Government Regulation
September 11, 2024
Epoxy Antidumping Update
Early antidumping ruling is somewhat negative for Olin, Westlake: KeyBanc
Sep. 11, 2024 9:35 AM ETOlin Corporation (OLN) Stock, WLK StockBy: Rob Williams, SA News Editor
A preliminary finding by the U.S. Commerce Department on whether imports of epoxy resin from several Asian countries were dumped in the United States is “moderately negative” for chemical makers Olin (NYSE:OLN) and Westlake (NYSE:WLK), according to analysts at KeyBanc Securities.
The Commerce Department on Sept. 10 concluded that government subsidies are being provided to producers and exporters of epoxy resins from Taiwan, India and China, but not South Korea, which was below the allowed threshold. The department will issue a final determination by Jan. 21.
“The announcement is a negative read for both Westlake (WLK) and Olin (OLN) as the proposed countervailing subsidy rates will not affect South Korea, the largest exporting country,” Aleksey Yefremov, analyst at KeyBanc, said in a Sept. 10 report. “We had earlier expected Olin (OLN) and Westlake (WLK) to each see approximately $75 million to $150 million annualized ebitda benefit from import duties on epoxy resins in the U.S. and EU.”
The U.S. Epoxy Resin Producers Ad Hoc Coalition, which consists of Olin (OLN) and Westlake (WLK), in April filed antidumping duty and countervailing duty petitions with the Commerce Department on imports of epoxy resin from China, India, South Korea, Taiwan and Thailand.
The Commerce Department’s preliminary proposal suggests a countervailing subsidy of about 109% for epoxy resins originating from China, about 1%-3% from Taiwan and about 2% from India except for those produced by Champion Advanced Materials, which will see a counter subsidy rate of about 114%.
Importantly, the European Union investigation is pending with a decision likely next year, according to KeyBanc.
“The benefit of tariffs will be fairly inconsequential unless the EU imposes a more meaningful duty than the U.S.,” KeyBanc said. “In the best-case scenario, we wouldn’t expect more than $30 million-$50 million annualized ebitda benefit for key producers, starting at some point in 2025.”
Olin (OLN) and Westlake’s (WLK) joint petition alleged that imports of epoxy resin from the targeted countries were being sold in the United States at less than fair value, or dumped.
The countervailing duty petition alleged that the governments of the targeted countries provide countervailable subsidies for the production and export of epoxy resin.
Olin (OLN) and Westlake (WLK) together alleged that domestic industry was materially injured and is threatened by the imports with further material injury.
More on Olin, Westlake Corporation, etc.
- Westlake Corporation (WLK) Q2 2024 Earnings Call Transcript
- Olin Corporation (OLN) Q2 2024 Earnings Call Transcript
- Olin Corporation 2024 Q2 – Results – Earnings Call Presentation
- Westlake, major PVC pipe makers accused of price-fixing in lawsuit
- Westlake raised at RBC as rate cuts seen driving stronger demand
September 8, 2024
Epoxy Resin Anti-dumping Analysis
Epoxy Resin Anti-dumping in an Era of Keen Economic Protectionism
Jane Denny : Aug 19, 2024 2:35:26 PM
Petrochemical TrendsNorth American Chemical MarketEpoxy Resin
European and US-based epoxy resin producers have triggered anti-dumping investigations against Asian producers in a bid to stop cheap imports. Meanwhile, India—the subject in the US complaint—claims to be a victim of dumping activity, too.
Last month, US-based chemical manufacturing companies Olin and Westlake and Spolchemie—based in the Czech Republic—submitted data to the European Commission (EC) outlining uncompetitive practice. Following the complaint, the EC initiated investigations into trading by producers in China, South Korea, Taiwan, and Thailand.
The move follows the initiation of a probe into the same countries—with the addition of Indian epoxy resin producers—by the US Department of Commerce and the US International Trade Commission in April 2024.
India’s Ministry of Commerce meanwhile, has initiated an anti-dumping investigation into liquid epoxy resin imports from the same countries as those under European Union (EU) and US scrutiny, and Saudi Arabia too.
Source: ResourceWise
What Is Anti-dumping?
