Bullets won鈥檛 stop them. They can control heat, electricity, fire 鈥� even time itself. They are the regulations pouring out of Whitehall and Brussels, and there鈥檚 hardly a business in the industry that鈥檚 safe. But is there a way of turning them to your advantage?
The construction industry will have to act quickly to avoid being strangled by red tape in 2005. A daunting array of European Union directives, 好色先生TV Regulations updates and legislative changes are planned, and their arrival will drive up costs and drain resources across the industry.
Much of the legislation comes from Brussels, where a focus on environmental and social policy is resulting in a flood of directives. While the EU鈥檚 intentions may be laudable, the implementation will be posing costly challenges for thousands of construction firms.
鈥淟egislation designed to improve health and safety is very difficult to counter,鈥� says David Evans, director of commercial business sustainability at cement manufacturer RMC Rugby (see 鈥淔eeling the pinch鈥�, page 36). Cement is facing two hard-hitting directives in the first quarter of 2005, and has a third looming on the horizon. Evans claims that bureaucrats are forcing through legislation without proper consultation. 鈥淚n my 30 years in the industry it鈥檚 the most difficult thing I鈥檝e ever had to deal with because it hasn鈥檛 been properly thought through,鈥� he says. 鈥淗ow the smaller companies cope, I don鈥檛 know.鈥�
The Construction Products Association has recently opened an office in Brussels in an attempt to gain the ear of EU commissioners and organise more effective lobbying. It held its first 鈥渕eet and greet鈥� for industry figures and EU officials last month.
鈥淚ndustry has got to get switched on to Europe,鈥� says Jean Emblin, the CPA鈥檚 external affairs director. 鈥淢any in construction don鈥檛 see the importance of lobbying. We鈥檙e trying to get our members out to Brussels, so they can get a better feel for it.鈥�
Other companies are more willing to accept rule changes and in some cases are striving to turn them to their advantage.
The Working Time Directive, which will limit the number of hours worked by lorry drivers this year, holds no fears for Gary Sullivan, managing director at Logistics firm Wilson James (see 鈥淭he glass-half-full approach鈥�, page 35). 鈥淭he impact is not great at Wilson James,鈥� he says. 鈥淲e鈥檝e already reduced average working time to 50 hours a week for construction-related deliveries, and we are committed to reducing it to 42 hours.鈥�
Sullivan believes that the WTD can actually be of benefit to Wilson James even though the government predicts it will lead to a shortage of 20,000 lorry drivers. 鈥淭he driver shortage will force clients to make more efficient deliveries. With model logistics we can spread deliveries across the day and avoid congestion on site.鈥�
Whether firms choose to tackle new rules in Brussels or tame them at home, they certainly won鈥檛 be able to ignore them. So, over the next four pages, we break down the most crucial changes are set to affect the construction industry in 2005. Whether you鈥檙e a supplier, designer, contractor, specialist or client, there will be at least one scary piece of legislation knocking at your door in the next 12 months 鈥�
好色先生TV Regulations: Part P 鈥� electrical safety in dwellings
Effective from 1 January 2005
What is it? Part P requires that all work involving the addition of a circuit to a dwelling is either carried out by an approved person who has met the standards of the ODPM鈥檚 five approved self-certification schemes or tested by local authority building control.
Why? Ten people a year die as a result of unsafe electrical work.
Arguments for As well as the 10 deaths, there are 750 serious injuries a year. Part P should improve the safety and quality of electrical installations.
Arguments against The problem for many councils is that the skills required to carry out electrical tests no longer exist in-house. 好色先生TV control officials have to undergo specialist training before they can check electrical work. In the meantime local authorities will incur the expense of contracting the work out.
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Chromium (VI) Directive
Effective from 17 January 2005
What is it? Arguably the biggest lump of legislation to hit the UK cement industry for 30 years. Cement contractors will have to control the amount of soluble chromium VI in all bulk and bagged cements by adding a reducing agent, such as ferrous sulphate. The directive states that the hydrated cement must not contain more than two parts per million of chromium VI when water is added. Why? The directive is being introduced to minimise the incidence of chromate-related allergic contact dermatitis.
