Why You Should Prepare Now for a No-Deal Brexit

Three years have passed since UK voted to leave the EU on the 23 June 2016 by a majority of 51.9% to 48.1%. Despite the UK triggering Article 50 to initiate the formal exit process with a leave date set for the 29 March 2019, the UK remains within the EU until the extended Article 50 deadline of the 31 October 2019.

In the first of this two-part series, Will Martin, a Tetra Tech partner with expertise in product compliance requirements particularly in the UK, is dissecting why Prime Minister Theresa May’s EU Withdrawal Agreement has failed to pass by the UK parliament and why a no-deal Brexit is looking increasingly likely.


The EU Withdrawal Agreement

The EU Withdrawal Agreement — finalised between the UK and EU on 14 November 2018 — sets out what will happen during a 21-month transition period following the original Article 50 exit date to provide continuity of trade, cooperation between the UK and EU on security and defence, and protection of UK and EU citizens’ rights whilst the long-term trade deal is being negotiated.

Given that in 2016, 43% of UK exports were to the EU, and a further 12% were to countries with EU preferential trade deals, the specifics of the trading relationship with the EU will be vital in protecting the UK’s immediate and long-term economic interests. Importantly, the transition period also provides time for businesses to adapt and prepare for the new trading relationship between the UK and EU.

During this transition period, the UK will have left the EU but will remain in the EU’s single market and customs union. This means frictionless free trade will continue without checks and delays at borders, but the UK will have to continue to follow EU rules and regulations. That includes EU budgetary payments, accepting European Court of Justice rulings, and allowing free movement of people. As the UK will have left the EU and will no longer have a presence in the European Parliament, European Commission or European Court of Justice, the UK will no longer have any say in making or changing rules.

The 21-month transition period starts on the original 31 March Article 50 deadline for the UK to formally leave the EU. That takes until the end of the transition period to the 31 December 2020 which also coincides with the end of the EU’s seven-year budget cycle. Moving the Article 50 deadline to the 31 October has effectively reduced transition period by seven months, significantly reducing the negotiation time for the long-term trading arrangement between the UK and EU. Should more time be required to negotiate the long-term agreement, the transition period can be extended by one or two years, although this would be difficult politically for the UK Brexiteers who want to leave the EU as soon as possible, but also on the EU’s side as they move focus to the next seven-year budget cycle.

The UK Parliament has debated the Agreement on several occasions and it has been voted on three times, but the House of Commons has not endorsed it, which greatly increases the prospects of the UK leaving the EU without a deal on 31 October.

Objections to the EU Withdrawal Agreement

The objections are in part due to the lack of control the UK will have during the transition period, but most controversial of all is the backstop arrangement.

If no trade deal has been struck by the end of the transition period, the backstop will be implement to avoid the creation of a hard border between Northern Ireland and the Republic of Ireland. This is to avoid a resurgence of the conflict and sectarian violence that was exacerbated in the past by the presence of physical infrastructure and checks on the Irish border. The backstop will comprise a single customs territory between the EU and UK that will ensure no physical border is reinstated.

If the backstop is in operation, the UK will be subject to “level playing field conditions” to not gain a competitive advantage while remaining in the same customs territory. That means the UK could not implement any trade deals with non-EU countries around the world that would involve removing tariffs on goods. The UK cannot leave this arrangement without EU approval which presents a huge sticking point to approving the Agreement over the concern that the UK could, in theory, be locked into a customs union with the EU indefinitely.

The Agreement is further compromised by the fact that, prior to its negotiation, the UK government led by Theresa May did not seek consensus from the electorate, parliament or her own party on what form of Brexit should be negotiated with the EU. For example: Did the UK want a “soft Brexit” whereby the UK remains within the Common Market like Norway, or did the UK want a “hard Brexit” whereby the UK leaves the EU single market and customs union and seeks to secure trade deals with the EU and with other countries?

This lack of a clear vision and underpinning strategy has entrenched views on the Leave and Remain sides, leaving both main parties deeply divided and unpopular with the electorate. Meanwhile populist movements such as Nigel Farage’s Brexit party have gained ground capitalising on the lack of progress implementing “the will of the people”.

Where Are We Now?

Prime Minster Theresa May has stepped down to make way for a new Conservative Party Prime Minister to manage Brexit. The contest to elect a new Conservative Party leader concluded on 23 July with Boris Johnson, a prominent Leave campaigner, winning the contest to become the UK’s new Prime Minister.

During the leadership campaign, Boris Johnson adopted a hard-line stance on Brexit, stating that the UK will leave the EU on 31 October come what may, with or without a deal. Given that the EU has repeatedly stated that it will not reopen and renegotiate the EU Withdrawal Agreement, and the limited time left now between the conclusion of the leadership contest and the 31 October deadline, this significantly raises the risk of the UK crashing out of Europe with no deal.

