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Corporate Europe Observer

CEFIC: The Toxic Lobby

The European Chemical Industry Council (CEFIC) is a major player in the EU's decision-making process, and its toxic influence is increasingly perceptible in the international arena as well. CEFIC's dual strategy involves blocking government intervention while at the same time promoting questionable self-regulation initiatives for the chemical industry. 

Potent Chemical Cocktail

he Brussels-based CEFIC, founded in 1972, is a complex cocktail of national federations, individual companies, issue-based lobby organizations and 'senior advisory groups' of chemical industries which together represent 30% of global chemical production.[1] Eleven members of the European Roundtable of Industrialists (ERT) also lobby with CEFIC, among them chemical giants Bayer, ICI and Rhône-Poulenc.[2] Represented on CEFIC's board are biotech lobby group EuropaBio, APPE (Association of Petrochemical Producers in Europe) and ECPA (European Crop Protection Association). CEFIC also includes two influential senior advisory groups: SAGEP which deals with trade and economic issues, and SAGE which focuses on environment.[3]

Chemical Access

CEFIC proudly claims that it "enables the European chemical industry to become an active partner in the making of public policy in the European Union and elsewhere at international level [...] Its intimate knowledge of the European legislative infrastructure enables CEFIC to gain early warning of policy strategy [...] enabling members to prepare for, and thereby minimize any adverse impact of EU and other international legislation".[4] The group enjoys privileged access to EU institutions, particularly the European Commission where it has cosy relations with some of the most influential directorates, such as DGI (Trade and External Economic Relations), DGXV (Internal Market) and DGIII (Industrial Affairs). According to Trade Commissioner Sir Leon Brittan: "I think that CEFIC has been very effective in being the mouthpiece of the chemical industry, and it has been effective as far as we in the Commission are concerned [...]. The real secret is that although the occasional meeting of the highest level is useful, it is the continuous contact at working level which is even more crucial [...]. Above all, be timely and, that is to say, tell us in good time if you think that something needs to be done and even more so if you think something is cooking that ought to be nipped in the bud".[5]

National industry federations play an active role in CEFIC's strategy by making the case for chemicals both at home and in the EU Council of Ministers. According to a CEFIC spokes- person, "Their [the national federations'] influence and importance in the national political arena lies in the fact that they are established players".[6] In Brussels, CEFIC's voice is strengthened by those of other influential industry lobby groups, such as the European Roundtable of Industrialists (ERT) and UNICE, the European employers' organization. CEFIC also outreaches to other sectors of society with its chemical messages -- for example sponsoring awards and museum programmes for students.

CEFIC, Globalization and Competitiveness

The world of the future, in CEFIC's vision, is a marketplace without borders. In preparation, the chemical industry is undergoing continuous mergers and restructuring in order to fully exploit economies of scale. As Dutch chemical company DSM chairman and former CEFIC president Simon de Bree explains: "The courageous approach has to be scrap and build [...]. We are on the right track with current discussions between companies on cooperation, joint ventures and mergers."[7]

International competitiveness is CEFIC's magic formula for creating growth and employment in a globalized economy. Thus, for CEFIC, competitiveness should be the main criterium for decision making. This line of thinking is also popular within the European Commission (EC), as is made crystal clear in the Commission's April 1996 communication entitled "An Industrial Competitiveness Policy for the European Chemical Industry: An Example". Among other things, the document explores ways in which 'benchmarking' [8] can be used as a tool for addressing competitiveness, and specifies 24 key points upon which CEFIC and the EC should work together,[9] including EU enlargement, biotechnology and the internal market.

The communication provides a good example of CEFIC's successful lobbying of different institutions. Seven joint Commission- Industry working groups were subsequently established on for example the internal market, environment, competition and R&D (research and development). In endorsing the communication, the EU ministers of industry stressed that "public authorities have a responsibility to [...] provide an adequate framework to enhance the chemical industry's competitiveness" and that "environmental regulations should pay close attention to competitiveness".[10] As CEFIC president Jurgen Dormann puts it: "The positive reception by the overall Commission and the Council of Ministers was very encouraging. Although the Communication was finally adopted by the European Parliament (EP) we have to strengthen the dialogue with the critical voices within the EP".[11] Furthermore, this case illustrates "a new and unique arrangement between the Commission and an industry where there is an institutionalized system of talking to all Directorates General about many elements which influence competitiveness".[12]

