Welcome to the Environment, Climate Change and Land Reform Committee's 12th meeting of 2019. Before we move on to the first item in the agenda, can I remind everyone to switch off their mobile phones or put them on silent as they may affect the broadcasting system? So on to the first item in the agenda. It's for the committee to consider whether to take item 3 in consideration of evidence taken in relation to EU exit future meetings in private. Are we agreed? Thank you. On to the second item on our agenda. It's for the committee to take evidence on EU exit and the environment, focusing on waste and on chemicals. We're going to take evidence from two panels, and we have the first panel with us just now, focused on waste. I'm delighted to welcome our panel this morning. Good morning. Linda Ovens, director of in-tech solutions and centre councillor chartered institution of waste management Scotland. Good morning. Libby Peek, senior policy adviser, resource stewardship, easy for me to say, the Green Alliance. Good morning. Steven Freeland, policy adviser and coordinator for the Scottish Environmental Services Association. Good morning. Rebecca Walker, head of function materials for Scottish Environment Protection Agency. One to you. Ian Gulland, chief executive officer of Zero Waste Scotland. Good morning to you all. I'm going to ask a broad question and just indicate to me whether or not you want to come in and give your view on it. I guess what are the key risks to the waste sector of EU exit, of whatever flavour, I guess? Is it worth, firstly—obviously, waste exports is a big issue for us—but it may be worth, firstly, clarifying what we mean by waste exports, because there's two types of waste that we export from Scotland and the UK as a whole. You've got recyclable waste and you've got non-recyclable waste, which is largely defined as RDF, which is a ffume for continental incineration plants. The biggest exposure for Brexit falls on the RDF exports, whereas a recyclable waste generally goes outside of EU, goes to the forest. Worse, it transits through Europe, where there might be some issues around border control. Most of our waste is not exported to Europe, it's exported outside of Europe to the forest. I think that a lot of our discussion and exposure and risk is around the RDF non-recyclable waste, which goes to Europe. Can you elaborate on what the risks are around that from the RDF perspective? The first initial risk had been whether we could still continue to export the RDF. As a UK as a whole, we're exporting 3.5 million tonnes of this. The Scottish figure is a lot less, and it's around about 100,000 tonnes. The biggest concern being that it could be exported to Europe has been addressed recently. The approvals and documentation that allow this waste to be exported has been agreed with all the member states in Europe who are happy to allow the continuation of existing procedures to apply. Even in a no-deal situation, that waste could still be exported. The problem is around, although there's no legal impediment to stop the waste being exported to Europe, there's still the issue around border controls and potential delays and friction. The talk of tariffs that you might want to get into, but the bigger threat to tariffs is the fall in the value of the sterling exchange rate, which is even worse than any kind of tariff that might be imposed if there was to be a tariff. It's really just what happens at the border. My gather is a 5 per cent inspection rule that 5 per cent of all exports are going to be stopped, whereas the moment doesn't just go regardless. So it's going to be a bit of border friction around the exports. I don't think everyone's worried about meltdown or Armageddon or catastrophic circumstances. It's all about slowing down rather than anything to— Potential cost implication. Oh, yes. Victim is the clutching from there. Stuart Stevenson wanted to come in. That sort of was what I wanted to ask, just whether the impact is economic or environmental, or is it both, and how does the balance come on this narrow subject of RDF? It's a bit of both. We're coming from a largely economic, as I've just mentioned, a cost of transport and such like. For environmental, the issue being if, for any reason, they weren't to take our RDF, which I don't think is feasible, isn't as likely. We don't have a capacity in this country to handle it, so we are, for the short term at least, short to medium term, reliant on the export route. So an environmental side of things, the regulations are still there, so they'll be rolled forward, so I don't think there's any concern on environmental stuff. It's mostly around economic impacts that we're probably concerned about. Libby Peek? I just wanted to clarify that there are probably two different types of impact that we might be talking about specifically just in relation to waste exports. In the first instance, you've got regulatory impact, which has largely been dealt with as much as it can be by Government officials and border officials who have ensured, as Stephen has said, that we will be able to continue to export waste theoretically, but then you have also operational impacts, and those are expected to be severe for at least three to six months. There's not much you could do in terms of regulation in order to make sure that they're not, because you're going to have plenty of knock-on impacts at the ports, because obviously it's not just waste that you're trying to export, you're trying to export all sorts of other things. You'd expect that waste wouldn't necessarily be prioritised over other things like foods and medicines and whatnot, so there's a real risk that it will back up at ports, which could be a problem if it's things like paper or RDF, which degrade and are potentially fire hazards, and you've got issues to do with storage. Then you've also got all sorts of potential impacts just in terms of the availability of lorries to transport things, the availability of labour. A lot of people who work in the waste and resources sector come from Eastern Europe, and I heard some figures that, after the Christmas break, 30 per cent of them haven't come back. In addition to all the back-ups at port, you might also get shortages of both lorries to do with gridlock and whether or not lorries are getting into the country to then grow out of the country, and shortages of labour to deal with the waste. When else in the panel, I want to wind up. I'll pick up more on the economic side of things. Yes, environmentally, degradable waste cannot be hanging about ports waiting to go out of the country, and we can't deal with it at the moment ourselves, so we would have to do that. As I understand it, the agreement is that we can ship RDF where it is under the existing agreement. That existing agreement will continue, but there are an awful lot of particular public sector organisations looking to use that route in the next 18 months prior to our degradable landfill ban coming in 2021. There are new contracts that need to be set up, and the timing of them is very important. Under the existing one, the majority of them are short-term, one-to-three-year contracts. They are all RPI, they are all index-linked, most of the contracts, rather than fixed-price contracts. Depending on what happens with our inflation rate, I have heard from the market that if we get extraordinary inflation, say 30 per cent inflation, then how do we cope cost-wise with those contracts and the ability to pay for that? I mean, any kind of waste has got a value. Is it fair to say that there is competition between countries putting their waste to use to RDF waste? It might just be too expensive—the waste coming from the UK compared to other countries. Could we be left with the waste that we haven't actually got a route to get rid of it effectively because it's too expensive compared to waste coming from other countries as a feedstock for whatever it's used for? For RDF, we pay for that waste to be taken in use, so it's a cost to us. That's why the indexation on top of that gate for them could be unpalatable or something that we can't afford. Which effectively means that we've got this waste that we don't really have the capacity to deal with in the UK? Not at the moment. Mark, you wanted to ask a question around this. In the long term, does it make sense to be taking this refuse-derived fuel outside of the UK anyway? How could we build a capacity to recycle greater components of the waste here rather than sending it abroad to be incinerated? What's the timescale for delivering that sort of capacity within the UK? Involved in a number of infrastructure projects and development projects at the moment. It's a sensitive balance of the long-term availability of that waste, with everything that we're doing to minimise that in the first place, and projects going forward. They are getting built. A five or six-year window from today would get you some residual capacity rather than exporting your waste, so it's not something that we can deal with in the short term. The concern that is covering all infrastructure and construction projects at the moment is the construction industry. You touched on it about manpower and the amount of work that we have from the EU and whether they will return home and whether there will be construction companies available to build this infrastructure even if we wanted it built. At the moment, what I'm saying is that the contracts for those are having clauses put into them, but there are not the same clauses getting put into all the construction contracts. They are all wanting some protection from EU exit at various levels. For a procuring authority, it's very difficult to know what they're going to be paying. Again, you can't get a fixed fee from the market. You don't know if you're going to have construction companies that want to deal with you. There's a great legal contractual debate going on at the moment about what protection we can give. I think that Linda is really talking about his incineration capacity being built in Scotland to deal with the waste rather than exporting. I think that your question was more about recycling capacity or reprocessing capacity here in Scotland. As you know, we're certainly en route for developing a more circular economy here and we have ambitions to do so. Those opportunities are real and present for us here in Scotland now in terms of the policy framework that's been set out by the Scottish Government and has been delivered by a number of other partners. The challenge is that we need time to do that. The opportunity to export waste at the moment is almost like a buffer until those opportunities are realised. If we suddenly have to take all that stuff back here, the focus will just be on how do we get rid of that waste. There will be a real challenge in building excess capacity that we don't actually need going forward and it will make it harder in terms of the commercial argument for some of those recycling opportunities. We need to take a much more structured approach to that, which is really what ourselves and others are looking at in terms of that reprocessing capacity. So there are things happening. There is a lot of interest in delivering the reprocessing capacity for materials, particularly around plastics and other key materials here in Scotland. Brexit doesn't help for a number of fronts. The uncertainty, I guess, in terms of inward investment, but also companies here who are looking to invest in that type of infrastructure are understanding what the global market will look like for Scotland in terms of currency impacts as well as the material flow in Scotland and in the UK, which is another aspect of that as well. If the UK starts to build reprocessing capacity for key materials as well, if they are faced with the same challenges as we are talking about here, then there is always going to be an opportunity for our materials to still lead Scotland and go to the rest of the UK where there is a greater amount of the stuff that is relative to our own country. It is on to the question that I was going to ask next, about the EU's circular economy package and whether or not the Scottish Government is going to have the capacity to deliver those messages outside the EU. That is something that we are not going to be part of any more, but I imagine that the aspiration is there to... The aspirations are exactly the same. They are very much aligned to the European package. In fact, I think that we would go further and say that Scotland's ambitions go further than the EU package. I think that in terms of our activities in the circular economy, we are ahead of most of the EU member states in terms of developing the framework and the programmes to deliver a circular economy. We have been up and running for some time, as you know. I think that we are already seen as a leader in the circular economy, but I think that aspects of Brexit could severely dent that journey in terms of the focus. Everybody is talking about Brexit, or EU exit, rather than thinking about climate change, resource efficiency and the circular economy. That is a real challenge for us, particularly talking to some of the SMEs that we engage with in Scotland, particularly things like food waste. For obvious reasons, we are very worried about what is going to happen if there is a sudden exit from the EU in terms of logistics and getting rid of their produce rather than thinking about food waste. There are some real challenges in terms of the uncertainty and how we tackle that, both from an individual business point of view, even a consumer point of view, but ultimately investment. We need investment. We have seen a lot of interest in Scotland from outside of Scotland and internally because of the ambition and the policy framework that the Scottish Government is leading on, but all the aspects of trade and tariffs and currency creates a degree of uncertainty at this moment in time. Rebecca Walker Just from SEPA's preparation here, an important part of our preparation working with the Scottish Government is to ensure environmental legislation continues to operate at EU exit day. From our point of view in terms of the requirements and standards on businesses, there is no reduction here. We are looking for the same compliance in terms of their authorisations. We are continuing to work with them on compliance but also in terms of looking at where we can move beyond compliance. As Ian said, we have ambitions in Scotland that go beyond and to see how we can help businesses to look for opportunities around the circular economy here. Claudia Beamish Claudia, you wanted to ask a quick question. Thank you, convener. It was just a very brief supplementary possibly only for Ian Gullum, but if