtually every type of manufacturing, from life-saving pharmaceuticals to crop protection to tablet display technology. Simply put, America’s high standards of living are tied to our industry’s ability to innovate and produce.
The world’s next technological breakthrough is also dependent upon the bright minds of our industry’s employees, working in laboratories or with their customers to identify newer and better methods to meet global demands. The fact that more than 70 percent of the world’s intellectual property resides in the United States is a testament to the strong innovative spirit that drives American manufacturing.
In order for us to continue to meet the world’s demands, driven by a growing population and technological dependencies, it is essential that our government pursue policies that help specialty manufacturers expand their markets and be more competitive.
Herbert Hoover, the 31st President of the United States and a mining engineer, said, “Competition is not only the basis of protection to the consumer, but is the incentive to progress.”
I believe this holds true still today; one such way is to pursue a bold trade agenda. Ninety-five percent of the world’s consumers reside outside our borders. However, through trade barriers and costly tariffs, trade is more difficult for specialty manufacturers, especially small and mid-sized companies, than for large multi-national firms. Trade agreements, therefore, are powerful tools for economic growth and help open our industry’s products to the global marketplace.
We now have an enormous opportunity before us to expand trade with Europe, our second largest trade partner behind Canada and Mexico. According to a study by Bloomberg Government, the U.S. chemical industry paid more than a billion dollars in tariffs exporting to Europe in 2011, $600 million of which was paid by organic chemical manufacturers, a major constituency of our organization. With such large trade flows between these economies, eliminating tariffs and addressing some of the challenges posed by non-tariff barriers would benefit both countries. Furthermore, it could help restore trade among SOCMA members that abruptly but reluctantly ceased trade with Europe due to the unreasonable costs as a result of REACH.
Another way in which our government can help us remain competitive is through smart regulation. Heavy handed policies aimed at prevention ignore innovation and are the antithesis of competition. In 2010, the specialty chemical industry spent more than $55 million to comply with regulations, which is about $815,000 per company. This is an enormous sum for such a small sector of the broader chemical industry, particularly when you factor in the characteristics of specialty chemical firms. These companies continually need ready capital to invest in designing new chemistries, and less so on interpreting regulations that often conflict with one another. In many cases, their ability to innovate is what keeps them in business.
We must also leverage regulatory efforts and increase regulatory cooperation with the EU in areas where appropriate. Such efforts can facilitate trans-Atlantic trade, while enhancing protection of human health and the environment. But these efforts must be grounded in sound science and risk-based. In contrast, approaches based more on the precautionary principle would be detrimental to our industry and not achieve the shared goals of the U.S. and EU.
I encourage continued conversations between regulatory bodies in the U.S. and EU and, in particular, between EPA and ECHA. Additionally, future regulatory coordination should be transparent and allow for input from U.S. and EU stakeholders. From SOCMA’s perspective, there is ample opportunity to improve REACH implementation, not the least of which is a willingness by ECHA to consider a dialogue with submitters when the agency has problems with a dossier. The lack of such a dialogue in the process is causing enormous problems and needless additional expenses.
Finally, I would like to talk briefly about efforts here at home to reform TSCA. I continue to be encouraged by an apparent consensus among stakeholders that our 30-plus year-old chemical control law needs to be updated. Unfortunately, agreement seems to stop there. Our failure to achieve TSCA reform has as much to do with our approach to reform as it does with the substance of it. In this politically charged, partisan environment in which Congress operates, somehow we have continually tried to find that silver bullet to fix everything in one comprehensive piece of legislation, only to lead us to a stalemate each time. To be successful, we need to identify areas where there is some consensus among stakeholders and move those ideas forward. Until we do, the prospect that there will be support from Democrats and Republicans alike will remain out of reach. Perhaps the lessons I learned as a chemical engineer early in my career make me more of a pragmatist than a politician, but sometimes a little more practicality and a little less celebrity is exactly what we need in Washington.
Thank you for your time and attention this morning and for your attendance at GlobalChem this year.