Arguments for The HSE wants to cut down on the estimated 430 cases of contact dermatitis that occur every year.
Arguments against Contractors believe that the cost of manufacturing cement could increase by as much as 拢1 per tonne.
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The Private Security Industry Act 2001
Effective from January 2005
What is it? The act makes it compulsory for anyone carrying out security duties on construction sites to be licensed. The recently formed Security Industry Authority will make spot checks on security sites.
Why? It intends to rid private security firms of their bad-boy reputation.
Arguments for Breaching the act will result in heavy fines or even a six-month prison sentence for both security firms and those responsible for employing them. Coupled with mandatory four-hour training courses to gain licences, the highest security standards will be ensured.
Arguments against The licensing process could add 拢20,000 to the cost of securing a site and lead to a shortage in licensed staff. There are estimates that 20% of the industry鈥檚 6000 workers could be lost as they will either have criminal records or have no evidence of their past five years鈥� residence.
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Code for Sustainable 好色先生TVs
Draft introduced January 2005
What is it? The code is expected to be unveiled in a blaze of publicity at the government鈥檚 communities summit in January. It will include sustainable performance standards for new buildings.
Why? The government wants to use the four areas it has marked out for growth as exemplars of high efficiency standards. For example, energy-efficiency targets will be about 25% tougher than building regulation requirements.
Arguments for The code won鈥檛 be mandatory 鈥� not yet anyway 鈥� and will initially be targeted at developments in growth areas, meaning that it will not overburden the industry as a whole.
Arguments against Many firms plan large chunks of their work over the next few years in growth areas such as the Thames Gateway, where the codes are likely to be insisted upon.
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EU Emissions Trading Scheme
Effective from 28 February
What is it? Energy-intensive materials producers will be given a carbon emission target for each of their installations. If a firm鈥檚 plant exceeds its quota it will be penalised and forced to buy credits from producers who have beaten their targets. Makers of bricks, cement, glass, and steel will all be subject to the scheme.
Why? The ETS is designed to cut the amount of greenhouse gases generated by energy-intensive plants and factories.
Arguments for The regulation provides a financial incentive. It is expected that firms that produce less carbon than their allocation will be rewarded with 拢5.50-7.00 per tonne saved.
Arguments against Installing measuring equipment to comply with the EU鈥檚 rigid reporting standards will be expensive. Moreover, in the UK the regulation is redundant. Through the climate change levy, large-scale manufacturers are already committed to improving the energy efficiency of their operations by 25.6% by 2010.
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Working Time Directive
Effective in the road transport industry from 23 March 2005
What is it? A key plank of EU social policy, this limits the average working week to 48 hours. Drivers of heavy goods vehicles typically work 55 hours a week.
Why? To improve work鈥搇ife balance.
Arguments for The sector will no longer stand alone from the rest of British industry. The construction sector will also be helped by the slow introduction of the directive: for the first months of its existence the Vehicle Operators Services Agency will focus on educating logistics firms rather then enforcing the directive. It will, however, investigate drivers鈥� complaints about rule-breaking firms.
Arguments against The reduction in hours will limit the amount of work truckers can do other than driving, such as paperwork and unloading. It will also bump up the costs of delivering materials. The Quarry Products Association estimates that the total cost for makers of aggregates will be 拢356m. The government says that the industry will need to recruit another 21,900 drivers.
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好色先生TV Regulations: Part F 鈥� ventilation
Consultation closed, Approved Document due out in July 2005
What is it? The revisions to Part F will increase ventilation rates as buildings become more airtight and get rid of background pollutants emitted by building materials.
Why? The revised Part L will demand even higher levels of airtightness, and this will make the need for adequate ventilation increasingly important. The ODPM has even adopted a catchy little mantra to drive home the message: 鈥淏uild tight and ventilate right鈥�.
Arguments for Because Part L will make buildings more airtight, the need for controlled ventilation becomes more critical.
Arguments against The ODPM鈥檚 regulatory impact assessment calculates that housebuilders will typically be spending 拢30 more on ventilators for a ground-floor flat.