other panel members want to answer as well, you have highlighted some of the challenges, but very clearly the opportunities that there are in relation to the circular economy. I am wondering to what extent—I know that Zero Waste Scotland looks a lot at supporting SMEs and communities. I am wondering to what extent you are able to assess the impact that new ventures will have on communities and to pre-empt that a bit, because it is good to be ahead of the curve in this, you know, with incineration and different things that might cause community concern. I still think that I still believe that the opportunities in the circular economy are across Scotland, and they could be embraced by individual communities in terms of some of those social enterprises and small businesses, in terms of reuse and repair. We have seen a lot of interest in that. I think that that is one of the opportunities in the circular economy. It is that it is not just about building big facilities in the middle of Scotland. It is about diversity across the whole of the landscape, and those opportunities, whether that is dealing with the materials at source or within the communities, instead of trucking them around. We have even seen the scalability of some of those technologies, which are smaller scale than they were, in terms of even dealing with organic waste. I know that I have been here before. That is the real excitement of the circular economy. That is not just about dealing with waste in the old traditional way, where we build it up and try to build something of a large scale to deal with it. That is much more distributive across the economy, and that is our work that we have done in the cities and Glasgow, particularly in the northeast and in Edinburgh. We are moving out to work in highlands and islands and some of the islands. Those opportunities are real. People recognise them at an economic development level, in terms of small business opportunities and engaging with communities. That is what the excitement thing is. As I have said before, that is what puts Scotland in the lead. It is not just trying to deal with waste, but it is trying to develop a different system, where there are jobs and social opportunities as well. You have spoken about the opportunities of a circular economy. Could you give me one or two practical examples? You do not all have to reply, but just one or two practical examples of the opportunities that arise from the development of a circular economy. Green Alliance has done some research with RAP, the Waste and Resources Action programme, on job opportunities from the circular economy and found that across the UK, if there is a really transformation or shift to a more circular economy, which involves things like treating organic waste differently, opening and closed-loop recycling as a last resort, but a lot more emphasis on repair and remanufacturing and things like that. We found that in a transformational situation, you would get 102,000 net jobs across the UK from changing the approach. These are jobs that occur across the skills spectrum, low-skill to high-skill, and quite often in areas that used to have industry and now don't have industry, because people will be using their new skills to repair and remanufacture things. There are job opportunities in terms of infrastructure. If you are looking at closed-loop infrastructure in terms of having things like more plastic recycling plants or anaerobic digestion facilities that have good jobs in them when you are dealing with waste and resources in the appropriate way. Anyone else has one or two opportunities? Things like refurbishing fridges or cars or what? I am just asking the daffladi questions, but, as a hill farmer, I am declaring an interest that I have made, do and mend all of my life and recycled and refurbished everything that I have ever had or owned turned into something for the next generation. Is it more than that? That is a really big part of it. You have got that, but then you are looking at the whole economy, so you are dealing with every single resource stream differently, dealing with manufacturing processes differently, so putting fewer resources into manufacturing processes to begin with. Constructing things differently, construction has a massive environmental impact. If you changed the approach to construction, you could drastically decrease the amount of carbon emissions and resources that go into it. It is really thinking about the entire economy, but refurbishing things is a big part of it. I think that the circular economy has really focused things on upstream and looking towards reducing that waste and not having a waste management industry, and now we talk about a materials management industry rather than a waste industry. Certainly, it is about remanufacturing and redesign in front of that so that we never have to deal with the waste. It is commonly said that, if there is a waste, it has not been designed correctly, and there is a real focus on that, and that does not produce something that cannot last and cannot be disassembled and re-used in the future. I just wanted to pick up on a comment about jobs, because we keep talking about the opportunities of jobs. My comment about workforce is not just about incineration and, on the back end, it is a general workforce concern, not just for the waste industry. It is across Scotland, but we are an industry in materials management. It is a high, intensive job opportunity, but we are reliant heavily on EU staff at the moment for that, and we do not know what is going to happen with that in the future. A universally agreed view. I want to talk about no deal and EU uncertainty. What are the key risks of a no deal at this stage, and what involvement have you had, one or two of you, in a no deal planning? We have worked very closely with the Scottish Government in providing technical expertise and advice in preparation for EU exit. This is for all potential outcomes. Recently, our focus has been on a no deal. It is made to ensure that Scotland's environmental standards are protected after we leave. The risk for us in terms of what could happen in terms of a no deal is waste storage and delays and disruptions at ports. That relates back to the initial question on exports. We have done scenario planning. We have set up an internal governance group within SEPA, and we have carried out scenario planning with the Scottish Government. In delay and disruption at ports, waste operators would be advised to temporarily store their waste on site within their permit conditions, and they would encourage them if they were unable to do that or find an alternative place for excess storage to engage in early dialogue with SEPA. We have also carried out looking at the capacity in terms of whether we have that delay and disruption at ports for waste exports, whether we have the capacity to deal with that waste in Scotland, and it became the conclusion that we do. The other alternative or not alternative, the other part of the scenario is that there will be perishable goods at ports that then become waste and what can we do with them? It is the advice that we would want to see them dealt with in line with the waste hierarchy, so that would be to redistribute to animal feed, to anaerobic digestion, composting energy from waste and finally landfill. We would work with those businesses if that became a reality. Green Alliance convenes Greener UK, which is a network of environmental NGOs that are watching the Brexit process to try to make sure that it does not harm the environment and that standards are indeed enhanced. We have been watching the SI process go through the Parliament in Westminster and I would say that the pace of legislation that has been coming through has been absolutely relentless. It is now largely complete, but there are over 10,000 pages of technical legislation that has now been passed and a quarter of that has been laid by DEFRA, so it is going to affect the environment. We have not had the capacity to study absolutely everything very carefully, but what we have seen is quite worrying, the things that we have noticed. First of all, there has not been proper stakeholder engagement from the start. DEFRA belatedly set up a reading room so that we could look at legislation before it was officially laid, but it came so late in the process that problems have not been rectified and it was too late to do anything. While the process was intended to be largely technical to make sure that the legislation could function, the regime could function in the event of a no-deal exit or whenever we do exit, that is largely true. There have been omissions and worrying changes that are not just technical, so quite often there have been things like they have stripped away the requirements to report to the European Commission and they have also done things like got rid of advisory committees, not necessarily in the waste legislation that you are looking at now, but in the reach legislation that you will be looking at, they stripped away. Overnight, the advisory committees on socio-economic impact and risk assessment and the membership committee will disappear and they have not been replaced with anything robust to make sure that the UK system is as good as the EU system that we are leaving. There are very real concerns about the SI process and I would say that now that the immediate threat of a no-deal exit has diminished, it would be a good opportunity to call for that to be reviewed and for some changes to be made to those SI's to make sure that they are adequate and up to the task of ensuring that the environment is as protected when we leave Brexit as it is now, because in the current situation it is not going to be. Is that the view generally then that the SI's that have been passed by the UK Government not for purpose, or just yours? It is definitely my view, but it is the view of greener UK in general. There are mistakes that need to be rectified and we need to look at some things again. There is the possibility to do so. The reach SI that was approved has already been amended by two further negative SI's. Unfortunately, they do not address our concerns with them, but it does show that technical problems are possible to address them through further secondary legislation. Just come on on the way specific SI's. There were two that came in at UK level. The first one, the Waste Miscellaneous Amendment's EU regulations, they were there to correct deficiencies in terms of if there was a reference to EU law or an institution that needed to change. Again, there was no change in policy so that has been transferred over to keep the same environmental standards to the EU. There was a second one with the same name here, the Waste Miscellaneous Amendment's EU exit number two regulations, and that was to address the producer responsibility regimes for end-of-life vehicles packaging, batteries and waste electrical and electronic equipment. Again, there was no change in policy. It was there to correct deficiencies, what are references to EU law or fixes, but it was to keep the same environmental standards. They were quite a straightforward swap in terms of the environmental standards, and then there was the Scotland one in terms of amendments needed around technical standards, for example, landfills, end-of-life vehicles, waste electrical and electronic equipment and batteries. In terms of the waste legislation for the two UK statutory instruments and the Scotland statutory instrument, then we're comfortable they've moved over into the environmental standards as is. Stephen Freeland wants to come in. I'm just going back to the original question around no-deal Brexit. There's been talk of, we're in contingency planning and such like, and one of the common issues is now is people talking about increasing storage on waste sites to allow more stuff to be set. We're a little bit concerned about that. We as a responsible industry, we've got a very broad spectrum of people in this industry, and unfortunately, as I'm probably well aware, waste crime is a big issue for the country and the sector as a home, and the concern being by giving additional storage changes or extensions to storage requirements could open the door for waste crime if we're not very careful. So rather than the permitting storage site, there might be some flexibility on the planning consent, so maybe allowing planning consent to be more flexible, opening hours, throughputs to allow them to deal with bottlenecks and such like, might be slightly better way rather than the permitting site. The last point in contingency, and this might go down like a lead balloon, but landfill capacity is really the only flexible option for contingency. If the stuff pining off in the port and it's spoiled or can't do anything, can't be recycled, it can only go to landfill. In the sector, we're not in business of just landfilling stuff, we don't have to, it's a last resort, but it is the backstop. In 2021, we're going to be in a very tricky position with the landfill barn coming in place in Scotland where we can't landfill with stuff, so a big question of where is it going to go? It just takes me nicely to the next question. What preparations have SEPA and others made to provide support to waste operators facing disruption and would SEPA anticipate an increase in waste-related crime in the event of a no deal? I mean, we're getting into the nitty gritty now, what we're going to do with that stuff, as you've just said, landfill is a position of last resort, but that would cost operators money, so what are the attendant risks? As mentioned, we've been preparing for all outcomes here. We've been working closely with operators and the communication of the messages that environmental laws aren't changing. Environmental authorisation stands there, but obviously in the event of a no deal there could be disruption here, so we're asking for early dialogue to engage with businesses in terms of their contingency plans. In terms of waste crime, absolutely we will continue to disrupt, prevent and carry out. We're absolutely committed to tackling waste crime here and understanding the risks and threats and harms that could be caused by it in the event of a no deal. So you've had discussions with Police Scotland and others in this regard? Through the groups that my waste crime colleagues sit on. I just wanted to go back to the SIs and just be clear what we're talking about here. What I seem to hear from SIPA was that the rules post the changes remain the same, but what I was hearing from Libby, I think, told me that the oversight was reduced. Is that a fair characterisation of what I had, that the rules are the same, but the concerns that the environmental groups have is that the