Dumping occurs when imported products are made available to buyers at prices lower than fair market value. Investigations are triggered when domestic producers raise concerns about the prices of foreign goods sold in their domestic markets.
Under EU conditions, there is a two-step test to ascertain whether dumping has occurred. Firstly, the export price of a product must be lower than its selling price in the exporting country. Secondly, the product’s availability in the market must have been injurious to the domestic producer community’s business.
If investigators find that dumping has occurred, measures are put in place to mitigate the problem.
China’s Capacity Growth Key
Jennifer Hawkins, Chemicals Sector Business Manager at ResourceWise, points to China’s significant increase in epoxy resin capacity in recent years, as shown in the infographic above.
“The growth in China’s domestic capacity has forced producers in South Korea and Taiwan to export their epoxy resins to other markets outside China—their erstwhile customer. At the same time, China, historically a net importer of epoxy resins, has started to export volumes to other regions too,” says Hawkins.
White Paper Download
Download Hawkins’ analysis of EU and US ADD investigations and International Trade Commission conference submissions, including insight from her epoxy resin market contacts.
In our 2022 blog post, How Will New Capacities Reshape the Epoxy Resin Market?, we explored China’s extra epoxy resin production capacity. With more of that planned expansion now realized, an oversupply scenario has replaced the tightness in global supply that triggered the expansions.
Back then, we predicted that “a supply glut… will undoubtedly create fierce competition, drive prices down, and possibly encourage a rise in exports.” This has now come to fruition.
Source: ResourceWise
China’s current spot liquid and solid epoxy resin prices are close to their lowest price point over the past near-decade, back in 2016. And even then, the drop was relatively fleeting. Both products have remained low and relatively flat since the close of 2023, as they have in Northeast Asia.
Modest rises have been seen in North American and European pricing structures this year. However, as the graph below shows, North American prices alone did not see any significant increase up to the end of 2023, which producers there have maintained to this day.
Measures to Protect
Anti-dumping duties are imposed by authorities within the country—in the case of the US—or region—such as the EU trading block. They are designed to level up the prices of incoming goods with those produced and sold domestically.
In the EU, producers selling into the region may be taxed according to transaction value or per specific amount of the product. The exporter may even agree to sell products at a minimum price.
In both Europe and the US, complainants sought an investigation into the level of dumping by China, South Korea, Taiwan, and Thailand. They seek adjudication on the question of whether dumped imports have caused material injury to the domestic epoxy resin industry.
The US-focused scrutiny was initiated following a complaint by Olin and Westlake. Unlike the EU complaint, the US complaint requests an investigation of India’s alleged dumping activities.
European Epoxy Resin Anti-dumping
In the EU-focused complaint—in which Spolchemie is a complainant alongside Olin and Westlake—it is alleged that exporting producers from Asian countries have injured European epoxy resin producers. The countries claim that they are selling products in the EU market at unfairly low prices, which significantly undercuts the prices of European producers.
| Country | Dumping margins alleged |
| China | From 140% |
| Korea | From 10% |
| Taiwan | From 20% |
| Thailand | From 60% |
∗ See our free-to-download white paper for upper margins alleged
Epoxy Resins Plant Shutdowns
Speaking to the EU complaint, Olin Epoxy & International president Florian Kohl president said: “Although this issue is not unique to epoxy, nor to the EU, the significant volume of what we believe are unfairly dumped imports of epoxy resin have a seriously negative impact on the EU.”
In March 2023, Olin announced plans to cease operations at its Cumene facility in Terneuzen, Netherlands. and solid epoxy resin production at its facilities in Gumi, South Korea, and Guaruja, Brazil.
At the time, the company described it as a “step to right-size our global epoxy asset footprint to the most cost-effective asset base to support our strategic operating model.” However, as part of that announcement, Olin referenced the softness of global epoxy demand and the surplus supply in the market.
Source: ResoureWise
Market Dynamics At Play
In the US-focused complaint, the country’s Department of Commerce has been asked to assess allegations involving exponentially higher margins.In part, the elevated price tags attached to epoxy resins in the US account for the significant price gap compared to all other regions.
