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ANALYSIS OF ALTERNATIVES
&
SOCIO-ECONOMIC ANALYSIS
Public version
Legal name of Applicant(s): FN Herstal
Manroy
Submitted by: FN Herstal
Substance: Chromium trioxide (EC 215-607-8, CAS 1333-82-0)
Use title: Use-1
Industrial use of chromium trioxide in the hard chromium
coating of military small- and medium-caliber firearms barrel
bores and auxiliary parts subject to thermal, mechanical and
chemical stresses, in order to provide hardness, heat
resistance and thermal barrier properties, as well as
corrosion resistance, adhesion and low friction properties.
Use number: 1
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C ON T E NT S
LIST OF ABBREVIATIONS ................................................................................................................................... 6
1. SUMMARY ............................................................................................................................................... 7
2. AIMS AND SCOPE OF THE ANALYSIS ......................................................................................................... 9 2.1. Applicants ..................................................................................................................................................... 10
2.1.1. FN Herstal ......................................................................................................................................................... 10 2.1.2. Manroy ............................................................................................................................................................. 11
2.2. Scope of the AfA ........................................................................................................................................... 11 2.2.1. FN Herstal’s hard chromium plating process .................................................................................................... 12 2.2.2. Manroy’s hard chromium plating process ........................................................................................................ 12
2.3. Products concerned...................................................................................................................................... 13 2.4. Supply chain ................................................................................................................................................. 14 2.5. Elements of context ..................................................................................................................................... 14
2.5.1. Market and business model ............................................................................................................................. 14 2.5.2. Focus on the defence market ........................................................................................................................... 15 2.5.3. Importance of the defence industry and FN Herstal for the Belgian territory .................................................. 15 2.5.4. Synthesis: general context of the AfA ............................................................................................................... 16
2.6. General methodology ................................................................................................................................... 16 2.6.1. Scope of the AfA ............................................................................................................................................... 17 2.6.2. Actualisation .................................................................................................................................................... 19 2.6.3. Confidentiality .................................................................................................................................................. 20 2.6.4. Focus: Technology Readiness Levels ................................................................................................................. 21
2.7. Substitution strategy .................................................................................................................................... 21 2.8. Presentation of the “applied for use” and “non-use” scenarios .................................................................. 22
2.8.1. “Applied for use” scenario ................................................................................................................................ 22 2.8.2. “Non-use” scenario .......................................................................................................................................... 22
3. “APPLIED FOR USE” SCENARIO ............................................................................................................... 23 3.1. Elements of context ..................................................................................................................................... 23
3.1.1. Hard chromium plating .................................................................................................................................... 23 3.1.2. Historical background ...................................................................................................................................... 24 3.1.3. Lifespan of firearm barrels ............................................................................................................................... 24 3.1.4. Standards requirements and customer requirements ...................................................................................... 26 3.1.5. Barrel life characteristics and failure criteria ................................................................................................... 28
3.2. Analysis of substance function ..................................................................................................................... 29 3.2.1. Scope of Use-1 .................................................................................................................................................. 30 3.2.2. Functional properties of hard chromium in the context of armament manufacturing .................................... 31 3.2.3. Complementary requirements for the research of alternatives to hard chromium plating ............................. 33
3.3. Parts concerned............................................................................................................................................ 33 3.4. Market and business trends including the use of the substance ................................................................. 36
3.4.1. Use of chromium trioxide ................................................................................................................................. 36 3.5. Remaining risk of the “applied for use” scenario ......................................................................................... 36 3.6. Human health impacts and monetised damage of the “applied for use” scenario ..................................... 37
3.6.1. Number of people exposed ............................................................................................................................... 37 3.6.2. Medical treatment ........................................................................................................................................... 37 3.6.3. Mortality and morbidity ................................................................................................................................... 40 3.6.4. Synthesis of the monetised damage of the “applied for use” scenario ............................................................ 46 3.6.5. Complementary elements of analysis: values taking into account a 4% discount rate .................................... 46
3.7. Environment, man-via-environment impacts and monetised damage of the “applied for use” scenario ... 46 3.7.1. Environment impacts and monetised damage ................................................................................................. 46 3.7.2. Man-via-environment impacts and monetised damage .................................................................................. 47
4. SELECTION OF THE “NON-USE” SCENARIO ............................................................................................. 48 4.1. Efforts made to identify alternatives ............................................................................................................ 48
4.1.1. Data searches and Research & Development ................................................................................................... 48 4.2. Potential alternatives already abandoned ................................................................................................... 49
4.2.1. Thermal spraying with HVOF (High Velocity Oxygen Fuel) ............................................................................... 49 4.2.2. Thermochemical surface modification ............................................................................................................. 50 4.2.3. Nickel and Nickel alloy coatings ....................................................................................................................... 50
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4.3. Research and development works in order to reduce the exposure to Cr(VI) for hard chrome plating (FNH1) 52 4.4. Assessment of shortlisted alternatives......................................................................................................... 54
4.4.1. Alternative 1: Chromium deposition from Cr(III) electrolyte ............................................................................ 54 4.4.2. Alternative 2: Vacuum process with PVD/CVD ................................................................................................. 55
4.5. Substitution timeline .................................................................................................................................... 57 4.6. Synthesis: summary of the potential substitution processes considered .................................................... 59 4.7. The most likely “non-use” scenario .............................................................................................................. 61
4.7.1. Potential “non-use” scenarios .......................................................................................................................... 61 4.7.1. Synergy between uses ...................................................................................................................................... 61
5. IMPACTS OF GRANTING AN AUTHORISATION ........................................................................................ 64 5.1. Economic impacts......................................................................................................................................... 64
5.1.1. Loss of revenues and profits ............................................................................................................................. 64 5.1.2. Loss of markets ................................................................................................................................................ 68 5.1.3. Lost investments............................................................................................................................................... 69 5.1.4. Relocation costs for FN Herstal ........................................................................................................................ 70 5.1.5. Increase of operating costs .............................................................................................................................. 70 5.1.6. Regulatory issues.............................................................................................................................................. 71 5.1.7. Potential financial opportunities ...................................................................................................................... 72
5.2. Human health or Environmental impact ...................................................................................................... 73 5.2.1. Impacts on human health ................................................................................................................................ 73 5.2.2. Greenhouse gas emissions ............................................................................................................................... 73
5.3. Social impact ................................................................................................................................................ 75 5.3.1. Direct impact on employment .......................................................................................................................... 75 5.3.2. Indirect impact on employment ....................................................................................................................... 77 5.3.3. Complementary element of analysis: total cost of the loss of employment for the AfA................................... 78
5.4. Wider economic impact ............................................................................................................................... 78 5.4.1. Impact on operational capabilities and sovereignty of States.......................................................................... 78
5.5. Distributional impacts .................................................................................................................................. 79 5.6. Uncertainty analysis for both the “applied for use” and the “non-use” scenario ........................................ 79
5.6.1. “Applied for use” scenario ................................................................................................................................ 79 5.6.2. “Non-use” scenario .......................................................................................................................................... 80 5.6.3. Conclusion ........................................................................................................................................................ 82
5.7. General conclusion on the impacts of granting an authorisation ................................................................ 83
6. CONCLUSIONS........................................................................................................................................ 85 6.1. Comparison of the benefits and risks ........................................................................................................... 85 6.2. AoA-SEA in a nutshell ................................................................................................................................... 85 6.3. Information for the length of the review period .......................................................................................... 87 6.4. Substitution effort taken by the Applicants if an authorisation is granted .................................................. 87
7. References ............................................................................................................................................. 88
8. Annex – Justifications for Confidentiality Claims.................................................................................... 91
9. Appendixes ............................................................................................................................................ 92 9.1. Main competitors of FN Herstal ................................................................................................................... 92 9.2. Focus on barrel failure modes ...................................................................................................................... 93 9.3. DGA’s position for the maintained use of hexavalent chromium for barrel bore hard chromium plating of small-calibre firearms ................................................................................................................................................. 96 9.4. Framework for the export of armament ...................................................................................................... 99
9.4.1. Belgian and European legal framework ........................................................................................................... 99 9.4.2. European Code of Conduct on Arms Export .................................................................................................... 100
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T A B L E S
Table 1. Uses of the Application for Authorisation ........................................................................ 9 Table 2. FN Herstal key figures, 2014 .......................................................................................... 10 Table 3. Manroy key figures, 2014 .............................................................................................. 11 Table 4. Manroy products and status in the context of the AfA .................................................... 13 Table 5. Scope of the AfA ........................................................................................................... 18 Table 6. Impact period of the AfA ............................................................................................... 18 Table 7. Inflation values taken into account in this dossier .......................................................... 19 Table 8. European Commission’s definition of Technology Readiness Levels ................................ 21 Table 9. Tonnages of CrO3 over the 2013-2015 period (tons), for Use-1 and Use-2 ....................... 36 Table 10. Lung cancer costs for Belgium (average of data for France, Germany and the United
Kingdom) for the first two years after the diagnosis .................................................................... 38 Table 11. Lung cancer costs in the United Kingdom for the first two years after the diagnosis ...... 39 Table 12. Net year survival rate after lung cancer diagnosis in France
,, ........................................ 39
Table 13. Individual lung cancer costs during the review period, not taking into account the excess
of risk for workers ..................................................................................................................... 40 Table 14. Total lung cancer costs during the review period, considering the total excess of risk for
workers and the respiratory equipments .................................................................................... 40 Table 15. Years of Life Lost (YLL) for Use-1 .................................................................................. 42 Table 16. Years of Life lived with Disability (YLD) for Use-1 .......................................................... 43 Table 17. Synthesis of YLLs, YLDs and monetised damage of mortality and morbidity related to the
excess cancer risk associated with lung cancer, Use-1 ................................................................. 44 Table 18. Value of statistical life and willingness to pay to avoid cancer ...................................... 45 Table 19. Incidence and mortality associated with lung cancer in Europe, in 2012 ....................... 45 Table 20. Mortality and morbidity costs for Use-1, complementary assessment ........................... 46 Table 21. Overall impacts of the "applied for use" scenario, Use-1 .............................................. 46 Table 22. Overall impacts of the “applied for use” scenario, Use -1. Complementary analysis taking
into account a 4% discount rate ................................................................................................. 46 Table 23. Substitution timelines for Alternative 1 and Alternative 2 ............................................ 58 Table 24. Summary of potential substitution processes considered (on grey background, the two
shortlisted alternatives) ............................................................................................................. 60 Table 25. Different "non-use” scenarios depending on the outcome of the application for
authorisation for Use-1 and Use-2 .............................................................................................. 62 Table 26. Loss of revenues for FN Herstal related to the “non-use” scenario ................................ 66 Table 27. Loss of revenues for Manroy related to the “non -use” scenario .................................... 67 Table 28. Total loss of revenues for Use-1 .................................................................................. 67 Table 29. Total loss of profits for Use-1 ...................................................................................... 67 Table 30. Detail of investments in amortisation, by year of last annuity ....................................... 69 Table 31. Relocation costs for FN Herstal, for Use-1 and Use-2 .................................................... 70 Table 32. Conversion factors for transportation modes. Source: Bilan Carbone v7.1.021 .............. 73 Table 33. Characterisation of the outward trip of the transportation journey associated with the
“non-use” scenario. ................................................................................................................... 74 Table 34. Greenhouse gas emissions associated with the “non -use” scenario for Use-1 ................ 74 Table 35. Loss of employment in the context of the “non -use” scenario for Use-1 ....................... 75 Table 36. Average individual social cost of an unemployed person in Belgium and the United
Kingdom, 2010 .......................................................................................................................... 76 Table 37.Total cost of the loss of employment for Use-1 ............................................................. 76 Table 38. Detail of the assessment of indirect job losses foreseen for Herstal and Erith in the
context of the “non-use” scenario .............................................................................................. 77
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Table 39. Global direct loss of employment and associated costs for the AfA (i.e. cumulated for
Use-1 and Use-2 ........................................................................................................................ 78 Table 40. Uncertainty analysis for mortality and morbidity, Use-1 ............................................... 80 Table 41. Qualitative uncertainty analysis of the main parameters of the “applied for use” scenario
................................................................................................................................................. 80 Table 42. Qualitative uncertainty analysis of the main parameters of the “applied for use” scenario
................................................................................................................................................. 82 Table 43. Synthesis of the monetised impacts of the “non -use” scenario ..................................... 83 Table 44. Other impacts of the “non-use” scenario ..................................................................... 84 Table 45. Justifications for confidentiality claims ........................................................................ 91 Table 46. Main competitors of FN Herstal, by country and product categories ............................. 92 Table 47. Belgian legal framework related to the export of armament ......................................... 99 Table 48. Criteria of the European Code of Conduct on Arms Export .......................................... 100
F IG U R E S
Figure 1. FN Herstal ................................................................................................................... 10 Figure 2. Barrel manufacturing, machining and packing activities on the site of Herstal ............... 10 Figure 3. Manroy Engineering ..................................................................................................... 11 Figure 4. Main FN Herstal products concerned by Use-1 .............................................................. 13 Figure 5. Supply chain of FN Herstal firearms. ............................................................................. 14 Figure 6. FN M2® machine gun ................................................................................................... 24 Figure 7. Barrel fatigue failure modes ......................................................................................... 29 Figure 8. Cross section of barrel bore, magnified (top) and general (bottom) ............................... 30 Figure 9. FN MINIMI® machine gun exploded view. In red, parts concerned by Use -1. .................. 35 Figure 10. Share of FN Herstal revenues related and not related to hard chromium plating (Use -1
and Use-2), on the basis of cumulated revenues over the 2000-2015 period. ............................... 64 Figure 11. FN Herstal revenues for the 2004-2014 period, in M€ ................................................. 65 Figure 12. Barrel fatigue failure modes ....................................................................................... 93 Figure 13. Barrel wear as a function of barrel length, for new and end -of-life barrels ................... 94 Figure 14. Barrel bore pictures, for new barrel (left) and end-of life-barrel (right) ........................ 94 Figure 15. Copper deposit (blue part of the picture) .................................................................... 95
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LIST OF ABBREVIATION S
AfA Application for Authorisation
B Billion (€)
Cr(III) Trivalent chromium
Cr(VI) Hexavalent chromium
DALY Disability-Adjusted Life Years
DAS Delivery and Acceptance Specification
DGA Direction Générale de l’Armement
French Armament Procurement Agency - French Ministry of Defence
GHG Greenhouse Gas
k Thousands (€)
kgCO2e Equivalent carbon dioxide kilogram
M Million (€)
PV Present value
QAI Quality Assurance Instruction
QST Quality Standard
STANAG Standardised Agreement
tCO2e Equivalent carbon dioxide ton
WHO World Health Organisation
WTO World Trade Organisation
YLD Years lived with disability
YLL Years of Life Lost due to premature mortality
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1. SUMMARY
C ON T E XT
FN Herstal (Herstal, Belgium) and Manroy (Erith, United Kingdom) are two
subsidiaries of the Herstal Group, a manufacturer of small- and medium-caliber
firearms.
