Affiliated to European Confederation of Managerial Staff (CEC)

EU chemical industry : Recovery is beginning after the shock of 11 September

After a difficult 2001, EU chemical production is expected to grow by 1.5% in 2002 and 3% in 2003. These favourable outlooks are linked to a strong improvement of the USA economy and a slow growth world-wide. The growth rate of pharmaceuticals compensates for the decrease of basic inorganic chemicals. Shares in chemicals are shunned by investors and those of pharmaceuticals are no longer a refuge, after having reached ceilings in terms of P/E ratio. Some risks linked to asbestos entail reactions towards companies concerned.

Sectors of Chemistry and Pharmaceuticals continue restructuring. Rhodia remains in fine chemistry, by resisting to the offer of DSM. Atofina digests its merge between the chemistry of Elf, Total and Fina and continues to close activities. Following the explosion in its fertilizer plant, the activity of "AZF Toulouse" will not start up again and SNPE has only a partial authorization to start-up (without phosgene). Hundreds of jobs lost are the consequence. Aventis sold the CropScience activity to Bayer which seeks a partner for pharmaceuticals. New mergers are announced in USA.

The labour force employed in the chemicals industry remains stable while the turnover increases. Labour productivity has risen by more than 4% per year over the period 1991-2001.

The image of the chemical industry remains weak, even if the general public remains hopeful of a better life thanks to more appropriate chemicals.

The President of FECCIA is a member of the CEC Executive Board to ensure the representation of European Professional Federations. In this role, and at their invitation, he attends the information meetings & the conferences organized by the European Federations (Banks, Construction, Metallurgy, Telecommunications).

Meetings of the CEC Executive Board are quarterly and reports are sent to the members of the FECCIA Steering Committee.

Meetings between the President, the General Secretary of CEC and European Professional Federations are annual. The last meeting took place in Brussels on 23 March 2002.

The presence of FECCIA on the CEC Steering Committee is assured by the President, or in case of absence, by the General Secretary.

The next General Assembly of CEC takes place in Brussels on 7 and 8 October 2002. F ECCIA has four votes. Participants are chosen preferentially among members of the steering committee.

European themes :

Restructuring: FECCIA recently responded to the Commission's consultation on the reorganisation of companies, because FECCIA had already submitted a congress report on this topic in 1997. This could be a means for the professional federations of making themselves known by the Commission.

FECCIA participated in a conference organized by the IES (Institute of European jurists in Social right).

Complementary pensions: consultation by the Commission: FECCIA believes that the diversity of the complementary pensions in EU constitutes an important obstacle to the mobility.

European company: participation in a French-German conference organized by ICOSI and FES (Friedrich-Ebert-Stiftung). The five French Unions were attending as well as the DGB/IG-Metall and Verdi.

Impact of euro: participation of F. Vincent and G. Liarokapis in a task force within CODES (Center of observation of Social Europe) with the support of ANDCP (National Association for Personnel Management).

Employability: participation in a conference of EAPM (European Association for Personnel Management).

FECCIA has signed agreements on several European works councils. Each time EMCEF is invited, FECCIA also takes part; this is now an established fact, in particular in France.

• Recent agreements signed or renewed:

• Recent agreements where FECCIA gave supports to representatives:

FECCIA signed an agreement in 1991 between its member Federations concerning mutual assistance. At AVENTIS, CFE-CGC made a list of French and German representatives for the works council of the holding.

Moreover, FECCIA succeeded in nominating a German manager (VAA), with the support of the French Federation (CFE-CGC Chemistry), for the Supervisory Board of AVENTIS. After the signature of the agreement between the management of Aventis, FECCIA, EMCEF, and the German and French trades union organisations, the candidate of FECCIA was co-opted by the Management Board, then elected by the General Meeting of Shareholders, with three other employee representatives of Aventis, in April 2001.

FECCIA President also takes part in support other European Federations in the negotiations of European works councils, for example SPIE, VINCI, VIVENDI UNIVERSAL, CEGETEL, AXA, etc.

Contact is established with European Federations of ETUC, in particular FETBP, UNI Europe and UNI World.

The signatory of an agreement for the establishment of a European works council by a European Professional Federation of CEC or by CEC itself is possible in France. Recent agreements were signed at SPIE, VINCI et CEGETEL in name of CEC by FECC.

FECCIA created on its Web site (www.feccia.org) a link with the European Foundation of Working Conditions where all the agreements of European works councils are indexed.

The presentation of training courses for CFE-CGC concerning the question of European works councils is assured by F. Vincent and G. Liarokapis.

The main subjects for the European Chemistry with respect to the European Commission are of legal matter (health of workers, principle of precaution) and are at the heart of the problems of society.

FECCIA is not recognised as an interlocutor consulted under article 138 of the Treaty.

Meetings with CEFIC (European employers) and EMCEF (ETUC) that also cover energy, took place.

In the Chemical sector, the European employers set up a negotiating group called ECEG (European Chemical Employers Group). FECCIA wrote to require equal treatment with EMCEF in the sectorial social dialogue. The Employers asked FECCIA that each member Federation of FECCIA contact the national employers' organisation (contacts have been made in France, Germany and in Italy; this will also be done in the United Kingdom, but it is not known if it will succeed). It is necessary that in each country there is contact between our representation of managers in the chemical industry and the representatives of the employers, so that the employers' organisation can then consult its members and state if it accepts FECCIA as a social partner. Four countries represent the majority of the European chemicals business: Germany, France, Italy, the United Kingdom; and FECCIA is present in these four countries. In Italy, the organisation is regional but they are creating coordinating structures for certain subjects like energy.