In fact, global epoxy resin price graphs from the chemicals business intelligence platform OrbiChem360 indicate the price differential between North American products and Asian output is several thousand dollars. With Asian producers subject to lower output costs, that price gap creates an opportunity for exports to US buyers.
| Trading Partner | Dumping Margin alleged |
| China | From 266.37% |
| India | From 9.92% |
| Korea | From 35.29% |
| Taiwan | From 91.15% |
| Thailand | From 143.73% |
∗ See our free-to-download white paper for upper margins alleged
Subsidized Industry and Anti-competition
According to a report by the US International Trade Administration (ITA), all countries under investigation for anti-dumping (except Thailand) will also be tested for Countervailing Duties (CVD). Also termed anti-subsidy duties, they are designed to counter the negative effects of subsidies.
The suggestion is that within all the countries named in the US complaint except Thailand, respective governments are propping up the epoxy resin sector with incentives. Established under World Trade Organization (WTO) rules, a subsidy includes grants, loans or tax credits.
Anti-dumping Duties: A Trending Solution
Anti-dumping measures are being implemented with increasing frequency as companies—and nations—seek to protect regional and local market shares.
In 2023, the EC proposed duties of between 6.6% and 24.2% for Chinese polyethylene terephthalate (PET) producers found to be importing goods at uncompetitive prices.
Similarly, the EC’s recent initiation of provisional anti-dumping duties against the majority of China’s biodiesel and hydrotreated vegetable oil (HVO) exporters has rocked natural product markets. Our blog post, Oleochemicals Volatility on the Horizon, explores the impacts.
Countries also rely on other means to halt the import of goods from competitor nations. In a blog post, India Halts Imports For Key Intermediate Chemical From China, we explored the Bureau of Indian Standards ruling, which has halted China’s PTA imports.
Future-gazing: Epoxy Resin Supply Chain
China continues to roll out expansion plans that were set in motion before the current downturn. Those expansions are rendering deals formerly made between China and countries such as South Korea and Taiwan unnecessary today. Producers that previously found buyers in China are now looking further afield.
China’s producers, who are faced with a weak domestic market, are also looking for customers in Europe and the US. If offering products at prices significantly lower than domestic producers wins the sale, they will likely do that.
If epoxy resins are subject to provisional anti-dumping duties after the investigations, how will Asia respond? Will the region’s producers still offer products at prices that bear the duty charge and remain attractive to buyers?
Only time will tell…
September 3, 2024
China Introduces a VOC Tax
Unveiling New VOC Tax Policy: Challenges and Opportunities of Green Transformation in PU
PUdaily | Updated: September 3, 2024
On July 31, 2024, Wang Dongwei, vice minister at China’s Ministry of Finance, announced an important decision at a press conference held by the State Council Information Office that volatile organic compounds (VOCs) will be included in the scope of environmental protection tax. This decision not only signifies a further improvement in China’s tax system but also marks a significant leap in the process of ecological civilization construction.
Background of the Policy
As China’s economy has transitioned to a stage of high-quality development, environmental protection and ecological civilization construction have been increasingly emphasized. VOCs are precursors to fine particulate matter (PM2.5) and ozone (O3) among other secondary pollutants, posing a serious threat to air quality and human health. Therefore, the inclusion of VOCs in the tax scope has become inevitable for environmental governance and pollution control.
Looking back, China’s VOCs control has undergone a gradual deepening process from the formulation of laws to policy promotion. China’s new Air Pollution Prevention and Control Law, which took effect in 2016, first explicitly defined the legal responsibility for VOCs prevention and control. The subsequent introduction of governance measures such as the 13th Five-Year VOC Prevention and Control Work Plan and the Three-Year Action Plan to Win the Blue Sky Defense War, has continuously promoted VOC governance efforts. In January 2024, the Central Committee of the Communist Party of China and the State Council issued guidelines to comprehensively promote the development of a Beautiful China, which clearly stated the need to expedite the inclusion of VOCs in the tax scope, laying a solid foundation for the Ministry of Finance’s policy decision.
