Chemicals sector strategy 2012-15
The sector comprises:
- Manufacture of chemicals (including downstream oil and petrochemicals)
- Refining and production of petroleum products
- Import and storage of chemicals and petroleum products
- Chemical storage
- Chemical and petroleum products distribution (excluding pipelines)
- Biological agents - biotech / pharmaceutical production
- Chemical use at work - provision of information / national use restrictions but risk control only within chemical industries
The UK chemical manufacturing industry is largely centred in the north of England and is in slow decline, with employee numbers falling a 1/3 since 1998/99 to around 175,000. However, chemical industries consistently account for about 6.5% of all manufacturing and contribute around 1% to GDP. Commercial pressures - mainly from the Far East - mean the UK industry is shrinking, becoming more specialised and slowly moving away from the manufacture of high volume-low margin chemicals towards an import model.
There are 900 COMAH sites in Britain.
The UK's biotechnology sector is clustered in three parts of the UK: the South East (notably London, Oxford and Cambridge), the North West (notably Manchester and Liverpool) and in central Scotland. It is much smaller than the chemical industry but growing with around 8000 employees. Globally the UK is an industry leader but there is a need to keep track of emerging technologies to ensure proportionate controls are adopted.
For onshore major hazards the main stakeholders are:
- Employer trade associations
- Trades unions
- Professional bodies, such as the IChemE
- The police and VOSA - in relation to the transport of hazardous substances by road
- Local planning and hazardous consent authorities, DCLG and devolved administrations
- Regulator and industry forums, including the Chemical and Downstream Oil Industries Forum (CDOIF) and the Process Safety Leadership Group (PSLG)
- COGENT - the main skills body for competence
For biological agents contained-use activities, key industry stakeholders are large organisations with multiple locations, whose primary focus is human and animal health protection. A High Containment Leadership Group has been established to identify and agree priority topics.
Safety and health issues
The occupational injury data for chemical industries indicates relatively lower rates, and lower than Manufacturing as a whole.
The main health and safety issues within the sector are:
- the major hazard risk (risk of a catastrophic incident)
- occupational disease - particularly longer-latency disease
- appropriate management of the chemicals supply chain
Major hazard risk
Major hazard incidents can have large economic, strategic, environmental and human consequences. The Buncefield incident in 2005 is estimated to have cost a total of £1 billion and the release of foot and mouth from Pirbright in 2007 is thought to have cost the farming community £100 million.
While there is a general acceptance of the need for hazardous installations, people expect, and the law requires, risks to be properly managed and all necessary measures to be put in place to prevent major accidents and to protect people from harmful consequences.
Issues facing the chemicals industry include:
- Gradual move away from production towards more storage / warehousing
- Financial constraints or ageing plant in declining subsectors
- Rapid development and supply demands in expanding areas
- Ageing workforce and loss of skilled workers. Maintaining sufficient process safety competence is essential to ensure that companies are able to deal with the technical and managerial challenges of operating a major hazard business
- Employer and employee recognition and acceptance of their responsibilities
Strong health and safety leadership is needed to ensure major hazard issues are effectively controlled and that companies continue to obtain information and learn lessons from others. A focus on involving workers in risk management is needed.
Another emerging challenge is the potential for SMEs to provide major hazard capability as business models change from bulk production to storage and formulation:
- A trend towards the use of less skilled workers, who may lack a fundamental understanding of chemical / major hazard risks and control measures
- This could lead to an increased risk of significant incidents, with severe consequences within and beyond the site boundary
- Some employers are showing a reluctance to accept the major hazard risks associated with their activities
- There needs to be an increase in competence and an understanding of off-site risks (and their consequences) by SMEs, especially in the sub-COMAH sector
COMAH definition can lead to issues with businesses attempting to (tactically) avoid designation as a COMAH site by holding dangerous chemicals in quantities just below COMAH designation limits. Such sites, albeit lower risk, still have potential for significant off-site effects and must have sufficient levels of worker competence and safety leadership to manage such risks effectively.
The challenge is therefore to maintain focus on the containment of hazardous substances and harmful biological agents in the plant, equipment and vessels involved in their manufacture, storage and distribution. Dutyholders also need to have suitable mitigatory and emergency response arrangements in place to limit the consequences to both people and the environment should an incident occur.
The chemicals sector has one of the highest rates of occupational diseases such as asthma, dermatitis and cancer. Underlying issues include lack of knowledge of the health effects of chemicals, inaccurate or insufficient information provided on their use, lack of competence in end user assessment of risks and selection of appropriate control measures.