CEFIC Ambitions

CEFIC strongly supports the Economic and Monetary Union (EMU). Completion of the single market, one of CEFIC's primary aims, [13] will be of great benefit to corporations.[14] In its 1996 Annual Report, CEFIC complains about the difficulties of operating in an incomplete internal market, with conflicting national health policies and costs. The group advises that countries should be forbidden to uni- laterally ban or place restrictions on chemicals: "Mechanisms should fully apply to prevent the resurgence of 'environmental nationalism'".[15] CEFIC is also happy with EU enlargement towards Central and Eastern Europe (CEE), having signed a contract with the Commission under the umbrella of the PHARE programme[16] to compare EU and CEE legislation with the aim of eventual harmonization.[17]

On the global level, the chemical lobby group has shown continuous support for multilateral trade liberalization within the World Trade Organization (WTO), and is enthusiastic about the inclusion of new issues such as investment, environment and competition under the WTO's wings.[18] CEFIC urges all major chemical producing countries, before proceeding with tariff reductions of their own, to join the WTO's agreement which harmonizes chemicals tariffs at a low -- and thus acceptable -- level.[19]

Pushing for Life Patenting

CEFIC's involvement in biotechnology lobbying goes way back. EuropaBio, the Association of European Bioindustries, is the result of the 1996 merger between CEFIC's SAGB (Senior Advisory Group on Biotechnology) and ESNBA (European Secretariat for National Bioindustry Associations).[20] CEFIC uses the usual arguments of the biotech industry: that modern biotechnology will boost European competitiveness, attract investments, create loads of jobs, and offer "the means to improve health, nutrition, safety and environmental performance and the quality of life generally".[21] The jobs argument is supported by the European Commission, for example by Agriculture Commissioner Franz Fischler who warned that the "hostile attitude" of consumers and the public towards biotech is putting 200,000 jobs at risk.[22] This figure is hotly disputed by environmental groups. CEFIC continues to pave the way for a biotech revolution by lobbying for the final approval of the EU's Patent Directive and the upcoming TRIPs (Trade Related Intellectual Property Rights agreement) review within the WTO. Although the chemical lobby was heavily involved in the TRIPs negotiations during the Uruguay Round in the early 90s, it now wants more far reaching uniform rules to enable the patenting of plants and animals all over the world.[23]
The Joy of Self-Regulation

Over the past few years, CEFIC has blocked numerous environmental policies, such as the long-debated EU CO2 tax.[24] In CEFIC's viewpoint, such a measure would increase energy prices, harm industry's competitiveness, create job losses and hinder investment.[25] According to CEFIC's Bent Jensen, the coalition's firm anti-tax position contributed to the weeding out of more radical elements of the Commission: "At that time [1991] Carlo Ripa di Meana initiator of CO2/energy tax] was Environmental Commissioner, and we took a very hard step on that. He left Brussels in a hurry. Really, industry did not want this taxation".[26] According to former CEFIC President Simon de Bree: "There are wiser, more elegant solutions". He refers to CEFIC's latest proposal, eco-VAT, which passes along the energy bill to consumers. De Bree prefers this type of measure to a CO2 tax, as "it would meet the desire of society to control energy consumption by means of fiscal measures, whilst lowering income taxes in order to make labour cheaper and stimulate employment".[27]

Other current CEFIC efforts include resistance to attempts by the EU's Environment Directorate (DGXI) to update and strengthen the 1994 EU Directive on Ozone Protection, a project to which European Commissioner Bangemann's DGIII (Industrial Affairs) is also hostile.[28] CEFIC's Bent Jensen also expresses grave concern about European Environmental Commissioner Ritt Bjerregaard's attempts to limit the quantity of HCFCs -- a dangerous ozone-killer -- that European industry is allowed to produce.[29]

Like other industry coalitions, CEFIC prefers to regulate itself, and has come up with voluntary agreements which avoid governmental interference and punitive fines. CEFIC's Voluntary Energy Efficiency Programme (VEEP 2005), for example, would supposedly increase industrial energy efficiency by 20% in reference to 1990 levels. CEFIC is also fond of deregulation measures, and strongly supports the EU's ongoing liberalization of gas and electricity markets which will result in lower energy prices.