oversight is reduced? Is that my understanding correct? In regard to specifically the waste legislation, yes, that's right. So far as we can tell, the SIs for waste have largely just been technical. That isn't true across the SIs. A lot of them have had much more major changes, but when it comes to waste, yes, they have been largely technical changes, but there are real concerns going forward in terms of governance. So we don't yet know what is going to replace across the UK the functions that the European Commission and the European Court of Justice have served. They've been incredibly effective in focusing minds, in monitoring and setting targets, in making sure that member states do meet the targets. A lot of the notices that have been served against the UK, about 14 per cent of the notices that were served against the UK, related to environmental matters, but almost half of the infringement actions were related to environmental matters. Having good oversight is incredibly important for things like this, for environmental matters, because there's no one to speak for it. Those functions were not entirely sure how they're going to be replaced. England has proposed an office for environmental protection to replace the functions, but so far that's just for England, and it's not as good as the European Court of Justice. It's not going to be fully independent because the committee and the budget are going to be set by the Secretary of State. It's going to have the ability to start court proceedings but not to issue fines. In terms of environmental principles, ministers will only have to have regard to the principles that are set out in a policy statement, which is really just a tick box exercise. What England is proposing isn't adequate, and it's not yet clear how things are going to be administered across the UK. While environmental matters are quite often devolved for the past 40-odd years, they've been administered through the common framework of the EU, so it's not yet clear what's going to happen after Brexit in terms of devolution and governance. That's a good chance to move on to Europe. I was just going to suggest that if Libby Peake could perhaps tell us in writing after the specific rules where there are issues, because I think that the general point about oversight is understood, but the rules are something that I suspect we might wish to engage in after this meeting in other ways. I agree with Stuart Stevenson that specific concerns could be put to us in writing. We'd be very grateful. We're moving on to talking about common frameworks. I'm Findlay Carson. It appears that, within the remit of the committee, there's four areas specifically, which include chemicals and waste. Can the panel tell me what you'll be looking at when it comes to common frameworks for waste to be delivered? As a general observation, I think that because of the SI process, the work on common frameworks seems to have stalled. I know that the Government did publish an additional report saying that they were going to be consulting and engaging more from March 2019, but I think that the progress on common frameworks has been quite slow from what we've seen. I think that with waste in particular, I find it a bit confusing that waste is split into two different sections, one of which might require a legislative framework, and one of which might require a non-legislative framework. I'm not clear why those two distinctions have been made, especially as there are some instances where the different bits of legislation that they're splitting at an EU level were designed to work together. Waste electrical and electronic equipment, that directive is in one category, but the restriction of hazardous substances is in another category. Those two things should be working together, so it's not clear to me why those have been split. We would like to see a lot more explanation and a lot more action with the devolved administration from the central UK Government. Rebecca Walker, to add that we're aware of common frameworks in our capacity as the Environment Protection Agency, we would provide technical advice and expertise to the Scottish Government if it was required on the practical implementation of regulations and legislation here. I'll go back to Libby's comments. In what circumstances would non-legislative approach be more appropriate than to have legislation when it comes to common frameworks? That example that you gave suggested that it maybe wasn't most appropriate, but is there other areas where it would be to have a divergence? Personally, I'd like to see a lot more explanation from the central government about what those categories are and how they have decided what goes into what category, because that's not clear to me. In most instances, it would be to do with waste and resources. It would be good to have some sort of common understanding and common regulations that different administrations would be free to exceed, but they're all operating on a level playing field, as is the case at the moment with the EU legislation. Obviously, as Ian said, Scotland has gone farther in some instances, so you'd want to see that continue. I'll move on to another point. There's already policy divergence within the UK in terms of recycling and landfill targets and some aspects of waste regulation. Do those cause transboundary problems at the moment? Potentially, going forward, they might. As I've alluded to, the landfill ban is not only if we've got waste crime as an issue just now. You can have a million tonnes of waste where there's no capacity in Scotland to deal with a million tonnes of waste. It's going to have to go to English landfill sites. Whenever it's on the move, there's going to be a cost increase associated with that. It seems to get a cost increase. You've got scope for waste crime. The regional differences are, at the moment, broadly workable. It can be a bit frustrating sometimes of different requirements, but any business risk can manage that. What we're all holding the same boat is stalling recycling rates. Recycling rates are set around about 45-46 per cent and not really going up. That's going to be a common issue that we're all going to have to address in going forward. The expectation is that because of the landfill ban that's coming in Scotland and the fact that Scotland doesn't have the capacity to deal with this, it will largely go across the border to England and could potentially result in increases in waste crime. However, I think that you could easily see impacts from divergences on things like if Scotland sets a different rate of landfill tax or if Wales sets a different rate of landfill tax, then that would immediately give people incentives to try to get around the higher landfill tax some way to send their waste elsewhere. You could easily see impacts from divergences and policies, which to date we haven't really seen too much of. That's a big one for Rebecca Walker. How is UK policy divergence managed at the moment? For example, the difference in landfill rates. However, how does SEPA engage to manage those divergence? We work closely with our colleagues in the environment agencies in the other UK administrations. At the moment, we don't have a difference in the landfill rate. There will be a difference when the biodegradable municipal waste ban comes in on 1 January 2021. It is only coming in in Scotland and not the rest of the UK, so we then anticipate what could happen as a result of that. We work with colleagues in the other environment agencies to understand where it might have an adverse impact in terms of the movement of waste, where there might be crime opportunities that might be sought after to understand that in terms of the movement of waste. We would work closely with colleagues across the border. Mr Stevenson? I think the last thing under common frameworks is just what we're expecting in the way of engagement for the development of common frameworks that will apply across the UK and substitute for what's happened in Europe. Is that consultation with the UK Government who are driving this started? If not, when does it have to? I've heard that it was meant to start in much wider consultations. They've said in their report that they were engaging behind the scenes with stakeholders previously. We haven't been engaged very much apart from the initial assessment of what would require common frameworks. I don't think that it's yet clear. They've promised that they would have wider consultations, but I would say that if the standards of consultations on the SIs or anything to go by, that won't be adequate. They've been very cursory, so you would want much more detailed and extensive and rigorous consultations with stakeholders, but also much more involvement with the devolved administrations. With the devolved administrations, they have agreed a set of principles, which are very good principles, but I don't think that they've yet been reflected in anything that we've seen result from the process. Can I just be clear roughly how many organisations the Green Alliance represents and the geographical spread? Green Alliance is an independent charity in think tank. The name is slightly misleading. We're not an alliance, although we convene an alliance of 14 major environmental organisations that respond to Brexit, and that's called Greener UK. Organisations like RSPB, Greenpeace, Friends of the Earth, National Trust and so on. All the representations of the various organisations that exist in the different jurisdictions are in there. In geographical scope, we work with the link groups as well in Scotland and Wales. They're not official members, but we do work with them. Therefore, what we're hearing is that the consultation process really hasn't started, and you haven't an indication yet of when it'll start either. What about industry groups? Are you hearing about consultation on this? I'm getting shaking heads. It's just very simple. It's just not happening, convener. Thank you very much. I move on to questions from Claudia Beamish. I'd like to drill down a bit further into environmental governance and principles. Libby, you've already highlighted issues around the Office for Environmental Protection in England. However, as you all know, for the record, there is a current Scottish Government consultation on environmental governance and principles. I'm wondering in relation to waste management, whether those broad EU principles are being picked up in the Scottish Government consultation, and there's the opportunity to shape the future positively. I don't know who would like to start on that. To see in terms of governance, we've been participating in the stakeholder workshops organised by Scottish Government to support the current consultation on environmental principles and governance. We're actively looking at it at the moment, and it goes to our agency board at the end of this month for consideration, and we'd be happy to share it with the committee at this point, should you wish us to. Could you perhaps highlight for us, Rebecca, what CEPA would see as the key governance functions fulfilled at EU level at the moment that will have to be transposed? I think at this stage, given our consultation response, it hasn't been considered by our agency board. I'd be happy to share it at the point once it has been considered by them in terms of our consultation response and provide this in writing to the committee. Anybody else highlight in terms of what the principle EU level governance issues are that will have to be transferred and perhaps suggest a positive model for Scotland, which is very complex? I noted what you said, Libby, about the separation from government in England, and there's not the possibility of setting fines. Obviously, we've got the criminal proceedings for environmental waste, but there are other issues. There may be waste infraction and things like that, so it would be helpful to know if there are any views on those issues at this stage. I think that the things that need to be replaced are monitoring and enforcement, and you definitely want to have something that is independent of government, can take government to court and can issue fines. Ideally, you'd want something that could work either in harmony or be part of the same organisation that England is proposing. Environmental matters obviously don't necessarily respect borders, so it would be very important that the different administrations work together in some ways to protect it. Are there other comments on that tool? I've been hearing fairly positive signs that the high-level principles around the Plutipaise and precautionary principles—all those—are hopefully going to be subsumed into our domestic framework and retained, which I think is very important. However, there might be scope to improve on some of those principles, so rather than having the waste hierarchy, it could not maybe change up to more line-by-circle economy or resource management hierarchy, which allows some of those models that have been talking about refurbishment and such like to have us a stronger, reflected better in our revised hierarchy. Overall, we're hearing that good signs that we're not hopefully going to lose any of the high-level principles, I don't think, as any appetite to shun those at all or to water them down by any means. Is there any view on how that relates to any possible courts that would replace some EU courts? It might be quite tricky. Part of the tool quite recently—it was quite hard to even get how the courts understand some of the technicalities around waste crime and some of the issues that they've been dealing with around waste policy, so it's just a quite steep learning cover, I think, but it's going to have to be addressed in some means. What do you see then as a replacement for the European Court of Justice? What would be the ideal to come out of this process? Because there is a question here about who watches the watchers. It's obviously perhaps difficult for SIPA to pass comment on something which you would be part of being held to account as well under a replacement system for European Court of Justice, so I don't know if Libby Peek has any thoughts on that. I do think that that is a particular challenge, and it's quite difficult to set up a body within the UK that's going to hold the UK Government to account, but that's why you need to make sure in setting it up that it is absolutely separate from government and it's not going to be appointed by government and it can do things like issue-find. Mark, do you want to move on to other questions around this? Are you happy with that? I had a supplementary perhaps after Angus. Okay, move on to questions from Angus MacDonald. Okay, thanks. Good morning to the panel. If I could