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好色先生TV Regulations: Part L
Effective by early 2006
What is it? Among the proposals for the latest revision of energy regulations are plans to ensure users measure the energy consumption of their buildings.
Why? Publishing the revisions by mid-summer 2005, would allow the new Part L to come into effect by early 2006. It would therefore coincide with the introduction of the European Commission directive, the Energy Performance of 好色先生TVs.
Arguments for The regulations will consolidate the energy conservation principles for new construction established in earlier revisions and will also aim to address the energy consumption of the existing building stock. The changes are also likely to promote the use of alternative forms of energy supply.
Arguments against The industry is still struggling to cope with the last revisions to Part L, which came out just two years ago. This more holistic approach will be even tougher to implement. Peter Caplehorn, an associate at architect Scott Brownrigg, explains:
鈥淭he changes will require input from the whole of the design team, which means the team needs to be in place at the feasibility stage.鈥�
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The European Waste Electrical and Electronic Equipment (WEEE) Directive
13 August 2005
The Restriction of the Use of Hazardous Substances (ROHS) in Electrical and Electronic Equipment
July 2006
What are these? These two directives were incorporated into UK law in August 2004. The WEEE directive is about collecting waste electrical equipment and increasing its re-use and recycling. It comes into force on 13 August 2005 for producers. The ROHS directive aims to reduce the amount of hazardous material used in materials鈥� manu cture. It comes into force in July 2006.
Why? The directives will help conserve raw materials and divert waste from landfill sites. Implementing them will reduce the risk to human health and the environment through the proper treatment of such waste.
Arguments for There will be less waste electronic equipment. Charities and less developed countries stand to benefit from the re-use, rather than disposal, of electronic equipment such as computers. There will be a reduction in the use of raw materials and reduced air pollution from manufacturers.
Arguments against The price of electronic equipment is likely to increase if producers are forced to pay more in manufacturing costs to enable equipment to be recycled. Business will pay more to dispose of electronic goods. Member states will be required to set up separate systems for the collection of waste electronic equipment so that firms will be able to get rid of old goods at special facilities. And if firms do not take care to dispose of data on equipment that is then re-used, they could be in breach of the data protection act.
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Reform (Fire Safety) Order
Awaiting parliamentary approval
What is it? This will introduce a duty on those responsible for the occupants of a building to maintain adequate fire protection. There will no longer be a requirement for fire certification, but fire authorities will be able to carry out regular inspections. Priority will be given to buildings deemed to be at the greatest risk.
Why? The existing fire certification can cover a building for years until a change in the building鈥檚 use takes place, prompting fears that fire safety is forgotten about over that period.
Arguments for The regular risk assessments that are bound to be insisted on by insurance firms will mean that up-to-date escape methods and fire-fighting equipment are always in place.
Arguments against The constant upgrade of fire precautions could be hugely expensive for building occupiers 鈥� a cost that might put pressure on rents and ultimately the commercial construction market.
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The Construction (Design and Management) Regulations
Late 2005/early 2006
What is it? This replaces two sets of regulations from the mid-1990s, and will effectively end the role of the planning supervisor, whose duties will be passed to the project team.
Why? It is felt that planning supervisors are appointed too late in the design process and don鈥檛 have enough power. They will be replaced with health and safety co-ordinators who will carry out tasks on behalf of the client and co-ordinate design and planning.
Arguments for Those involved in the project such as designers and contractors will have greater control over health and safety.
Arguments against There are only about 200 Health and Safety Executive inspectors who will be able to enforce the regulations.
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Housing Bill: Home condition reports
1 January 2007
What is it? Now the Housing Bill has become law, the industry has to gear up to provide home condition reports by 2007. Vendors will have give potential purchasers a Home Information Pack that includes information on the energy performance of the home.
Why? To comply with the European Performance of 好色先生TVs Directive, which requires buildings to have energy use certificates.
Arguments for The compulsory home condition report could be a boon to surveyors as the ODPM estimates that up to 8000 home inspectors will be needed to carry them out.
Arguments against It remains to be seen if there are enough competent people available to carry out the audits.
