Sunday, April 27, 2008

Vintage Booker

In a way, Booker's column today, featuring Dr Rubinah Chowdhary, director of the small chemical company QuatChem, is a throwback.

It is a vintage EU "red tape" story. It is of a type that we used to do virtually every week in the late 90s, and even went on to do similar weekly columns in The Daily Mail and The Daily Telegraph.

That we do this type of story less often does not mean that the burden of "red tape" is any less – far from it. However, there is a limit to the number of stories we could write about mainly small businesses, usually owned by distinctly unphotogenic middle-aged men suffering the slings and arrows of outrageous Brussels legislation. Eventually, even we tired of writing them.

The great problem was that, with the Tories just as complicit as Labour in accepting this tidal wave of legislation, there was never any political traction which could pull the stories out of their "red-tape ghetto" and propel them into the mainstream. Then as now – as we see with Dr Rubinah Chowdhary, who has had no help from her MPs or MEPs – when issues like this come up, the politicians dive for cover, knowing full well that there is nothing they can do.

Anyhow, the Booker story speaks for itself, although even he can barely touch on the complex ramifications of this issue – and so very few people care that we have to be sparing with the details.

However, what struck me when I spoke to Dr Chowdhary earlier this week was the casual incompetence of the legislators who brought this instrument of torture, the Biocidal Products Directive, into being.

At its heart is a well-meaning – if flawed – intention: that all "biocidal products" (disinfectants, to you and me) should be regulated, all in the interests of the "consumer" of course.

What does the damage is the way they have gone about it, and the blithe, totally unwarranted assumptions that they have made in constructing their new law.

It is at this point, as we dive into the detail that we lose most of our readers. Their eyes glaze over and they more onto the more entertaining fare of Mr Dale's Diary. Who, after all, gives the proverbial fig about the intricacies of the workings of an arcane EU directive, when we can soar to the giddy heights of speculation about the current lead item - Harriet Harman's blog password?

Anyhow, for the sole reader who is still with me, Dr Chowdhary's essential problem is that the Biocidal Products Directive adopts a two-stage approval process, known in the trade as the "Annex 1" and "Annex VI" processes. See what I mean about detail? Who the hell cares?

Ploughing on – talking now only to myself – one finds the process requires, in the first instance, that manufacturers first get their base chemicals "listed" on Annex 1 and only once they are so listed can they be used in formulations – the finished products, comprising many different chemicals – which must then get "market authorisation" under Annex VI (involving yet more costs).

Now, the point is that once a basic chemical is listed in Annex 1, it is theoretically available for use by any formulator. Without some creative fixing, this means that the company which invests the £6 million-odd that it takes to get a chemical listed is giving its competitors a gift. They can then pile into the market, making formulated products based on the listed chemical.

To get over what is known as the "free rider" problem, the geniuses in the commission imagined that all the manufacturers producing specific chemicals would all happily get together to form consortiums, sharing the costs of getting their chemicals listed. That way, the pain was shared and no one got a free ride.

So all these fiercely competitive companies, who would cut their grandmothers' throats for a few percent uplift in market share were all going to ride off into the sunlit uplands, holding hands with each other as they shepherded their chemicals through the regulatory maze? Yeah, right!

Of course, it didn't happen. And the first casualties were minnows like QuatChem. Dr Chowdhary did try to join one of the "listing" consortia, offering to pay costs in proportion to turnover. That went down like a lead balloon and, after a few stiff bills from consortia "legal advisors" – how is it that the lawyers always make money? – she was forced out into the cold.

Now comes the rub. The evil geniuses in the commission went to work. They decided that, although the legislation said that, once a product was listed under Annex 1, it could be used by any formulator, that was not going to be the case.

In order to apply for an Annex VI "market authorisation", formulators would have to submit official technical details of the chemicals used. But those official details are not published. They are in the "dossiers" submitted by applicants who had pursued Annex I listings. To get that information, you had to have a "letter of access", which would be granted only to those who had participated in the original listing process.

At this point, I fully appreciate that I have completely lost anyone who might have come back into the fray and tried to follow the gist of what I am writing. But complexity is what EU law is all about. You can see why the politicians run for cover and why the real political bloggers concern themselves with far more important things like Harriet Harman's blog password.

For the likes of Dr Chowdhary though, what all this incomprehensible guff means is that, unless her company coughs up £6 million or so – or such unspecified lesser sum as the regulators may decide, but haven't yet – in order to duplicate the information that numerous other companies and consortia are also providing, QuatChem is out of business. Outside the listing process, she will not get her "letter of access" and will not be able to sell the product her company makes.

But, like I said – who the hell cares? This is all far too complicated. The bones make for a good little story in the Booker column and, to the delight of the Sunday Telegraph, Dr Chowdhary isn't a middle-aged man, so she photographs well.

Still, it gave us a good post and an opportunity for Tim Worstall to sound off. Next week, we will do another story. Dr Chowdhary will be left with the mess and, in due course, her company will go out of business, like the thousands more before her, and the thousands to follow. Vintage Booker, it may be, but it is not one in which our politicians, or their groupies, are the least bit interested.

Thank you for listening.


No comments:

Post a Comment

Note: only a member of this blog may post a comment.