As a major source of VOCs, the polyurethane industry mainly generates them from reaction kettles, storage tanks, pipelines, finished product storage and some other production processes. The VOCs in polyurethane include unreacted isocyanates, polyols, solvents (such as DMF, DMAc, etc.), additives, and various by-products. These compounds not only easily form photochemical smog in the atmosphere, affecting air quality but may also pose health risks through respiratory pathways, skin contact, among others.
To further reduce VOC emissions in polyurethane, VOCs emission characteristics in each process have been preliminarily analyzed so as to implement targeted emission reduction measures. The methods include reducing by-products by optimizing reaction conditions, improving production processes to achieve solvent-free or low-solvent manufacturing, and perfecting waste gas collection and treatment systems.
The Impact of VOC Tax on the Polyurethane Industry
1. Deep Economic Impact and Restructuring
Reshaping Cost Structures: The introduction of tax on VOCs will compel polyurethane companies to revisit their cost structures. Apart from direct tax expenditures, businesses need to consider the indirect costs associated with upgrading, maintaining, and managing environmental protection facilities. These cost increases will have a profound impact on business strategies and financial status, prompting companies to seek more economically efficient solutions.
Rebuilding Market Competitiveness: The prices of polyurethane-related products may be adjusted accordingly with rising costs. This will change consumers’ perceptions of value, thus affecting market demand structures. Those who successfully achieve green transformation and reduce VOC emissions will become more competitive in the market.
2. Driving Forces and Challenges of Technological Innovation
Breakthroughs in Green Manufacturing: Businesses need to increase R&D investments in green manufacturing to address the challenges of VOC taxes, including exploring new catalysts, optimizing reaction routes, and developing recyclable or biodegradable materials. Breakthrough technologies will deliver significant environmental and economic benefits.
Upgrading Waste Gas Treatment Technologies: Existing waste gas treatment technologies may struggle to meet stricter environmental standards. Therefore, businesses need to focus on the latest developments in waste gas treatment technologies domestically and internationally, actively introducing and grasping advanced technologies. Furthermore, strengthening independent R&D capabilities and developing more efficient, cost-effective waste gas treatment technologies are crucial.
3. Far-reaching Changes and Opportunities in Industry Chain
Supply Chain Integration and Green Transformation: The introduction of VOC tax will prompt businesses in the polyurethane supply chain to enhance cooperation. Raw material suppliers need to provide more eco-friendly materials to support downstream manufacturers’ green transformation, while downstream manufacturers may demand higher environmental performance from products to improve their brand image and meet customer requirements. The supply chain integration will push the industry towards a green and sustainable future.
Enhancing Industry Standards and Aligning with International Standards: With increasingly stringent environmental policies and the implementation of environmental taxes, relevant standards and specifications in the polyurethane industry will be gradually enhanced, helping regulate market order, raising the industry level and promoting fair competition. Aligning with international environmental standards will also provide strong support for polyurethane businesses’ global expansion.
Strategies for the Polyurethane Industry
1. Strengthening Internal Management for Enhanced Environmental Performance
Building and improving environmental management systems, reinforcing the daily operation and meticulous maintenance of environmental facilities are crucial to support the high-quality development. Through fine-tuned management strategies, businesses can effectively control energy and material consumption, significantly reducing the emission of pollutants like VOCs, thereby contributing to environmental protection. Sustainability training for employees, integrating green concepts into each employee’s mindset to enhance their social responsibility and participation, is essential for paving the way for green roads. These measures not only showcase businesses’ environmental responsibility but also serve as key drivers for transitioning towards a better and more sustainable future.
2. Increasing R&D Investment to Promote Technological Innovation
Increasing R&D efforts in green manufacturing and air pollution control technologies, actively incorporating advanced technological achievements are strategic focuses. Beyond the industrial sphere, businesses can deepen collaborations with universities and research institutes to facilitate the conversion of research outcomes into practical applications, jointly advancing technological upgrades and industrial advancements.
3. Monitoring Policy Changes and Flexibly Adjusting Business Strategies
Businesses should closely monitor changes in national environmental and tax policies, stay informed about policy requirements and demand changes. Based on this information, flexibly adjusting business strategies and development directions ensures their sustained growth and market adaptability. For instance, adapting product structures, exploring emerging markets, or intensifying communication and collaboration with government entities based on policy trends.