Looking at the UK economy more broadly, the UK independent watchdog The Office for Budget Responsibility (OBR) has just published its analysis that a no-deal Brexit will likely cause the UK to fall into recession, and economic growth could fall 2% by 2020 relative to forecasts where the EU Withdrawal Agreement was in place.

What Does This Mean for the Automotive Industry?

There are many implications of a no-deal Brexit for the automotive industry. Please check back next week where I will break down the future impacts on automotive players within and outside the UK.

And to keep abreast of Brexit developments and strengthen your product compliance to easily adjust to any Brexit situation, contact us.

 

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Will Martin, Managing Director of EPR Consulting Ltd, has collaborated with Tetra Tech as their UK-based product compliance expert since 2005, serving clients in automotive and aerospace industries with ELV/IMDS and REACH guidance and support. With Tetra Tech’s recent acquisition of WYG, Will’s collaborations with Tetra Tech will be enhanced as he continues to support us to guide clients through Brexit and other challenges.  Details of upcoming IMDS and REACH training courses in the UK can be found here.

 

Best Practices for Effective Chemical Reporting Trainings and Workshops

The EU’s upcoming 2020 chemical reporting database may soon create the need for tens of thousands of suppliers to be educated on how to provide chemical content information to their customers. Formal training of many of these suppliers will be necessary for global exporters in automotive, aerospace, electronics, heavy equipment and other industry sectors to continue to export their products onto the EU market.

When it comes to employee and/or supplier training, the question on any leader’s mind is, “Does it work?” At Tetra Tech, we’ve asked ourselves the same question and continue to do so, to streamline our IMDS, REACH and RoHS chemical reporting trainings and to best prepare our attendees for using tools to reach their future compliance goals.

Since 2002, Tetra Tech has trained 8,500 individuals on IMDS and other chemical reporting requirements and maintains a database of survey results from each of these training attendees.  We have leveraged this information to continuously improve the user experience for IMDS and other chemical reporting trainings.

In 2018 and 2019, we offered three distinct large-group workshops and surveyed the attendees from each of these sessions to set a baseline for understanding how OEMs can create best practices for educating suppliers on material content reporting requirements.

In all, 293 individuals, representing 233 supplier companies, attended these trainings; 32 industry experts representing 12 large OEM/Tier 1 companies presented; and 28 other non-industry stakeholders (consultants, industry organization representatives, government agency representatives, etc.) also attended.

We asked a wide sample of industry participants for feedback after each of the workshops, and we were provided with great insight into what is effective for workshops and what takes away from the end goals.

The high-level results for benchmarking best practices are, in summary:

  • The optimum size for material content reporting workshops is in the range of 50-80 attendees. This “sweet spot” balances the needs for teacher-student interaction vs. critical mass for networking benefits.
  • Controlled agendas with well-defined, closed-ended, real-world, hands-on training exercises are significantly more beneficial than open-ended, theoretical, abstract training concepts.
  • We learned that it is critical to thoroughly screen attendees to validate that their level of pre-requisite knowledge matches the base level of competency required to benefit from the training program.

In our recently released white paper, we discuss each of these findings in more detail, as well as other best practices that we have established based on the data points gathered from all 293 workshop attendees. We are also working on a future white paper which will quantitatively establish the benefit of trainings, based on tracking the error rates of suppliers who were trained versus a control group of suppliers who did not receive formal training.

For full details, please download and view the case study summary here. (IMDSPortal members only)

chemical reporting training

DOWNLOAD AND VIEW THE CASE STUDY (IMDSPortal members only)

 

To discuss best practices for hosting your own chemical reporting workshop, please contact a Tetra Tech training coordinator.

 

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4 Signs Your Commissioning Expert Will Get You the Most ‘Bang for Your Buck’

In the young history of building commissioning, we’ve already witnessed a surge of underqualified firms that have suffered from what I like to call the “I can figure that out” fallacy.  

Yet, building commissioning is more than filling out and submitting paperwork to meet code requirements. It is a detailed process of analyzing complex building systems, ensuring they were installed correctly and are operating at optimal efficiency, and evaluating how the systems are operating holistically 

When conducted properly, building commissioning — be it retro-commissioning, re-commissioning or ongoing commissioning — can benefit building owners for many years to come. Expect lower operating costs, extended system and equipment lifespans, fewer maintenance or failure issues, and substantially more money in your pocket. That sounds good, right?  

But how do you know that you’re hiring the commissioning agents who will help you save the most money over the long haul of your building?  

The following are some clear indicators that your commissioning firm is looking out for your best interests.  

The Firm Is a Dedicated Team of Building Commissioning Agents 

Many firms have designers who “switch hats” to offer building commissioning services when the need arises. The firms that will provide you the most value, though, have a dedicated team. These commissioning agents are knowledgeable on the latest industry trends, Cx tools and training, and are focused on providing expert commissioning services, nothing else. This results in a streamlined commissioning process that yields a more value-added commissioning service.  