The EU chemicals industry is experiencing a slow recovery this year after a difficult 2001, so 2002 will prove to be a modest year. With the prospect of a positive trend across all sectors and geographical areas in 2003, a marked improvement is expected for most EU chemicals segments.

2001 was a difficult year for the chemical industry in Europe. Output growth slowed due to sharply decelerating world output and trade, and, especially, to the economic recession in the US. The terrorist attacks in the US are a key element, changing the economic world in fundamental ways.

The first quarter of 2002 saw some recovery for the industry, and the business climate will continue to improve in the second quarter. However, the consumer climate remains weak, indicating no significant turnaround in final demand.

Strong economic growth in the USA is the key factor stimulating growth for the major Asian countries and Europe.

Next year, overall output in the EU chemicals industry (excluding pharmaceuticals) is expected to grow by 3%, reaching 3.5% if pharmaceuticals are included. Most EU chemicals segments will see better growth compared to 2002, especially basic inorganic chemicals and polymers.

In the EU, some 34 000 chemical companies employ a total staff of about 1.7 million people, or 7% of the overall workforce in the manufacturing industry. Employment is some 15% less than in 1990, whereas production has grown by 40% in real terms.

EU chemicals is a lead industry with high skills and productivity. Labour productivity in the EU chemicals industry has risen by more than 4% p.a. over the period 1991-2001.

The labour force employed in the chemicals industry is more qualified, trained and better paid than the average industrial worker. Personnel costs for the EU chemicals industry are 50% higher than the average for all other manufacturing sectors

In his inaugural address as new Cefic President to the General Assembly in Versailles, Eggert Voscherau called for a more coherent industrial policy and for a level playing field for the chemicals sector in Europe.

"It is imperative that Europe creates an internationally competitive framework within which the chemical industry can flourish". The chemical sector needs to be able to compete on a level playing field, both inside and outside the EU. Striving to create such a playing field will be my top priority as President of Cefic", said Eggert Voscherau.

The pressures of globalisation and competition are forcing companies to change the way they operate - including where they locate their business. As they make these decisions, they are looking very carefully at production costs and the regulatory environment.

Scientific innovation has created new ways of meeting human needs, has helped us to use finite resources more efficiently and has dramatically contributed to the health, wealth and welfare of much of the world's population. The chemical industry has played a large part in this process.

More than ever, the world depends on chemistry and molecular science for meeting essential needs. Because of its nature and diversity, the chemical industry has an obligation to protect human health and the environment. For this reason, it is playing an active role in the assessment and management of substances and products. It is helping to develop cleaner technologies, waste-recycling processes and environmentally-friendly production techniques based, for example, on biotechnology, catalysts, membranes and desulphurisation.

By applying its skills and resources to managing risk and solving problems, the industry plays a central role in Sustainable Development. And it goes further. Cefic's involvement in a range of research programmes: LRI, SUSTECH, AllChemE, helps to address public concerns about the industry's products and processes and provides data to help Europe's regulators take more informed decisions.

There are mixed signals from the Cefic pan-European survey* (PES 2002) of the industry’s image. On the plus side, there is growing recognition of efforts to control pollution, and that the chemical industry is essential for meeting needs of future generations. On the minus side however, the overall reputation is declining once more, after a halting of the downward trend last year.

Since 1992, Cefic has been conducting a biennial public opinion survey to track the public image of the chemical industry with a view to providing the "outside in"-perspective - indispensable to guide the industry's efforts in ensuring a supportive business environment.

The key results of the survey 2002 are as follows:

• From 2000 to 2002, the chemical industry fell to 7th place in overall favourability among eight surveyed industries;

• The chemical industry continues to lose public recognition for its economic benefits and importance;

• Growing recognition that the chemical industry is essential for meeting needs of future generations but continuing lack of confidence in its social responsibility;

• Insignificant improvement in trustworthiness rating that remains poor; no reduction in strong pressure of public opinion on licence to operate/operating environment, most respondents wanting industry to face yet tougher control.

The Cefic PES will be a major tool to help define the strategy of the Trust and Reputation Programme. More detailed results can be made available to the members of Cefic.

*More than 9,000 citizens were surveyed in the period from January to mid-March 2002, in order to track the public image of the chemical industry in B, D, E, F, GB, I, NL and SWE, representative of 88% of the adult EU population. PES 2002 completes a history of 10 years in tracking the chemical industry’s image at EU level.

The Concept

The Brundtland report, Our Common Future, 1987

Sustainable Development balances three principal requirements:

• The needs of society (the social objective);
• The efficient management of scarce resources (the economic objective);
• The need to reduce the load on the eco-system in order to maintain the natural basis for life (the environmental objective).

By 2050 our planet will need to support some ten billion people - compared to about six billion today.

How do we provide food, clothing and shelter for this rapidly growing population without depleting the world's resources and eroding the inheritance of future generations?

The answer is Sustainable Development, a concept which seeks to balance economic and social progress with concern for the environment and the careful stewardship of natural resources.

For Sustainable Development to work, society must meet the needs of the population and address social and economic inequality. But Sustainable Development also means managing resources efficiently and maximising the benefits we get from them so as not to overload the world's eco-system.

While most agree on the objective, how we achieve it is the subject of heated debate and calls for action by governments, businesses, organisations and ordinary people around the world.

Industry has a key role to play. Within the chemical industry, we're contributing vigorously to the debate while developing solutions to help make Sustainable Development a reality.