Under Use-1, FN Herstal and Manroy are downstream users of chromium trioxide in
the hard chromium coating of military small- and medium-calibre firearm barrel
bores and auxiliary parts subject to thermal, mechanical and chemical stresses.
Hard chromium coating constitutes a key element in the performance of FN Herstal
and Manroy products, notably in terms of service lifespan of firearms and therefore
of ownership costs for their customers. Hard chromium coating therefore constitutes
an essential condition for the competitiveness of FN Herstal and Manroy; the
economic impacts of its banning from the market would strongly affect both
companies.
S U B S T A NC E F U N CT IO N
The main functional properties sough-after by FN Herstal and Manroy with
chromium trioxide include: hardness, heat resistance and thermal barrier properties,
corrosion resistance, efficient coverage of complex or inner shapes, preservation of
tolerances, as well as chemical barrier properties, adhesion properties and friction
properties.
I DE NT IF I CAT IO N O F AL T E R NAT I V E S
A significant work of research carried out internally and through partnerships with
external research centres led to identify two potential alternative processes to hard
chromium plating for the surface treatment of firearm barrel bores and auxiliary
parts.
As a result of testing and analysis over the last decade, two potential alternatives
appear promising: deposition of chromium from a Cr(III) electrolyte (Alternative 1)
and vacuum process with Physical/Chemical Vapour Deposition process
(Alternative 2).
These processes, however, have yet to be further investigated, implemented and
qualified and will therefore not be available before the sunset date of chromium
trioxide.
“ A P P L IE D FO R U SE ” AN D “ NO N- U SE ” SC E NA RIO S
Under the “applied for use” scenario, FN Herstal and Manroy will pursue the use of
chromium trioxide for the surface treatment of parts concerned by Use-1 for the
period of time necessary to develop, implement and qualify an alternative process,
thereby securing both their industrial activity in the European Union and the supply
of firearms to armed forces of sovereign States.
In conjunction with research works for alternatives, and subject to the granting of an
authorisation, FN Herstal will implement an optimised hard chromium plating
process allowing to reduce the use of the substance and the exposure of workers to
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Cr(VI) during the period of time necessary to develop and implement a sustainable
substitution process.
The most likely “non-use” scenario is the following: with the ban on the use of Cr(VI)
compounds and therefore the cessation of hard chromium treatment, FN Herstal and
Manroy will have to relocate their hard chromium plating operations outside the
European Union.
Since Use-1 concerns the very core of FN Herstal’s and Manroy’s current and future
portfolios, this scenario will have strong economic, environmental, social and wider
impacts on both companies.
I M P ACT S OF G RA NT I NG A UT HO RI S AT ION
The main impacts of the “applied for use” scenario include costs related to the
medical treatment, morbidity and mortality associated with the excess of risk of
cancer arising from the exposure to chromium trioxide of workers over the review
period.
The total monetised impacts of the “applied for use” scenario amount to € 1,106.
Main monetised impacts of the “non-use” scenario include the loss of revenues,
profits, employment and investments, as well as relocation costs
The total monetised impacts of the “non-use” scenario amount to € [100-
1,000M](#1a).
Based upon the present assessment, the socio-economic benefits outweigh the risks
arising from the use of the substance by a factor of approximately [100,000-
1,000,000](#1b).
In addition to monetised impacts, the “non-use” scenario involves the loss of
markets that will be closed to FN Herstal and Manroy due to the relocation outside
the EU, an increase of operating costs, stringent regulatory issues and safety of
supply issues, impacts on human health, greenhouse gas emissions as well as a loss
of sovereignty and loss of investments for States that are customers of FN Herstal
and Manroy.
C ON C L U SI ON
Based on the argument put forward, and in order to develop, implement and
qualify an alternative solution for Use-1, FN Herstal and Manroy apply for a
twelve-year review period.
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2. AIMS AND SCOPE OF THE ANALYSIS
The aim of the present document is to provide a comprehensive analysis of both
the Analysis of Alternatives and Socio-Economic Analysis parts of FN Herstal’s and
Manroy’s Use-1 Application for Authorisation (AfA), i.e:
- to provide a comprehensive understanding of the context of the AfA;
- to describe FN Herstal’s and Manroy’s research works for alternatives,
potential alternatives and substitution strategy ;
- to provide a comparative assessment of the monetised impacts of the
pursued use of the substances (“applied for use” scenario) and the impacts
of the denial of an authorisation (“non-use” scenario).
For the sake of clarity, it is reminded that this document is part of a broader AfA.
FN Herstal’s, Manroy’s and Browning’s authorisation dossier is indeed composed of
two uses:
Use-1
Industrial use of chromium trioxide in the hard chromium coating of military small- and medium-caliber firearms barrel bores and auxiliary parts subject to thermal, mechanical and chemical stresses, in order to provide hardness, heat resistance and thermal barrier properties, as well as corrosion resistance, adhesion and low friction properties.
Use-2
Industrial use of chromium trioxide in the hard chromium coating of civilian firearms barrel bores and auxiliary parts subject to thermal, mechanical and chemical stresses, in order to provide a low friction coefficient as well as heat, corrosion and wear resistance properties.
Table 1. Uses of the Application for Authorisation
Under the brands FN Herstal, Manroy and Browning, the Herstal Group designs,
manufactures and distributes a full range of firearms and associated products for
FN Herstal (Herstal, Belgium) and Manroy (Erith, United Kingdom) are two
subsidiaries of the Herstal Group, manufacturing small- and medium-caliber
firearms. From the point of view of the REACh regulation, FN Herstal and
Manroy are considered as downstream users of chromium trioxide in the
hard chromium coating of military firearm barrel bores and auxiliary parts
subject to thermal, mechanical and chemical stresses.
Hard chromium plating is a key criterion for the performance of FN Herstal’s
and Manroy’s products, notably in terms of service lifespan of firearms and
ownership cost for customers. Hard chromium coating therefore constitutes
an essential element for the competitiveness of the two companies; the
economic impacts of its banning from the market would strongly affect the
activities of the Herstal Group as well as endanger FN Herstal’s and Manroy’s
overall survival.
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defence, law enforcement, hunting and shooting. Since 1997, Herstal Group has
been 100% owned by the Walloon Region of Belgium. With manufacturing locations
in Belgium, US, UK, Portugal, Japan and Finland, the global Herstal Group provides
employment to a workforce of about 2,400 people.
2.1. Applicants
Use-1 of the present AfA concerns two subsidiaries of the Herstal Group:
FN Herstal and Manroy.
2.1.1. FN Herstal
Figure 1. FN Herstal
FN Herstal is a leading manufacturer of small- and medium-caliber firearms for
both military (Use-1) and civilian (Use-2) markets located in Herstal, Belgium.
The history of FN Herstal, formerly known as “Fabrique Nationale d'Armes de
Guerre1” or “Fabrique Nationale”, dates back to 1889. The site of Herstal comprises
all firearm manufacturing activities: machining, surface treatment, assembly, testing,
packaging and dispatching.
Figure 2. Barrel manufacturing, machining and packing activities on the site of Herstal
Main figures of FN Herstal’s activity in 2014 are summarised below:
PROPRIETE REVENUES EMPLOYEES
FN Herstal € 306M 1,314
Table 2. FN Herstal key figures, 2014
1 French for: “National Factory of War Weapons”
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2.1.2. Manroy
Figure 3. Manroy Engineering
Manroy Engineering (referred to as “Manroy” in what follows) provides
solutions for weapon design, production and mounting requirements for Infantry,
AFV2 and Naval platforms.
Manroy manufactures the .50 cal M2HB machine gun with Quick Change Barrel, the
7.62mm GPMG, tools, gauges and provides a full and comprehensive spares service
along with the associated training for both weapons. Manroy also designs and
manufactures weapon systems, one man turrets and weapon mounts.
All Manroy equipment is on active service with worldwide and NATO forces and are
registered with NATO Codifications in the UK.
Manroy was originally formed in 1975 to support the spares requirements of the
British Army, and has been a wholly-owned subsidiary of Belgium-based small arms
manufacturer FN Herstal, S.A. since July 2014.
Main figures of Manroy’s activity in 2013 are summarised below:
PROPRIETE REVENUES EMPLOYEES
Manroy £ 18.5M 80
Table 3. Manroy key figures, 2014
2.2. Scope of the AfA
Chromium trioxide is classified under REACh as a Substance of Very High
Concern due to its carcinogen category 1B and mutagen 1B properties, according to
Art. 57(a) and 57(b). It was included in the Annex XIV of REACh during ECHA’s third
recommendation. Sunset date for the use of CrO3 is 21/09/2017; latest application
date was set to 21/03/2016.
Under Use-1, FN Herstal and Manroy use chromium trioxide for high
performance hard chromium plating of military gun barrel bore and auxiliary parts of
military firearms.
Functional properties sought-after with hard chromium include:
- corrosion resistance,
- hardness,
- low friction coefficient,
- thermal barrier,
- thickness,
2 Armoured Fighting Vehicles
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- expansion coefficient,
- resistance to corrosive combustion gases,
- no detrimental interaction associated with the firing of ammunitions.
2.2.1. FN Herstal’s hard chromium plating process
The hard chromium process is performed by FN Herstal:
- in a single facility on the site of Herstal (Wallonia, Belgium),
- on three hard chromium plating treatment lines,
- by 21 employees directly involved in the operation of the hard chromium
lines (i.e. concerned by both Use-1 and Use-2),
- working two 7hr-shifts per day,
- for 200 days per year.
FN Herstal overall use of chromium trioxide amounts to 5.5 tons for 2015; this
tonnage includes both Use-1 and Use-2 of the present AfA at the site of Herstal.
General risk management measures at the site of Herstal notably comprise:
- A fully automated treatment excluding manual work for the operators
nearby the chromium tanks. The only manual operations consist in the
instalment and removal of parts on the processing carts. These operations
are carried out meters away from the chromium tanks, and do not involve
contact with Cr(VI) ;
- An efficient general ventilation of the overall facility, (a) involving the
overpressurisation of the room and (b) ensuring an air renewal rate of 5 to 6
air changes per hour with 100% new air (no recycling) ;
- A good level of containment for the chromium-containing baths, with an
automatic closure system relying on movable shutters at the surface of baths
and enclosing hoods fitted on the automated treatment carts carrier ;
- Specific local exhaust systems fitted on all the baths’ surfaces, connected to
a high performance air treatment system;
- Comprehensive pollution prevention from unplanned releases, with all the
treatment lines being localised above retention ponds;
- An on-site wastewater treatment plant.
2.2.2. Manroy’s hard chromium plating process
At Manroy’s site of Erith, hard chromium plating is carried out:
- in a single facility on the site of Erith (London, United Kingdom),
- on one hard chromium plating treatment line,
- by 1 employee,
- working on average 65 eight-hour days per year for the hard chromium line
operation.
Manroy overall use of chromium trioxide amounts to 117 kg for 2015.
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2.3. Products concerned
The whole FN Herstal’s firearms portfolio is concerned by this AfA:
Figure 4. Main FN Herstal products concerned by Use-1
In addition to mounting solutions, vehicle recovery systems and turret systems,
three main firearms constitute the Manroy portfolio. Among them, Heavy Machine
Gun (HMG) and General Purpose Machine Gun (GPMG) constitute the historic core
business of Manroy and still generate the vast majority of the revenues of Manroy.
PRODUCTS STATUS
20 mm cannon
- Not concerned by the AfA
.50 cal M2 Heavy Machine Gun
(HMG)
- Represents around one
third of Manroy revenues.
- Concerned by Use-1 (hard
chromium plated by FN
Herstal in Herstal)
7.62mm General Purpose Machine Gun
(GPMG)
- Represents around two
thirds of Manroy revenues.
- Concerned by Use-1 (hard
chromium plated by
Manroy in Erith)
Table 4. Manroy products and status in the context of the AfA
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The site of Herstal carries out chromium plating operations of parts that are
intended to be implemented on Manroy’s Heavy Machine Gun (HMG); even though
only GPMG parts are hard chromium plated at the site of Erith, HMG is also
concerned by Use-1 of the present AfA.
Given the criticality of the parts concerned by Use-1 for the proper functioning
of firearms, hard chromium treatment of gun barrels and associated auxiliary parts is
at the very core of FN Herstal’s and Manroy’s activity. Not only the surface treatment
activity but also parts manufacturing as well as firearms assembly, packaging and
dispatch activities directly depend on the hard chromium plating process.
All firearms manufactured in Herstal and the majority of firearms
manufactured in Erith use parts treated with hard chromium.
2.4. Supply chain
The global supply chain of FN Herstal firearms can be described as follows:
Figure 5. Supply chain of FN Herstal firearms.
2.5. Elements of context
2.5.1. Market and business model
FN Herstal and Manroy serve a worldwide market. In the context of military
firearms, the two companies are dedicated to serving States and are thereby not
supplying individuals or non-sovereign groups.
FN Herstal is subject to a strong legal framework within which export operations can
be carried out. The complexity of this framework, governed by Belgian and European
legal rules as well as the European Code of Conduct on Arms is outlined in section
5.1.6 and Appendix 9.2.
The business model of FN Herstal and Manroy is built upon decades of experience
(FN Herstal history goes back to 1889) and is dedicated to high-end firearms, offering
both extremely high levels of performances (rate of fire, accuracy), quality and
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lifespan. As of today, and given (a) the market elasticity (see section 2.5.2.1) and (b)
the stringent legal framework regulating import-export operations for firearms, this
business model is the only one driving forward to a price level that is compliant with
the maintenance of FN Herstal’s activity within the European Union.
Hard chromium coating is a key criterion for the performance of FN Herstal’s
products, since it is a direct driver of the service lifespan of firearms and therefore of
the overall ownership costs of firearms for an army.
The level of performance provided by the use of CrO3, notably in terms of
lifespan of cannon barrels, directly conditions the competitiveness of FN
Herstal’s and Manroy’s firearms vis-à-vis its competitors. It also represents a
key factor in the maintenance of FN Herstal’s and Manroy’s manufacturing
activities in the European Union.
2.5.2. Focus on the defence market
2.5.2.1. A relatively elastic market...
From a market point of view, FN Herstal is one of the few players able to
manufacture the three main small- and medium-caliber firearms categories:
handguns, rifles and machine guns.
There are, however, several competing companies serving this market, leading to a
somewhat strong market elasticity, as illustrated in Table 46 (Appendix 9.1).