The Building Commissioning Firm Has Extensive Experience 

It’s one thing to understand and implement the Commissioning Process on a project — it’s another thing to understand how the many building systems operate. Rarely do you find there is one commissioning agent who knows everything from mechanical to electrical to plumbing. You don’t want a mechanical commissioning agent commissioning your UPS emergency power system on your data center.  

The right commissioning firm will have commissioning specialists for the various systems who have garnered years of in-the-field experience across different industries and building types and have become true experts in their fields. There is no guesswork in what your building needs. These commissioning agents can work efficiently and cost-effectively. And you can be certain your building will be operating smoothly after they are through.  

The Agents Are Proactive in the Entire Building Commissioning Process 

The commissioning process can begin anywhere in the design and construction of your project, however, it is more valuable if it starts early in the design phase. The commissioning firm that is working proactively can get involved early in the design phase reviewing the OPR, BOD, drawing and specifications, as well as developing the commissioning plan. They invest themselves more than even design firms and continue to follow through on designs with the contractors, which then helps the team successfully complete the project on-time, on-budget and with little to zero defects. There is no need to backtrack to fix things, because your commissioning agents will have already done so.   

The Building Commissioning Firm’s Priority Is Your Building’s Performance 

Of course your building commissioning agent needs to fill out the paperwork so you can get important things like your LEED certification or Certificate of Occupancy. However, with buildings becoming more complex, and investing even more in sustainable yet complex building systems, the need to make sure everything is working the way it should is more important than ever.   

A building commissioning agent has the onus to take responsibility for your building systems being able to perform as intended and for your benefit. It takes a meticulous yet holistic approach — and not every firm is cut out for it.  

Tetra Tech has over 60 commissioning agents dedicated to ensuring optimal performance of your manufacturing operation buildings and more. To learn more about our capabilities and extensive experience could serve your operation, please visit our website 

 

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How Ongoing Commissioning Could Benefit Your Manufacturing Operation

You may have had your building and manufacturing process undergo a thorough commissioning process when you designed and constructed your building. Good job!  You are certainly enjoying all the benefits of commissioning your building year after year after year — or are you? 

When you buy a new car and the service light comes on, you wouldn’t dare not bring the car in for service. Like an automobile, you need to perform periodic tuneups in order to keep your building and manufacturing systems running smoothly and energy efficiently.  

Because once a building is in operation, the total energy use will increase as the efficiency of the building systems gradually decrease. 

Re-commissioning your building systems every three to five years results in the past has proven the best way to keep your building systems operating at peak efficiency. 

But with new technology, there is another option to consider — and it potentially could save you even more and extend your building’s life even longer.  

Instead of waiting up to five years to recommission your systems, what if you could identify operating inefficiencies that lead to increase energy use as they happen, in real time? The building industry has been moving toward exactly this type of program by the name of ongoing commissioning. 

 What is Ongoing Commissioning?  

Ongoing commissioning is a continuous process that tracks, measures and analyzes a buildings operational data over time, in real-time. This allows for building owners to continually operate their systems at high efficiency, thereby lowering energy use and costs and increasing the company’s profits.   

The ongoing commissioning process is a natural complement to the commissioning (or retro-commissioning) process, and it starts in the design phase of the project.   

Your Cx agent will develop the ongoing commissioning plan and identify operational metrics that need to be monitored. Besides overall energy use, the use of sub-meters can break down the energy use to isolate HVAC systems, lighting and plug load. In addition, the building automation system (BAS) can provide data such as space temperatures, airflows and specific energy use. Using the BAS or a third-party software, data pulled out of the building is analyzed and summarized allowing the facilities staff to recognize potential issues and enact a proactive approach to maintenance and operations.  

In some cases, if an operational metric falls out of operational parameters, the building operators can be notified immediately to address the situation.   

Making the Most of Ongoing Commissioning 

Building commissioning in and of itself is important. But ongoing commissioning has the power to realize the benefits of commissioning over the life of the building.  

Ongoing commissioning is designed to identify and resolve operating issues, improve comfort and optimize energy use. Plus, this ongoing effort can save you substantial money in operating costs.  

 

With the ongoing data input…total thermal energy costs were reduced from $1,037,753 to $510,067. 

 

For example, a case study “Continuous Commissioning of Building Energy Systems,” from David Claridge and WD Turner, Texas A&M University, analyzed a 123,000 square foot research building set up for ongoing commissioning. The entire building’s chilled water and steam consumption was metered and provided data on an hourly basis. With the ongoing data input, a commissioning agent optimized the heating and cooling loads of the buildings and did so for several years. As a result, annual heating and energy consumption was reduced by 63%, annual cooling energy reduced by 42% — and total thermal energy costs were reduced from $1,037,753 to $510,067 (Journal of Solar Energy Engineering, American Society of Mechanical Engineers, 2003).  

Be in control of your building operations. Take charge of its efficiency and manage substantial savings well into the lives of its systems. Contact a commissioning expert to learn how ongoing commissioning can be implemented into your manufacturing facilities.  

 

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