The long-latency effects and the multifactor nature of these diseases (also influenced by personal factors such as diet and smoking etc) means attitudes among employers and employees may not fully support tackling occupational diseases and may even serve as an excuse for deliberate non-compliance in some cases.
The industry needs to better understand the issues that lead to high reported rates of occupational disease and commit to tackling and preventing exposure. Support will be required from stakeholders such as trade bodies and other Government departments to direct industry - especially SMEs - to the information and guidance they need to achieve this.
Legislation and regulation
Industries within this sector generally have global reach and can generate environmental as well as health and safety concerns, both for workers and consumers of chemical products. As such, the industry is subject to a number of broad European or wider international regulatory pressures that place requirements on a National or Competent Authority.
These are enacted in UK law by regulations under the HSW Act or more recently by direct acting regulations. Notable legislation includes:
- The Control of Major Accident Hazards Regulations (COMAH) (operated as a permissioning system to prevent and mitigate the effects of major incidents where sites have certain levels of dangerous substances)
- Separate planning regulations that require referral to HSE of:
- consent applications for major hazard sites and
- planning applications for developments near to major hazard sites
- REACH and Classification, Labelling and Packaging Regulations (CLP)
- The Control of Substances Hazardous to Health Regulations (COSHH)
- Regulations covering biological agents including COSHH, Genetically Modified Organisms (Contained Use) Regulations and Specified Animal Pathogens Order, Biocidal Products Regulations
- The Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations (CDG) (enforced by the police and VOSA, covering the transport of dangerous chemicals by road)
HSE fulfils important statutory functions such as providing appropriate regulatory frameworks in support of product registration and classifications, as well as meeting statutory duties to assess major hazard safety reports and inspect establishments.
The international nature of chemicals regulation (eg REACH) makes it important for the UK government to monitor EU developments and influence proceedings at an early stage. This will be essential to avoid additional regulatory requirements for obligations that may already be effectively discharged under existing UK legislation.
Chemical supply chain information provision
REACH and CLP regulations require improved quality data and risk assessments for chemicals in the supply chain and place requirements on manufacturers and importers to provide this information within registration dossiers for chemicals imported or manufactured in quantities of more than 1 tonne per annum.
Those within the supply chain are required to pass on this information and also to pass information on the use of chemicals back up the chain. This requirement is being staggered up until 2022, with dossiers on chemicals imported in larger quantities being required first.
The challenges are to ensure suppliers, importers and manufacturers are aware of their responsibilities and are competent to discharge them, and to create a level playing field through full compliance. Additionally, REACH enables authorities to identify and manage the most dangerous substances, eg by introducing bans or authorisation requirements.
There will be increased competition for bulk manufacture from the emerging economies but the centres for innovation and development will remain in Great Britain.
Overall, the medium to long-term trend is a decline in the manufacture of large volume-low margin chemicals and specialisation within the manufacturing sector. This will be accompanied by an increase in the importation of bulk chemicals and fuels and associated storage and distribution:
- This is likely to result in an increase in the transportation of hazardous chemicals, particularly by road, as well as a concentration of bulk storage at ports and estuary terminals
- Intermediate storage in support of distribution is likely to see increased warehouse storage located close to the main motorway routes
- Closure of strategic plant makes the UK and the chemical industry dependent on imports and the vagaries of the market
The pharmaceutical industry is already seeing competition from emerging economies for bulk manufacture. However, development and innovation still remain relatively strong, so is likely to remain an important sector of the economy over the coming decades. Manufacturing will be dependent on the quality of research and development activity. Bulk manufacturing will increasingly shift to Asia as old patents lapse.
The UK's biotechnology sector continues to grow in response to the threat from new and emerging infectious diseases (human and animal) but also in response to new technologies that have enabled the development of advanced therapies and treatments.
Aims for 2012-15
Organisations (those subject to COMAH and biological agent regulation and sub-COMAH sites) recognise and understand any potential for catastrophic health and safety incidents from their businesses and take proportionate measures to reduce the risk as low as is reasonably practicable providing appropriate wider assurance.
Preventing ill health and other chemical harm
Within Chemicals sector the people and bodies best placed to do so are addressing the most significant work-related health issues.
UK industry complies with requirements in UK and European law to assess the properties of chemical substances and mixtures and, where necessary, to understand how risks associated with use of these substances or mixtures can be effectively managed, and communicate this down the supply chain.
Delivering mandatory work
Deliver mandatory work associated with HSE's varied work as national authority under CAD, REACH, CLP, PIC, biological agents and genetically modified organisms, plant protection products (agricultural, horticultural and home garden pesticides), non-agricultural (public hygiene) pesticides and biocides, and detergents regimes, and to promote UK policy in European and international fora on chemical safety and the interests of the UK generally.