turn to funding and other EU support structures, I'd be keen to hear the panel's view on what the key EU funding streams are for the waste and resource sector in Scotland and what could the implications of losing those funding streams be. I'd be keen to hear from the whole panel, but when Ian Gullin responds, I'd be particularly keen to hear how Zero Waste Scotland is planning for the EU exit, in particular given that Zero Waste Scotland is partly funded through the ERDF fund. We are secured access to ERDF funding at the moment, so obviously that is at this moment in time continuing. There was a commitment made that programmes that were already up and running would receive continued support to 2023. We anticipate that that money will still be available to us. Obviously, we have been using that money match with the Scottish Government money to accelerate support for businesses in the circular economy, so it has been very critical to that. Obviously, we are aware that there are conversations at the UK level about a follow-on fund—I can't remember the name of it, but—looking at something that would come in to support those types of projects beyond that or, certainly, another type of fund that is proposed on structural funds. That has been key to us in terms of the existing work that we are involved in. Not having access to that type of funding would have significant impacts on our ability to support, particularly SMEs and social enterprises in the wider community work that we do in terms of the circular economy. What is also very important is that the EU is looking at its own fund in terms of horizon and life funding and all those sorts of things, and putting a considerable amount of money—hundreds of millions of euros into those funds, particularly around the circular economy. To back up the point about the package that is being adopted by the Parliament and member states is now beginning to develop their own programmes and investment, the EU is putting significant funds into those programmes as we speak and looking forward. Again, not having access to that funding is, to some extent, going to put us at a disadvantage from other member states. That is possibly quite critical to us thinking where that investment is going to come from, because that is about investment and new infrastructure and new ways of working, new business opportunities, both individually and collective supply chains coming together to redesign the use and consumption of materials in a much more circular way. That is not just about behavioural change, which is at the heart of it, but about engaging in new systems and new infrastructure. Having that investment available to us will be critical, but it is something that we have got a watching brief on. What sits beside that, as well, is our ability to work in partnership with EU members states or partners over there on some of those projects. We have secured some of those projects in the past. We would also be looking to do that in the future with universities and colleges or other technology institutions across Europe to develop our knowledge and skills, but also to share what we are doing here in Scotland. All those things, as you would imagine, are uncertain in terms of the EU exit and how strong those relationships and partners can be maintained, particularly in terms of EU funding programmes going forward. Llyr Dov. That is okay. Did you have a follow-up for us? I was just going to mention the horizon. You raised the horizon issue. Obviously, the horizon 2020 is coming to an end. I think that it is getting replaced by horizon Europe. When we went to Brussels, we heard from the Norwegian directorate to have tapped in quite successfully to horizon 2020. Would you see any difficulties in tapping into horizon Europe once it is under way? Again, it comes down to the point at what type of EU exit will we have in terms of that relationship. However, there are obviously learnings from other countries such as Norway and how they have interacted with European funding in the past that we will learn from. That is something that we are actively engaging with other types of partners and other types of bodies to understand how they have accessed money in the past and how we might access it in the future. Obviously, as well as that, we are talking to our university partners here in Scotland who are obviously key to us in terms of developing a circular economy and who have personally more experience of access in European funding and learning from their knowledge as well. All of that is definitely still on the table, but it is something that we need to start seriously thinking about how, depending on what EU exit model we have, how available those funds will be, it just makes us slightly uncertain again in terms of trying to engage with partners around some of that funding and starting to build up your project, which takes a lot of time in terms of European funding from an idea and bring building the partnerships when there is so much uncertainty about our actual relationship in some of those partnerships, more formal, in terms of accessing that funding as it is at this moment in time. Generally, on a day-to-day basis, public and private sectors are not an industry that is reliant hugely on EU funding. Where there is investment made in the sector on a day-to-day basis, it is either a public sector through potential borrowing or through private sector investment, and that is global private sector investment, so it is not something that particularly concerns us on a day-to-day basis. The ERDF funding is the only kind of exposure, I suppose, through Zero West Scotland, and that is more particularly on upstream businesses rather than the traditional waste management. However, it might have an effect on innovation that is done in the university sector, presumably as well, which is another sector, but it has an impact on your sector. Absolutely. In terms of the relationship that we now have with universities about innovation, technology and system thinking, all of that has been developed in the last couple of years, but that does, to some extent, rely on research investment and so on from universities, so that potentially is under threat. The other level of investment that is available at the moment is through European Investment Bank. Again, the European Investment Bank has specifically been asked by the European Commission to look at supporting the transition to a circular economy. We are talking about major infrastructure here in terms of system thinking, so they are beginning to get some extent their heads around the idea of the circular economy. They have created a circular economy team in the EIB, and we have met them. All of those things are potential opportunities for us if we are in the EU, if we are not. It is another avenue that, to some extent, gets closed off for us. Most of the investment opportunities at the EU level are being considered or asked to be considered by the EU commission around the circular economy. That is how important it is in terms of shaping the European economy. Having been denied access to those types of investments means that we have to find our own way of, to some extent, finding that investment, whether that is from central sources or through private investment. To some extent, it puts us outside of the box. Mark Ruskell, you had a small question to ask. Angus, is that okay? Mark, I will come back to you. I was struck by what Stephen Freeland had said earlier on that we are effectively flatlining on progress here and flatlining on recycling rates. We are looking at more incineration. We have an issue about exporting waste for incineration as well. Where is that next major jump in innovation and technology going to come from that? Is that going to come from the public sector funds that we are discussing now? Or is that going to come from a combination of public and private sector funds? Are we going to see private sector funding of R&D and innovation increase over time? Or are you basically building towards more incineration and the kind of models that perhaps track shareholders but are not about creating real innovation and an interesting technology that could perhaps take us to the next level? Recycling and incineration do not conflict. The plant is designed to deal with a certain type of waste at a certain level on the waste hierarchy. There might be a lot of focus given to energy from waste because it is a large, multi-million pound investment in equipment. That is not to suggest that the eye has been taken off the ball when it comes to recycling. Clearly, there will need to be further investment. A lot of the facilities that have been built in the last eight to ten years will probably require some sort of upgrading, not only because they are reaching that time but also because there are a lot of changes in the policy framework that require some of those plants to be upgrades of a change of spec and change of technology. On building things to burn stuff, I am talking about innovation in research technology that is not proven yet where somebody needs to take a risk here. It is either the state or it is the private sector. How geared up is the private sector to really be investing in transformative technology that is going to drive recycling rates and drive waste minimisation? Can anybody answer that? I think that throughout the UK you have seen for a number of years that the only bankable technology that the private sector has been really willing to invest in on a very large scale is incineration or energy from waste infrastructure. I think that if he wants to move away from that sort of model, what is needed is more intervention from the state probably and a much more clear policy framework and much more certainty for people who might invest that the direction of travel is going to be sustainable and continue in the right direction. I think that in that regard Brexit really does not help because throughout the waste sector, whether it is incineration or anything else, people have been reluctant to make investment in large bits of infrastructure or other things to do with waste and resources. I think that you probably do need strategic direction and some directed investment in innovation and really need to set out your stall on where you want to go, which you have been doing to be fair, but to go even further. That innovation needs to come upstream of the waste industry, needs to come in the circular economy and reducing the amount of waste that we are dealing with. I come back to the final question from Angus MacDonald. In addition to the funding question that I asked earlier, there are other EU structures and collaborations that are important to the sector, including data systems and networks of expertise. I would like to hear your views on what impact you see with regard to the support structures that could be challenging after Brexit. Others might have a view. We spent quite a bit of time developing those networks within the rest of the EU and beyond. That was not anything to do with the EU exit or anything. That is just part and parcel of understanding what is happening in the other parts of Europe's interpretation of policy and building alliances. I hope that they will be maintained. In fact, we have a programme of work to maintain those networks and to maintain those interactions with others. I mentioned already our cities and regions work, and there is a lot of interest in that across Europe. Some of this is about playing to our strengths and the things that we can take out there to share with others—our carbon metric, etc—as well as pick up on what is happening in other parts of the EU. Specifically, if we are out of Europe and the EU policy evolves, we will not understand how that is evolving, so we can adapt as well. Those things should be maintained. The difficulty is that we are recognised within the EU commission. We get meetings, etc. We are part of the infrastructure or part of the landscape. Anything that starts to distance us from that is going to be quite challenging. At the end of the day, it is people meeting people or talking to people, so I would hope that those things can be maintained. However, as I said, in terms of access to project funding, etc, those could get quite challenging if we were not—a lot of the partnerships that are built sometimes from a standing star on a formal engagement around a project go on to other things, but that is usually an entry point for a lot of the partnerships that we have had in the past. It is very important for us as the Environment Protection Agency to maintain those partnerships. Collaboration across Europe and further afield, learning from them, sharing knowledge is really important. We are a member of the network of European Environment Protection Agencies. We will continue to be part of this and continue to collaborate, share ideas and understand how we can work together. We have run out of time. I would like the panel to answer one final question. We have a six months period because of what happened a few weeks ago. The cliff edge is further away. What would you like to see happen in the next six months that is addressing some of the issues? It is a big question, but maybe if I can go round the panel. For us, the uncertainty and all the aspects of whether it is waste, recycling or all the things that we have talked about, that is why, for us, the ambition and the push for a circle economy is so important. It is a no-regrets policy because that builds us a degree of resilience against all those things. We have seen in the past when material prices collapsed in 2008-2009. It caused a shockwave similar to that, to some extent, in terms of waste and movement of materials and recycling rates and all of the things, just through the uncertainties. Building the idea of a circle economy, investing in the opportunities that our material providers provide in terms of end-of-use and recycling back into the economy, but more importantly, up front in dealing with some of the input material that is required by our economy. Over 84 per cent of chief execs in manufacturing in Scotland last year said that the thing that is keeping them awake at night, the top of the thing that is keeping them awake at night, was the volatility, the price of raw materials for their businesses. That is obviously to do with global politics, but to do with how we can tackle that and using our resources here in Scotland in a much more circular way is at the heart of that. I understand that the politics that are involved in EUX are absolutely making that commitment, that regardless of what happens, we need a more circular economy, not just for our own economy, but to show that this is the direction of travel for the global