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JOINT COMMITTEE ON ENTERPRISE, TRADE AND EMPLOYMENT díospóireacht -
Tuesday, 8 Jan 2008

Scrutiny of EU Proposals.

I welcome Mr. Aidan Hodson, principal officer, and Mr. Bill Brandon, assistant principal officer, from the office of science, technology and innovation in the Department of Enterprise, Trade and Employment; Mr. Padraig O Conaill, the research attaché with the Irish permanent representation in Brussels; Mr. Tom Sheedy from Enterprise Ireland and Mr. Matthew Kennedy from Sustainable Energy Ireland who are here to assist us in scrutinising the first two proposals: COM (2007) 243 and COM (2007) 571. I propose that we discuss these two proposals together. Is that agreed? Agreed. I thank Mr. Hodson for the useful note provided and ask him to make his presentation.

Mr. Aidan Hodson

I thank the committee for the opportunity to address it and to build on the content of the information notes which we supplied earlier on the proposal for a Council regulation to establish the ARTEMIS joint technology initiative, JTI, in embedded computing systems and on the proposal for a Council regulation setting up a JTI on fuel cells and hydrogen.

While the sectors covered by these two initiatives are distinct, the research policy background, legal basis and administrative arrangements applicable to both are similar. As the Chairman stated, we propose to address both initiatives together in this statement.

Joint technology initiatives are a major new element of the EU's seventh research framework programme. They provide a way of creating new partnerships between publicly and privately-funded organisations involved in research, focussing on areas where research and technological development can contribute to European competitiveness and quality of life. The approach proposed by the JTIs signals a real change in how Europe promotes industry-driven research, designed to establish European leadership in certain technologies that are strategic to Europe's future. The subject areas of these JTIs are complex and we have experts here from Enterprise Ireland and Sustainable Energy Ireland to assist us with any technical questions.

I propose, first, to contextualise these new funding initiatives within the broader EU research policy agenda and against the background of significantly increased levels of national investment in research and development.

The goals of European research policy continue to be consistent with Ireland's strategy to be one of the world's leading knowledge-based economies. Ireland fully subscribes to the development of a European research area and to the objective of raising EU research efforts. Our success in meeting the challenge of global competition will depend on our ability to co-operate and share experiences and knowledge for our mutual benefit. This is the very basis upon which the concept of the European research area is built.

In April 2007 the Commission published its Green Paper on the ERA, entitled New Perspectives. This draws attention to progress made since 2000 when the original vision for the ERA was first articulated. Its broad conclusion, however, is that significant progress is still required if Europe is to address the fragmentation of its research effort and bring about a more coherent approach across the member states, complemented by action at Community level. The Green Paper highlights the continuing importance of the framework programme and, in particular, the need to develop well co-ordinated research programmes and priorities, including joint technology initiatives. The JTIs are seen as being very much at the heart of the ERA objective of restructuring and co-ordinating the European research effort.

The research framework programmes are the EU's main instrument for funding research in Europe and have been operating successfully since 1984. They have played a particularly important role in bringing together European researchers in academia and in industry in collaborative research projects, in facilitating the mobility of researchers across Europe and in supporting economic and social development. Irish participation in the framework programmes has provided essential funding and collaboration, which has contributed to the creation of a workforce capable of acting as a magnet to attract and retain high technology companies. It is no exaggeration to say that the significant national investment taking place in science, technology and innovation would not have come about were it not for the influence of European support for this area during the past 20 years.

Ireland participated actively in the sixth framework programme, FP6, which, with a budget of approximately €17 billion, spanned the period 2003 to 2006. Irish researchers and companies were successful in securing approximately €210 million from FP6. The seventh framework programme, FP7, has a budget of more than €50 billion and covers the seven-year period 2007 to 2013. It was designed to build on the achievements of its predecessor towards the creation of the European research area and carry it further towards the development of the knowledge economy and society in Europe.

When compared with previous programmes, FP7 represents a significant increase in scale and scope. It continues to focus on collaborative research in the thematic areas, such as ICT, health and energy, and attaches particular priority to promoting mobility of researchers under the Marie Curie fellowships. FP7 also provides for new initiatives such as the European Research Council and joint technology initiatives. The latter offer further opportunities for Irish researchers.

To extract the maximum benefit from the opportunities available within the seventh framework programme, a new national support structure has been put in place headed up by a national director who leads a team based at Enterprise Ireland. This new structure ensures that a co-ordinated and coherent approach is adopted towards FP7 across all Departments, agencies and other organisations involved. Through it, a mix of guidance, advice and financial assistance is available to encourage researchers and enterprises, where appropriate, to avail of the opportunities within the programme.

Last November the Cabinet committee on science, technology and innovation agreed that the total share of EU funding to be targeted by Ireland over the lifetime of the seventh framework programme should be in the region of €600 million. This target is realistic yet sufficiently challenging. It takes into account the potential for Irish participation in different parts of the programme, including joint technology initiatives.

Through the National Development Plan 2007-2013 and the strategy for science, technology and innovation, which covers the same period, the Government is committed to providing €8.2 billion to ensure Ireland remains a key location for leading edge research and development and the quality jobs it can deliver. This represents a tripling of the spend provided under the National Development Plan 2000-2006, bringing Ireland into line with research and development performance in leading countries.