Responsible Care?

In its continuous drive for self-regulation rather than government intervention, the chemical industry promotes the so-called Responsible Care (RC) programme which it claims will "improve all aspects of performance which relate to protection of health, safety and the environment".[30] Based on a set of guiding principles, the programme is implemented by the national chemical associations. However, as author Joshua Karliner explains: "A primary function that these voluntary codes of conduct serve is to evade public demands for strong government regulation and control of industrial activity".[31]

Responsible Care was initiated in 1984 by the International Council of Chemicals Associations (ICCA), of which CEFIC is member.[32] Its creation was largely catalyzed by Union Carbide's 1984 Bhopal disaster, which cast a dark shadow over the chemical industry's image. ICCA recognises the value of such a public relations tool: "The chemical industry believes that demonstrating both commitment and improved performance is the key to maintaining and retaining public acceptance of the industry".[33]

Although the RC approach seems to be taken very seriously by most public authorities,[34] its positive image as portrayed by the chemical industry is not shared by ICEM, the Brussels-based International Federation of Chemical, Mine and General Workers' Unions. ICEM denounces the fact that corporations do not implement the same programmes in countries with high environmental legislative standards as in the rest of the world, and calls upon the chemical industry to accept that Responsible Care "is not a substitute for legislation, monitoring and enforcement, but is rather an additional commitment".[35]Other studies on RC confirm these and other flaws: RC does not apply to foreign subsidiaries of member companies; it does not encourage transparency on behalf of other activities of the chemical industry; and it does not include safety criteria, which allows companies to present banned pesticides and ozone-depleting chemicals as "safe" in other parts of the world.[36]


1. CEFIC comprises around 40,000 large, medium and small chemical companies with a production value of some ECU 380 billion and over 2 million employees. Source: CEFIC web site -- CEFIC Annual Report 1996, p. 5. There are 16 member federations and 6 associates grouped in the Assembly of Federation Members (AFEM). CEFIC individual companies are grouped in ACOM, the Assembly of Corporate Members. Source: CEFIC news release, "CEFIC raises its public profile", 4 December 1997.| Back to Text |  

2. The ERT members are Bayer, British Petroleum, Hoffmann-La Roche, ICI, Norsk Hydro, OMV, Petrofina, Repsol, Rhône-Poulenc, Shell and Solvay. Other CEFIC members include Azko Nobel, DuPont, Dow Europe, Exxon, Elf, Hoechst, Monsanto Europe, Novartis, Procter & Gamble and Union Carbide. | Back to Text |

3. In 1997, SAGEP concentrated on international negotiations such as the Trans-Atlantic Business Dialogue (TABD) and the GATT-follow-up within the World Trade Organization (WTO), whereas SAGE mainly dealt with the Responsible Care programme, endocrine modulators, and the proposed EU CO2 tax. Source: CEFIC Annual Report 1997, p. 15.| Back to Text |  

4. "CEFIC's Role" on CEFIC's web page. | Back to Text |

5. Sir Leon Brittan, "The European Institutions and the European Chemical Industry: Developing the Relationship", Spotlight, no. 51, September 1997.| Back to Text |

6. Wilfried Sahm, Chairman of the CEFIC AFEM (Assembly of Federation Members), "The Complementary Roles of CEFIC and the National Federations in Advocating the Chemical Industry's Position in the European Decision-Making Process", Spotlight, no. 51, September 1997.| Back to Text |

7. Speech by former CEFIC President Simon de Bree, DSM chairman, at the Chem Systems' Annual European Seminar, London, 11 February 1998.| Back to Text |

8. Benchmarking is a way of institutionalizing competitive- ness into policy-making, as promoted by some European industry. According to the influential European Roundtable of Industrialists, benchmarking means "scanning the world to see what is the very best that anybody else anywhere is achieving, and then finding a way to do as well or better." (Europe, Inc. p. 19, from ERT: Benchmarking for Policy-Makers: the Way to Competitiviness, Growth and Job Creation, Brussels, 1996, p.11) | Back to Text |