2.5.2.2. ... for which manufacturing in the European Union constitutes a
strong condition for several customers
In the context of defence applications, manufacturing within the European
Union usually constitutes a prerequisite to serve many of the European States.
Manufacturing within the European Union constitutes, for example, a
mandatory criterion for the tender procedure launched by the French Ministry of
Defence in order to replace FAMAS, the current assault rifle of the French army. In
this context, “manufacturing” refers to both production means and assemble means,
as well as source of supply of the main components such as cannons barrels3.
2.5.3. Importance of the defence industry and FN Herstal for the Belgian
territory
The armament sector constitutes a significant player in the economic life in
Belgium. In 2008, it generated a gross added value of € 417M, about 0.12 % of the
Belgian GDP4.
3 Bulletin officiel des annonces des marchés publics, Avis n°14-70321 publié le 14/05/2014,
May 16th, 2014. 4 GRIP (Groupe de Recherche et d’Information sur la Paix et la Sécurité), Note d’Analyse –
Radiographie de l’Industrie de l’Armement en Belgique : mise à jour 2010, 2010.
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A specific analysis of employment for the armament sector in Belgium estimates
to 9,760 the number of jobs directly related to defence applications in Belgium. This
report also outlines the dependency of other sectors and other companies to the
defence sector: of these 9,760 jobs, 5,341 are initial jobs (i.e. in the defence industry
companies) and 4,419 are direct or indirect jobs (i.e. in other companies of the
defence industry or subcontractors). In other terms, it can be estimated that, on
average, one job in the armament industry triggers 0.83 indirect jobs. For the
Walloon region alone, it is estimated that the overall employment related to the
armament industry amounts to 6,123 jobs5.
With around € 106M of gross added value and 1,173 employees in 2012,
FN Herstal was both the second company in terms of financial size and the first
employer of the armament industry in the Walloon region6. FN Herstal is also one of
the few Belgian armament companies to be 100% dedicated to defence applications.
2.5.4. Synthesis: general context of the AfA
Based on the argument put forward in the foregoing sections, three main
characteristics place FN Herstal’s and Manroy’s AfA in a particular context:
1
FN Herstal is one of the largest defence companies of the Walloon region
in Belgium and Manroy is a very dynamic player in the defence industry
sector in the United Kingdom.
2
The business models of FN Herstal and Manroy are dedicated to high-
end, high performance firearms. This market positioning directly
conditions the sustainability and the maintenance of FN Herstal’s and
Manroy’s activities over the European Union.
3
The level of performance provided by hard chromium plating is a
condition to the achievement of customer requirements and is therefore
a key condition to the competitiveness of FN Herstal and Manroy in a
globalised and relatively elastic market regarding prices.
2.6. General methodology
On the basis of the carcinogenic properties of Cr(VI) compounds for which it is
not possible to determine a threshold, and since it cannot be demonstrated that the
risk to human health or the environment from the use of the substance is adequately
controlled, the “socio-economic route” applies for the present application. The socio-
economic route applies where it can be demonstrated that the risk to human health
or the environment from the use of the substance is outweighed by the socio-
5 GRIP (Groupe de Recherche et d’Information sur la Paix et la Sécurité), Les rapports du GRIP
– Répertoire des entreprises du secteur de l’armement en Belgique, 2014. 6 GRIP (Groupe de Recherche et d’Information sur la Paix et la Sécurité), Les rapports du GRIP
– Répertoire des entreprises du secteur de l’armement en Belgique, 2014.
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economic benefits and there are no suitable alternative substances or techniques
(Art. 60(4)).
As per ECHA’s guidance, the assessment of the socioeconomic component of the
present AfA will be based upon a Cost-Benefit Analysis approach. A comparative
assessment will therefore be carried out, between the monetised impacts related to
the “applied for use” and the “non-use” scenarios.
In order to best reflect the consequences of both these scenarios, an effort has
been undertaken to place this AfA in the context of the realistic worst-case scenario.
Whenever possible:
- Over-estimating hypothesis have been used to assess the impacts of the
“applied for use” scenario and, conversely, underestimating hypotheses have
been used to assess the impacts of the “non-use” scenario;
- Representative examples have been provided and structuring hypothesis or
assertions have been justified either based on literature or institutional
sources.
Where appropriate, complementary elements of analysis have been provided,
notably concerning:
- An alternative methodology of assessment of costs related to mortality and
morbidity;
- An alternative assessment of the costs of the “applied for use” scenario,
considering a 4% discount rate.
Furthermore, and so as to provide a comprehensive understanding of the limits
of the proposed assessment, an uncertainty analysis was carried out for both the
results of the “applied for use” and “non-use” scenarios. This analysis, carried out
both quantitatively and qualitatively, is provided in section 5.6.
2.6.1. Scope of the AfA
Key elements of the scope of the AfA are provided in Table 5 below:
SCOPE COMMENT
Temporal
boundary
12 years post sunset date: 2018-2029. See Table 6 for a description of
the triggering period for each impact.
Geographic
boundaries
Direct impacts concern Belgium and United Kingdom.
Indirect impacts for FN Herstal’s and Manroy’s supply chain customers
cover a worldwide scope.
Economic
boundaries
Monetised damage of the impacts on human health of the “applied for
use” scenario includes:
- Medical treatment;
- Mortality and morbidity.
Main impacts of the “non-use” scenario include:
- Economic impacts on FN Herstal’s and Manroy’s activity include loss
of revenues, loss of markets, relocation investments as well as
regulatory issues and an increase of operating costs;
- Human health and environmental impacts;
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- Social impacts related to the loss of employment;
- Wider economic impacts related to the unavailability of the
concerned equipments for armed forces. The “non-use” scenario
also impacts FN Herstal’s and Manroy’s industrial partners involved
in the development, production and support of the equipments
concerned by Use-1.
Tonnages - Quantities used: 5.0 tons per year
- Quantities on the final product: none
Table 5. Scope of the AfA
Focus on the temporal boundaries and the impact period:
SCENARIO IMPACT IMPACT PERIOD DISCOUNTING PERIOD
“Applied for use”
scenario
Medical treatment 12 yrs: 2018 - 2029 14 yrs: 2016 - 2029
Mortality and morbidity 12 yrs: 2018 - 2029 14 yrs: 2016 - 2029
“Non-use”
scenario
Loss of profits 12 yrs: 2018 - 2029 14 yrs: 2016 - 2029
Relocation investments 3 yrs: 2018-2020 5 yrs: 2016 - 2029
Loss of employment 1 yr: 2018(*) 3 yrs: 2016 - 2018
Table 6. Impact period of the AfA (*) Average unemployment period is considered to be 460 days, but was rounded here to 1 yr
Present value is set in 2015, at the date of drafting of this document.
Considering that the sunset date for chromium trioxide takes place at the end of the
year 2017, an assumption is made that impacts will take place in 2018. Similarly, the
discounting period is set to begin in 2016.
In order to ensure consistency of analysis between impacts of both scenarios,
and as recommended by ECHA’s guidance, it was chosen to consider a common
impact and discounting period for both the “applied for use” and “non-use”
scenarios. In order to remain as close as possible to the temporal scope of the AfA, it
was chosen to assume that the impact period and discounting period of both
scenarios correspond to the review period of each use of the AfA.
This assumption can be justified as follows:
- The period of time covered by the review period of the uses of the AfA
comprises the period of time with the highest mortality rates after diagnosis,
thereby encompassing the majority of the impacts;
- By assuming that the discount period is in line with the review period, and
therefore assuming that the impacts will take place in a closer future than
what is realistically foreseeable, it is deliberately chosen to discount the
impacts of the “applied for use” scenario by a lower factor than if a more
realistic period of time was chosen, for example 20 or 30 years.
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2.6.2. Actualisation
All final monetised results of this document are expressed in present value (PV).
In this context, the following factors are used for the actualisation of past values
(correction for inflation) or future values (discounting).
2.6.2.1. Inflation
Given the type of values considered (health expenditures, social benefits), it was
chosen to rely on the Consumer Price Index to carry out actualisation according to
inflation. The choice of this statistical estimate is in line with
ILO/IMF/OECD/UNECE/Eurostat/The World Bank recommendations, stating7: “CPIs
are widely used for the index linking of social benefits such as pensions,
unemployment benefits and other government payments, and also as escalators for
adjusting prices in long-term contracts.”
The following values will be used in the present document:
2 BELGIUM UNITED
KINGDOM PORTUGAL
EUROPEAN
UNION
2003-2015 26.0% 32.4% 22.2% 28.0%
2008-2015 11.0% 18% 7.7% 11.3%
2010-2015 8.6% 11.8% 7.0% 8.0%
2012-2015 2.0% 4.1% 0.5% 1.7%
Table 7. Inflation values taken into account in this dossier8
2.6.2.2. Discounting
Comparing costs and benefits during different periods of time to present values
requires the use of discounting technique to translate future costs and benefits into
present-days values to account for the time value of money
The choice of discount rate is important since it can affect the cost-benefit results of
the analysis. The higher the discount rate, the lower the future benefits and costs
values will be, as compared to present values.
In our methodology, we deliberately chose to use two different discount rates
depending on the type of future impacts evaluated.
Thus, future human health costs described in the “applied for use” scenario of this
dossier will be evaluated using a lower discount rate that the one used to consider
economic impacts in the “non-use” scenario. This difference is related to the
different “nature” of these impacts and aims to reflect the society’s rate of time
preference with respect to health risks.
7 ILO/IMF/OECD/UNECE/Eurostat/The World Bank, Consumer price index manual: Theory and
practice Geneva, International Labour Office, 2004 8 OECD, Main economic indicators, Consumer Price Index – data and methods
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As per ECHA’s guidelines, the calculation of discounted values is performed on
an annualised basis, with the following formula:
Considering:
- = present value
- = future costs at year
- = annual discount rate
- = last annuity of the discount period
Discounting of health impacts
A 3% discount rate is used in this dossier for health impacts. This choice is in line
with WHO9, stating: “For many years, a discount rate of 5% per annum has been
standard in many economic analyses of health and in other social policy analyses, but
recently environmentalists and renewable energy analysts have argued for lower
discount rates for social decisions. The World Bank Disease Control Priorities study
and the GBD project both used a 3% discount rate, and the US Panel on Cost-
Effectiveness in Health and Medicine recently recommended that economic analyses
of health also use a 3% real discount rate to adjust both costs and health outcomes.”
Please note that, in order to ensure a complete consistency of the values with
ECHA’s requirements, a complementary assessment is provided for the “applied for
use” scenario in section 3.6.5, considering a 4% discount rate.
General discounting
Based on ECHA’s recommendation10, a 4% discounting rate is used to assess the
future cost/benefits values for impacts not related to health matters.
2.6.3. Confidentiality
In order to preserve the confidentiality of strategic data of the present AfA,
confidential business information has been blanked out in this public version of the
AoA-SEA document.
In what follows, such figures will be indicated as follows: [€ 10-100M](#1a).
Please refer to section 8 for a justification of confidentiality claims.
9 World Health Organisation, Environmental Burden of Disease Series, No. 1 - Introduction
and methods, Assessing the environmental burden of disease at national and local levels, 2003 10
ECHA, Guidance on the preparation of socio-economic analysis as part of an application for
Authorisation, 2011
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2.6.4. Focus: Technology Readiness Levels
Technology Readiness Levels (TRL) are a method of estimating maturity of
technology elements.
According to the European Commission’s definition, TRL can be defined as
follows:
TRL DEFINITION
TRL 1 Basic principles observed
TRL 2 Technology concept formulated
TRL 3 Experimental proof-of-concept
TRL 4 Technology validated at laboratory scale
TRL 5 Technology validated in relevant environment
TRL 6 Technology demonstrated in relevant environment
TRL 7 System prototype demonstration in operational conditions
TRL 8 System complete and qualified
TRL 9 Actual system proven in industrial environment
Table 8. European Commission’s definition of Technology Readiness Levels11
2.7. Substitution strategy
A significant work of research carried out internally and through partnerships with
external research centres led to identify several potential alternative processes to
hard chromium plating for the surface treatment of firearm barrel bores and
auxiliary parts.
As a result of testing and analysis over the last decade, two potential alternatives
appear promising: deposition of chromium from a Cr(III) electrolyte (Alternative 1)
and vacuum process with Physical/Chemical Vapour Deposition process
(Alternative 2).
These processes, however, have yet to be further investigated, implemented and
qualified and will therefore not be available before the sunset date of chromium
trioxide.
11
European Commission, G. Technology readiness levels (TRL), Horizon 2020 – WORK Programme 2014-2015 General Annexes, Extract from Part 19 - Commission Decision C(2014)4995.
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2.8. Presentation of the “applied for use” and “non-use”
scenarios
2.8.1. “Applied for use” scenario
Under the “applied for use” scenario, FN Herstal and Manroy will pursue the use
of chromium trioxide for the surface treatment of parts concerned by Use-1 during
the period of time necessary to develop, implement and qualify an alternative
process, thereby securing both its activity and the supply of firearms to its
customers.
In conjunction with research works for alternatives, and subject to the granting of an
authorisation, FN Herstal will implement an optimised hard chrome plating process
allowing to reduce the exposure of workers to Cr(VI) during the period of time
necessary to develop and implement a sustainable substitution process.
Main impacts of the “applied for use” scenario concern operator’s health and
monetized damage includes costs associated with medical treatment, mortality and
morbidity.
Risks and impacts of the “applied for use” scenario are respectively detailed in
sections 3.5 and 3.6.
2.8.2. “Non-use” scenario
The most likely “non-use” scenario is the following: with the ban on the use of
Cr(VI) compounds and therefore the cessation of hard chromium treatment,
FN Herstal and Manroy will have to relocate hard chromium plating activities for the
manufacture and the maintenance in operational conditions of their small- and
medium-calibre firearms.
Since such products constitute the very core of FN Herstal’s and Manroy’s
current and future portfolio, this scenario entails a temporary cease of production
for the period of time necessary to relocate the activity, thereby disrupting both
their activity and the supply of their customers.
Impacts of the denial of an authorisation would involve economic, social and
distributional dimensions:
- Economic impacts on FN Herstal’s and Manroy’s activity include loss of
revenues, relocation investments and increased operating costs, as well as
contractual penalties;
- Human health and Environmental impacts, include impacts on human
health as well as greenhouse gas emissions.
- Social impacts mainly consists of impacts on employment;
- Wider economic impacts include the unavailability of the concerned
equipments for armed forces.
Impacts of the “non-use” scenario are detailed in section 5.