The strategy for science, technology and innovation aims to build strong linkages to ensure diffusion and commercialisation of an increased flow of new ideas and knowledge from research and development to the benefit of all. What matters is converting research and development investments into new products and services and fostering development of high quality jobs in Ireland. There is a high degree of complementarity between Ireland's strategy for science, technology and innovation and wider European objectives in this area. The strategy has identified active participation in the seventh framework programme on the part of both public research organisations and the private sector as being key to the internationalisation of Ireland's research and, therefore, central to realising the vision on which the strategy is based.

I hope what I have said provides an overall context as to how EU research initiatives interact with national objectives. I will now deal in more detail with the developments concerning joint technology initiatives.

The seventh framework programme identifies six potential joint technology initiative candidates, although an individual case must be made in respect of each. The Commission has to date published proposals for five such initiatives in the fields of embedded computing systems, ARTEMIS, innovative medicines, IMI, aeronautics, "Clean Skies", nanoelectronics, ENIAC, and the hydrogen and fuel cells proposal. The other candidate area in respect of which a proposal is envisaged is that of global monitoring for environment and security.

JTIs are established on the basis of Article 171 of the EC treaty, which allows the Commission to set up joint undertakings for "the efficient execution of Community research, technological development and demonstration programmes". Article 172 states that these joint undertakings can be implemented via a Council regulation in agreement with member states.

As mentioned earlier, the approach proposed by the JTIs is new and it aims to promote industry-driven research in a scenario where research is becoming increasingly global and increasingly competitive. To become world class and stay in the lead requires a concerted effort from Europe's research community, public and private, both pulling together. In some areas, traditional instruments of the framework programme, such as individual projects with a small number of partners, are no longer seen as the best way to achieve the objectives of the programme in such areas. The rapid pace of technological change, the rising costs of research, the increasing complexity and interdependence of technologies, and the potential economies of scale to be gained by co-operation across Europe are all strong reasons for setting up long-term public-private partnerships. JTIs are a new way of doing this, by combining private sector investment with national funding and funds from the EU's research framework programme.

I refer to the ARTEMIS joint technology initiative. In May 2007 the Commission published its proposal, under Article 171, for a JTI in embedded computing systems. Embedded computing systems are the computers and electronics used in larger systems or machines to control equipment such as automobiles, home appliances, communications devices, office machines and aircraft. Normally when we speak of computing devices we think of personal computers. However, by far the most common forms of computers in the world today are embedded computers, which are often hidden in equipment and machines of all kinds. More than 90% of computing devices are embedded systems and forecasts predict more than 16 billion embedded devices by 2010 — almost three devices per person on earth — and more than 40 billion of such devices by 2020. Within the next five years, the share of embedded systems in the value of the final product is expected to reach unprecedented levels in key industrial sectors. For example, more than 20% of the value of a car is due to embedded electronics and this share is expected to double in the next few years.

While European industry has been strong in the field of embedded systems, it faces serious competitive pressures from established and newly-emerging global players. It is strategically important for embedded systems to remain one of the strongholds of European industry. However, the current structure of European industry is highly fragmented and does not provide the necessary framework in which to further develop the enabling technologies and the standards needed to cope with the very significant challenges posed by the increasing number and complexity of embedded systems and their applications. At risk is not only the competitiveness of EU industry but also its ability to innovate.

ARTEMIS aims to create a single, Europe-wide and industrially-driven research and development programme that will help EU industry to achieve world leadership in embedded computing technologies. This JTI will combine, for the first time, a critical mass of national, EU and private resources within one coherent, flexible and efficient legal framework. It will also ramp up research and development investment in Europe by providing incentives to industry and member states to increase their research and development expenditure.

The founding members of the new joint undertaking are the European Community, represented by the Commission, 19 individual member states, including Ireland, and the industry association, Artemisia. The total budget of the joint undertaking over the period 2008 to 2017 is €2.7 billion, of which €400 million will be from the EC, €700 million from member states and €1.6 billion from the private sector. Its governance structure comprises a governing board, a public authorities board comprising representatives of participating member states and the European Commission, and an industry research committee. It will be managed by an executive director. Annual calls for proposals will be managed by the joint undertaking. Each participating state would commit prior to the launch of a call the amount of funding that it would make available to its own successful researchers. The Public Authorities Board will approve the selection of projects to receive public funding on the basis of evaluation of proposals carried out by technical experts. The Commission will fund successful researchers at a rate of up to 16.7%. The member states would provide further funding. Most member states would top up to approximately 50%.

The joint technology initiative proposal was agreed at the Competitiveness Council on 23 November 2007 and formally adopted at Council in December 2007. First calls for the proposal will follow in early 2008.

This technology area is of undoubted strategic significance to Ireland and is likely to increase in importance in the years ahead. Enterprise Ireland will play a key role in promoting this joint technology initiative to potential Irish participants from both industry and academia and, in conjunction with IDA, will administer the national funding requirements.