perspective as well. Does anyone else like to make a final comment on what you want the next six months to achieve? We need that resolved as soon as possible. From a public sector point of view, then the majority of waste movement is all under contracts and their public procurement. Those contracts are very difficult to negotiate at the moment because we don't know what clauses and what protection and what risks we're trying to manage. That needs resolved. Pushing us back six months hasn't helped at all. It's now stalled in terms of trying to now get a level playing field in procurement and commercial land. I'd like to widen it out a bit to more environmental matters. I'd like to see this breathing space used to review the SI process and to identify deficiencies in it, because there certainly are some that could be rectified doing this process. Above all, the most important thing that we'd like to see is the governance gap addressed by the central UK Government and by all the devolved administrations preferably to gather to make sure that, going forward, after Brexit, the environment is as protected as the politicians have said it's going to be. If no one else is getting any comments, thank you very much for your time today. We're going to suspend the meeting briefly to allow the change in the panel. Thank you very much for all your time today. Right. We continue taking evidence on the EU exit and the environment with our second panel, Focused on Chemicals. I'm delighted to welcome to the panel Michael Warhurst, the Executive Director of Chem Trust. Oh, he's on the phone. Okay, thank you for just reminding me of that. Good morning. Can you hear us? I can hear you. Excellent. Maybe we need to boost your volume a little bit so that we can hear you a bit better. We've got Sylvia Asegna from Reach Executive, the Chemical Industries Association. Good morning to you. We have Tom Shields, Acting Chair of Chemical Sciences Scotland. Good morning. Janice Mill, the Head of Function for the Scottish Environment Protection Agency, and Libby Peak is also continuing from the previous session. I'd like to ask you the same question that I asked the previous panel about what you believe the key risks are for the chemical sector of EU exit. So, if you'd like to indicate to me if you'd like to answer Tom Shields. Good morning, everyone, and I appreciate this opportunity to say a little bit about chemicals in Scotland. Just to place it in context, the chemicals industry in Scotland is the second largest exporter, manufacturing exporter that is in the country, exporting some £3.91 billion for Scotland in chemicals and pharma. Of that figure, £3.17 billion, that's about 80 per cent, goes to the EU, so our exports to the EU are an enormous proportion of the overall exports internationally. Additionally, we import well over 60 per cent of our raw materials from Europe, from the EU countries. We have a really high dependence on the export of chemicals to Europe and the import of chemicals and raw materials and intermediates from Europe. In many cases, the supply chain goes in both directions more than once, so that we export an intermediate, it gets some processing and then it comes back to the UK here in Scotland and then goes back into Europe perhaps as a finished product. There's quite a lot of our business that is really threatened if there is a problem actually in that supply chain crossing the border between Scotland, the UK and Europe. The principle regulation that controls all of that traffic is the reach regulations. That's a regulation that we have spent over 10 years now investing in registration and approval of chemicals and getting licenses and putting all the necessary data in place. Our entire industry has been well focused on that, and all our exports and imports really depend on that 80 per cent portion, depend on reach working effectively for us. If anything threatens that, for example, if our reach registrations were not recognised and we had to go back to re-registering even without testing, that would be an enormous disadvantage to the chemical industry in Scotland and would threaten that economic contribution that we make to the Scottish economy. The thing that our companies are most concerned about is threatening the well-organised and heavily invested in system around reach. Anything that threatens that threatens us. We're really keen to make sure that there isn't a problem like that and that we do have the flow of trade. That's probably the highest priority. Coming high up in the priority list also is access to skills and expertise across the European border, because we in Scotland are very high on innovation. Our academic sector, our universities punch well above their wit in terms of the impact they have in bringing forward intellectual property to the market. A lot of that backs up the scientific and technical services that we provide as part of the export drive in Scotland. We depend quite a bit on getting skills and people to travel here and work here and make their careers here from Europe. If that is threatened, then a lot of the powerhouse behind innovation in our sector in academia would be threatened. A drop-off from that since 2016? There has been a little drop-off, some people have gone home, but there is a great deal of concern amongst the academic community about losing people. People are really watching the situation very carefully, so it's a fear about what might happen if we have a hard or a Brexit that really threatens academia. One thing that has happened that is very concerning is that in terms of European funding to research applications, we are finding that our proposals are at something of a disadvantage because of the uncertainty around Brexit, so we are finding it more difficult to compete. I am getting this from my academic colleagues in the European funding market, if you like, for research, and that is something really that is happening just now. Anyone else would like to answer? People's perspective, our role in reach has strengthened the health and safety executive as the UK Chemicals Agency will have a statutory duty to take SEPA's advice on board. I would say that, in contrast to what we were talking about earlier with Waste, there are some real regulatory problems that will come about if there is a no-deal exit with relation to chemicals. As has been alluded to, the reach regime at the EU level was one of the most complicated bits of legislation that ever went through the EU. It has taken 10 years to amass this database that is centrally administered in Helsinki that contains extensive safety dossiers on 21,000 chemicals. In the event of a no-deal Brexit or a Brexit in which we are not able to negotiate access to the reach regime, we are going to immediately lose all of that information. The SI that has been laid before Westminster is completely inadequate, we believe, to ensuring that the environment and human health is as protected in the event of the UK administering its own system compared to what it is now. We are going to lose all that information. Has there not been a commitment from the UK Government to take all that information and effectively keep the same standards? Are you not getting a sense of that? We are part of it right now, but we have access to all that information. How are we going to lose it? We are going to lose it because most of that information is owned by private companies and it has been amassed in a dossier with the explicit purpose of being registered in the reach regime. In the event of a no-deal Brexit or losing access to reach, we will immediately lose all of that access and UK companies will have to get permission from all of the other people who have been involved in creating the dossiers to reuse that information. At an EU level, they have been quite effective in bringing companies together that all use a common chemical and then jointly they have been responsible for identifying or running all of the safety information. That is going to be lost in the UK system. Duffra, for instance, has committed £5.8 million to recreate a database with the purpose of being able to re-gather that information. However, on exit day, that is going to be an empty database and it is going to have to be repopulated. Could we put that to Cabinet Secretary, Rosanna Cunningham? I am going to quote directly from her. I consider the likelihood of significant disruption occurring will be low in the short to medium term and I am satisfied that the new UK regulatory arrangements will be in place upon exit day that will draw on existing expertise and resources to provide an acceptable level of regulation. In a no-deal exit, a UK reach IT system will be put in place by Duffra to provide continuity for UK businesses. What is your response to that? That is what the Scottish Cabinet Secretary said. Yes, so they have made some allowances to try to ensure that the regulation functions, the regime functions on exit day. The grandfathering and recognising the EU data that has already been registered, we will lose all that information. While it is possible that it will function, the UK Government will not have access to that information. They are allowing between six months and two years to notify and then recreate those dossiers. Two years is probably not the most realistic timescale. It sounds like quite a long time to go without those safety dossiers but it has taken ten years to create those safety dossiers at an EU level and we are going to need them in a UK system and we will not have that on exit day. I'm going to break in Sylvia Segna, because obviously you have... Yes, I would like to add the fact that the decision to further extend article 50 and delay Brexit avoided the immediate danger of no-deal for the chemical industry but at the same time it has further extended uncertainty for business. So we need a solution as soon as possible because of course the failure to agree away forward in time will negatively affect business confidence to invest in the UK. So this is a big risk for the chemical sector. On chemical regulations we have engaged closely with our members and government departments and across Parliament to try to address a number of legislative gaps we've identified and we're pleased to see that these are being addressed by the government, by DEFRA through updated statutory instruments. Otherwise, without this new amended version of the statutory instrument, many companies will not be able to mitigate the impact of no-Brexit. So we will not be able to use the transitional measures that the government has designed to put in place. So... Why is that? Sorry? Why are certain organisations and companies not able to access that? The problem was in relation, for example, of chemicals registered, chemicals on the reach that are imported from outside the European Union and registered by the known European manufacturer through a representative based in the U27 countries. There were no provision in the rich statutory instrument to allow UK companies importing these chemicals to benefit from a transitional arrangement or to be able to notify within 180 days to the health and safety executive in order to continue to import in the short term before being able to register within two years. So we are pleased to see that these gaps being addressed by the government, but at the same time we still have great concerns on reach and also on other chemical regulations under no deal specifically on timelines and data sharing issues as highlighted by Libby and also how we are going to minimise the additional cost that many companies will face post Brexit because the same product will need to be registered, approved, evaluated both by EU authorities and the UK authorities. It is the fact that having to respond to two separate regimes, we believe that it may turn into a very complex and expensive process that may weaken competitiveness of the UK chemical industry and also has the potential to reduce the number of chemicals on the UK market, so this is a big risk for the chemical industry. Stuart Stevenson, do you want to ask your question? I just want to understand who is the owner of the intellectual property that is in the existing European database. I think that I am hearing that the intellectual property ownership continues to reside with those who have submitted to it and therefore each of the companies who have submitted to the database is in control of how that data is used here and after. Therefore those 10,000 or whatever the number was, submitters would have to provide authority to the UK to continue to use that. Is that my correct understanding? I am seeing nodding heads, so I think that I have probably got a correction. Tom Shields? Yes, I believe that the intellectual property rests with those who submitted and and invested in doing the validation and having the tests done and then the registration undertaken, so I think that that information still resides in the correct ownership. Just referring to Libby's evidence, I do not have the same extreme concern that we will lose a large volume of data and we too in the industry have been reassured a number of times by Government agencies and indeed you have pointed to the cabinet secretary's response, which is very strong in saying that the chance of disruption on day 1 is low and that she is satisfied that UK regulatory arrangements will be in place on exit day. Now I think that I take that as it said, but I think that we all might have experienced and known of large complex IT systems that were swapped on to a duplicate system and then didn't work at all. The banks have had that kind of problem, all sorts of organisations have had problems changing over from large complex IT systems like EU reach IT and replicating it with something called UK reach IT. We remain reassured by the agencies and by Government that all will be well should there be and no deal breaks it. Indeed, we did have some evidence from the HSE last time back in December about this, but I am somewhat concerned about the sheer fact that it is a really big complex system and it is an IT-based thing. I know that you are meeting with the cabinet secretary for the environment shortly and I would like to understand the risk assessment that has been undertaken to arrive at the opinion that the risk is low of disruption and that there is satisfaction with the UK systems that will be put in place. I would really like to get a bit more into the, I would advise the committee to get a bit more into how has that judgment been made on what evidence, what risk assessment has been undertaken, was it quantified, was it qualification, is it simply opinion, or is there some real substantiation to the view that the risk of significant disruption is low? I am conscious