SOCMA Gives Smaller Chemical Companies a Voice

13.04.2011 -

As anyone who has ever tried to shout at a player during a soccer game surely knows, it's almost impossible to for a relatively small voice to be heard in the middle of a crowd - no matter how good the tactical advice coming from the stands might be. Looking at the chemical industry, between all of the large multinationals are a considerable number of small- and mid-sized companies, often times owned by families or private equity firms. Making sure their interests are fairly represented is no easy task, especially in the U.S., where a whole host of regulatory issues are now coming to the forefront.

That's where the Society of Chemical Manufacturers and Affiliates - better known as simply SOCMA - comes in. The association, which is now celebrating its 90th year -represents the interests of the batch, custom and specialty chemicals manufacturing industry. "The needs of the batch industry are very different than those of the commodity chemical companies," said SOCMA President and CEO Lawrence D. Sloan. "That is why we really strive to provide a unique service to smaller-sized chemical companies." Brandi Schuster spoke to him about the organization's current "front-burner" issues for its 200-plus member companies and its three strategic directions.

CHEManager Europe: Mr. Sloan, SOCMA has a lot on its plate right now, from demands from the Department of Homeland Security to the Toxic Substances Control Act - also known as TSCA - reform. What is your number one issue right now?

Lawrence Sloan: One of our biggest issues right now is the U.S. Department of Homeland Security's CFATS - which stands for Chemical Facility Anti-Terrorism Standards. Currently, the standards establish risk-based performance standards for the security of U.S. chemical facilities. It requires covered chemical facilities to prepare assessments to identify facility security vulnerabilities, and to develop and implement measures that satisfy the identified risk-based performance standards.

That sounds reasonable, particularly for a country such as the U.S., which has spent millions on boosting its domestic security since 2001.

Lawrence Sloan: We advocate that CFATS is a strong and robust program, and we are working to get it reauthorized for a multi-year period. Several bills have recently been introduced in the U.S. Senate and House of Representatives that would extend the current chemical site security rules for several years; this would allow enough time for the rules to be implemented before making premature revisions. The Senate bill (S.473), spearheaded by Senator Susan Collins, would extend CFATS for three years, while the House bills, H.R. 901 and H.R.908, would extend the program for seven and six years, respectively. We find it encouraging that representatives across party lines are working together to continue the Department of Homeland Security's comprehensive chemical security regulations for years to come.

Another issue in the U.S. is "inherently safer technology" or IST. What is it about?

Lawrence Sloan: It more or less means that the Department of Homeland Security would have the responsibility and the management of requiring chemical companies to mandate product substitution changes. In other words, if they deemed that the manufacture of a particular chemical was too dangerous, they could mandate that that company replace that chemical with something safer.

What is SOCMA's take on that?

Lawrence Sloan: It makes no practical sense. First of all, the experts cannot even agree on what IST means. And even if you could get all the experts to agree on what IST means, the Department of Homeland Security is being asked to dictate science. The Department of Homeland Security knows nothing about the science behind this process safety measure.

What is the current state of IST now in the U.S.? Is it being enforced, or are its guidelines covered under CFAT?

Lawrence Sloan: Right now, IST does not technically exist as a mandated policy. Historically, chemical companies have and will continue to innovate towards products which are designed and formulated to meet the EPA's green chemistry principles; however, we feel it is best left up to the private sector to manage new product development rather than some sort of top-down "one size fits all" IST mandate that is neither practical in its approach nor readily enforceable by an agency such as the Department of Homeland Security, whose focus is and should remain in the realm of site security and terrorism prevention.

The Department of Homeland Security is a relatively new entity in the U.S., having been created as a response to the Sept. 11, 2001, terrorist attacks. Who regulated this sort of thing prior to then?

Lawrence Sloan: No one. This all came into effect after Sept. 11.

TSCA is also in the process of being reformed now.