In October 2007 the Commission published its proposal, under Article 171, for a joint technology initiative on fuel cells and hydrogen. Hydrogen is the lightest chemical element and can be used as a fuel. It has the potential to offer cost-effective solutions to reduce greenhouse gas emissions, improve air quality, diversify energy supply and reduce noise. One of the main ways in which hydrogen may be used as a fuel is in fuel cells. The energy conversion process in the fuel cell is intrinsically clean and silent. Fuel cells convert fuel and air directly to electricity, heat and water in an electrochemical process. The technology challenge facing fuel cells and hydrogen is of great complexity and scale and technical competence in this field is very widely dispersed. Therefore, in order to achieve critical mass in terms of scale and activity, the joint technology initiative aims to define and implement a research and development programme to support the broad market introduction of these technologies. The aim is to enable development to the point of commercial take-off by 2010 for some early market applications. By 2015 commercialisation of stationary applications such as domestic and commercial combined heat and power is envisaged and large scale mass market roll-out of transport applications is envisaged by 2020. The founding members of this joint undertaking will be the European Community and an industry grouping, a not-for-profit organisation which brings together the sector's key players.

The budget of the joint technology initiative over the period 2008 to 2017 is €1 billion which will be covered in equal parts by the EC and the industry grouping. The governance structure of the joint undertaking consists of a governing board, a scientific committee, which will advise the governing board, and a programme office composed of the executive director and supporting staff. A stakeholders' forum will enable stakeholders, including EU member states, to exchange information on research activities. The governing board will have overall responsibility for the operations of the joint undertaking, including approval of implementation plans, annual budgets and approval of selected project proposals. The programme office will manage calls for project proposals as well as project evaluation and selection. Calls for proposals will be open to any organisation able to contribute to the research theme in question. The Slovenian Presidency plans to progress this joint technology initiative proposal through the Council research working group over the coming months.

Hydrogen and fuel cells offer great development potential to secure sustainable energy supply, reduce greenhouse gas emissions and create dynamic and competitive energy and equipment industries. While it is not currently an area of particular research strength in Ireland, it is one in which Ireland aims to develop its research capability. There is potential for Irish organisations to become involved in the JTI as an associate member. The JTI will act as a focus for wider networking activities and collaboration at EU level and enhance the uptake of research into this technology. Sustainable Energy Ireland will encourage the active engagement of Irish research centres, universities and SMEs in the initiative. From an FP7 energy perspective, Irish SMEs are being encouraged to participate in the activities of the JTI, both through the calls for proposals and through the adoption of specific measures to assist SMEs.

Ireland has fully supported the challenging JTI initiatives which are key enablers in creating critical mass for European research and innovation and in consolidating our efforts in key strategic areas. Clearly, the funding of research per se does not always guarantee success. However, we believe the pooling of public and private research investment in industry driven research makes sense and is a necessary step towards strengthening Europe’s efforts in the global race for growth and high quality jobs. The FP7 national support network will provide hands-on support to all potential JTI participants.

Thank you very much, Mr. Hodson, for a comprehensive statement which made both COMs understandable to lay people like ourselves. There are exciting times ahead in this area, particularly with regard to the pooling of public and private research and investment, which is important to achieve the objectives.

I thank Mr. Hodson for the briefing document which explained more clearly an interesting issue which would, otherwise, go over our heads. He said this approach does not guarantee success. How is success or value for money measured in this area? What targets have been set out to do this when the initiative begins?

Mr. Aidan Hodson

I will ask my colleague, Mr. Sheedy, from Enterprise Ireland, to reply.

Mr. Tom Sheedy

The area I deal with is embedded computing systems. European research activity in the area of information and communication technology is probably the leading area in terms of budget and over the years has been seen as doing well for Europe. The proposed process would be to carry out mid-term evaluations of programmes. It is built into our regulations that after a number of years, perhaps two years, the first mid-term evaluation will take place. A team of experts will be assembled for this and it will look at the projects funded and the results. A similar evaluation will be conducted at the end of the period.

The joint technology initiative is a new approach in Europe to co-ordinate and bring together research and Ireland is now being asked to put some of its national funding into projects being co-ordinated Europe wide. As this is the first time this approach is being taken, its success will be demonstrated by whether all the countries involved can successfully bring their funding together and reduce the fragmentation of research throughout Europe so that we have a single strategic research agenda backed financially by all of the countries involved. This is an industry led research activity supported by some of the major companies in Europe such as Nokia, Phillips and DaimlerChrysler. While it is an initiative that remains to be tested and proven, its success or failure will soon become evident as these companies will not continue to be involved if the initiative is unsuccessful.

I thank Mr. Hodson for his presentation which provided a great deal of information. With regard to hydrogen and fuel cells, other capital cities seem to be taking the lead in terms of public transport. In its presentation the delegation refers to the founding members of this joint undertaking as including the European Community. Are there any Irish participants in this industry grouping?

Mr. Adrian Hodson

I will ask my colleague, Mr. Matthew Kennedy, to reply to that question.