that I have not addressed Michael Warhurst. Would you like to come in? Yes, please. I am from the chem trust. We are a charity who focus exclusively on chemicals policy, particularly on the EU level, but also on UK, trying to make sure that humans and wildlife are well protected. I think the key thing with this database, for example, is that it needs to be clear that the database that is created by the UK in the event of a no deal for outside reach will be empty. It will be a database sitting there, but it will not have the information in it. Whereas the reach database, which is the best one in the world, has huge amounts of information. It took several years, quite a few years, to develop the database software, and then it took many years, more than 10 years, to get the data in there. There is a big difference between an empty database and a full database. The worry really is that the UK will put in place this system, which appears to be a copy of the EU system, but it will not have the information. You will have a very gradual phase in of data, and there is a lot of concerns about how much data industry would have to supply to that and how much that will cost. You will still end up with a system that does not have the same amount of information in it. The worry is that you end up with a system which is a shadow, almost a ghost system, a virtual system that appears to look the same as the EU one, but the reality of what is actually going on inside it is very different. Chemicals' policy is very difficult because there are tens of thousands of chemicals in millions of different products. Keeping a hold on this is very difficult. It is the reason why it has taken so long for any jurisdiction to make good progress on it. The EU is the strongest, but it is still not in any way perfect. You have this challenge. The EU has put in place a complex system, and that system is constantly developing. There are constantly new analyses going on, new data coming in, decisions coming out. Those decisions currently, the UK has made no commitment to follow those decisions. The EU will look at something and decide, well, we want to restrict this, we don't want these chemicals until receipts, for example. The UK has made no commitment to copy those decisions. It is not just a lack of data in the databases then that the UK is not saying it is going to copy any of those decisions. I think the third point that is worth mentioning is that the EU system is quite an open system in that there are many different meetings, management boards and different meetings where you have people from the member states around the table, but you also have people from industry and people from environmental groups, consumer groups, unions. They can all input into the discussion and say, are you sure you haven't probably considered this particular piece of research or this use? There is a very open process that actually, generally, all the stakeholders are pretty happy with that. The UK has said in the withdrawal act, the way it works, you transfer everything from an EU law into UK law and then you remove the bits that aren't operable. They said all these committees are not operable. We don't have member states in the UK so we are just going to put everything inside the HSE and we get rid of all these stakeholder functions. You are creating, moving from quite an open system to a very, very close system. One of the things that Chemtrust said to DEFRA, it said, why not say, well, actually yes, there aren't member states in the UK, but there are devolved administrations and maybe you can create some committee structures that allow representation of devolved administrations and then also put the stakeholders in there, but DEFRA didn't take that up. It is all basically subsumed into the HSE with some role for the Secretary of State in London, but it is creating a very close system to carry out this thing that pretends to be a copy of the EU system but isn't. Mark Ruskell has some questions on this broad theme. I just wanted to follow up on what that means in terms of research, because if there will be a database, but, as I think several people have said, there won't necessarily be everything in it, or certainly not from day one, it may take several years before that becomes useful potentially for research. What happens during that period? Are there any concerns about where research might go elsewhere within the EU if there's a more comprehensive system that you could use in Germany, for example, but you can't use here? Is that a concern about whether research effort moves to within Europe as a result of that or not? Would anyone like to answer that? The EU system is open to academic research coming in from other places, so it's not just about European research, however you define European. One of the things that the EU does is fund very big projects looking at specific issues, for example, as one called human biomonaturing, which looks at the level of chemicals in our blood and other tissues, and that's a collaborative project across Europe. There's also a set of projects looking at how mixtures of chemicals affect us. At the moment that the UK partners in those projects, like all the EU funding, there are uncertainties about what happens after Brexit, so I think one of the important things is that the EU is actually in a very important funder of research in this area, and the risk is that the UK will start to drift out of those funding. The access to the reach database is not actually easy for academics anywhere in Europe, although governments have access, but even they have to be quite cautious about what they do. They have to sign contracts and have special security measures, so I think the funding is more important in terms of the research around Europe and the database is accessible to a level to researchers, but even that's quite restricted. What about private sector? I'm sorry to respond to Mr Mark Russell's point, but the reach database is not primarily about research at all. It's about regulation and safety and ensuring that we're using chemicals in an acceptable way and that they're being controlled. There's a little bit of research involved in being informed by that, but most research wouldn't put its important data on to a public system like that, so I have less concern about the data in that respect, but I do have a lot of concern about the skills involved in creating the intellectual property in the first place. Mark Russell's question. I think that in terms of the impact that you're going to see during the transition period, it isn't mainly to do with research, it's to do with the private sector having to refund tests or go about paying to get access to the safety information or having to reconduct tests, potentially even animal tests, testing on animals during that process in order to populate the database. Okay, is that a significant concern then that's shared? Yes, this is a concern shared by our member companies, because the companies in the European Union jointly developed the information on the intrinsic properties of chemicals and the risk they pose in more than 10 years of compliance with REACH, and now with Brexit companies have to renegotiate again access to this information to use it again to submit it to the UK authority in future. Our members are concerned by the fact that they may not always be able to obtain all the data they need from all the data owners, and their dossier would ultimately contain less information than the equivalent, so in principle would not be possible to assess the risk of the substances adequately unless of course industry duplicate testing and this would come with additional cost and of course potentially repetition of animal testing. What kind of animal testing are we talking about? What kind of products would need to be tested? There are a number of testing methodologies that are required within REACH based on the other properties of the chemicals that you need to look at, so it could be on rabbits. Okay, what kind of chemicals? It's all industrial chemicals that need to, of course, need to comply with REACH with industry, how to develop information on the properties based on the tonnage. The highest the tonnage most stricter of the requirement are in terms of information requirements. I think the message is very clear here that if we do get into a situation where we don't have access to large chunks of data, then it's pretty disastrous for our operations. If we have to go back and start revalidating, retesting and setting up, duplicating the work that we've already done over the past 10 years, that becomes an enormous disadvantage to the Scottish chemicals industry, and we must not get to that position. I think that it remains the fact that if we've done the testing and the research and created some data, that data belongs to us and will be in the system, but because of the complication of a lot of materials going to EU countries and then coming back, and maybe that happening more than once, we've worked very much in an integrated way with the European supply chain, and we've all used REACH. If something disrupts that, it becomes very difficult indeed, very difficult to continue business in the way that we've done it in the past. Fin Carson has a supplementary question. A very, very quick question. Looking at all the evidence and what you've already said this morning, how likely or unlikely is it that we're going to have to create our own REACH, or how likely is it that we've actually come to an agreement with our previous partners to use European REACH? On a scale of 1 to 10, how likely are we to go one way or another, given what we've just heard? From my point of view— Sorry. Bring Michael in. Yeah, so obviously the UK remains in REACH in any transition period, and obviously in this extension. The question then is what does the UK need to do to stay in afterwards, and our analysis based on what happened with Switzerland, who also looked at becoming part of REACH, is to—the UK would need to pledge basically to follow all the decisions of the EU chemical agency. We might get to participate in those decisions, but not vote, like as Norway does. We would also need to accept the CJ, or potentially after court, and we would need to keep in place quite a wide range of other chemical-related laws, which helps make sure that REACH works properly. Our assessment is there is a chance that the UK could do that. It's part of this dynamic alignment discussion that has been going on, also with Labour and the government at the UK level. So I think it can happen, but it's not going to happen by default, and it's not going to happen unless the UK is prepared to make very clear, legally binding commitments to the EU. Even then, the EU has got to decide that REACH is, as we would argue, important for public health and the environment, and there should be dealt with outside any debates on cherry-picking a single market. We think it's possible at this point, but let's say something like six out of ten, because the UK has got to really try and commit. At the moment, the noise is on things like dynamic alignment, staying in line with the EU law, tend to move backwards and forwards a lot, and tend to be quite vague as well, whereas that would require a legal binding treaty essential, essentially. If you on this is much higher than six out of ten, I'd put it more like eight or nine, and that is because it is in everyone's interest, especially the large chemical companies around Europe, to have a situation where we co-operate in this matter, because we all depend on each other on this very complicated supply chain. I'm much more hopeful that we would actually get a positive outcome to this, but it will require some leadership from the Government. Libby Peek I think that it's probably worth pointing out that it does remain the UK Government policy to try to get access to the rich regime through associate membership of the European Chemicals Agency, and both the ministers that were introducing their SI in the House of Commons and the House of Lords did reconfirm that. However, as has been alluded to, it's not just up to us. In the event of a no deal exit, we would lose access, absolutely. But if we are able to meet the conditions that the European Union might put on it, then yes, it would be in everyone's interest for the UK to remain a member of reach. Matt Ruskell, you had one question before I move on. Yeah, it's just a little one about trade deal negotiations. I'm wondering if you see any concerns or otherwise around countries outside of the EU seeking a trade deal with the UK, what kind of pressure they may put on the UK to change our regulatory approach. Would anyone like to tackle that, Tom Shields? I don't think that Mr Snodd does like reach. But just remember that that's 20 per cent of our business in terms of exports, not the 80 per cent, which is in Europe, so I don't see the impact being enormous. Libby? I think that there are two things. There are whether or not the UK manufacturers are going to have to meet the standards, and then there's the other issue of whether or not imports are going to undercut the UK manufacturers. So I think there's always a risk with environmental protections that if we do have the sorts of trade deals that would favour a US style approach, then that would damage that could potentially undercut UK producers and expose people and the environment to dangerous chemicals. I'd probably note that the UK doesn't have a really good track record of monitoring the information, the sorts of chemicals that get placed on the market that shouldn't be placed on the market already. I think Michael from Chemtrust might be able to come in on this, but there's a system in the EU called RAPEX that Chemtrust has done some research into. They found that the UK isn't very active in monitoring what's placed on the market and we benefit at the moment from notifications from all the other member states who do find if a product is placed on the market and doesn't meet the regulations and you notify all the other member states so that you can take that off the market. So we're going to lose that and it's given our track record we won't be picking up all of that work in an independent system. Angus MacDonald? On the issue of product safety we've got a number of chemicals that are incorporated in almost everything. So if you buy a toy in a market then that product will have chemicals in and the research shows that unfortunately a lot of toys imported into the EU from places like China will have chemicals that are actually banned within them and can leach from them and the UK we did a big survey by FOI of councils and discovered that many councils are actually not spending any money on checking out