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Highlighting issues of substance for the chemicals sector - May 2017

  • United Kingdom
  • Diversified industrials - Chemicals

12-05-2017

Welcome to Eversheds Sutherland’s May chemicals sector e-briefing.

Highlights in this edition include the Environmental Audit Committee’s report on the post Brexit future of the UK chemicals regulation, potential impacts on trade, plus related Brexit considerations regarding migrant workers, which make up a sizeable percentage of chemicals sector workers in the UK. We also include some case law developments; from the US Supreme Court regarding patent infringement and the English courts regarding misuse of confidential information. Do also take a look at our spotlight on China’s new cybersecurity law that comes into force on 1 June 2017 and its potential impact for chemicals sector companies.

We hope that you enjoy reading the briefing and we welcome your feedback on other topics and events.

Phillip Tunney

Head of Eversheds Sutherland Chemicals Sector

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Environmental Audit Committee report on the post-Brexit future of UK chemicals regulation

On 29 April 2017 the EAC published its second report examining areas where the Government must ensure the environment is considered during Brexit negotiations. The announcement of the June 2017 general election prevented preparation of a full report. However, the EAC identified several key messages for the Government.

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Biocides and Brexit

To date it’s been REACH which has hogged the headlines as a Single Market regulation which merits special Brexit-related consideration. However, the Biocidal Products Regulation (BPR) is another EU regulation which will also be converted into UK law on Brexit. You may wonder how difficult this can be, but it presents its own particular challenges.

Like REACH, many aspects of the BPR depend on the involvement of EU institutions. For example, it is the European Commission which decides whether or not to approve an active substance which is in the EU Review Programme for a particular product type

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Article 50 Notice has been given – what happens next?

On 29 March 2017, Theresa May, the British Prime Minister, gave notice to the European Council of the UK’s intention to leave the EU triggering the two-year withdrawal process. Article 50 of the Treaty on European Union sets out the steps to be taken for the UK and the EU to try and agree a withdrawal agreement “taking into account the framework for their future relationship”. In this briefing, we set out what has happened since notice was given and the next steps in the withdrawal process; focussing on possible implications for the chemicals sector, such as the imposition of import tariffs.

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Energy Storage Projects in the chemicals sector

Across Europe, energy storage is fast becoming an important part of the energy strategy, providing energy security and an opportunity to support the greater use of renewable energy generation on the electricity system, which has the potential to have a real impact in the chemicals sector. Legal developments have led to a large number of battery storage projects entering the planning and development phases in the UK and therefore it is crucial that all environmental and health and safety issues should be considered at the earliest possible opportunity. This article summarises some of these key issues that companies in the chemicals sector who are considering implementing battery storage should consider.

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Enforcement Undertakings in the Chemical Industry

The Environment Agency now has access to powers to apply civil penalties, known as ‘Civil Sanctions’ for certain environmental offences as an alternative to prosecution when taking enforcement action. The most popular of such sanctions is the Enforcement Undertaking. We consider their use below, including examples of where they have been used after chemical contamination incidents, and set out some practical tips for companies who may need to consider them.

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What chemical sector companies need to know about illegal workers

A significant percentage of workers in the UK chemicals industry are migrant workers, in 2015, migrant workers accounted for around 36% of the workforce in the chemical and related process operations. As we approach Brexit, employers in the chemical sector now more than ever before, need to ensure their employees have the right to work in their business. In 2016, both the offences and penalties relating to the employment of illegal workers broadened significantly, meaning mistakes can be extremely costly for a business both in monetary terms and in relation to reputational damage suffered.

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Supreme Court Limits § 271(f)(1) Overseas Infringement Reach: More than One Exported Component Required for Offshore Manufacturing Liability

The US Supreme Court held in Life Techs. Corp. v. Promega Corp., Slip No. 14-1538 (Feb. 22, 2017) that supplying a single component of a multi-component invention manufactured abroad does not give rise to patent infringement liability under section 271(f)(1) because a single component cannot constitute a substantial portion of an invention’s components for section 271(f)(1) purposes.

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Theft and misuse of confidential information

Practical rather than punitive approach to damages - The importance of confidential information in the chemicals sector is difficult to overstate, with the industry being propelled by research and development, and know-how. In cases concerning the alleged theft and misuse of confidential information, opposing parties invariably adopt greatly disparate positions on the financial value of the claim. The recent case of Marathon Asset Management LLP and another v Seddon and others [2017] EWHC 300 (Comm) provides a helpful yardstick against which parties can measure their expectations.

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Guerrilla tactics: resulting in indemnity costs awards?

In this article we focus on how courts internationally are reacting to clear use of guerrilla tactics being deployed in arbitration, which become the subject of an appeal. We have in particular examined the differing approaches in Hong Kong, England and Australia by the courts penalising parties by imposing indemnity costs awards to curb the unnecessary and inappropriate use of guerrilla tactics. We also examine how this trend is developing in the Irish courts, and the clearly stated reluctance of the Irish judiciary to interfere or alter an arbitrator’s award, save in the most exceptional of circumstances.

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China - Cybersecurity

China’s new Cybersecurity Law will come into force on 1 June 2017, supporting the PRC government’s drive to protect “internet sovereignty” and ensure “secure and trusted” network products and services. However, many organizations (both domestic and international) are becoming increasingly concerned that the new law will lead to additional difficulties and restrictions when it comes to doing business in China. In this article we explore the implications of the new Cybersecurity Law and what impact it may have on your business operations in the chemicals and energy sectors.

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Upcoming events

Health and Safety summer school

27 - 28 September 2017, Oxford

When the Regulator gives health the same priority as safety, employers must take notice. This Summer School considers subjects including asbestos, vibration and mental health as well as new developments and recent incidents, with insights from the Crown Prosecution Service, clinicians and the defence QC in the Bath tipper-truck tragedy.

Click here to book

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Wind and Solar Energy Storage Advancements

13 - 14 June 2017, London

We are delighted to be a partner for the upcoming Wind and Solar Energy Storage Advancements Forum.

The event will cover various topics including, understanding stakeholder perspectives, legal status and regulatory policies, insights gained from current global wind and solar energy storage projects and co-location, decentralisation and the internet of things.

Click here to book

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