Mr. Matthew Kennedy

There are two parts to the answer to the Deputy's question. First, much of the testing and demonstration of the use of hydrogen in public transport has been led by the European Commission through its CIVITAS transport programme which has been tested in many European cities. With regard to Ireland's involvement, the organisations and industries which make up the joint technology initiative are large scale such as Fiat, Volkswagen, etc. They have made a substantial contribution in that they have contributed €150,000 or €200,000 to become involved. Many of them have offices within Ireland but they are not necessarily Irish, per se.

I thank the officials for their presentation. How are companies or individual academics or experts sourced? Is it by means of advertisement? How is the information disseminated?

On energy supply and storage, one must deal with issues of scale and how the energy produced is to be stored. For instance, there is a question with regard to rapeseed oil as to how much must be produced in order to create the final product of fuel or energy. Are there similar issues relating to hydrogen and fuel cells?

Mr. Bill Brandon

I will deal with the Deputy's first question on how information is disseminated to researchers, industry and people on the ground. In our presentation we referred to a new national support structure which we have put in place to promote participation in FP7 and the framework programme generally. It is a comprehensive structure with a national director appointed for the first time to oversee the promotion. The programme is divided into various thematic parts and a distributive network with national contact points for the different areas. Experts are in place in Departments and agencies such as SEI or IDA Ireland. The national contact points offer hands-on support. We have also appointed national delegates who attend programme committee meetings in Brussels and explain our strategic positions—

Is private industry included?

Mr. Bill Brandon

The network support structure is a distributive one. Delegates work with private industry. The national contact points have experts and delegates. For instance, the ICT contact point liaises with representatives from private industry on issues relevant to it. The promotion effort is focused on working with enterprises. As my colleague, Mr. Tom Sheedy, stated, greater industry participation has been one of the aims in dealing with the framework programme both at national and European level. As industry has perceived it to be bureaucratic, efforts have been made to streamline the programme. In the case of Ireland, this has been considered by the national support structure. Regular seminars and events are held to which the key industry players are invited and we listen to feedback from them. There is a good solid network which is competitive. However, at the end of the day there is nothing guaranteed in participation in the framework programme. In dealing with the issue of how to gauge success, it is gauged by the funding obtained from it. It is also gauged by the collaborations built and the contacts and networks established. People can get into very good networks with key companies in Europe through their involvement in the framework programme. We get the information out through seminars and information days.

Mr. Kennedy might deal with the other question raised.

Mr. Matthew Kennedy

If I heard the Deputy's question correctly, he focused on the key issue of storage of hydrogen and fuel cells. I will break it into two strands, academic and industry. The Irish academic organisations have a key interest in the development of storage capabilities regarding both hydrogen and fuel cells. Fuel cells are low carbon technologies. Academic organisations are trying to exploit their benefits in terms of their storage potential or power generators. From an industry perspective, they are not really looking at the bio energy side, but at things like wind and even ocean energy to a point. They are considering the scale of power they can achieve from, for example, a wind turbine and how that power can be stored. From a commercial perspective, that is what is happening. There is a lot of investment in the use of flow batteries and assessing how some of that power can be captured and stored. There are many commercial opportunities available to Irish organisations from that fuel cell perspective.

With regard to hydrogen, in Ireland organisations view the matter in terms of how best to capture carbon. It is at demonstration stage, but through the use of the JTI and targeting key organisations, be they industry or academic, we can avail of some of the available opportunities to secure Irish involvement as regards hydrogen and especially fuel cells.

It is at a preliminary stage from the point of view of storing the end product.

Mr. Matthew Kennedy

Yes. Not only in Ireland but also across the European Union we are talking about demonstration to a vast degree. We have exploited the potential of many of the renewable sources such as wind energy. However, core research and development investment are required to try to capture the benefits of storing and releasing it to manage the scale and demand, as the Deputy mentioned.

Mr. Tom Sheedy

To answer the first part of the Deputy's question on the involvement of industry, from an Enterprise Ireland point of view, we have recently announced our strategy, Transforming Irish Industry 2008-2010, one of the key elements of which is the development of innovation as a main driver of transformation in Irish industry. Our work in promoting the framework programme should be seen in that context. We see it as one of the many ways in which we can push innovation in the transformation of industry. In the area of information and communication technologies there is a track record of participation of industry as a result of calls for proposals. JTI and ARTEMIS fit within this wider information and communication technologies programme. We have even had cases of new companies being built on the research funded in Europe.

I have a question on embedded systems. How important will this research funding be to Ireland in the context of companies operating on the ground? Is there latent demand for such funding or will we need to beat people into becoming involved? Will it end up being academic?

Mr. Tom Sheedy

I will address that issue. Enterprise Ireland has identified, in response to questions it asked, approximately 50 companies which have indicated an interest in this area of research. Some of the companies might not have the capacity to participate in research programmes. A limited number of places are available. Multinational companies such as Xilinx, which is an important player in this sector, and indigenous companies such as the company in Tuam which used to be called Connaught Electronics — I cannot recall its new name — are involved in this area. Each research project will have to suit the company that is charged with undertaking it. I cannot tell the committee how many companies will be involved. We will make all the necessary information available. Each company will have to decide how far it wishes to go with its research activity. The form of technology under discussion will increase in importance in the future. It behoves us to ensure that Ireland participates in this initiative as fully as possible.