markets and shops in their area and what they're selling as regards to chemicals so it's quite a serious area where the UK is not doing a good job at the moment and maybe just quickly to add to the US issue that's mentioned if you look for example at documents produced in India where you look at what the Indian companies tell the Indian government they want out of trade deals they complain a lot about reach so I think it's very clear that there would be pressure from around the world against the UK using reach and so the UK would have to withstand that pressure and obviously as has been said you know the rest of the EU is a much more important trading partner. Angus MacDonald? Yes thanks convener it's just for clarification Michael Warhurst mentioned a short while ago about the situation between Switzerland and reach and we often hear about a norwish relationship with the EU but we very seldom hear how Switzerland deals with the EU and just for the record can you repeat what you said about the arrangement between Switzerland and and reach? So the Switzerland has some very strong relationships with the EU in some areas but the I mean aviation for example there is a process whereby the Swiss create their rules they have a joint committee with the EU and the EU basically only allows the Swiss full flying rights if they obey the EU rules so the Swiss appear to have a sovereignty over aviation but actually they don't because they have to do what the EU tells them to do. On chemicals the Swiss did explore the idea of joining reach some years ago but in the end they wouldn't accept the three conditions that the EU set which was following the European Court of Justice following EU decisions without a vote they possibly were participation and keeping other EU law so the Swiss copy quite a lot of the chemicals law but they're not actually part of it because they weren't able to take those decisions and the Swiss basically have a set a very large number of different agreements with the EU which to some extent exist independently and they're constantly in joint committees with the EU where the EU says well sorry you know you need to change your rules. There was a big blow up a few years ago about free movement because the Swiss are in are in Schengen as well as having free movement with the EU so it's a very complex arrangement with Switzerland but in the case of chemicals they're not actually fully collaborating. Sylvia, I want you to comment. One addition on the relationship between the European Union and Switzerland for chemicals one exception is biocytes the BPR legislation there is a bilateral agreement motor recognition agreement that allows UK regulator and UK companies to participate in the implementation of the BPR so I think that is the one of the exception I'm aware of and of course we would much welcome similar arrangement going forward between the UK and the EU. Thank you. I'm going to move on to questions from John Scott. Thank you convener. In regards to a no deal that the reach EU exit regulations have already been amended to extend transitional arrangement periods and are now being amended again to address further industry concerns about disruption to supply chains. Do you have any outstanding concerns about these regulations or are you confident that the issues have now been addressed leaving out the database issues? Do you have other issues or not? I mean I would say because it's also the decision making issue. It's both the transparency of the decision making and the extent to which the EU decisions are then taken in the UK as well because the UK will rapidly move out of alignment with the EU if it doesn't commit to copy EU decisions so you will start having chemicals that are banned in the EU that aren't banned here may be labelled as a carcinogen in the EU and not in the UK so that will happen immediately in you know you can argue that that shouldn't be in the legislation it's a policy decision but that's something that we would like to see happen in the next month is the government come out with a policy decision to say well our position is that we will carry on following exactly what the EU does on chemicals because otherwise we will have this quite rapid divergence and we are likely to end up in a more deregulated system quite rapidly. My main concern to do with the SI is that the original reach SI as set out by the EU includes as Michael has alluded to it mandates that there are some committees set up to help provide oversight and well informed decision making so there are three committees the committee on socioeconomic risk the one on socioeconomic impact the risk assessment and the member state committee which resolves differences of opinions and all of these allow for stakeholder engagement so people like environmental groups industry unions they can all contribute to the decision making process it's very transparent it's very it's clearly well informed in the reach SI that that class has been omitted entirely and there's no there's no promise to to replicate those in a UK system and instead what's replaced what replaces it is a duty on the asset HSE which is the UK competent authority to seek advice from one or more competent people and that's a very close system and obviously open to mistakes being made and not being well informed by all the all the various stakeholders and so what we would like to see is the is the SI amended so that committees are reproduced and obviously we're not saying that all of the member states should be in these committees which is the which is what DEFRA said we're saying that we should have expert committees to make sure that we have transparent well informed decisions being made and then something that is related to the SI but it's not actually in the SI is the budget and capacity issues so the UK government has confirmed that the HSE is going to be the competent authority and they've estimated that it will need a budget of about 13 million pounds a year with an addition of 35 to 40 extra staff. We don't think that that's sufficient given the fact that the UK is going to have to regulate just about as many chemicals as the EU does but the EU budget for the past 10 years has been 100 million euros per year and they have 600 statutory members of staff so I think that the UK is going to be attempting to replicate the EU system at a cut rate price and that's going to be damaging to the environment and human health. I have a concern about divergence as time goes on I don't think it's something that will happen in the very short term but I think if we do separate then the situation that Michael was describing where validations and testing and so forth that goes on in the European chemical scene will be diverging from what we are doing here in the UK and you will get difference in standards building up which will then be a barrier and the only other way it could go is for the UK to follow completely everything that is happening in Europe but without having any influence on it whereas at the moment we have quite a bit of influence on chemical legislation as far as European directives is concerned so I have a concern in the medium and longer term about a divergence occurring should we separate? We've heard concerns about the SI being incomplete but what are your views on the readiness and capacity of the health and safety executive to deliver on a UK reach in the case of a no deal? Libby Peake makes it quite clear that she has huge concerns. Do you share those concerns? I do have large concerns because I think I'm very concerned about two IT systems, one being duplicated from the other and it's a very complicated system that's been built up over a decade and I have concern that it will be very difficult for the HSE from day one to be up and running and doing everything in a seamless, bumpless way like we have now so I'm not completely concerned, I'm not completely convinced that the HSE is entirely ready for this and I was hoping actually the memorandum of understanding that was mentioned earlier might shed a bit of light on this and again I would encourage the committee to talk to the cabinet secretaries about how ready is the HSE really in terms of handling a no deal Brexit on day one? We have reassurances from our cabinet secretary, we have HSE here as well assuring us that they were ready some time ago. Your concern seems to be a question of functionality and computers being able to talk to each other. It's not about a lack of awareness of the problems or an ability to deal with them, it's not about that, it's about whether or not the computers can talk to each other. I would agree, it's not just the computers but the whole system and how it operates as a process. I have no doubt that everyone is very well aware of the concern and will do their best to deal with it but I haven't seen evidence of a rigorous risk analysis having been undertaken with real substantial evidence that the HSE and the authorities are ready for this in a no deal situation and that's what I would encourage you to try and probe on the 30th of April. From what I said we also agree that it's unclear how decisions on chemicals will be made in UK post Brexit and whilst these scientific committees won't be using UK, we believe still that aspects such as transparency, independence and the range of expertise and stakeholder engagement will be necessarily as part of the decision-making process so we would welcome more clarity going forward on this point. Then another concern is of course about cost of compliance with the future UK regulations and one aspect is in relation to fees with the statutory instruments we are going to convert EU fee regulation into the UK legislation so fees are just going to be transposed into UK law and do not reflect the market side so this one, the concern that has been raised in CIA recently. Can I just ask a question now about business, preparing for potential change from EU reach to a UK system? Are there particular challenges for certain businesses, for example SMEs, or are they less well prepared than perhaps multinationals? Yes, that's the answer. I think that SMEs are not well prepared. I think that there has been plenty of preparation provided in the terms of workshops and we're in a sessions. The Scottish Government agencies, Scottish Enterprise and SDI have been running events for SMEs. There's a website and campaign running about being ready for Brexit but the fact is that we've got hundreds of SMEs in the chemical sector. They're usually very small companies and are being run by a few talented individuals who are really busy. They're all aware of this issue but the pressure of running a small business and surviving and prospering takes precedent because it's more urgent. I'm quite concerned that SMEs in particular, which are a large part of our sector and chemicals, are not well prepared for a hard Brexit. The question has to be, then, how would that lack of preparedness manifest itself of what are the risks to us as a population? Are there risks? The risk that I'm concerned about is that SMEs go out of business fairly quickly because they're unprepared and they're depending on a supply chain that delays or interrupts or doesn't deliver on the timescale that they need. If you're running a small business that's on a very tight cash flow, it's very easy to become insolvent very quickly. My concern is about the success of those businesses in that situation. I'm concerned. Are those businesses aware of the risk to their own operations? Apparently, you're saying that they're not or they'll be doing something about it, so what's to be done about that to just go on a bit further through this? I mean, we don't want to see companies going out of business. I encourage the campaign on Brexit readiness to continue. The real message is that we don't want a hard Brexit. We don't want to get into the situation where we do have this scale of disruption to the supply chain. We're going to move on to questions from Frank Carson. Thank you. Earlier in the session we heard that Libby Peak had issues with the common framework and how that was progressing in regards to waste. Can I ask the stakeholders what your views on the process in developing a common framework across the UK and what would that framework need to deliver? Sylvia, did you? We would prefer to see no divergence between the devolved administration on rich and chemical regulations in general because divergence has the potential to fragment the UK internal market and make compliance more challenging for companies. So, in our view, the decision should be UK-wide as much as possible to avoid trade barriers. Today, chemical regulations operate on UK-wide basis and we would hope to see the same to continue in future. Would anyone else like to come in? Michael? To some extent, it is an issue because chemicals are so centralised in the EU and that was deliberate because that was viewed as the best way to do it. It did mean that individual member states could do less by themselves. We have now a situation in the UK where, on the one hand, you can argue for UK centralisation and say you cannot do anything in Scotland, for example, but then you have the issue that Scotland already has more commitment to continued alignment with EU environmental law than is the case at the UK level at the moment where it is much more confused. You can make strong arguments for the idea that if Scotland wants to carry on being aligned with the EU laws, then maybe it should be able to. Clearly this does disrupt markets, but I think you come into some of the fundamental issues around Brexit and what is it that the UK is trying to do on environmental policy? This is an important environmental policy. If the UK does not want to follow EU developments in this area, what is the rationale for that? If Scotland does want to follow those things, why should it not be able to? I think the problem is that you end up getting into very big issues about how environment policy is dealt with in general and obviously Scotland does have a lot of powers in that area. I do not think there is a simple answer to it, but it is going to be a big challenge because I would disagree with panellists saying that there would not be divergence quite fast because there are so many decisions being made. I have heard a speaker from the health and safety executive saying that he would expect divergence to happen quite fast. I think that this issue about whether the UK pledges to do the same controls, the same safety measures as the EU, or whether it diverges and whether Scotland agrees with that is really fundamental. I think that the chemical industry would want to see a common UK framework for dealing with these issues and to see it as integrated as possible. I