EuPC: Challenge ‘suspicious' force majeures

EuPC has urged distressed plastics convertors to challenge their raw material suppliers in court if they are faced with suspicious declarations of Force Majeure. EuPC´s Managing Director, Alexandre Dangis said, "The frequency of Force Majeures we have recently experienced is unprecedented in our working life-time. Several raw material suppliers have sailed very close to the wind legally and if the tests of ´Unpredictability´ and ´Irresistibility´ are applied many of these Force Majeure declarations are highly questionable. These really need to be put to the test as only the courts can form a view".

EuPC certainly acknowledges that highly unusual factors have affected raw material supply in the last two years. "Demand for plastics materials reduced considerably on the back of the banking crisis´´ said Dangis. ´´Equally the degree of recovery experienced over the last nine months has taken many of us in industry by surprise but this has been made much worse by the rapid succession of Force Majeures".

"This has caused hardship for many plastics processors all over the EU since they have found it difficult to fulfil their own supply contracts with customers whilst not having the possibility of any legal recourse to their own suppliers". He continued, "in some parts of the EU some speciality materials are just not available. Some of our member associations have informed their respective governments that the availability of essential plastics raw materials is now an issue of national strategic concern´´. Dangis pointed to a recent KPMG study, "The Future of the European Chemicals Industry", which forecasted a 26% reduction in cracker capacity in the EU by 2015.

Dangis concluded "It is ironic that just as society is beginning to appreciate the positive role of plastics in addressing some of the big issues of our time such as mitigating Climate Change, reducing food waste and improving the lot of people of the third world, raw material unavailability is set to undermine the reputational progress our industry has made in recent years.