What is the general profile of the companies which are engaging in research and development? Are they small companies with two or three employees, or are they big companies with small departments?

Mr. Tom Sheedy

Companies at both ends of the spectrum have been involved in the projects which have been funded to date in the information and communication technologies area. The first call for proposals in the information and communication technologies area under the EU framework programme benefitted from the Union's biggest ever research budget. Intel, for example, participated in a number of projects under the programme. Some small companies, such as a new UCD-based company, InChorus Solutions, are also involved. Other companies which are associated with this sector include Valentia Technologies and Ericsson. National and multinational high-tech companies of all sizes are involved. Levels of participation are probably strongest among the new indigenous high-tech companies.

Mr. Matthew Kennedy

Two matters have to be considered from an energy perspective. Every industry in Ireland is focusing on energy efficiency. Companies are trying to reduce energy costs and carbon emissions. They are interested in applying renewables at the back of their plants, etc., to manage peak load demand. This applies to all organisations in Ireland, from small and medium-sized organisations to multinationals. Many of the organisations which are engaging in research and development are small and technology-specific. An organisation that is involved in testing wave or ocean energy off the coast of County Galway might be the first to bring such a form of technology to the market. A larger organisation might be involved in research and development across sectors like bio-energy, photovoltaics and transport. A vast range of organisations is engaging in research and development in this country. Developments in this sector have been much more positive over the last four or five years than they were before then.

I thank Mr. Hodson, Mr. Brandon, Mr. Ó Conaill, Mr. Sheedy and Mr. Kennedy for helping the committee with the scrutiny process. Their informative contributions will be of great assistance to the committee as it tries to bring some clarity to this complex area. A legal team is almost needed to evaluate the complex regulations and directives in this sector. We are glad that the representatives of the various organisations have come to this meeting to simplify the process, in so far as that is possible, and help to deal with the issues members have raised today. I thank them for their help. We will contact them in future when we have further issues for them to clarify on our behalf.

We will move on to the next item on the agenda. I welcome Ms Anne-Marie Finlay, assistant principal officer, and Ms Aisling O'Reilly, executive officer, from the chemicals policy unit in the Department of Enterprise, Trade and Employment; Ms Sharon McGuinness, assistant chief executive officer, and Ms Caroline Walsh, inspector, from the chemicals division in the Health and Safety Authority; and Mr. Keith Armstrong from the pesticide control service of the Department of Agriculture, Fisheries and Food, who are here to assist us in scrutinising COM (2007) 355 and COM (2007) 613. I invite Ms Finlay to make her presentation.

Ms Anne-Marie Finlay

I thank the Chairman for the invitation.

Does Ms Finlay have a paper to present?

Ms Anne-Marie Finlay

I do not have a paper. When I discussed this previously with Mr. Eugene Crowley he said committee members would have the Oireachtas scrutiny note that was originally submitted which highlights the main point. If the Chairman wishes, I can follow up with a short paper covering the points that will be made today.

That might be useful.

Ms Anne-Marie Finlay

That is no problem. I will not read from a script, unlike my colleague who spoke earlier, and my presentation will be a little shorter.

There are two proposals on this agenda and both relate to the classification, packaging and labelling of chemical substances. The main proposal is the GHS, globally harmonised system, regulation. The second proposal relates to a change in the regulation of detergents. The changes to the detergents regulation are due to the GHS regulation. They are purely technical amendments that relate only to references to the new regulation which will come into place. A change of description is involved. Instead of calling a substance a preparation, we will call it a mixture. In a sense there is no policy change on detergents. I will focus mostly on the GHS. I will go through the background to the change and Ms Walsh will go into more detail on the content of the regulation.

The raison d’être for the regulation dates back to the Earth Summit in Rio de Janeiro in 1992. It was agreed at political level that there would be a benefit in having a global system for classifying chemicals. In the following ten years experts from the major international organisations such as the International Labour Organisation, the OECD and the United Nations met to develop this system which has been incorporated into the UN purple book. It is continually refined as more information on chemicals becomes known. The draft EU regulation is designed to make this UN-based system legal in the European Union.

There was a long lead-in time for the GHS regulation, involving considerable consultation in the Commission, in which we engaged and responded to various points, including the Commission's impact assessment. This is a sister to the REACH regulation which this committee, under the last Government, considered several times. Much of the impact of this new chemicals regime derives from REACH and has been considered. The main impact of the GHS will be changes in labelling, getting to know the new rules on classification of chemicals and investment in computer equipment which businesses will make over a few years.

There are implications for downstream legislation, covering, for example, detergents, cosmetics, end-of-life vehicles, electrical and electronic equipment waste for which the existing classification rules are a reference point. The line of approach is to make few or no changes to this legislation. The Seveso directive, however, will require work. There will be a proposal to amend it later this year, to ensure that under the new rules, it will retain its scope as determined under the old classification rules.