understand that there are some issues and there is a letter from the Cabinet Secretary about devolution and the apparent inconsistencies of the discussion so far on that, but we really need to get that framework resolved and have it common so that we have a seamless move forward as we possibly can in the UK. Presumably maintaining the standards that already exist and the protocols that exist with reach? Yes, we wish to be common with reach as much as is humanly possible. Stuart Stevenson? Just briefly, I am interested, is engagement on the development of the common framework taking place or is, like in waste, silence more obvious? I am getting shaking heads, convener. I think that that is the answer. I have really, we have not been involved in any significant engagement on a common framework and pretty much in the dark on that issue. Janis Milne? Yes, and what is your position? Concerned, we have not been involved in development. We have been focusing very much on building the existing relationships that we have with the environment agencies, because under the UK Chemicals Agency, Health and Safety Executive, they are required to take SEPA's advice on board, but we do that through the environment agency. We have good working relationships, but we need to enhance them even more, so our focus is on being on that further collaboration, rather than focusing on the frameworks. However, if Scottish Government asks for a technical input as a regulator, we would do that. John Scott, you have just commented. The shield is a very quick technical point. Is the deal as proposed by Mrs May, would that cover the reach arrangements? Would that allow the reach arrangements to continue? If it were to be passed. I understand that it would on day one. There is still the concern about divergence in the longer term, in my view. Avoid the immediate concerns if it were to be accepted. The reach regime would have to be part of the future relationship agreement. It is not something that is explicitly addressed in May's deal. It is something that would have to be agreed, and the UK would have to negotiate access to the reach regime if it wanted to continue it. Just to be clear, this is all really not about the deal. It is about the transition period, is it not? I have not got it in front of me of the political agreement. It is where this will be dealt with, not in the deal. That is correct. The political agreement includes the UK's desire to have a relationship, but it makes no commitments on the EU side. I just wanted to briefly fill up on the point from SEPA, convener. It was about stakeholder engagement. I am just wondering in terms of SEPA's role here. There is a concern that stakeholder engagement is being lost from the current regime. Is there a way that SEPA could facilitate some of that in Scotland? Does it bring together a lot of the NGOs and unions and those who have got an interest in this area to facilitate a view that you feed into the HSE? If that was something that officials wanted us to do, then yes, we could take that on board. We have been discussing our contingency planning, encouraging businesses to come and speak to us if they see challenges. We are quite clear that we expect a high level of environmental performance. We also feed our expertise into the Environment Agency's chemical assessment unit to help them to provide advice to the health and safety executive. We have mechanisms by which we can engage. If that was something that you wished us to do, then yes, we would look at that. It is useful. Can I move on to governance then? EU governance gap. Could you outline what the functions are of the EU in relation to policy and regulation and what those gaps might be following exit? What are the main things that you are concerned that we lose here? All about reach and the trailing relationship and ensuring that we can continue our exports and imports without disruption. That is really the main aim, as far as I am concerned. There are a couple of other legislative things around persistent pollutants and mercury and so forth that was mentioned in some of the paperwork. There is a small involvement or a smaller involvement in Scotland in those particular business areas. There may be only a small number of companies involved, but reach covers everyone. It is really the policy associated with reach that is the priority, as far as we are concerned. There are also a number of other chemical-related regimes, which are not part of reach, but where if reach says this chemical is a carcinogen, then they are influenced. There are regimes on cosmetics. There are some stuff on chemicals in toys. There is water framework directive on water pollution. There are laws on industrial accidents, as well as industrial emissions. It is not just about reach. Reach is in some ways the most straightforward indicator of the problem, but we are dealing with quite a wide range of other laws that are relating to chemicals. They have different issues attached to them, but the EU has, in DG environment, in the environment department, in DG grow in the commission, and also in DG health in the European Commission. There are quite a lot of people working on different aspects of chemicals and pollution. All these processes and policies are also important. It is actually quite a lot more complicated than just reach by itself. Libby Peake. Just say that the general concerns I have about governance remain, but with reach in particular, I think there are some additional concerns just in terms of the capacity and expertise that will be required if the UK all of a sudden has to start assessing the safety information and safety dossiers on its own. We have largely lost a lot of the institutional memory that was around when HSE was involved with setting up reach in the first instance. They are recruiting some people to take over these functions, but we do not think that the level of staffing is going to be adequate to the task that needs to be administered. What about wider governance issues? ECJ was mentioned previously. Do those concerns arise in relation to chemicals as well? Would anyone like to answer that? We will take Michael first and then Tom if you would like to. Michael, go ahead. Sorry, you have the regulatory system and then you have how it is enforced. As we mentioned, there is a lack of enforcement now of chemicals in products coming into the country, but the whole enforcement of the system, whether there is a body that can actually tell the government that you are not implementing the system properly, all these issues cover chemicals in a big way as well, if we do not have something like the ECJ and the commission sitting there. The biggest worry I would have is that you end up with a system in the UK which looks like it is doing something, but in reality it is just not doing much. You have not got that many staff. You have got thousands of chemicals. They are mainly involved with talking to industry about these grandfathering registration procedures and they are not actually doing much in terms of controlling chemicals. Legally, you can say that they are carrying out the basic function but they are not actually operating in line with what the law is supposed to achieve. That is the sort of thing that may be a court process or a Uber regulator could deal with, because otherwise you just end up with a system that is essentially empty. Tom Shields? The only thing that I was going to raise in terms of wider governance issues is our participation in the EU ETS trading system. This is about greenhouse gases and the taxes and regulations associated with that. We currently generate quite a lot of power within the industry and we are part of that EU ETS trading system. If we separate, then how do we proceed in that particular area? I would say that the EU ETS trading system only applies to some parts of industry, so it applies to the process industry and the energy generation industry, but not things like transport and agriculture, which are also large emitters, but they are not part of that system. We would be concerned about what governance we are going to have around that particular area and greenhouse gas emissions. I will continue the line of questioning that Mark has started. If you think that the issues about environmental governance and principles have been picked up by the Scottish Government consultation on principles and governance and what you would like to see specifically here in Scotland in relation to monitoring or enforcement or courts, if you have any views at this stage, as it relates to your industry particularly, but more widely as well. Tom Shields? I think that we just like to have more visibility of what is likely to happen and we are not really getting that. It is pretty difficult to see where we are going to go in a number of areas when we separate what the future would hold and whether there would be tighter governance and more restriction, whether we would have more influence than we do in the EU. It is just not clear at this point in time and it would be helpful if we could have a framework that would help us to see that coming. Are you able to feed into the consultation, Scottish Government consultation on this and being an optimist hopefully this will clarify? Yes, we are, but I see no clarity about what the outcome might be. Right. Are there others? Sylvia? Just to add that, the CIE will be making a response to the consultation in the course and the CIE advocates for continued joint approach between the devolved administrations in respect to upholding environment law. On governance, we have already expressed support in principle for an oversight body in England to ensure environment protection is upheld. We urge that this body, being a public body, is given autonomy to openly provide views whether it should be negative or positive so that it can be truly effective in upholding environment law. Also, in our view, consideration should be given whether one oversight body for the UK would be more appropriate in terms of resources and decisions making and thereby providing more effective environment protection, but we will share our views in more detail through the consultation. Anyone else wants to come in, Libby? Briefly say that. It seems quite open-ended the consultation and there has not yet been a firm commitment to replicate the watchdog in governance functions that are administered at an EU level. We would absolutely like to see some concrete proposals on how that will be replaced in Scotland and the rest of the UK. Claudia Beamish, are you happy with that? Go on, move on to the final area of questioning. Thank you very much. Now to Angus MacDonald. Okay, thanks. Communion, if I could turn to funding and other EU support structures, our committee consideration of the RHSI first highlighted to us the significance of a centralised ECHA databases and registration systems. We also know that the ECHA, I think was mentioned by Libby earlier, has a management committee and numerous technical committees with stakeholders from industry NGOs and trade unions permitted to participate in these meetings. What other EU support functions are important for chemical regulation and how can they be maintained or replicated after EU exit? Would anyone like to take that first? There is one other agency, which is the European Environment Agency, which does have members outside the EU. We currently have no clear position on whether the UK Government would wish to stay in it, I think. The European Environment Agency does do studies and reports on chemical issues, so it is part of the general debate on chemicals policy and the general finding of information. That is another important agency. Tom Shields? There are a number of inputs that we make to European committees involved in creating directives that are about the manufacture of equipment and processes. Although that is not directly an environmental thing, it does affect the environment in which you are running process equipment, for example. We would like to think and understand about where we go to in terms of our input to that kind of issue going forward. Do we go back to UK standards or do we continue to participate in a Europe-wide more international approach? Clearly, we would like to do the latter, but that is another area that is not entirely clear yet. Moving on to funding streams with regard to the chemical sector, can you give us an idea of how might chemical research and innovation in Scotland be impacted? I mentioned to the previous panel the issue of horizon 2020 and the new horizon Europe that is planned. I also mentioned that when we were speaking with a region directorate in Brussels, they had tapped into horizon 2020 quite successfully. If we have, for example, an ory model, would you see us tapping into horizon Europe as successfully as a new region has done? To that, Scotland has benefited enormously over its membership as part of the UK in the EU from things like horizon 2020 and a number of others. A lot of development in the process industry and in the energy industry has come through that. It has helped to drive academic innovation in our universities and is a mainstay of how they go forward in terms of their thinking about funding. This is one of the areas where I think we are really concerned that we can tap in in the future and some sort of the Norway type of deal that Scandinavian countries in general have been very effective at ensuring that small countries have been able to get funding for their innovation and research. We want to be in that situation where we can still tap into those European funding areas. As I said earlier, I am a bit concerned about our competitiveness when we are putting in funding bids. There are already some signs that show that we are being kind of disadvantaged by the fact that there is all the uncertainty around about Brexit. It is an area that is really important for our academic development in this sector, and we must really get to the point where we can still access those international funds. I want to thank the panel for all the time this morning. Thank you very much for all the evidence that you have given us. I will just give some information about future meetings. That concludes our session in public today. At the next meeting on 30 April, the committee will hear from the Cabinet Secretary for the Environment, Climate Change and Land Reform and for government, business and constitutional relations on EU exit and the environment. The committee will also consider the carbon accounting scheme amendment regulations 2019 and the Locker and Marine Conservation Order 2019. As previously agreed, the committee will now move into private session and I request that the public gallery be vacated. Thank you very much.