9. CEFIC Annual Report 1996, p. 15.| Back to Text |

10. Council of Ministers Industry Affairs, 14 November 1996. Source: CEFIC Annual Report, 1996, p. 24.| Back to Text |

11. Jurgen Dormann, CEFIC president, CEFIC Annual Report, 1996, p. 5.| Back to Text |

12. Ibid, p. 7. | Back to Text |

13. CEFIC News Release, "CEFIC President Jurgen Dormann Stresses the Interdependence of the Single Currency and Completion of the Single Market, 13 June 1997.| Back to Text |

14. "Industry will gain nassively from the introduction of the Euro", comment by Wolfgang Bruhl, Hoechst Chief Economist, CEFIC Annual Report 1996, p. 18.| Back to Text |

15. CEFIC Annual Report 1996, p. 8.| Back to Text |

16. See 'Europe, Inc.', Corporate Europe Observatory, 1997.| Back to Text |

17. CEFIC Annual Report, pp. 8 and 21.| Back to Text |

18. Although supporting the MAI (Multilateral Agreement on Investment) being negotiated at the OECD, CEFIC would prefer negotiations on an investment treaty within the WTO. This agreement should in CEFIC's view include at least: a broad definition of investment, national treatment, most favoured nation, adequate investor protection and dispute settlement mechanism -- in other words, a MAI clone. Source: CEFIC web site. For more information, see "MAIgalomania", CEO, 1998.| Back to Text |

19. CEFIC News Release, "Commitment to WTO", 11 September 1996.| Back to Text |

20. For more information, see "Europe, Inc.", chapter 2.7.| Back to Text |

21. CEFIC Position Paper, "Patents: Key to Innovation in Europe", November 1996.| Back to Text |

22. ENDs Daily, "Fischler Blames Consumers for EU Biotech Woes", 15 October 1997.| Back to Text |

23. CEFIC Position Paper, November 1996. The patenting directive would permit corporate ownership of human, animal and plant parts, genes and even entire species. This would mean radical changes to current health care and agricultural systems and would threaten biological diversity.| Back to Text |

24. For more information, see "The Weather Gods: How Industry has influenced the Kyoto Climate Summit", Corporate Europe Observatory, 1997.| Back to Text |

25. In the period between 1985-94, the European chemical industry invested ECU 32 billion outside Europe (95% in the USA), and ECU 17 billion within the EU. Source: speech by Simon de Bree at the Chem Systems' Annual European Seminar, London, 11 February 1998.| Back to Text |

26. Phone conversation with CEFIC's Bent Jensen, 23 October 1997.| Back to Text |

27. Speech by Simon de Bree at the Chem Systems Annual European Seminar, London, 11 February 1998.| Back to Text |

28. This Directive is based on the Montreal Agreement of September 1997, which establishes rules for phasing out the use of chlorofluorocarbons (CFCs), hydrochloro- fluorocarbons (HCFCs) and the pesticide methylbromide.| Back to Text |

29. "Clash Looms over CFCs Proposals", Friends of the Earth Europe Weekly Bulletin, 4 February 1998.| Back to Text |

30. ICCA Position Paper on Responsible Care, 4 January 1995.| Back to Text |

31. Joshua Karliner, "The Corporate Planet: Ecology and Politics in the Age of Globalization", Sierra Club Books, San Francisco, p. 189.| Back to Text |

32. Through its ICCA (International Council of Chemicals Associations) membership, CEFIC presents its views to UN agencies such as UNCTAD (United Nations Conference for Trade and Development), FAO (Food and Agriculture Organization) and the WIPO (World Intellectual Property Organisation) as well as to other institutions, including the WTO (World Trade Organization), the OECD, the ISO (International Standards Organization) and the International Chamber of Commerce (ICC). ICCA focuses on policy issues of international significance, such as health, safety and the environment; international transport; intellectual property and trade policy.| Back to Text |

33. ICCA Position Paper on Responsible Care, 4 January 1995.| Back to Text |

34. Ibid.| Back to Text |

35. ICEM Secretary General Vic Thorpe in ENDs Daily E-mail News, 15 December 1997.| Back to Text |

36. Peter Simmons and Brian Wayne, "Responsible Care: Trust, Credibility and Environmental Management," quoted in "The Corporate Planet: Ecology and Politics in the Age of Globalization", p. 275.| Back to Text |

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