Economic and Strategic Consequences For SMEs in Norway Following Implementation of the New EU Chemicals Legislation, REACH.

Abstract: On the last day of May 2008, new chemicals legislation, REACH came into force in Norway following its implementation within the EU in 2007. The regulation streamlines and improves an earlier legislative framework for chemicals of the European Union. To be able to comply with the new regulation, enterprises will have to put in place considerable measures and undertake possibly restructuring part of or the entire enterprise. Such measures could include the need for training, external consultancy and need for new practical software. Other measures include strategic changes in the enterprises such as the centralization of operations, change of short/long term plans, venturing into areas, change in procurement procedures etc. These may vary from enterprise to enterprise depending on their position on the supply chain as defined by the new legislation. Importers and producers of chemicals have more duties under REACH than downstream users and distributors. This study investigates how small and medium-sized enterprises (SMEs) within the chemical industry in Norway have been affected by the implementation of the legislation; the main focus of the study is on the economic and strategic effects of REACH on SMEs. Most SMEs in Norwegian chemical industry fall under REACH’s definitions of downstream users and distributors meaning they have fewer duties compared to producer and importers. Despite fewer duties, the effect of REACH on SMEs is quite comprehensive and far-reaching.