4. Actively Engaging in Industry Self-Regulation and Cooperation
Polyurethane businesses should actively engage in self-regulation and enhance collaboration with industry peers. By jointly formulating industry standards and regulations, sharing technologies and experiences, they can promote industry transformation and sustainable development.
In conclusion, the impact of VOC tax on the polyurethane industry is diverse and far-reaching. Market participants need to adopt an open innovation approach to embrace challenges and opportunities actively. Green transformation and sustainable development can be achieved through initiatives such as strengthening internal management, promoting technological innovation, flexibly adjusting business strategies, and actively engaging in industry self-regulation and cooperation.
August 29, 2024
EPA Targets
EPA Targets Five Widely Used Chemicals: TSCA “High Priority” Designation Signals Potential Future Use Restrictions on the Chemicals and Products Containing Them
by: Javaneh S. Tarter, Nancy B. Beck, PhD, DABT, Gregory R. Wall, Matthew Z. Leopold of Hunton Andrews Kurth – The Nickel Report
Thursday, August 29, 2024
Related Practices & Jurisdictions
On July 25, 2024, the US Environmental Protection Agency (EPA) proposed to designate acetaldehyde (CASRN 75-07-0), acrylonitrile (CASRN 107-13-1), benzenamine (CASRN 62-53-3), vinyl chloride (CASRN 75-01-4), and 4,4-methylene bis(2-chloroaniline) (MBOCA) (CASRN 101-14-4) as high-priority substances for risk evaluation under the Toxic Substances Control Act (TSCA). A high-priority designation marks the first step toward EPA performing a risk evaluation of a chemical, which could lead to a risk management regulation imposing significant restrictions on uses of the chemical, including products containing the chemical. Companies involved in the manufacture, import, processing, distribution, use or disposal of these widely used chemicals or products containing them should take note that EPA is considering them for potential evaluation and restrictions in the future.
High Priority Chemicals
Under TSCA Section 6, a high-priority substance is a substance that EPA determines “may present an unreasonable risk of injury to health or the environment” because of potential hazard and exposure under the conditions of use, including an unreasonable risk to potentially exposed or susceptible subpopulations. In proposing the five chemicals for high-priority designation, EPA considered their conditions of use and production volume or changes in conditions of use and production volume over time, hazard and exposure potential, and impacts to potentially exposed or susceptible subpopulations, including children, consumers, workers, and overburdened communities. The chemicals’ persistence and bioaccumulation and whether they are stored near significant sources of drinking water are also relevant criteria.
If EPA finalizes its proposed high-priority designations for these substances, EPA will proceed to release scoping documents defining the scope of the risk evaluations and will conduct risk evaluations to determine whether the substances present an unreasonable risk to human health or the environment. If EPA does find that the substance presents an unreasonable risk, EPA must propose risk management rules, such as bans, worker protection programs, concentration limits, labeling, notification, and other restrictions to the extent necessary to eliminate the unreasonable risks. EPA must complete the risk evaluation process within 3-3.5 years and the risk management process within 2 years of the final risk evaluation.
Notably, EPA has been significantly delayed in these timelines for other high-priority substances that are still undergoing risk evaluations. There are currently 24 high-priority chemicals that are still undergoing the risk evaluation process. EPA has announced the goal of releasing more information about high-priority substances earlier in the process to attempt to gather more data on uses from stakeholders about high-priority chemicals, resulting in more efficient and informed risk evaluations and risk management rules.
Uses of the Five High Priority Chemicals
EPA released high priority designation documents for each of the five chemicals. The documents detail why under the statutory criteria EPA believes they warrant a high priority designation. In particular, EPA outlines the conditions of use of each chemical that it is aware of based on publicly available data such as TSCA Chemical Data Reporting (CDR) rule data, Toxics Release Inventory (TRI) exposure data, safety data sheets, and other EPA databases. Below, we outline the conditions of use that EPA has identified in these high-priority designation documents.
