An interview with Thomas Carlyle, Nonwovens Commercial Manager – Americas, Lenzing AG and INDA
Q: What does government affairs mean to you?
For me, government affairs equals regulation and legislation.
In the last ten years, we went from not seeing a need, to now needing to create a government relations and advocacy strategy. We’re finding regulating bodies becoming more and more involved in our industry, whether it's the FDA, the EPA, the Division of Environmental and Natural Resources, or NACWA, the National Association of Clean Water Agencies. We have a lot of organizations thinking about how they regulate our products, and on the legislation side, we see a lot of movement being pushed by nonprofit governmental organizations.
There have been dramatic changes with ingredient disclosure requirements, a focus on flushable wipes, the single use plastic movement and a lot of things that are still yet to come. The momentum is building.
We've seen proposed legislation that would have a dramatic impact on our business. Not just on our customers, or on consumers, but really an impact throughout the entire supply chain, all the way back to supplying raw materials, which is what Lenzing does.
Government affairs and advocacy is very important to Lenzing, and to our industry as a whole. Most INDA members don't have the capability to do their own lobbying or to track what's happening in legislation, even on a federal level, much less at the state level. Having INDA, as our industry organization, drive those activities and keep members up-to-date, to stay ahead of oncoming legislation and understand how we can impact proposed legislation-- is huge!
We have a lot of legislators out there that are passing bills that impact us that really don't understand our industry and what we do. While their proposals have positive intentions, education is often required to help them fully understand the potential fallout from uninformed policies. The potential could be devastating to consumers, healthcare and our economy as a whole. Nonwovens and engineered materials are in so many different and necessary areas of everyday life, and oftentimes unnoticed, so unintended consequences are a serious risk. Having INDA identify these education gaps goes a long way toward helping legislators achieve realistic and manageable solutions. As an industry, we need INDA to identify these education gaps too. Involvement with the legislative process helps us to protect investments our industry has made, and to better chart future strategies toward higher sustainability standards.
At the moment we're closely watching the Miscellaneous Tariff Bill (MTB), on the trade side. We’re also monitoring the Section 301 tariff which was added during the Trump administration to assess further taxes on Chinese goods coming into the U.S. We’re seeing a lot of regulatory activity in the world of single use plastics coming into place. Products that are disposable are a huge portion of the nonwoven industry.
Q: What’s the potential financial impact?
Looking at the Miscellaneous Tariff Bill alone, considering the total wood-based fiber market, you're talking anywhere from $10 to $20 million in tax revenue that could be impacted.
Q: How has INDA’s government advocacy helped Lenzing?
In early 2019, we were unaware that the Washington State Legislature was about to label regenerated cellulose as a plastic. All our fiber, including Veocel™ Lyocell is regenerated cellulose. We had no idea this bill was about to be passed. It was being driven by the flushable wipes regulation. There's no question, if that had happened, it would have dramatically impacted our business and the market.
Having notification from INDA allowed us to participate in educating the legislators and their staff on the impact of their actions. And luckily, with the team, we were able to reverse course. So, this went from being a proposed bill that would restrict or prohibit something, into a labeling bill — where our industry would label non-flushable wipes with the Do Not Flush symbol.
It is a significant advantage for Lenzing, and our whole industry, that INDA was aware and completely changed the course of the bill that was proposed by the state of Washington.
The solution is education. INDA keeps members informed of what’s happening, what’s being discussed, and gives a forewarning to members, through emails, and committee activities and proactively shares what’s being discussed “before” bills can be formed. This forewarning gives INDA member companies the ability to gather, prepare content to help support education, meet and educate the government advocacy professionals, regulators and government staffers with the real facts and impacts on industry, and the consumer to help influence decisions before the bills even take shape.
Technically, you can do your own research, but the amount of resources and time that's needed to do this — to read through the bills and understand exactly how it's impacting your business takes hours and hours. It's something INDA is able to do very quickly because they understand both the legislative process, and they understand our industry.
Understanding what's happening and trying to influence all the states to do the same thing, while at the same time implementing federal legislation and regulation, is really critical.
It's tough. Everybody has their own objectives. Everybody's got their own goals. When you bring together a team of companies that are of different sizes, different positions in the supply chain, they're all doing work together, whether they're competing or whether you're supplying one another, and sometimes doing both — then trying to get them to align on the same objectives and the same strategy. It's tough and INDA’s been very, very successful in making that happen.