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3. “APPLIED FOR USE” SCE NARIO
3.1. Elements of context
3.1.1. Hard chromium plating
Functional hard chromium plating is characterised by the following features12,13:
- High hardness up to 1200 HV,
- High resistance to wear,
- Low friction and tribologically advantageous,
- Anti-adhesive,
- Machinability,
- Resistant to chemicals,
- Resistant to temperature.
This technique is still widely industrially used (hard chromium plating is extensively
used in mechanical engineering on parts like jacks, rolling mill cylinders, drawing
dies, printing plates and cylinders, etc), despite major disadvantages:
- Concentration of the electrolyte (a conventional plating bath, temperature
around 60°C, contains 300 g/L of chromic acid, and one or more catalysts
such as H2SO414,15) causing significant losses in the rinsing baths and high
costs for reprocessing waste water.
- Emission of harmful mists above the bathroom (vesicles).
12
Morisset, Chromage dur et décoratif, publication CETIM, 1993 13
Benaben, Chrome et chromage, Techniques de l’ingénieur, Référence M1615 14
Ibid. 12 15
Ibid. 13
Under Use-1, FN Herstal and Manroy use chromium trioxide for the hard
chromium plating of small- and medium-caliber military firearm barrel bores
and auxiliary parts subject to thermal, mechanical and chemical stresses.
The main functional properties sough-after by FN Herstal and Manroy with
Cr(VI) notably include : hardness, heat resistance, erosion resistance and
resistance to hot oxidising gases.
Impacts of the “applied for use” scenario are related to the carcinogen
properties of Cr(VI) compounds and include medical treatment costs as well
as costs associated with morbidity and mortality.
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3.1.2. Historical background
Rifling of firearms bores imparts spin, thereby stabilising firearms projectiles and
providing an increased accuracy as opposed to smoothbores (i.e. non-rifled
firearms).
Rifling, however, generates several constraints for gun bores and notably
decreases muzzle velocity, increases waste heat in the barrel and helps retain highly
corrosive combustion by-products in the bore, thereby damaging the rifling and
weakening the barrel’s material.
In order to counteract those detrimental effects, one approach has been to use
corrosion-resistant materials for barrels, notably using electrodeposited chromium
which was commercially developed as a commercial process as early as 192416. The
first implementation of chromium plating in small arms was patented by Olin’s and
Schuricht in 193217.
Hard chromium of firearms bores was consequently worldwide adopted in
the 1950s. It still constitutes today the standard in military small- and
medium-calibre firearms.
3.1.3. Lifespan of firearm barrels
Firearm barrels have a finite lifespan, which is defined by the maximum number
of rounds that a gun can fire, based on the type of round used and its muzzle
velocity.
A comparative assessment was carried out by FN Herstal regarding hard
chromium plated and non-plated barrels, in the case of the M2 machine gun .50
caliber barrels. In order to ensure representativeness and reproducibility, these tests
were performed during a long period of time between 1982 and 199418.
Figure 6. FN M2® machine gun
16
Dubpernell. Plating, 47, 35. 1960 17
US Patent 1,886,218 18
Amongst other data available from FN Herstal testing centre reports 1992-244 and 1993-108
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The main result of this study is the following: the average barrel lifespan19 was
increased by a factor two for hard chromium plated as compared with non-plated
barrel bores20. These internal findings are confirmed by bibliographical
references21,22.
In the context of military armament, lifespan requirements for such firearm are
defined in the DAS366.811.00023 standard. According to the aforementioned results,
gun barrels that did not undergo hard chromium plating cannot achieve such level of
performance and as a consequence, firearms relying on these barrels cannot be
qualified, let alone be put on the market.
As a complement, it has to be noted that hard chromium does constitute an
extremely efficient process thanks to its low operational cost: hard chromium plating
only accounts for around 10% of the cost of the firearm while doubling its lifespan24.
Focus: Cost of ownership
The lifespan of an FN Herstal’s machine guns is approximately (#2a)
rounds with a cannon lifecycle of (#2b) rounds, meaning the rifle’s cannon is
expected to be replaced once during the rifle’s overall lifespan. Given that the rifle’s
cannon represents approx. 20% of the firearm cost, a withdrawal of the hard
chromium plating would generate a 40% increase of the overall cost of ownership
of the rifle.
Current trend for customers is to minimise the need for spare parts, so as to
optimise maintenance and logistics requirements. In this context, such an increase
does not comply with the requirements of FN Herstal’s customers and does not
allow FN Herstal products to compete with its competitors. As mentioned above,
thanks to its relatively low operating costs, hard chromium plating therefore
directly contributes to the competitiveness of FN Herstal’s and Manroy’s firearms.
The example based on M2 machine gun is representative of FN Herstal’s and
Manroy’s whole military firearms range25: depending on the calibre and the
ammunition type, the barrel life varies accordingly to barrel bore temperature
19
Assessed with the following methodology: firing schedule of 300 rounds in 3 minutes and maintenance every 1,800 rounds 20
Barrel chromed according to QST87093 and controlled by QAI226.010, minimum barrel life guaranteed in DAS366.811.000 21
Derek Allsop and al (1997), Brassey’s essential guide to military small arms - Design principles and operating methods, p89. Londres: Brassey’s 22
Hypervelocity guns and the control of gun erosion, Washington: National Defense Research Committee, 1946. 23
DAS stands for " Delivery and Acceptance Specification” 24
Excerpt from Baan 21st august 2015 P/N: 3662000616 and P/N : 3662008361 25
Given (a) the specific calibres manufactured by FN Herstal, (b)the high stress levels induced by the firing of ammunitions and (c) the criticality of a potential incident, the factor 2 increase in lifespan provided by hard chromium is also relevant for handguns.
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(external barrel temperature may reach 350°C to 550°C) but the overall issue is the
same for all military firearms manufactured by FN Herstal and Manroy.
The lifespan of FN Herstal’s and Manroy’s small- and medium-caliber
firearms is directly related to the use of hard chromium for the surface
treatment of gun bores and auxiliary parts. Without this treatment, FN
Herstal firearms do not meet standard requirements in terms of lifespan and
therefore cannot be put on the market.
3.1.4. Standards requirements and customer requirements
3.1.4.1. Standard requirements
FN Herstal customers are located worldwide. In order to meet customer
requirements, FN Herstal’s internal chroming procedure (QST87093) is in line with US
military and aeronautical standards:
- MIL-STD-17126 standard describes the appropriate coatings for military use,
and hard chromium plating is recommended for all surfaces subject to wear
or abrasion according to MIL-DTL-5002E;
- Chromium plating shall be in accordance with requirements of the SAE
AMS246027 standard, Class 2 (engineering coating), type 1 "bright finish"
with a minimum hardness level of 850HV.
These standards describe both the properties to be achieved and the procedures
to be applied in order to reach the requirements in terms of lifespan of FN Herstal’s
and Manroy’s customers. Specifically, AMS2460 states that “parts should be plated
by electrodeposition of chromium from a chromic acid solution” (page 12 of 14).
These standards are translated into the product technical definition by the
technical drawings. For some NATO customers, when the weapon is selected in the
army inventory, the product technical definition and configuration comes under
customer control. This means that the product manufacturing based on the technical
drawing cannot be modified unless the customer agrees so.
3.1.4.2. Customer requirements: DGA’s position for the pursued use of
hexavalent chromium for hard chromium plating of small-calibre
firearms’ barrel bores
The DGA (Direction Générale de l’Armement – French Ministry of Defence’s
Procurement Agency) was consulted in the context of the present AfA with a
contribution that is provided in Appendix 9.3. A translation of the content of this
contribution is provided in what follows.
26
Department of defense manufacturing process standard – Finishing of metal and wood surfaces (TABLE II. Inorganic finishes, metallic coatings; 1.2.2 Engineering plating, AMS-QQ-C-320, class 2) 27
(replacing AMS-QQ-C-320): Aerospace material specification – Plating Chromium (Class 2 Engineering plating)
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“The REACh (CE) 1907/2006 regulation aims at improving the knowledge of chemical
substances’ properties manufactured or put on the market in the European Union, at
ensuring the management of risks related to their uses and, if needed, at reducing or
prohibiting their use. On August 14th 2016 was published the (EU) 895/2014
regulation modifying the Annex XIV of the REACh regulation so as to include salts of
hexavalent chromium. Without an authorisation, the use of hexavalent chromium will
be banned as of 2017/09/21 (whatever the quantities produced, imported or used).
In the context of its commitments in terms of operational and training capacities, the
French army uses firearms manufacturer by the Belgian company FN Herstal, which
require the use of hexavalent chromium during their production (hard chromium), as
detailed below:
Fireams currently in operation using hard chromium plating:
- Minimi Para 5.56mm x 45 machine gun: used unmounted
- 7.62mm x 51 (MAG58) machine gun: used unmounted and mounted on
several carriers (air, sea, land)
- 12.7mm x 99 (M2 HB/QCB) machine gun: integrated on the Leclerc main
battle tank
- 12.7mm x 99 (M3M): integrated on Cougar and Puma helicopters
Firearms being currently acquired and which will use hard chromium plating:
- Minimi Para 5.56mm x 45 machine gun: market recently modified in
December 2015 for the acquisition of several hundreds of firearms for the
land army and navy
- 7.62mm x 51 (MAG58) machine gun: pursued delivery of the market notified
in December 2010 (approx. thousands of firearms are remaining to be
shipped in their qualified definition)
For all these cases, the barrel is a replacement part that has to be supplied
throughout the duration of use of firearms.
The DGA has furthermore launched a consultation for the future individual armament
system (“Arme Individuelle du Futur”) intended to replace the FAMAS28. This
consultation, for which an AAPC (notice of a competitive public tender) was published
at the Official Journal in May 2014, refers to 90,000 firearms. It specifies that the
barrel is manufacturer within the European Union because it a critical part for which
the safety of supply is required.
In any case, hexavalent chromium is used for hard chromium plating of barrels,
guaranteeing the resistance of the barrel to aggressive environments encountered
during the shooting of ammunitions (high temperatures, active chemical substances).
This constitutes an essential element to the lifespan of barrels, and therefore to the
operational performances of firearms. The downgrade of this coating may impact the
safety of servicemen using firearms, be it indirectly, due to their inability to defend
themselves in case of failure of the firearm, or directly, due to the risk of bursting
28
Fusil d'Assaut de la Manufacture d'Amies de Saint-Etienne
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induced by the degradation of the internal coating of the barrel. For this reason, the
modification of the coating process constitutes a major change, which induces at the
minimum the need for the complete re-qualification of the firearm and is a lengthy
(several months to a year for the most complex cases) and costly.
A ban on the use of hexavalent chromium plating would call into question the
implementation of the markets obtained by FN Herstal, thereby probably generating
penalties for the company, but would also delay the supply of said firearms, which
would impact the operational capabilities of armed forces.
Substitution studies have been conducted by industrial companies, with or without
State support, and no substitution solution was identified: substitution solutions are
far from being mature and offer the required military requirements.
Furthermore, the French defence exemption regime cannot be used in his case, as FN
Herstal does not manufacture in France.
Due to this ban on the use of hexavalent chromium, the FN Herstal Company may be
unable to fulfil its contractual agreements and would be disadvantaged toward
competitors that would carry out hard chromium plating operations outside the EU.
The ban on the use of hexavalent chromium would also have direct consequences on
the availability of several equipments, and therefore on the operational capacities of
armed forces. This is obviously not acceptable, as France is engaged on several
external field operations.
The DGA therefore supports FN Herstal’s Application for Authorisation aiming at
having an additional delay to identify and qualify technically, operationally and
economically viable alternatives.”
3.1.5. Barrel life characteristics and failure criteria
The functional need for hard chromium plating of small- and medium-calibre
firearms barrel bores and associated parts subject to thermal, mechanical and
chemical stresses is directly related to failure modes of such firearms. In order to
provide a comprehensive understanding of the issues at stake with Use-1’s AfA,
these failure modes are covered in what follows.
Apart from brutal barrel failure (caused for example by barrel obstruction and
overpressure), barrels are decommissioned because of fatigue i.e. when the hit
probability is degraded.
A degraded hit probability is usually associated with a decreased projectile initial
velocity at barrel muzzle, oscillating or obliquely striking projectiles at 50m from the
muzzle as well as an increased dispersion at 50m from the muzzle.
In order to ensure their maintenance in operational conditions, the main
functional parameters that are monitored during servicing and maintenance of
firearm include barrel forcing cone wear, barrel straightness and barrel minimum
bore diameter.
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The decreased hit probability may arise from three types of barrel fatigue failure
modes29,30,31:
- forcing cone wear, inducing a decreased projectile velocity and a loss in hit
probability. It is the most frequent failure mode;
- copper deposit, resulting from the interaction of the barrel metal with the
projectile jacket, degrades the stabilisation of projectiles;
- muzzle wear, also resulting in a loss stabilisation of projectiles.
These three failure modes are illustrated in Figure 7 below:
Figure 7. Barrel fatigue failure modes
Please note that these failure modes are further described in Appendix 9.2
Forcing cone wear and muzzle wear are directly related to the wear of barrel
bores induced by the firing of ammunitions. Hard chromium plating of such
parts and of auxiliary parts subjects to similar stresses allows for the
reduction of their wear and therefore the extension of the firearm lifespan in
order to meet standard requirements.
3.2. Analysis of substance function
During their operational service-life, firearms barrels and auxiliary parts have to
sustain three closely interconnected types of stress: mechanical, thermal and
chemical. Operational conditions and working environment related to these types of
stresses are the following:
- Mechanical stresses: ammunition peak pressure is around 450MPa.
- Thermal stresses: maximal flame temperature of propulsive powder is
greater than 1,500°C.
- Chemical stresses: high temperature corrosive gases emitted during the
combustion of propellant, including CO2, CO, H2O, H2, N2 and radicals H,
OH, NO.
29
Allsop and al, Brassey’s essential guide to military small arms - Design principles and operating methods, p89. Londres: Brassey’s, 1997 30
Hypervelocity guns and the control of gun erosion, Washington: National Defense Research Committee, 1946 31
Handbook on Weaponry, Rheinmetall Gmbh, 1982
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In order to withstand such stresses, hard chromium plating of steel armament
parts is necessary to compensate for the weaknesses of steel as a substrate,
notably concerning high temperature characteristics and corrosion resistance.
The bonding of the chromium layer with the steel substrate is illustrated on
Figure 8 below.
Figure 8. Cross section of barrel bore, magnified (top) and general (bottom)
3.2.1. Scope of Use-1
The use of chromium compounds under Use-1 includes both surface preparation
operations (electrolytic polishing and chromium pickling) and surface treatment
operations (hard chrome plating) for the site of Herstal.