Companies should be aware that these uses are likely to be included in risk evaluations for these chemicals and potentially regulated in the future:
Acetaldehyde
Acetaldehydeis used as an intermediate in chemical, petrochemical and adhesive manufacturing, as well as an intermediate in packaging (excluding food packaging). It has commercial uses in adhesives, sealants, plastic and rubber products, golf and sports turf, agricultural non-pesticidal products, and paper products. Additionally, EPA identified acetaldehyde in commercial use for construction and building materials, including paper articles; metal articles; stone, plaster, and cement; and glass and ceramic materials.
Acetaldehyde is also used in consumer paints and coatings, plastic and rubber products, paper products, leather cleaning products, surface cleaners, wood polish, car degreaser and wax, motor oil, caulking, surface sealer, drywall, home insulation, automobile components, imaging products such as cameras and camcorders, displays, projectors, audio equipment, broadcasting systems, harnesses, cables, sheets, films, blankets, jewelry, clothing, and children’s products such as toys and games.
Acrylonitrile
Acrylonitrileis used primarily in the manufacturing and processing of plastics, paints, fibers, rubber, petrochemicals, adhesive and sealant, and other chemicals. Acrylonitrile is used as an intermediate and a monomer in manufacturing chemical products such as plastic material and resins, synthetic rubber, organic fibers, and paints and coatings. Other conditions of use of acrylonitrile include soaps and detergent manufacturing; surface active agent manufacturing; photographic film, paper, plate and chemical manufacturing; petroleum refineries; bulk gasoline terminals; pulp and paper; ferrous metals, and as a solvent in degreasing.
Consumer products reported to contain acrylonitrile include auto adhesives, batteries, multipurpose adhesive, printer inks, paint/stain products, surface sealers and upholstery, glues, coloring pens, corrective fluid, food packaging, clothing, textiles, furnishings, audio equipment, automobile construction, automobile equipment, battery cases, broadcasting systems, carbon fiber, displays, fans, imaging products such as cameras and camcorders, optical units, projectors, and nitrile gloves. EPA also identified acrylonitrile uses in several children’s products, including craft supplies, toys, games, bibs, and clothing.
Benzenamine
Benzenamine (also referred to as aniline) is used as an intermediate in chemical, petrochemical, pesticide, fertilizer, and other agricultural chemical, plastics, resins and synthetic dyes and pigment manufacturing. Benzenamine is also processed as a reactant in dyes in synthetic dye and pigment manufacturing and dyes in textiles, leather, and apparel manufacturing. Benzenamine is a processing aid and heat transfer agent for several industrial uses. It is also used in inks, toner, color products, rubber tires, textile (fabric) products, as well as furniture and furnishings, including soft plastic articles and leather articles.
Other conditions of use of benzamine include brightener in paper manufacturing, soaps and detergents, pH regulators, water treatment products, degreasing, and industrial surface coating and solvent use. Additionally, benzamine is present in consumer products such as fabric, jewelry, paints and coatings, fuels, batteries, speaker systems, audio equipment, imaging products such as cameras and camcorders, broadcasting systems, cable parts, magnetics, switch holders, seals, housings, ink, optical whitening agents, and children’s products such as toys and apparel.
Vinyl chloride
Vinyl chloride is primarily used to manufacture and process plastic materials such as polyvinyl chloride (PVC), plastic resins, and other chemicals, many of which are used for pipes and insulating materials. It is used as an intermediate, binder, and monomer in plastic material and resin manufacturing, as well as an intermediate in manufacturing products such as adhesives, industrial gas, and petrochemicals. Additional conditions of use of vinyl chloride include other basic inorganic chemical manufacturing, plastics, rubber products, unlaminated plastics film and sheet (except packaging) manufacturing, pulp and paper, ferrous and non-ferrous metals, degreasing, and industrial surface coating and solvent use.
Consumer products reported to contain vinyl chloride include adhesives and sealants, paints and coatings, furniture and furnishings, floor coverings, fabric, agricultural and food packaging, medical devices, vinyl wallcovering and roofing, upholstery, instrument and door panels, convertible tops, swimming pool and industrial liners, sporting goods, luggage, briefcases, accessories, adhesives, glues, inks, and children’s products such as toys and apparel.
