Financial Statements - Solvay

110
Solvay Global Annual Report 2008
pharmaceuticals) will require registration under the REACH Regulation, in addition to the other requirements preexisting
to REACH, related to applications (such as food/feed, food contact, cosmetics,etc.).
Given the international scope of the Group, those regulatory approvals emanate from authorities or agencies in many
countries. The withdrawal of any previously granted approval or the failure to obtain an authorization may have an adverse
effect on our business and operating results. The same could also apply in the case of regulatory changes likely to cause
us to incur additional costs.
To the same extent, the existence of price controls in the Pharmaceuticals Sector negotiated with or imposed by relevant
health authorities or the possible existence of trade barriers and tariffs could also limit our revenues and have an adverse
impact on our business and operating results.
The geographical spread of the Group around the world is a factor reducing some regulatory and political risks.
Prevention and Mitigation efforts
Proper design of products and their production processes contributes to the management of regulatory and legal risks, as
do timely and thorough applications for necessary approvals.
In pharmaceuticals, processes have been set up for contacts with regulators and to promote the accurate and
appropriate fl ow of product information among all stakeholders, such as prescribers, patients, and regulators supervising
and controlling product use.
In Chemicals and Plastics, Solvay has set up a dedicated organization to deal with compliance with specifi c product
regulations covering pharmaceuticals, medical devices, cosmetics, personal care, food, feed and related packaging.
In 2008, Solvay achieved the pre-registration of all its products concerned by REACH.
To manage legal risk Solvay maintains in-house legal and intellectual property resources, and relies on additional external
professional resources as appropriate. The simple fact of doing business exposes Solvay to disputes and litigation.
Adverse outcome of such disputes or litigations is always possible. The Group is managing this risk by relying on internal
and external resources and by making appropriate fi nancial provisions.
In the chemicals and plastics industries, technological know-how can remain protected by way of trade secret, which is
often a good substitute for patent protection and Solvay is, in many cases, a leader in the technological know-how for
its production processes. However, Solvay systematically considers patenting new products and processes and maintains
continuous efforts to preserve its proprietary information.
In respect of political risks, Solvay’s actions include risk-sharing with local or institutional partners as well as
insurance solutions.
4. Corporate Governance and Risk attached to Internal Procedures
The risk attached to Internal Procedures is Solvay’s exposure to failure to comply with its own Code of Conduct, policies
and processes. Examples of risks are failed Human Resources strategy, failure to integrate an acquired company, failure
to comply with internationally recognized Corporate Governance rules and good practices, etc.
Prevention and Mitigation efforts
In the fi eld of Corporate Governance, Solvay has a comprehensive corporate governance charter, publicly available on
www.solvay.com, and publishes its yearly report on the application of Solvay’s Corporate Governance rules.
With respect to behavioral risks, training programs are being widely deployed in order to make managers aware of
the importance of legal and antitrust risks. Training courses are organized to enhance ethical compliance with Solvay’s
Code of Conduct. Any violation of the Code will be acted upon.