The choice of regrouping these operations under a single use in the present AfA
can be justified as follows:
- Strong links and interdependencies characterise surface preparation and
surface treatment operations. Each step of the hard chromium plating
process as specifically developed for FN Herstal’s processes: removing or
modifying one step of the process would compromise the overall outcome of
Use-1. For instance, electrolytic polishing is a fundamental step of the
manufacturing process; in the absence of such surface preparation,
chromium adhesion to the substrate does not appear sufficient to provide all
the functional requirements for military firearms.
- Electrolytic polishing constitutes a military requirement for firearm barrel
bores and therefore conditions the placement on the market of FN Herstal’s
and firearms.
- Both operations being indistinctly carried out on the treatment lines, the
exact distinction of the CSR and SEA aspects could represent an issue and
generate unnecessary uncertainties.
As hard chromium operations carried out at the site of Erith concern auxiliary
parts and not barrel bores, and since their compliance with FN Herstal’s processes is
still ongoing, no surface preparation operations are carried out at the site of Erith.
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3.2.2. Functional properties of hard chromium in the context of
armament manufacturing
Given the high level of thermal, mechanical and chemical stresses involved in
their operation, production of firearms involves several technical challenges. Among
them, it can be said that the coating constitutes the most difficult part32. In the case
of FN Herstal and Manroy, the main sought-after coating characteristics in the
context of surface treatment of firearms’ barrels bores and auxiliary parts include:
Hardness
Hardness of the hard chromium layer provides wear resistance and impact
resistance properties allowing withstanding impacts associated with the shooting of
small- and medium-calibre firearms at high rates of fire. Specific mechanical
properties that constitute the “hardness” parameter include: hardness (up to
1,000HV33) in atmospheric conditions and in high temperature conditions, erosion
resistance and Young’s modulus34 in line with that of steel and high elastic limit.
The coating must be resistant enough at the service temperature of firearms to
withstand stresses related to the firing of projectiles and the propellant gas wash. In
the case of rifled barrel bores, the coating has to possess a sufficient strength to
withstand the rifling torque.
Heat resistance and thermal barrier properties
Heat resistance of the hard chromium layer allows preserving the mechanical
properties of the steel substrate exposed to high temperatures.
The coating also has to offer thermal barrier properties, insulating the substrate from
the damaging effects of the heat input from high temperature propellant gases.
The coating is also expected to provide both thermal stability and "heat resistance"
properties. This term encompasses a number of properties, including: a high melting
point, a high hot hardness, thermal shock resistance, and a lack of phase
transformations throughout the service temperature range.
Thermal properties of the coating, along with its thickness, should prevent phase
transformation or reaction of the substrate. This is achieved by damping out the high
temperature pulse. In the case of a steel substrate, the martensite-austenite phase
transformation occurs at about 727°C. When this temperature is exceeded, the
transformation causes a discontinuity in the thermal expansion coefficient, resulting
in large local strains. Since steel is also soft at this temperature, the strain is taken up
plastically rather than elastically. On rapid cooldown, the plastically deformed
austenite transforms back to martensite. This martensite, however, is hard and
32
Defense - Technical Information Center, Compilation Part Notice ADP012479 33
Vickers hardness number 34
The Young's modulus, which is also known as the elastic modulus, is a mechanical property of linear elastic solid materials. It defines the relationship between stress (force per unit area) and strain (proportional deformation) in a material.
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brittle, and so cracks instead of plastically deforming to accommodate thermal
stresses on further cooling. This is called heat checking. Obviously, this phase
transformation really wreaks havoc the integrity of the coating. It will tend to
thermal fatigue and crack the coating, as well as promote de-adhesion.
Corrosion resistance
In order to preserve a high level of performances all along the firearms lifespan,
a good level of corrosion resistance is necessary, both in atmospheric conditions and
in the presence of hot oxidising gases.
The presence of high temperature gases, in addition to the high pressures generated,
heats the barrel to the extent that chemical interaction with the metal itself occurs.
No chemical reaction can be tolerated.
Efficient coverage of complex or inner shapes
The geometrical complexity of parts to be coated (small inner tubes, blind holes,
inside corners, etc.) generates the need for coating process that can provide an
homogeneous treatment of the parts.
Preserve components tolerance
Complementarily, the treatment has to ensure dimensional compliance with firearm
parts, i.e. provide a deposit thickness of 10 to 80μm, according to their specific
functional requirements.
Chemical barrier
The coating must act as a chemical barrier for the substrate against the erosive
effects of the hot propellant gases. It must therefore be free from cracks, both as-
produced and in service. Any cracks will be exploited by the very aggressive
environment of propellant gases during firing, and the substrate will be attacked.
These cracks will also be wedged and ratcheted open by microscopic fragments
during firing, and after firing, the substrate can be attacked by simple corrosion.
There should be a low solubility of chemical elements such as hydrogen, carbon,
nitrogen and oxygen since these will degrade the substrate.
The coating also has to ensure a low level of reactivity with these elements:
there should not be a large negative free energy of reaction at the temperatures,
pressures and chemistry environment encountered during firing.
Adhesion properties
A good level of adhesion on steel substrates is required so that no delamination
results from the high level of thermal, mechanical and chemical stresses associated
with the firing of ammunitions. The process therefore results in a coating with
extremely good adhesion, to the point where it is considered as metallurgically
bonded. In welding terms, it must have 100% joint efficiency
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Friction coefficient
In order to ensure the proper functioning of parts in relative movement, such
parts have to possess both a good abrasive wear resistance and a low frictional
resistance.
3.2.3. Complementary requirements for the research of alternatives to
hard chromium plating
Price
Both investments and running costs have to be taken into consideration in the
process of research for alternatives to hard chromium plating.
Compliance with the current FN Herstal’s and Manroy’s
industrial facilities
FN Herstal’ surface treatment capabilities are not limited to hard chromium
treatment. Compliance of the alternative process with the currently used workshop
does therefore represent a potential for both economic and technical synergies in
terms of know-how, facilities and collective protection equipments.
Risks for health and environment
Any potential alternative is expected to ensure a lower level of risk for both
human health and the environment, as compared to hard chromium plating.
Compliance with military standards
Given the market for firearms concerned by Use-1, compliance with military
standards constitutes a critical criterion for selecting an alternative.
3.3. Parts concerned
In the armament industry, hard chromium plating is a critical process since it
improves the firearms characteristics in terms of performances, reliability and
lifespan.
As presented in section 3.1.1, firearm barrel bores are hard chromium plated
(with a minimum thickness of coating of {#2c} µm in MI.50 barrels and of
{#2d} µm in other calibre barrels) in order to ensure a satisfactory service
life35,36. Hard chromium is also used on auxiliary parts (gas cylinder, piston, gas block,
etc.) subject to the same level of thermal, chemical and mechanical stresses, for
which the coating thickness ranges from 10 to 80 µm.
As an illustration, parts concerned by Use-1 for a FN MINIMI® light machine gun
are identified on the firearm exploded diagram below. In the case of the FN
35
FNH R&D note réf: 0000031630 36
MIL-M-45590A
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MINIMI®, such parts include: barrel assembly, plug and gas regulator, gas cylinder
assembly and piston, as illustrated in Figure 9 below.
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The above figure shows that the number of parts subject to hard chromium
plating is relatively low, as compared to the overall number of parts constituting the
firearm: Use-1 was precisely defined on the basis of specific levels of thermal,
mechanical and chemical stresses to which parts are subject.
3.4. Market and business trends including the use of the
substance
3.4.1. Use of chromium trioxide
3.4.1.1. Herstal
The tonnage of chromium trioxide for both Use-1 and Use-2 over the last three
years is provided in Table 9 below:
In tons 2013 2014 2015
CrO3 flakes (electrolytic polishing)(*)
1.5 0.5 1.0
Concentrated CrO3 (chroming)(**)
6.5 5.5 4.5
Total 8.0 6.0 5.5
Table 9. Tonnages of CrO3 over the 2013-2015 period (tons), for Use-1 and Use-2 (*) = Used only for Use-1; (**) = Used for Use-1 and Use-2
An estimate of the breakout of concentrated CrO3 consumption between Use-1
and Use-2 at the site of Herstal was carried out and is as follows: 87% for Use-1 and
13% for Use-2.
Based upon this allocation basis, the CrO3 tonnage associated to Use-1 amounts
to 5.0 tons.
3.4.1.2. Erith
The consumption of CrO3 at the site of Erith in 2015 amounts to 117 kg. As
stated in the CSR, this tonnage is expected to decrease over the review period, as
hard chromium plating activities are foreseen to be carried out at the site of Herstal.
3.4.1.3. Total CrO3 tonnage
The total annual consumption of chromium trioxide associated with Use-1
for the sites of Herstal and Erith amounts to 5.0 tons for 2015. This tonnage is
considered as representative of the CrO3 consumption over the review period
for Use-1.
3.5. Remaining risk of the “applied for use” scenario
As described in the CSR, the “applied for use” scenario only presents a risk for
workers dedicated to the surface treatment operators, for quality control operators
as well as for laboratory workers; risks for general population have been shown to be
negligible and have therefore not been monetised. The handling of the mixture
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containing the substance is well managed with general and personal protection
equipments and safety procedures.
3.6. Human health impacts and monetised damage of the
“applied for use” scenario
Monetised damage of the impacts on human health of the “applied for use”
scenario includes medical treatment, mortality and morbidity.
When relevant, and in order to offer a comprehensive understanding of the
amounts at stake, it was chosen to supplement values taking into account the total
excess risk of cancer with values based on the individual excess of risk of cancer.
In what follows:
- Individual values refer to values based on the individual excess risk of
cancer, thereby related to one worker;
- Total values refer to values based on the total excess risk of cancer, thereby
related to all the workers concerned by the use.
3.6.1. Number of people exposed
3.6.1.1. Herstal
Long-term exposures
A total of 21 persons work on a daily basis at the site of Herstal over the three
hard chromium plating lines for both Use-1 and Use-2; four persons are in charge of
quality control operations.
Punctual potential exposures
Punctual exposures are encountered for one operator of the laboratory staff, in
charge of the sampling and the analysis of the baths composition.
3.6.1.2. Manroy
One worker is in charge of the operation of the hard chromium plating line at
the site of Erith.
3.6.2. Medical treatment
Different studies evaluate the global cost of lung cancer treatment including,
depending on the study: hospitalisation costs, medicine costs but also other
associated costs such as in-house care37,38,39,40.
37
Mc Guire, Treatment cost of non-small cell lung cancer in three European countries: comparisons across France, Germany, and England using administrative databases, Journal of Medical Economics Vol. 18, No. 7, 2015, 525–532 38
Simrova et al, The costs and reimbursements for lung cancer treatment among selected health care providers in the Czech Republic, 2014
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For the following analysis, it was chosen to rely on data provided in a recent
study41 which compares the cost of medical treatments associated with lung cancer
in France, UK and Germany based on regional or national administrative databases.
This study is only based on NSCLC (Non Small-Cell Lung cancer) which represents
approximately 80% of lung cancers without considering the other forms such as SCLC
(Small-Cell Lung cancer). Nevertheless, a previous study in France42 shows that the
costs associated with other forms are 50% lower than those of NSCLCs and that the
combined cost is nearly the cost associated with the NSCLC only. In order to remain
in the context of the realistic worst-case scenario, it was therefore considered that
100% of lung cancers are NSCLC form.
Due to the lack of specific data, and in order to maintain the same level of detail
over all sites of the AfA, it was chosen to use average figures of medical costs
associated with NSCLC in France, Germany and the United Kingdom to characterise
cancer costs in Belgium.
In a 2-year follow-up after diagnosis approach, the different costs associated to
lung cancer are listed in the tables below:
YEAR 1 YEAR 2
Hospital in-patient € 9,672 € 4,547
Hospital out-patient € 1,816 € 1,092
Medicines € 5,541 € 2,063
Other € 966 € 641
Total € 17,672 € 7,441
2-year total € 25,113
Table 10. Lung cancer costs for Belgium (average of data for France, Germany and the United Kingdom) for the first two years after the diagnosis
39 Chouaïd et al, Economics of the clinical management of lung cancer in France: an analysis
using a Markov model, British Journal of Cancer (2004) 90, 397–402. doi:10.1038/sj.bjc.6601547 40
Braud et al, Direct treatment costs for patients with lung cancer from first recurrence to death in France, Pharmacoeconomics. 2003;21(9):671-9. 41
Mc Guire, Treatment cost of non-small cell lung cancer in three European countries: comparisons across France, Germany, and England using administrative databases, Journal of Medical Economics Vol. 18, No. 7, 2015, 525–532 42
Allemani, Global surveillance of cancer survival 1995–2009: analysis of individual data for 25 676 887 patients from 279 population-based registries in 67 countries (CONCORD-2), Lancet, 385: 977–1010, 2015
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YEAR 1 YEAR 2
Hospital in-patient € 5,985 € 1,156
Hospital out-patient € 1,209 € 834
Medicines € 8,593 -
Other - -
Total € 15,787 € 1,990
2-year total € 17,777
Table 11. Lung cancer costs in the United Kingdom for the first two years after the diagnosis
Regarding this information, to monetise the health impact, we will also consider the
net survival rate by country at 1 year, 5 years and 10 years after diagnosis, with the
following values:
YEARS AFTER DIAGNOSIS SURVIVAL RATE, BELGIUM SURVIVAL RATE, UK
1 year 36,9% 32.1 %
5 years 14,7% 9.6 %
10 years 8,7% 4.9%
Table 12. Net year survival rate after lung cancer diagnosis in France43,44,45
To monetise the damage on human health, we will consider the probability of
appearance of lung cancer on workers. The probability, in this case, corresponds to
the excess of risk to have a lung cancer. Data at five years after diagnosis are based
on Allemani 2015 and data at 1 to 10 years after diagnosis are based on European
data for Belgium and on specific data for UK.
The individual lung cancer costs are synthesised and listed in Table 13 below,
taking into account the cost of lung cancer treatment by year after diagnosis (we
consider that the cost per year after year 2 is the same as for year 2), the net survival
rates at 1 year, 5 years and 10 years and the requested review period of 12 years but
not considering the excess of risk.
In order to conform to the realistic worst-case scenario, it was chosen to apply
the survival rate of the upper bound of each year after diagnosis range, i.e. for UK:
- Survival rate during the first year after diagnosis is supposed to be 100% ;
- Survival rate between year 2 and year 5 after diagnosis is supposed to be
32.1% ;
- Survival rate between year 5 and year 10 after diagnosis is supposed to be
9.6% ;
43
Institut National du Cancer, Prévalence et survie nationales du cancer du poumon, 2015 44
Allemani, Global surveillance of cancer survival 1995–2009: analysis of individual data for 25 676 887 patients from 279 population-based registries in 67 countries (CONCORD-2), Lancet, 385: 977–1010, 2015 45
Extrapolation from European values
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- Survival rate for more than 10 years after diagnosis is supposed to be 4.9%.