Negotiations are proceeding in the Council which Ms Walsh will discuss in detail. The Presidency has planned to try to reach a First Reading agreement with the Parliament in June or July. We hope this will be in place by then. There will be two implementation phases, by 2010 for chemical substances and 2015 for mixtures. GHS will be a regulation and thus will apply directly, in other words, there will be no specific transposition measures for its detail, except the enforcement measures. We are including it in a draft chemicals Bill to cover enforcement measures which the committee will see in the coming months.

Ms Caroline Walsh

The GHS regulation was presented to the Council working group on 2 July 2007. Since then there have been approximately eight working party meetings at Council level. In these we have gone through the 60 articles in the regulation. For the most part, most member states support the regulation and the content therein. There have been several issues that need to be discussed again in the second reading of the technical discussions which will begin tomorrow.

Some questions have arisen regarding the scope of the linguistic aspects of the regulation. Much of what the committee sees in the regulation concerns terminology. Heretofore, European regulations would have always referred to a mixture of substances as "preparations"; under the new regulation these will be called "mixtures". Under existing regulations, a chemical would be referred to as "dangerous"; under this regulation they will be termed "hazardous". That has caused some difficulties because in many languages "hazardous" and "dangerous" linguistically are the same.

For many years chemicals with the same intrinsic properties were classified differently through schemes that developed over the years. The great benefit of this regulation will be that there will be one scheme with one symbol, pictogram, label, safety data sheet which will make a huge difference to industry, trade and international understanding of chemical hazards. It will ultimately lead to much better protection to health and the environment.

Several articles in the regulation are still being negotiated. Some of these concern confidentiality. For the most part we used the UN's The Purple Book, the globally harmonised system of classification and labelling of chemicals, GHS, for the EU regulation. In doing that, we were allowed to use a building block approach so that we did not have to take all aspects of the GHS if it impinged on our existing system. The regulation is based on Article 95 of the treaty concerning the Internal Market. It is very much a trade-based regulation. Matters such as small packaging, confidentiality, poison centre and so on were issues we brought into the EU regulation that are currently still being negotiated for the UN's The Purple Book. They are not mirror images of each other. Certain criteria from the UN's The Purple Book were exempted from the EU regulation as they were deemed to be barriers to trade within the EU context.

I attended the UN meeting in December in Geneva at which The Purple Book was being amended. We have responsibility for implementing it worldwide. All the other jurisdictions are working to implement it by 2008. It was an ambitious timeline in 1992. Most jurisdictions will meet the timeline, as well as the EU member states.

In the negotiations, countries such as South Africa, and EEA member states such as Norway, Liechtenstein and Iceland, have stated that when the EU legislation is in force, they will adopt the system, which will be of great assistance. Countries such as Australia, which have implemented The Purple Book as it stands, are now under pressure from trade associations to implement the UN model. In time we will have a much greater influence in amending The Purple Book at UN level because of the hard work the Commission did in adopting it into the UN system.

We hope to finish the negotiations by June or July 2008. Although there are several issues that need to be addressed, we are still optimistic we will get it in by the first reading. There is a large bonus to people in the workplace and in the home by having this regulation in place. No matter who imports chemicals anywhere in the world, the same information will be seen, which currently is not the case.

I thank Ms Walsh for her presentation. I was under the impression that the introduction of the REACH system was controversial at the time. What impact will this regulation have on small businesses? Will they be aware they have to throw out the old regulations and introduce the new one? Will there be any cost involved for small business?

Ms Caroline Walsh

Currently in the EU system there are two separate items of legislation, one for preparations and one for substances. This new regulation combines the two, so that in itself facilitates the understanding of the legislation. Obviously, there will be an initial cost because the labels will change as will the information contained in the safety data sheets. In the longer term, however, the benefits will outweigh the costs. There will be a transitional period, up to 2010, for companies to get their substances classified for GHS — and up to 2015 to get their mixtures classified. They will not have to do this overnight. Like REACH we have held seminars to make the SMEs and industry aware of what was happening. They are very familiar with the situation.

Are small businesses not going to wonder where it will all end? Will it affect small businesses such as a coffee shop with some washing materials or will companies below a certain size be exempt?

Ms Anne-Marie Finlay

Perhaps I should answer that since I am in charge of the new chemicals policy of the Health and Safety Authority's services division, which is responsible for implementing REACH as well as for GHS. REACH and GHS are part of a package involving the review of chemicals management in a more holistic, transparent and consistent manner. The reduction of some 40 items of legislation which have been on the Statute Book since 1967 to two in a way makes matters much clearer for industry, which knows it must comply with them. From the GHS perspective in particular, industry is very much open to this. It is in fact welcomed since it is recognised that it will give industry a much easier flow to do business, not just within the EU, but globally. As Ms Walsh indicated, instead of making a label for every region in the world, a company has the potential to use the same label for a chemical, whether it is being sold in Ireland or the USA, and this is a major advantage.

Overall, while we recognise that SMEs have particular concerns about regulation in general, and the extent of it, we have done a great amount of work in this area. I am sure the committee will have seen a number of the REACH advertisements last year. We have done a great amount of work through media advertising and awareness raising in seminars as well as through a helpdesk established for GHS. We are very much involved in making matters clearer for industry and the companies as regards how, when and what they need to do, so that we can at least remove some of the initial concerns they might have.

