European Compounders and Masterbatchers Association (EuMBC) questions legality of recent high number of Force Majeure declarations
11 Force Majeure cases in Europe since the turn of the year, all because of ‘technical reasons’
Tuesday, April 21, 2015 — This high number of Force Majeure declarations from European Polyolefin producers has been leading to low product availability, shortages and inevitably to significant price increases.
A Force Majeure is defined as an extraordinary event or circumstance beyond control of the supplier or act of God such as a war, strike, riot, crime, hurricane, flood, earthquake, etc. Only under these circumstances the supplier would be relieved from fulfilling its contractual obligations towards its customer.
However, so far EuMBC has not seen convincing evidence justifying these recent declarations of Force Majeure, only technical reasons were being invoked.
EuMBC is very concerned that the low availability/shortages of material as well as the significant price increases will affect the whole plastics chain, including consumers and subsequently will endanger employment in Europe.
Therefore, EuMBC started further investigating the matter in order to appropriately respond to this critical situation.
Not only EuMBC is addressing the issue of the recent Force Majeure declarations, also the European Plastics Converters Association EuPC (the umbrella association under which EuMBC operates) is concerned about the possible damaging effects for the downstream plastics industry.
“This is particularly damaging at a time when many EU states are trying to claw their way back to recovery and in particular when the EU plastics industry is in such a great position to be in the vanguard of growth with its potential to deliver customers and broader society carbon savings and resource efficiencies”, as Alexandre Dangis, EuPC's Managing Director, pointed out last week.