A 3% discount rate was applied to the costs in order to take into account time
preference and express the cost in current value.
YEARS AFTER DIAGNOSIS HERSTAL (BELGIUM) ERITH (UK)
0 to 1 year € 17,672 € 15,787
1 to 5 years € 10,983 € 2,555
5 to 10 years € 5,469 € 955
10 to 12 years € 1,295 € 195
Individual lung cancer costs € 35,420 € 19,492
Individual lung cancer costs,
discounted(*)
€ 30,455 € 17,463
Table 13. Individual lung cancer costs during the review period, not taking into account the excess of risk for workers
(*) Taking into account a 3% discount rate until the end of the review period
The following table synthesises the lung cancer costs per worker, taking into
account the total excess of risk for Use-1 (1.2x10-3 for Herstal and 1.6x10-4 for Erith):
YEARS AFTER DIAGNOSIS HERSTAL ERITH TOTAL
0 to 1 year € 20.4 € 2.5 € 22.9
1 to 5 years € 12.7 € 0.4 € 13.1
5 to 10 years € 6.3 € 0.2 € 6.5
10 to 12 years € 1.5 € 0.0 € 1.5
Total of lung cancer costs € 40.9 € 3.1 € 44.0
Total of lung cancer costs, discounted(*)
€ 35.2 € 2.7 € 38.0
Table 14. Total lung cancer costs during the review period, considering the total excess of risk for workers and the respiratory equipments
(*) Taking into account a 3% discount rate until the end of the review period
3.6.3. Mortality and morbidity
Several summary measures of population health have been devised, including
the Quality-Adjusted Life Year (QALY), the Disability-Adjusted Life Expectancy and the
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Healthy Life Year46,47,48,49. The benefits and challenges of these measures have been
examined in several publications50,51,52,53.
According to the WHO recommendations54 and since it has been widely used, it
was chosen to assess the impacts of both mortality and morbidity associated with an
excess risk of cancer through one combined measure: the Disability-Adjusted Life
Years or DALY.
The DALY method is recommended by ECHA for the assessment of mortality and
morbidity impacts55,56.
3.6.3.1. General methodology
The following methodology is based on the general WHO methodology for the
calculation of DALYs57.
DALY is a combined measure of the period of time lived with disability and the
period of time lost due to premature mortality:
Where: = years of life lost due to premature mortality and = years lived with
disability.
In such an approach, time is used as a common currency for non-fatal health states
and years of life lost. Disability weights are thus used to formalize and quantify social
preferences for different states of health, measured as number on a 0-1 scale,
46
Weinstein, Stason, Foundations of cost effective analysis for health and medical practices. New England Journal of Medicine, 296:716-721, 1977 47
Murray, Rethinking DALYs. In: Murray, Lopez, eds. The global burden of disease. Geneva, World Health Organization, Harvard School of Public Health, World Bank, 1996 48
Hyder, Rotllant, Morrow, Measuring the burden of disease: healthy life years. American Journal of Public Health, 88:196-202, 1998 49
Murray, Salomon, Mathers, A critical examination of summary measures of population health. Bulletin of the World Health Organization, 8(8):981-994, 2000 50
Anand, Hanson, Disability-adjusted life years: a critical review. Journal of Health Economics, 16:695-702, 1997 51
Williams, Calculating the global burden of disease: time for a strategic reappraisal? Health Economics, 8:1-8, 1999 52
Murray, Lopez, Progress and directions in refining the global burden of disease approach. Geneva, World Health Organization (GPE Discussion Paper No 1), 1999b 53
Murray, Salomon, Mathers, Lopez, Summary measures of population health: concepts, ethics, measurement and applications. Geneva, World Health Organization, 2002 54
World Health Organisation, Environmental Burden of Disease Series, No. 1 - Introduction and methods, Assessing the environmental burden of disease at national and local levels, 2003 55
ECHA, Guidance on Socio-Economic Analysis – Restrictions, May 2008 56
ECHA, Applying socio-economic analysis as part of restriction proposals under REACH - Workshop proceedings, Helsinki, 21-22 October 2008 57
Mathers, Stein, Fat et al, Global Burden of Disease 2000: Version 2 methods and results, Global Programme on Evidence for Health Policy Discussion Paper No. 50: World Health Organization, 2002
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where: “0” is assigned to a state of ideal health and “1” to a state comparable to
death.
3.6.3.2. Years of Life Lost due to premature mortality
The basic formula for calculating the years of life lost (YLL) metric is the following:
Where: = number of deaths and = standard life expectancy at age of death (in
years).
The number of deaths ( ) is supposed to be the total excess risk of cancer. Life
expectancy at age of death ( ) is calculated by subtracting the standard life
expectancy (81 years on average in Europe58,59) and the average age of death by lung
cancer in France (68 years in France60,61). Due to the lack of specific data for Belgium
and the UK and in order to ensure calculation homogeneousness, data regarding
France have been used to characterise both sites of Herstal and Erith
A 3% discount rate was applied to YLL in order to take into account time
preference and express the cost in current value.
YLL and intermediate data are detailed in Table 15 below.
PARAMETERS VALUES
Standard life expectancy 81 years
Mean age of lung cancer death 68 years
Number of years lost 13 years
Site Herstal Erith
Total excess risk of lung cancer, per site 1.2x10-3
1.6x10-4
Total YLL, per site, discounted(*)
1.2x10-2
1.6x10-3
Total excess risk of lung cancer, for Use-1 1.3x10-3
Total YLL for Use-1, discounted(*)
1.3x10-2
Table 15. Years of Life Lost (YLL) for Use-1 (*)
: considering a 3% discount rate until the end of the review period
58
Eurostat, Mortality and life expectancy statistics, June 2015 59
This value is furthermore in line with the WHO recommendations for calculation of DALYs and corresponds to the upper end of the life expectancy range to be considered. 60
INSERM, INVS/CépiDC, 2012. In: Institut National du Cancer, Mortalité nationale des cancers, 2015 61
Due to the lack of representative data, the value for France has been used.
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3.6.3.3. Years Lived with Disability
The calculation of the years of life with disability (YLD) is based on the following
formula:
Where: = disability weight, = number of incident cases and = average
duration of disability.
In the case of lung cancer, the value of 0.772 was used for 62. The number of
incident cases ( ) was estimated by multiplying the number of workers exposed and
the excess of risk of cancer. The average duration of disability ( ) was obtained by
subtracting the mean age of death (68 years63) and the mean age of diagnosis (66
years64,65) associated with lung cancer.
A 3% discount rate was applied to YLD in order to take into account time
preference and express the cost in current value.
YLD and intermediate data are detailed in Table 16 below.
PARAMETERS VALUES
Mean age of lung cancer death 68 years
Mean age of lung cancer diagnosis 66 years
Number of years with disability 2 years
Disability weight 0.772
Site Herstal Erith
Total excess risk of lung cancer, per site 1.2x10-3
1.6x10-4
Total YLD, per site, discounted(*)
1.4x10-3
1.9x10-4
Total excess risk of lung cancer, for Use-1 1.3x10-3
Total YLD for Use-1, discounted(*)
1.6x10-3
Table 16. Years of Life lived with Disability (YLD) for Use-1 (*)
: considering a 3% discount rate until the end of the review period
62
Migrin, A Review and Meta-Analysis of Utility Values for Lung Cancer, U.S. EPA 63
Institut National du Cancer, Cancer du Poumon – Quelques chiffres, Les cancers en France en 2014 64
Institut National du Cancer, Cancer du Poumon – Quelques chiffres, Les cancers en France en 2014 65
Due to the lack of representative data, the value for France has been used.
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3.6.3.4. Synthesis of the monetised damage related to mortality and
morbidity
Monetised damage related to YLLs and YLDs was calculated using the central
value of a statistical life-year recommended by ECHA66 and based on the NewExt
study67: € 55,800 (in 2003 price levels). This value is in line with Desaigues68, which
estimated the central value of life year to € 50k, based on a survey of French
residents and with EurovaQ study69, proposing a value per life year of € 45,064.
Please note that an uncertainty analysis of the costs associated to mortality and
morbidity using the lower and upper bounds of Value of a Statistical Life-Year is
provided in section 5.6.
Correction for inflation was applied based on the change in consumer price
index on average in Europe: 28.0% over the 2003-2015 period70.
Final YLLs, YLDs and monetised damage are synthesised in the following table:
PARAMETERS VALUES
YLL 1.3x10-2
YLD 1.6x10-3
DALY = YLL + YLD 1.5x10-2
Value of life year lost(*)
€ 71,403
Total cost for mortality and morbidity (PV) € 1,068
Table 17. Synthesis of YLLs, YLDs and monetised damage of mortality and morbidity related to the excess cancer risk associated with lung cancer, Use-1
(*): considering a 28.0% average inflation rate in Europe over the 2003-2015 period
3.6.3.5. Complementary assessment
Since the costs associated with mortality and morbidity constitute the main
monetised damage of the “applied for use” scenario, and in order to validate the
previous calculation, another estimate methodology was used, based on the value of
a statistical life and the willingness to pay to avoid a cancer case as provided in
ECHA’s SEA guidance:
66
ECHA, Guidance on Socio-Economic Analysis – Restrictions, May 2008 67
NewExt, New Elements for the Assessment of External Costs from Energy Technologies, 2003 68
Desaigues, Rabl, Ami, Boun My Kene, Masson, Salomon, Santoni, 2007a. Monetary Value of a Life Expectancy Gain due to Reduced Air Pollution: Lessons from a Contingent Valuation in France. Revue d’Economie Politique 117 (5), 675–698, 2007 69
EurovaQ, European Value of a Quality Adjusted Life Year, Final Publishable Report, 2010 70
OECD, Main economic indicators, Consumer Price Index – data and methods
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VALUE OF A STATISTICAL LIFE
WILLINGNESS TO PAY
TO AVOID A CANCER CASE
Initial value € 1,052,000
(2003 price levels)
€ 400,000 per non-fatal case
(supposed 2008 price levels)
Inflation 28.0%
over the 2003-2015 period(*)
11.3%
over the 2008-2015 period(*)
Present value € 1,346,161 € 445,361
Table 18. Value of statistical life and willingness to pay to avoid cancer71
(*) = On average in the European Union
Please note that the value of € 400,000 per non-fatal case for the willingness to
pay to avoid a cancer case is not referenced in ECHA’s guidelines. It was nevertheless
used in this complementary analysis since it is in line with the value of € 395,656
calculated by Alberini and Ščasný72.
Mortality rate was derived from incidence and mortality data in Europe:
PARAMETERS VALUES
Lung cancer incidence 313,000
Lung cancer fatal cases 268,000
Mortality rate 86%
Survival rate 14%
Table 19. Incidence and mortality associated with lung cancer in Europe, in 201273
Based on the parameters previously put forward, the overall impacts of cancer,
as calculated with this methodology are synthesised below:
PARAMETER VALUE COMMENT
Mortality
Number of fatal cancer
cases over the review
period
1.1x10-3
Taking into account: the total
excess risk of cancer and the
average mortality rate of lung
cancer in France
Subtotal:
costs of mortality € 1,185
Discounted until the end of the
review period
Morbidity
Number of non-fatal
cancer cases over the
review period
1.9x10-4
Taking into account: the total
excess risk of cancer and the
average survival rate of lung
71
ECHA, Guidance on the preparation of socio-economic analysis as part of an application for authorisation, Version 1, January 2011 72
Alberini and Ščasný, Stated-preference study to examine the economic value of benefits of avoiding selected adverse human health outcomes due to exposure to chemicals in the European Union, FD7. Final Report - Part III: Carcinogens, Charles University in Prague (Environment Center), September 2014. 73
GLOBOCAN 2012 (WHO), Lung Cancer Estimated Incidence, Mortality and Prevalence Worldwide in 2012
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cancer in France
Subtotal:
costs of morbidity € 66
Discounted until the end of the
review period
Total € 1,251 Present value
Table 20. Mortality and morbidity costs for Use-1, complementary assessment
The results of this complementary assessment (€ 1,251) validate the order of
magnitude of the results obtained with the DALY approach (€ 1,068).
3.6.4. Synthesis of the monetised damage of the “applied for use”
scenario
The overall monetised impacts of the “applied for use” scenario can be
summarised as follows:
IMPACTS COSTS
Medical treatment € 38
Mortality and morbidity € 1,068
Total € 1,106
Table 21. Overall impacts of the "applied for use" scenario, Use-1
3.6.5. Complementary elements of analysis: values taking into account a
4% discount rate
In order to ensure a complete consistency of the values with ECHA’s guidelines,
monetised impacts of the “applied for use” scenario are also provided considering a
4% discount rate:
IMPACTS COSTS
Medical treatment € 36
Mortality and morbidity € 987
Total € 1,024
Table 22. Overall impacts of the “applied for use” scenario, Use-1. Complementary analysis taking into account a 4% discount rate
3.7. Environment, man-via-environment impacts and
monetised damage of the “applied for use” scenario
3.7.1. Environment impacts and monetised damage
Environment impacts have been shown to be negligible and have therefore not
been subject to a monetised quantification.
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3.7.2. Man-via-environment impacts and monetised damage
Man-via-environment impacts have been shown to be negligible and have
therefore not been subject to a monetised quantification.
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4. SELECTION OF THE “NON-USE” SCENARIO
4.1. Efforts made to identify alternatives
4.1.1. Data searches and Research & Development
Research and development works for the substitution of Cr(VI) in the surface
treatment of firearms barrels and auxiliary components date back to 2003.
Taking into account both the expenditures already carried over the last decade and
those planned in the coming years, a total of € 180k will have been spent annually on
the 2010-2018 period. This amount can be divided between internal and external
resources as follows: 44% for external resources (research centres or supply of
equipment) and 56% for internal resources.
As outlined above, data searches initiatives have been based on both internal
and external resources:
- Internal resources involve working hours of FN Herstal Research and
Development department.
- External resources mainly involve partnerships with Belgian research centres,
consisting of two public-private R&D centres dedicated among others to
surface treatment specialties and one university department focusing on
PVD74.
74
Due to confidentiality agreements, the name of these research centres cannot be disclosed in this document.
A significant work of research and testing of potential alternatives to hard
chromium plating for the functional requirements of Use-1 was carried out
over the last decade by FN Herstal, notably through partnerships with
external research centres and Manroy, through internal research works.
As a result of this work, two potential alternatives to Cr(VI) compounds have
been identified: deposition of chromium from a Cr(III) electrolyte
(Alternative 1) and vacuum process with Physical/Chemical Vapour
Deposition process (Alternative 2).