What about the size of companies? Will this affect every single company that has detergents stuck on the top shelf?

Ms Sharon McGuinness

Detergents stuck on the top shelf can remain there. However, new stock will have to be relabelled and classified. There will be a period during which companies may use all the stock or the labels they have. Once these are gone the new system will come into operation. It is not a matter of throwing out 10,000 labels. The whole idea is for companies to plan and prepare now, while being aware that if they have 10,000 labels in stock, they should not replicate the same order when these are used up.

As regards the reduction of the 40 items of legislation to two, will the 38 redundant items be stood down or retired?

Ms Anne-Marie Finlay

REACH and GHS regulations replace an entire host of EU directives, going back to 1967. These have been subject to change over the years and have been replaced by new directives. So that is, indeed, the case. The REACH regulation already abolishes the other directives and GHS will, in time, overtake the existing directives. The consequential action for national legislation as regards statutory instruments will do away with those as well.

I have the same type of question as regards cost implications, not just for producers, but for consumers at the end of the line. There were certain conditions put on producers and suppliers in the WEEE directive for passing on the extra costs. Are there similar kinds of restrictions with this?

Ms Anne-Marie Finlay

The consequence to the WEEE directive is purely a reference change. GHS will now be the reference regulation, instead of the 1967 directive on classifying and labelling substances, so there will be no effective change. Our indications are that there will be minimal costs in complying with GHS requirements. Companies must comply with the existing classification and labelling legislation already. There will be a learning period but for mixtures of preparations, the deadline for making all those changes will be 2015. There is a long lead-in period and if companies want to avail of that, it can be worked within the natural business cycle.

Ms Sharon McGuinness

Consumers will see a change in the symbols on their household goods, such as a bottle of bleach. Many people are confused by the symbol that currently exists and the point of GHS is to make this easier to understand. In theory, there is no financial cost to a consumer. It is an additional benefit to the consumer, as he or she will understand it and be able to work with it, thus avoiding any potential hazards.

The whole thing does not look as bad as we thought. On domestic products such as soap and shampoo, we often read warnings on the label. There will be clarification in this area and we will see one standard label rather than depend on particular companies or products. Is that what will come about?

Ms Anne-Marie Finlay

That is the idea. There will be one system and that should make it more straightforward.

I understand there will also be a directive on pesticides for agriculture, which is currently being discussed in the EU. This will have consequences for Irish agriculture because of the differences in our climate. Does the directive from the Rio de Janeiro summit have world wide effect, or has there been a new directive from the Commission? What stage is it at for Ireland?

Mr. Keith Armstrong

Is the Deputy referring to sustainable use of pesticides or is he specifically referring to this provision?

In recent months we have heard about discussions on the issue. I recently attended a meeting where a colleague of the Chairman, namely, Deputy Sherlock, referred to it. Grain farmers are especially conscious of it and the effects it might have. The climate in Denmark is quite different to that of Ireland in terms of moisture and so on. Different pesticides and herbicides are needed in those environments. A standard directive across Europe could have consequences for one country or the other.

Mr. Keith Armstrong

Unfortunately, I am only qualified to speak on this provision.

We will have to get Mr. Armstrong's colleagues to get back to us.

On what provision will Mr. Armstrong speak?

Mr. Keith Armstrong

I will speak on GHS and the impact on pesticides. We feel that the impact will be minimal. There will be some cost to general chemicals, but the cost will be outweighed by the benefits in the long term. Pesticide products are relatively simple mixtures of chemicals as there is a small number of components, so classification costs should be lower than products with more complex chemical mixtures.

In terms of labelling costs, because pesticides are sold to a relatively large number of consumers, be they agricultural end-users or domestic consumers, the label is very much part of a marketing approach, so labels quite frequently are revised for commercial and marketing reasons. In addition, labels are revised for other regulatory reasons. The labelling costs we would envisage for pesticides therefore would not be as great as might be the case for other general industrial chemicals.

My concern was with regard to the restriction.

Mr. Keith Armstrong

We are moving from one particular EU system for classification of packaging and labelling, which has developed over 40 years, to a global system which is slightly different and would include slightly different classifications. In essence, there is no restriction in that regard.

I thank Mr. Armstrong.

In terms of the proposed changes to the UN-based classification, will the changes affect every chemical or will the classification of some chemicals not change because of the similarities that may have existed?

Ms Caroline Walsh

The Senator will note from the information I circulated that many of the symbols would have been similar to the previous EU symbols. One would have the St. Andrew's cross, the corrosive symbol and the danger to the environment symbol. The shape and colour of the symbols and pictograms will change but the information will remain the same.

The criteria for classifying the chemicals will change slightly for some chemicals but not for the most part. If a chemical is considered an irritant, the same tests that would apply in the European system would for the most part apply globally. Most of the chemicals that would have been classified as irritant in the EU system therefore would still have an irritant classification. Some chemicals will no longer be classified as irritant and others that were not classified originally might now be caught in the criteria changeover.