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Registration, Evaluation and Authorisation of Chemicals Regulation
Expected 2007/08
What is it? Although at least two years away, this regulation has already prompted great concerns in the cement industry. The EU will require registration of all chemicals manufactured or imported into the community, including cement.
Why? The EU wants to ensure that dangerous chemical substances do not reach the marketplace.
Arguments for British lobbyists may yet have won themselves a minor concession. To lessen the financial impact of registering every company鈥檚 chemical product, the UK and Hungary have put forward a joint proposal to allow generic registration of chemicals, which would enable companies to share the cost of compliance.
Arguments against Without the concession, the administrative costs will be huge 鈥� up to 拢5bn over the next 10 years for all chemicals. REACH risks making the costs of cement products prohibitively expensive in the UK, leading to users sourcing alternatives from other trading blocks (see 鈥淔eeling the pinch鈥�, left).
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Additional reporting by Andy Pearson and Thomas Lane
The glass-half-full approach
As the boss of a firm facing two major new pieces of legislation in the next three months, Gary Sullivan is remarkably sanguine.
His company Wilson James is a logistics and security specialist that will be affected by both the Working Time Directive, which will impose a 48 hour-a-week working limit for lorry drivers, and the Private Security Industry Act, which requires the licensing of all security officers.
But, rather than grumble about the costs of compliance, Sullivan hails the legislation as major opportunities for his business. He regards the WTD as a chance for clients to organise their construction sites more efficiently, and he believes that the Private Security Act will go some way to ridding the security industry of its rogue reputation.鈥淭he security act is a fantastic thing. Our industry hasn鈥檛 got the best of images and now we can check the criminal records of all security officers,鈥� he says.
Sullivan is also enthusiastic about the positive effect the WTD could have on productivity. He says that logistics firms and construction sites will have to be more efficient to reduce deliveries and counter the expense of fewer and higher paid drivers.
鈥淭o maximise the working day, we have to be smarter,鈥� says Sullivan. 鈥淏y using logistics models we can spread deliveries across the day and reduce congestion on site. This will help the drivers get the most out of their day.鈥�
Feeling the pinch
No construction sector is being buffeted by European legislation as much as the cement industry. In the next two months the EU Emissions Trading Scheme and Chromium VI Directive will blow in from Brussels and in two to three years cement producers will feel the full force of the stringent new Registration, Evaluation and Authorisation of Chemicals Regulation.
David Evans, director of commercial business sustainability at cement manufacturer RMC Rugby, has been trying to influence the form of the new legislation at Brussels for 10 years. Like many before him, he is frustrated at the lack of influence industry has had. 鈥淲hat concerns me is that we are talking to people who know nothing about the cement industry,鈥� he says. 鈥淭he EU鈥檚 focus on health and safety and a reduction in carbon emissions means that the cement industry is being hit hard by legislation from Europe.鈥�
Evans lobbied for cement鈥檚 exclusion from the Chromium VI Directive, which aims to reduce the incidence of chromate-related allergic dermatitis among cement users. He thinks its implementation will be counter-productive. 鈥淢oney should have been spent on publicising the dangers of handling wet cement. There is a danger that end users will think that with the elimination of chromium VI, the cement will be safe to handle, but there is still a danger of other problems, such as alkaline burns.鈥�
He is also worried that an uneven playing field across Europe will penalise UK cement manufacturers. In the UK, the Health and Safety Executive is insisting that the directive will be applied to bagged and bulk cement, whereas elsewhere in Europe member states are applying the regulation only to bagged cement as they don鈥檛 believe people will come into contact with the bulk cement fed into automated systems. 鈥淲e have to demonstrate compliance, but in the rest of Europe it is chequered,鈥� says Evans.
The amount of legislation imposed on the cement industry concerns Evans. 鈥淚t is worrying in terms of the multinationals investing in the EU. These new rafts of legislation represent real costs to the business. There is the danger that customers will just ship the product from elsewhere.鈥�
Key to symbols
MS Material suppliers
C Contractors
A Architects
C/D Clients
LA Local authorities
S Specialists
拢 Cost rating (relative additional expense) out of five
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