These processes, however, are currently at a low level of maturity and have
yet to be further investigated, implemented and qualified; neither
Alternative 1 nor Alternative 2 will therefore be available before the sunset
date of chromium trioxide.
In conjunction with research works for alternatives, and in order to minimise
the consumption and the exposure of workers to Cr(VI) compounds, FN
Herstal is furthermore involved in the development of an innovative surface
chromium process for the duration of the review period, still Cr(VI)-based
but that would be carried out in a closed environment.
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4.2. Potential alternatives already abandoned
Several potential alternative processes are mentioned in the literature75,76,77.
Among these, very few processes appear to comply with FN Herstal and Manroy
requirements for Use-1 in terms of (a) functional properties (hardness, heat
resistance, corrosion resistance, etc.), (b) meeting of standard requirements and (c)
ability to be implemented on complex shape parts.
The potential substitution processes that have been considered are developed in
what follows.
4.2.1. Thermal spraying with HVOF (High Velocity Oxygen Fuel)
In the HVOF process, powdered material is accelerated at high speed and
temperature and sprayed on the component in a plastic state. The coating is
deposited droplet by droplet.
WC-Co (tungsten carbide - cobalt) and Cr3C2-NiCr (chromium carbide - Nickel
chromium) powders are particularly used as substitutes for hard chromium. From a
technical point of view in the context of Use-1, these processes show significant
limits, such as:
- Inability to coat small and intricate parts, or parts with a small internal
diameter (about 100 mm)78. This last part is particularly critical for
FN Herstal, since small- and medium-caliber firearms that are produced in
Herstal have internal barrel diameters comprised between 6 and 13mm.
- The bond between the sprayed-on coating and the substrate is purely
mechanical; by contrast, chromium plating adheres to the substrate
according to the laws of solid-state physics. The mechanical bond of the
HVOF coatings is potentially subject to poorer adhesion of the coating.
- Coatings applied are porous and, in case the coating thickness is too low (i.e.
<80μm) and not fully sealed, increased corrosion may be encountered. As a
consequence, HVOF cannot be accepted as a potential alternative to hard
chromium plating for parts whose dimensional requirements imply low
coating thicknesses (requirements for FN Herstal’ and Manroy’ small- and
medium-calibre firearms are comprised between 10 and 40 µm). Conversely,
small or complex components with undercuts are particularly difficult to coat
with this process if they can be coated at all.
75
Holeczek, Kölle, Metzner, Report on inclusion of chromium trioxide (CrO3) in Annex XIV - Fraunhofer IPA-Institut für Produktionstechnik und Automatisierung, 2011 76
Bielewski, Replacing Cadmium and Chromium, Institute for Aerospace Research National Research Council Canada Ottawa, Ontario CANADA- RTO-AG-AVT-140, NATO Science and Technology Organization, 2011 77
Audino, Use of Electroplated Chromium in Gun Barrels - US Army RDECOM-ARDEC-Benet Laboratories, DoD Metal Finishing Workshop Washington, DC 22-23 May 2006 78
Bielewski, Replacing Cadmium and Chromium, Institute for Aerospace Research National Research Council Canada Ottawa, Ontario CANADA- RTO-AG-AVT-140, NATO Science and Technology Organization, 2011
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- HVOF processes result in rough coating surfaces. Depending on the
application, such surfaces may require subsequent machining, which can be
very costly when hard ceramic coatings such as WC-Co are used. Large
quantities of hard metal dust are produced during both the spraying (up to
60% overspray can be expected) and the grinding processes, thereby posing
potential hazards for the health of operators.
- HVOF coatings have a very low factor for elongation at fracture and are
brittle.
Taking into account the abovementioned considerations, HVOC was rejected
by FN Herstal as a potential alternative solution to hard chromium.
4.2.2. Thermochemical surface modification
Nitriding can be accomplished using the plasma process or heat treatment,
whereby components are immersed in molten salt or gas nitriding is used.
During the nitriding operation, process temperatures of 520°C to 580°C occur
upon immersion in molten salt, while temperatures of 450°C to approx. 550 °C are
common for plasma nitriding.
For small thickness parts, nitriding can generate parts warping. For other
applications, parts tolerances should be monitored. Steel mechanical properties will
also be modified and should be taken into account.
Deposited layers are very brittle and may lead to flaking, cavitation and even
failure in the context of dynamic stress and surface pressure experienced during
firing of firearms.
Thermochemical surface modification processes do not effectively protect
weapon hot parts such as barrels against corrosion by combustion gases and
therefore have to be implemented in conjunction with other complementary
processes and notably hard chromium plating.
Attempts of nitriding gun barrels before chromium plating treatment have
been performed between 2003 and 2005 by FN Herstal. Further research
concerning this process have been abandoned, due to the remaining need to
use Cr(VI) compounds during the hard chromium plating step.
4.2.3. Nickel and Nickel alloy coatings
Deposition can be accomplished either electro-chemically or without the use of
electric current.
Nickel-based coatings such as electroless nickel are increasingly used in the industry
as safer and more environmentally-friendly alternatives to hard chromium plating. In
the context of requirements in terms of high temperature wear resistance, Nickel-
based coatings have a low melting point (1,455°C against 1,907°C for chromium).
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For gun bore applications, nickel has a significant potential drawback related to
the interaction with nickel and copper from projectiles. Due to its low melting point,
copper melts during the firing of ammunition and the travel of projectiles in the
barrel bore. In case of extended firing, molten copper may build up on the bore
surface and then interact with the nickel coating to form low-melting, easily eroded
surface layers79.
Electroless nickel-phosphorus (Ni-P) are hardenable, corrosion resistant coatings
consisting of nickel alloyed with a varying percentage of phosphorous, comprised
between 8% for harder coating layers to 10% for better corrosion resistance
properties.
Such processes offer good thickness uniformity and control but the use of nickel
and nickel alloys as potential alternatives is subject to a few technical limitations:
- Unhardened nickel and nickel alloy coatings have a lower hardness
(500-750 HV) than functional chromium plating. This value is not sufficient
for FN Herstal applications and does not comply with the requirements of
the SAE AMS2460 standard.
- Heat treatment is required to increase the hardness of Ni-P alloys deposited
without the use of electric current: temperatures of approximately 400°C are
required. For small thickness parts, Nickel plating heat treatment can
generate parts warping. For other applications, parts tolerances should be
monitored. Also steel substrates characteristics should be checked.
- Electroless Ni-P composite coatings are available with addition of
nanoparticles such as silicon carbide (SiC) for an improved wear resistance.
The use of such nanoparticles is increasingly mentioned in the scientific
literature in order to modify the properties of nickel coatings, so as to tend
toward the functional properties of hard chrome plating. This process is
nevertheless reported to be very hazardous for the health and safety of
workers.
- Electroless nickel-boron (Ni-B) coatings exhibit better wear resistance
properties, a lower friction coefficient and higher hardness but lower
corrosion resistance properties as compared to hard chromium plating. In
addition, Ni-B coatings are expensive to produce, have limited availability
and plating baths contain toxic substances, such as lead or thallium.
Tests with Ni-B as an alternative coating have been conducted by the Herstal
Group between years 2005 and 2006. Qualification tests on weapons did not
appear conclusive.
This alternative has therefore not been further considered since it does not
match FN Herstal’s and Manroy’s technical requirements, notably in terms of
79
Montgomery, Watervliet, Interaction of copper-containing rotating band metal with gun bores at the environment present in a gun tube - Weapons. Laboratory, Watervliet Arsenal, WVT-TR-74026, 1974
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hardness. In addition, boron compounds could be further regulated in the
near future.
4.3. Research and development works in order to reduce the
exposure to Cr(VI) for hard chrome plating (FNH1)
In conjunction with research works for alternatives, FN Herstal has undertaken
works for the optimisation of hard chromium plating in order to reduce the exposure
of workers to Cr(VI) compounds.
Confronted with the difficulty of identifying an alternative technology meeting
FN Herstal’s and Manroy’s technical requirements for Use-1, it was decided in 2011
to redesign the hard chromium plating process in such a way as to greatly reduce the
exposure of workers to Cr(VI). This project will be referred to as “FNH1” in what
follows.
The principle of this innovative chromium plating process is based on ---------- ----
----- ------------- --------- ------------- --------- ------------- --------- ------------- --------- -------------
--------- ------------- --------- ------------- --------- ------------- --------- ------------- --------- ---------
---- --------- ------------- --------- ------------- --------- ------------- --------- ---(#3a).
FNH1’s expected benefits include:
- The use of much smaller baths volumes than for immersion and removing of
the soaking step in the baths, thereby reducing chemical hazards for
workers’ health; workers will be separated of hard chromium plating
installations by two floors and there will be no contact between the
operators’ position and chemical substances during the surface treatment
operations.
- The possibility to obtain a chromium surface offering improved
performances as compared to the immersion process. It is also known that
this kind of process process helps limiting hydrogen embrittlement80 as well
as the overvoltage effects related to the stagnation of gas bubbles in the
barrel.
- The increase in productivity made possible by the use of high current
densities during electroplating, which are made possible thanks to ---------- ---
------ ------------- --------- ------------- --------- ------------- --------- ------------- --------- -
------------ --------- ------------- --------- ------------- --------- ------------- --------- ---------
---- --------- ------------- --------- ------------- --------- ------------- --------- ------------- ---
------ ---(#3b).
The general timeline of research works can be outlined as follows:
- First exploratory phases were conducted between 2011 and 2013 under
contract in an electrochemistry lab and a pilot plant of a research centre.
- In the second step (2012-2013), a pilot (laboratory-scale) line for this
experimental chromium plating process and tooling was designed and
80
Yin, Wang, Surface and Coatings Technology 114, 213–223, 1999
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manufactured with the research centre, on the basis of results of laboratory
research works. The start of FNH1 and the development of plating
parameters were performed in 2013.
- The first qualification testing on barrels produced on this experimental
treatment line took place in 2014. FNH1 is currently at TRL 7 (Technology
demonstrated in relevant environment) and is expected to attain TRL 8
(System complete and qualified) or 9 (Actual system proven in industrial
environment) within 2022.
- The third implementation step consists in the development and the
installation of an industrial-scale prototype, requiring a significant
engineering work notably in terms of scaling and safety. The budget for the
third step is foreseen to amount to at least € 300k and up to € 1M.
- The fourth implementation step is the replacement of current lines with
FNH1-inspired lines. Estimated implementation costs of this process are
comprised between € 4.5M and € 7.5M (considering a unit cost of € 1.5M to
€ 2.5M per chroming line and the need for three chroming lines).
The implementation timeline of FNH1 is provided in section 4.5, along with that
of Alternative 1 and Alternative 2.
The future industrialized version of the processing line, will allow separating the
positions of workers and baths by two floors. There will be no contact between the
operators’ position and chemical substances during the surface treatment
operations.
Given its nature and level maturity, FNH1 will not require the re-qualification of
firearms, which makes its implementation possible in the early phase of the review
period and thereby relevant in the context of the substitution process.
From an economic standpoint, aside from investments, operation costs are
foreseen to be similar than those of the current hard chromium coating process.
In case Alternative 1 is deemed compliant with the functional requirements of
Use-1, it is also likely to be compliant with the FNH1 process, making the overall new
process even more economically relevant to FN Herstal.
FNH1 will constitute an improvement of the hard chromium plating process and
will be carried out in a separate room (away from workers), thereby reducing the
exposure of workers for all the steps related to the operation of the plating line
(notably for the installation and removal of parts to be treated on jigs).
The improvement of this new process, the development of plating tools and
endurance shooting tests will be pursued on a set schedule until the end of 2016.
The choice to industrialise or abandon this process will be conditioned by the
favourable or unfavourable opinion of ECHA toward the present AfA.
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4.4. Assessment of shortlisted alternatives
Research works have resulted in the identification of two potential alternatives
for the functional requirements of Use-1: deposition of chromium from a Cr(III)
electrolyte (Alternative 1) and vacuum process with Physical/Chemical Vapour
Deposition process (Alternative 2).
4.4.1. Alternative 1: Chromium deposition from Cr(III) electrolyte
4.4.1.1. Substance ID and properties
Under Alternative 1, chromium deposition is investigated with the use of a
Cr(III) electrolyte instead of a Cr(VI)-based electrolyte.
4.4.1.2. Technical feasibility of Alternative 1
Research works have been focused for some time on deposition of trivalent
chromium electrolytes in the context of chromium plating. In the area of decorative
chromium plating, trivalent chromium electrolytes are already being used as a
substitute for Cr(VI) electrolytes-based chromium plating for some applications.
However, processes for the deposition of functional chromium coatings using
trivalent chromium electrolytes are still in development phase.
Even after conclusion of development works, deposition of hard chromium
coatings from trivalent electrolytes will only be possible for special applications and
for very simple component geometries due to the electro-chemical limits, low
hardness and low coatings thickness.
FN Herstal initiated in 2014 a literature search on the subject in collaboration
with a Belgian research centre. The most promising approaches are actually
laboratory tested.
As of today, Alternative 1 is at TRL 3, meaning that active R&D works are in
progress but that technical feasibility and compliance with FN Herstal’s and Manroy’s
functional requirements have yet to be demonstrated.
From an industrial point of view, Alternative 1 does not constitute a major
change as compared to the current process since it consists of a replacement of the
electrolytes of the current baths. As a consequence, it would certainly be compliant
with current facilities and surface treatment lines and its implementation would
incur much lower costs than for Alternative 2, both in terms of investments and
operating costs (personnel).
4.4.1.3. Economic feasibility and economic impacts of Alternative 1
Alternative 1 will certainly be compliant with the current hard chromium plating
lines and will therefore not imply heavy investments for its implementation. It will,
however, imply a strong increase in the cost of electrolytes.
Cr(III)-based surface treatment processes furthermore require a more frequent
chemical monitoring (several analysis on a daily basis as opposed to one analysis per
week with the current process) and therefore require hiring a dedicated laboratory
technician.
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Alternative 1 is also expected to require increased maintenance works and
therefore increased wastewater treatment capacity, with related costs of the order
of magnitude of € 100k per line.
4.4.1.4. Availability of Alternative 1
No commercially available solution exists that meets the requirements of FN
Herstal and Manroy for the presents AfA’s Use-1.
4.4.1.5. Hazard and risk of Alternative 1
Cr(III)-based surface treatment solutions may involve the use of boric acid. Since
hazard and risk constitutes a key parameter in the selection and development of an
alternative, the Applicants focuses on boric acid-free solutions.
4.4.1.6. Conclusions on Alternative 1
Given its compatibility with the current surface treatment facilities at the sites of
Herstal and Manroy, Alternative 1 constitutes the most hoped-for alternative to
Cr(VI)-based processes. As of today, however, Alternative 1 is at a too low level of
maturity to prejudge of its final compliance with the requirements of Use-1.