The idea is to harmonise all the different classification and labelling schemes that have developed worldwide. Much of the technical information that emanated throughout the world came from the UN and the OECD in any case. It was just their interpretation. Much of the change is visual. The pictogram will change and the terminology will change ever so slightly. It is like the different ways of pronouncing the word "tomato"; it is the same concept of informing people about the hazards of the chemical. The only good thing about this is that the same symbols and information will apply globally. If one is importing chemicals into the EU, the information will be the same and one will not need to have a regulatory team in the four or five jurisdictions of the world. This will be of great benefit in the longer term.

Ms Anne-Marie Finlay

The number of chemicals is likely to be greater in the long term. This is not because of GHS but because of REACH and the kind of information that will become available through REACH. Whereas very little information on chemicals is available currently, the whole idea of REACH is to make information more available. When more chemicals are identified as hazardous, there will be more chemicals in the pool. However, that will happen over the very long term.

I have a question on a domestic level. Bottles of shampoo and bleach contain a list of chemical ingredients, including, say, E11 or E47. The ordinary layperson does not have a clue what these chemicals are. Will the contents of particular products be spelled out in clear detail so the public is made aware? People are becoming more consumer conscious with regard to the contents of various products, be it pesticides, detergents, bleaches or otherwise.

The witnesses suggest that the uniformity of application of regulatory control is consistent with the principle of the free movement of goods, so that all goods can now flow without a major regulatory border and without all countries examining them in a national context. I accept that this will facilitate freedom of movement but, undoubtedly, there are language difficulties across frontiers. Will the ingredient contents of a product originating in Holland, for example, be clear to consumers here?

Ms Caroline Walsh

Shampoos come under the cosmetics regulations because they are intended for use by humans. Those regulations are somewhat different from what we are discussing in regard to hazardous industrial chemicals. The objective of this regulation is to protect human health by avoiding contact with these chemicals.

There has been a requirement for the past 40 years to include on product packaging what are known as the risk and safety phrases in the languages of all member states. That will remain the case. They are now called hazard and precautionary statements but the same principle will apply. This system was well regulated in the past 40 years and many of these chemicals were brought into the globally harmonised system, GHS. Linguistically, it is the packaging of smaller products that causes the greatest difficulty because the text is necessarily small. This is being addressed in the regulation, particularly in regard to multi-label packaging where there could be 20 languages on the one package.

Am I correct in summarising that the impact of the regulation for Ireland will be minimal and that the only action to be taken is to bring forward one item of legislation? Why is there a need to introduce any legislation?

Ms Anne-Marie Finlay

A chemical enforcement Bill is required to put in place the legal provisions under this regulation, the REACH regulation and other EU legislation. Member states are obliged to implement the necessary national measures under these provisions. We do not currently have primary legislation in place to allow us give effect to these provisions. The objective is to ensure the Health and Safety Authority, the Department of Agriculture, Fisheries and Food and other relevant agencies have an enforcement remit with regard to the EU chemicals legislation.

Will the same have to be done in other jurisdictions?

Ms Anne-Marie Finlay

It will.

We in Ireland are usually good Europeans, while other jurisdictions select to implement only those provisions they consider appropriate. We have suffered because of this, as Deputy Ned O'Keeffe and I are aware. Sometimes the French, for example, consider a regulation and implement it as they see fit. Will there be uniformity of application in terms of the primary legislation to be implemented in each jurisdiction? How will the system be supervised to ensure uniformity? We could be the great men and women of Europe by putting in place effective legislation. That will impose a cost but it is the right action to take if it protects consumers from hazardous materials. However, whose role is it to ensure all other member states will be as fastidious about the implementation of primary legislation to ensure enforcement of these provisions?

Ms Anne-Marie Finlay

Uniformity will come about in respect of the GHS and REACH regulations precisely because they are regulations and thus directly applicable. The same rules will apply throughout the European Union. In terms of the quality of enforcement, it is the Commission's job, where a member state is not enforcing legislation, to bring that state to the European Court. As to how member states will put in place their own national legislation, there is no uniformity in that respect. Every member state can do this in its own way, whether by primary legislation as Ireland is considering, by statutory instrument or whatever other measures it has in place. It is a factor of the kind of legal systems that are in place.

I thank everyone for their attendance so early in January, which we appreciate. I thank Ms Finlay, Ms O'Reilly, Ms McGuinness, Ms Walsh and Mr. Armstrong, who represented the various Departments and agencies. Members are grateful for their attendance and they simplified the proposal well.

On first examining this issue, I had thought it would be horrendously difficult to understand. However, when we got down to its nuts and bolts, there was some common sense to it. Obviously, the duty and remit of members is to scrutinise such proposals to ensure they do not impose impediments and costs in respect of our own competitive situation. The witnesses have helped to clarify the matter and I am sure they will appear before the joint committee again. Mr. Armstrong can discern from Deputy Ned O'Keeffe's comments that members are already thinking of other areas that must be considered. In that context, members are grateful to the witnesses and look forward to meeting them again in the not too distant future.

The joint committee stands adjourned until 9.30 a.m. on Wednesday, 23 January 2008. In the meantime, I will meet my colleagues in other parts of the country.

The joint committee adjourned at 1.15 p.m. until 9.30 a.m. on Wednesday, 23 January 2008.
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