Lawrence Sloan: Yes, and we believe there should be some reform, but it needs to be based on the concepts of risk and prioritization of chemicals. Simply said, just because a chemical is hazardous doesn't necessarily mean it should be banned. Draft legislation that came out of the Senate and House committees last year were heavily slanted in favor of environmentalists, and would be impractical to implement. Even if it were possible to enforce it, the Environmental Protection Agency would need far greater resources in order to handle the amount of testing work that would be involved.

Do you see any similarities between the TSCA reform and Reach?

Lawrence Sloan: There is a lot of uncertainty now in the U.S. chemical industry as to whether TSCA will become an American version of Reach. European companies have said that they are willing to share a lot of the health and safety data that has been collected under Reach, so there are definitely points for synergies between the regulations. However, as an industry, we have to look at not only the hazardous nature of a chemical, but also at the risk of exposure. There are a lot of chemicals out there where the risk of exposure is minimal to none; while some might be hazardous, they are used in a very controlled environment.

SOCMA also does advocacy work in regards to Food and Drug Administration reform.

Lawrence Sloan: Our separately funded affiliate, the Bulk Pharmaceuticals Task Force, focuses on this kind of work. A significant problem right now is the discrepancy between FDA inspections in the U.S. and outside of the country. When the FDA inspects a foreign facility, it has to schedule its visit months in advance; inspectors can't just spontaneously show up like they do in the U.S. Also, the frequency is a problem - overseas, inspections may take place in five- even seven-year intervals, whereas it can be every two years in the U.S. That's why we're working toward FDA reform from a legislative perspective to provide the agency with more funding, in order to provide the pharma industry with fair inspections.

This sounds very similar to something Rx-360, a U.S.-based pharmaceutical supply chain consortium, is pushing for. How closely do you work together?

Lawrence Sloan: Rx-360 members are companies and organizations, not individuals, and it is NOT intended to replace regulatory systems or provide oversight. Our Bulk Pharmaceuticals Task Force is an official organizational member and several of our members are also members of Rx-360. Both organizations work together both on Capitol Hill and with the FDA in advocating for drug supply chain reform; specifically, there is mutual interest in strengthening foreign drug plant inspections so that they are on par with domestic inspections and developing some sort of "origin of country" labeling requirement.

I will be representing the Bulk Pharmaceuticals Task Force as a speaker at the upcoming Rx-360 Open Forum being held at Chemspec USA in Philadelphia on May 5. Three Bulk Pharmaceuticals Task Force members will serve on a panel and share their insights about the benefits of their companies' affiliation with Rx-360.

How do you coordinate your efforts with European groups, such as the European Fine Chemical Group, the EFCG?

Lawrence Sloan: We work very closely with the EFCG. Most recently we've been coordinating commentary to the FDA on the reform issue to make sure that we are aligned. Here in the States, we also work together with the American Chemistry Council. On some of the macro-business issues like employment labor law or taxation issues, we will work with the National Association of Manufacturers. NAM is a big powerhouse in Washington, and they address more of the general business policy issues.

SOCMA has three strategic directions - helping members grow, working to build confidence in the chemical industry and advocating your members' interests in Washington. SOCMA's numerous peer groups plug into the growth strategy, and your work in Washington is also clear. What do you do to build confidence in an industry that often comes under fire?

Lawrence Sloan: One main component here is ChemStewards, which is our environmental, health, safety and security program designed to help US facilities optimize their performance, save money and enhance their role as good corporate citizens.

In what way?

Lawrence Sloan: ChemStewards is not a one-size-fits-all program. A main difference between ChemStewards and other performance improvement programs is that it is facility driven, which means all of our members' manufacturing facilities must be ChemSteward certified. Third-party audits are conducted every three years. The types of reporting that are required depend on the company size, and we are currently working on adding metrics for being green and sustainable.

What advantages do your members have from the program?

Lawrence Sloan: We are finding that there is a commercial advantage in practicing ChemStewards; oftentimes it is actually written into the purchase agreement and our members are becoming preferred vendors in many areas. And that is a pretty big deal, because now the companies moving beyond the realm of environmental, health, safety and security and a feel-good program to one that actually has a tangible effect on the bottom line. 


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