4,4-methylene bis(2-chloroaniline) (MBOCA)
MBOCA is used in plastic material, resin, synthetic rubber, and paint and coating manufacturing. It is also used as a plasticizer in plastic and rubber products. Other MBOCA uses include degreasing and industrial surface coating and solvent use; processing as a curing agent (epoxy resins); and as an intermediate in polyurethane elastomers to produce polyurethane foams. Additionally, MBOCA may be present in consumer products such as golf balls, robot wheels, roller skate wheels, high-load wheels for platform and tool-box carts, sports boots, shoe soles, belts, belts and rollers used in computer printers and photocopy machines, paper, and corrugated cardboard.
Comment Period
EPA is interested in receiving comments on these proposed high priority designations that would inform its hazard and exposure assessment, as well as identify conditions of use it could include in a risk evaluation. Comments must be received on these proposed designations on or before October 23, 2024. Companies who use these chemicals may want to provide EPA with data about how they use these chemicals in their facilities, including what current worker protections are used or whether there are restrictions or limitations on how the substance is used in consumer products, so that EPA can have the most updated information about the real-world applications of these substances.
August 26, 2024
Latest Canadian Rail Strike Update
Canadian agency upholds binding arbitration order to end rail dispute
Union says it will appeal ruling to federal court
· Saturday, August 24, 2024
This story originally appeared on Trains.com.
OTTAWA, Ontario — The Canada Industrial Relations Board has affirmed the decision by Labor Minister Steven MacKinnon to end the work stoppages at Canadian National Railway and Canadian Pacific Kansas City, requiring the railroads to resume operations and to impose binding arbitration between the railroads and the Teamsters Canada Rail Conference to resolve new contract terms.
Operations are to resume by 12:01 a.m. ET on Monday, Aug. 26, while the labor contract that expired on Dec. 31, 2023, is extended until a new agreement is completed. The start of the arbitration process will begin with a meeting with the CIRB on Thursday, Aug. 29, at 11 a.m. ET.
In response to the decision this evening (Saturday, Aug. 24), the union has said it will comply, but will also appeal the CIRB ruling to federal court.
“This decision by the CIRB sets a dangerous precedent,” TCRC President Paul Boucher said in a statement. “It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union. The rights of Canadian workers have been significantly diminished today.”
A statement from Canadian National says the railroad will comply with the order. “While CN is disappointed an agreement could not be reached at the bargaining table,” the statement reads, “the company is satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months.”
CPKC also said it would comply and was ending the lockout it imposed on Aug. 22. The railroad’s statement said it was asking TCRC workers to return to work for the day shift on Sunday, Aug. 25, “so that we can get the Canadian economy moving again as quickly as possible and avoid further disruption to supply chains.” CPKC said the CIRB ruling “ends months of unnecessary uncertainty and disruption” for the economy, but also cautioned that it will take “several weeks” for the rail network to fully recover and “a period of time beyond that for supply chains to stabilize.”
The CIRB, in a pair of decisions — one addressing each railroad — said it determined it “does not have the authority to review the minister’s directions or to assess their validity,” saying that is a matter for the courts, and that it further “has no discretion for ability to refuse to implement, in whole or in part, the minister’s directions or to modify their terms.”
MacKinnon had announced his decision to send the matter to arbitration on Thursday, Aug. 22 — about 17 hours after both railroads locked out members of the TCRC. But rail operations remained in limbo as CPKC awaited the board’s ruling before advancing its plans to restart operations and the union kept its picket lines up at that railroad in the interim. CN ended its lockout on Thursday at 6 p.m. and the union originally said it would return, but then issued a strike notice effective at 10 a.m. on Monday, Aug. 26, while it awaited the CIRB action, saying the move was intended to “pressure CN into negotiating an agreement.”
CN’s statement notes that the CIRB ruling prohibits any further labor stoppage during the arbitration process, and therefore voids the TCRC strike notice.
MacKinnon, in a post this evening on social media site X, said he expected the railroads and employees to “resume operations at the earliest opportunity.”
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