4.4.2. Alternative 2: Vacuum process with PVD/CVD
4.4.2.1. Substance ID and properties
PVD and CVD processes are relatively well-known alternatives to hard chromium
plating. Included in this category are sputtering and cathodic arc deposition that
produce thin coatings (below 10 μm) and Electron Beam-PVD (EB-PVD) techniques
which can produce coatings up to hundreds of micrometers in thickness. Two of the
most important features of PVD coatings, relevant to hard chromium applications,
are high deposition rates and compressive residual stresses in the coatings after
deposition.
Among PVD coatings considered as hard chromium alternative are CrN, TiN and
Metal containing Diamond-Like Carbon (Me-DLC) coatings that can be deposited by
magnetron sputtering or cathodic arc evaporation.
4.4.2.2. Technical feasibility of Alternative 2
Vacuum technologies are constantly evolving. As of today, these processes have
limitations in the context of Use-1.
FN Herstal is supporting, since 2014, projects of two Belgian research centres,
with the aim of developing new high performance coatings and above all, new
deposition tools, able to overcome limitations associated to the complex geometry
of weapon parts.
PVD processes offer high quality coatings but due to the process technology,
coating capabilities of inner surfaces parts and blind holes of parts with complex
geometry, are highly limited.
Alternative 2 is at TRL 3, meaning that active R&D works are in progress but that
technical feasibility and compliance with FN Herstal’s and Manroy’s functional
requirements have yet to be demonstrated.
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From an industrial point of view, Alternative 2 constitutes a complete disruption
of the industrial facilities at the sites of Herstal and Erith. Its implementation would
therefore require a complete modification of the workshop as well the employment
of a qualified and trained personnel.
4.4.2.3. Economic feasibility and economic impacts of Alternative 2
Capital costs as well as operation costs for PVD equipments are expected to be
high but, due to its low level of maturity, a precise estimate of the costs associated
with Alternative 2 cannot be carried out.
4.4.2.4. Availability of Alternative 2
Vacuum processes are relatively well-known from an industrial point of view,
and are notably implemented for the surface treatment of simple-shaped parts and
external surfaces. These solutions, however, do not comply with the requirements of
FN Herstal’s and Manroy’s products in terms of geometrical shape (notably: long and
thin tubes that constitute gun barrels) and potential magnetisation of parts that are
used.
As of today, no vacuum solution is available that can be implemented in thin
tubes such as those used by FN Herstal and Manroy and even experimental devices
still have to be miniaturised by around one order of magnitude. Such a
miniaturisation does involve very strong technical challenges that ongoing research
works aim at overcoming.
4.4.2.5. Hazard and risk of Alternative 2
A preliminary assessment does not seem to show that Alternative 2 involves
hazard and risks.
4.4.2.6. Conclusions on Alternative 2
Alternative 2 is investigated for the substitution of CrO3 for the surface
treatment of firearms parts concerned by Use-1. Its development still require major
technical improvements in terms of the size of device and its implementation would
constitute a major change in terms of equipment and staff as compared to the
current hard chromium process. As it constitutes a completely different process from
hard chromium, comprehensive long and costly requalification procedures of FN
Herstal’s and Manroy’s products will be required to permit their commercialisation.
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4.5. Substitution timeline
The substitution timeline for FNH1, Alternative 1 and Alternative 2 is outlined
below.
On the basis of this timeline, and considering both uncertainties on the technical
steps and research results, as well as the period of time needed to submit a new
dossier should the need arise, either Alternative 1 or Alternative 2 is expected to be
fully developed, implemented and qualified in 2029.
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
FNH1
Industrial-scale research works
Industrialisation
Internal qualification
Alternative 1:
Chromium deposition
from Cr(III)
electrolyte
Laboratory-scale research works
Industrial-scale research works
Industrialisation
Internal qualification
Alternative 2:
Vacuum process with
PVD/CVD
Laboratory-scale research works
Industrial-scale research works
Industrialisation
Internal qualification
Table 23. Substitution timelines for Alternative 1 and Alternative 2 Key milestones:
❶ = Launch of industrial scale R&D works on FNH1 will be conditioned by the granting of an authorisation for a twelve-year review period for Use-1
❷ = The industrialisation of FNH1 will not be required if Alternative 2 is deemed appropriate
❸ = Continuation of works on Alternative 1 will be conditioned by the results obtained between 2016 and 2021 at laboratory-scale
❹ = Investments for industrial-scale processes for Alternative 2 will be conditioned on the failure of research works on Alternative 1
❺ = Investments for industrial facility dedicated to Alternative 2 (new facility) will depend on the issue of the industrial-scale research works
3
4
5
1 2
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4.6. Synthesis: summary of the potential substitution
processes considered
As a summary of the aforementioned description of the potential technologies
investigated by FN Herstal over the last decade as potential alternatives to CrO3 in
the surface treatment of firearms inner barrels and auxiliary parts is provided in
Table 24 below.
CATEGORY POTENTIAL ALTERNATIVES
PERIOD OF TEST AT FN
HERSTAL HA
RD
NES
S
HEA
T
RES
ISTA
NC
E
CO
RR
OSI
ON
EFFICIENT COVERAGE ON COMPLEX OR
INNER SHAPES
PRESERVE COMPONENT TOLERANCES
FIT WITH EXISTING
PLANT FACILITIES
HEALTH AND ENVIRONNEMENT
HAZARDS
MEET MILITARY
STANDARDS
STATUS IN 2015
PERSPECTIVES WITHIN 5
YEARS
Po
ten
tial
alt
ern
ativ
es
alre
ady
aban
do
ne
d
HVOF
(High Velocity Oxygen Fuel) - - - - F F F
High
(overspray) -
Rejected
None
Thermochemical surface modification
2003-2004 - F P F F - - Not all
- Rejected None
Ni and Ni alloy coatings
(Ni-B, Ni-P; Ni-W) 2005-2006
P if hardened
F if not F P P
F if hardened
P if not P
High
(if boron compounds or
nanoparticles are used)
F
- Rejected None
Alt
ern
ativ
es
Alternative 1: deposition of chromium from Cr(III)
electrolyte 2014-2017 PF P PF PF P P ? ?
TRL3
Considered alternative
Alternative 2: vacuum process with PVD/CVD
2014-2017 ? ? ? PF P F - ?
TRL3
Considered alternative
Pro
viso
ry p
roce
ss d
uri
ng
revi
ew
pe
rio
d t
he
tim
e
ne
ed
ed
to
su
bst
itu
te
FNH1: new industrial hard chromium plating process
reducing the risks associated with the use of
hexavalent chromium
2011-2017 P P P
P for inner coating of
barrels
PF for other complex shapes
P F - Lower than the
current plating process
P
TRL7
TRL8-9 if authorisation
granted by ECHA
Table 24. Summary of potential substitution processes considered (on grey background, the two shortlisted alternatives) P = Pass (same as current electrolytic hard chromium plating or better); F = Fail; PF = Perfectible;? = Insufficient data; − = Not applicable or no data
= Pursued investigation; = Further works abandoned
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4.7. The most likely “non-use” scenario
Hard chromium plating plays a central role in the activity and the
competitiveness of the firearms manufactured by FN Herstal and Manroy. As
described above, due to the high level of requirement for the hard chromium plating
of parts identified in the scope of Use-1, no satisfactory alternative will be available
for FN Herstal and Manroy by 2017.
The most likely potential “non-use” scenarios are explored in what follows.
4.7.1. Potential “non-use” scenarios
It will be shown that neither the downgrade of performances (putting non-hard
chromium plated firearms on the market) nor the subcontracting of hard chromium
plating activities outside the EU is deemed realistic; the most likely “non-use”
scenario is the relocation of hard chromium plating activities outside the EU.
4.7.1.1. The downgrade of performances hypothesis
As demonstrated in section 3.1, untreated firearm barrel bores have a lifespan
that does not comply with both standard requirements and customer requirements.
Since no alternative process to hard chromium is available, a downgrade of FN
Herstal’s and Manroy’s firearms performances by the cease of hard chromium
plating of parts subject to thermal, mechanical and chemical stresses is not deemed
realistic.
In addition, no alternative surface treatment process exists that provide a
lifespan to firearms meeting both customer and Standard requirements.
4.7.1.2. The subcontracting outside EU hypothesis
Subcontracting of the surface treatment activities outside the European Union is
not further investigated for the following reasons:
- Hard chromium coating constitutes a very specific and complex process.
Potential subcontractors for such operations have not yet been identified;
- Subcontracting would imply a loss of know-how for FN Herstal and Manroy,
thereby potentially impeding the companies’ research and development
potential in the future;
- The impact on employment would be greater than in the case of relocation,
since industrial support and control functions would be impacted in addition
to production teams.
4.7.1. Synergy between uses
Given that FN Herstal is concerned by both Use-1 and Use-2 of the present AfA,
“non-use” scenarios for each use to some point depend on the outcome of the
application for each use, as illustrated in Table 25 below.
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AUTHORISATION FOR USE-1
AU
TH
OR
ISA
TIO
N F
OR
USE
-2
- “Applied for use” scenario: pursued
activity for FN Herstal, Browning
and Manroy for the period of time
necessary to implement an
alternative process
- FN Herstal (Use-2) and Manroy:
relocation of hard chromium
operations outside the EU
- Browning: pursued activity for the
period of time necessary to
implement an alternative process
- FN Herstal (Use-1) and Manroy:
pursued activity for the period of
time necessary to implement an
alternative process
- Browning: relocation of hard
chromium activity outside the EU
- “Non-use” scenario: relocation of
hard chromium plating activities of
FN Herstal, Browning and Manroy
outside the EU
Table 25. Different "non-use” scenarios depending on the outcome of the application for authorisation for Use-1 and Use-2
= Authorisation granted; = Authorisation not granted
As can be seen, and in order to ensure a good understanding of the dossier, the
“non-use” scenario for Use-2 of the present AfA is based on the assumption that
neither Use-1 nor Use-2 is granted. In this context, relocation of hard chromium
plating activities does appear as the most-likely “non-use” scenario.
4.7.1.1. The most likely “non-use” scenario
Given (a) the dependence of FN Herstal and Manroy on products concerned by
Use-1, (b) the economic and support functions capabilities of FN Herstal and Manroy
and (c) the regulatory context of the Belgian and British territory, the relocation of
hard chromium plating operations outside the EU is considered as the most realistic
“non-use” scenario.
The regulatory and economics burden of the relocation of the hard chromium
plating operations outside the EU is nevertheless expected to bear strong impacts for
the activity of FN Herstal and Manroy, e.g.
- Economic impacts on FN Herstal’s and Manroy’s activity include the loss of
revenues and profits, the loss of markets, lost investments, as well as
relocation costs, the increase of operating costs and regulatory issues.
- Human health and Environmental impacts, include impacts on human
health as well as greenhouse gas emissions.
- Social impacts mainly consists of impacts on employment;
- Wider impacts include the unavailability of the concerned equipments for
the armies, as well as loss of sovereignty and loss of investments for
sovereign States.
The relocation process is expected to require a three-year period in order to
purchase the land, to build the plant and to install the hard chromium plating lines as
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well as the ventilation and wastewater treatment plants. Such a disruption in
production will significantly jeopardise the very activity of both FN Herstal and
Manroy. In what follows, it was chosen to consider a three-year loss of revenues for
the economic impacts generated by the “non-use” scenario instead of a bankruptcy
of FN Herstal and Manroy. This assumption, if not realistic per se, provides
underestimated amounts as compared to the bankruptcy hypothesis and was chosen
for this reason.
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5. IMPACTS OF GRANTING AN AUTHORISATION
5.1. Economic impacts
5.1.1. Loss of revenues and profits
FN Herstal
As already stated, all firearms manufactured in Herstal contain hard chromium
plated parts. The activity of FN Herstal therefore strongly depends on Use-1, as
illustrated in Figure 10 showing the share of the cumulated revenues over the
2000-2015 period that are related and not related to hard chromium plating (Use-1
and Use-2):
Figure 10. Share of FN Herstal revenues related and not related to hard chromium plating (Use-1 and Use-2), on the basis of cumulated revenues over the 2000-2015 period.
From a global point of view over the 2000-2015 period, an average of [10-
100%](#1d) of FN Herstal’s revenues is shown to directly depend on hard chromium
plating.
The evolution of the global revenues of FN Herstal over the 2004-2014 period is
provided on Figure 11 below:
(#1c)
The “non-use” scenario will generate significant economic impacts (and
notably a loss of revenues, relocation costs and loss of investments), social
impacts (loss of employment), as well as environmental impacts (greenhouse
gas emissions) and other impacts (increase of operating costs, regulatory
issues, impacts on the operational capabilities of sovereign armies).
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Figure 11. FN Herstal revenues for the 2004-2014 period, in M€
Given the restructuring of the company during the last years, the average of FN
Herstal revenues for the 2011-2014 period, i.e. € 243M, is considered as
representative of the future revenues of the company during the review period that
is applied for Use-1 (12 years post-2017).
Hard chromium plating concerns both Use-1 and Use-2, with the following
breakdown in terms of revenues [10-100%](#1d-1)} for Use-1 and [1-10%](#1d-2)} for
Use-2.
It is estimated that the relocation of hard chromium plating activities will entail a
three-year loss of revenues for FN Herstal, corresponding to the period of time
needed to plan, build and render operational the relocated surface treatment
workshop. The calculation of the loss of revenues associated with the “non-use”
scenario will therefore be based on the assumption of a 3-year loss of revenues for
FN Herstal. This hypothesis, although not considered as realistic per se (it does not,
for example, take into account the fact that the very survival of the FN Herstal would
be jeopardised in case of a 3-year cease of activity), was elected since it provides
underestimated figures for the present assessment. An uncertainty analysis
regarding the loss of revenues and the impact on employment is provided in section
5.6.
In order to remain in the context of the realistic worst-case scenario, the
estimate of the loss of revenues generated by the “non-use” scenario is based on a
zero-growth hypothesis for the revenues of FN Herstal over the 2018-2021 period.
For uncertainty analysis purpose, an alternative estimate, taking into account the
growth of revenues of FN Herstal over the review period on the basis of the past
years trends is provided in section 5.6.
Based on the above assumptions, the calculation of the loss of revenues is
synthesised in Table 26 below:
114 118 136
201 214
224 203
179
237 249
306
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
M€
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VALUE
Average annual revenues for FN Herstal over the 2011-2014 period € 243M
Share of revenues directly related to hard chromium plating [10-100%](#1d-6)
Share of revenues related to hard chromium plating that are related to Use-1
[10-100%](#1d-3)
Relocation period considered for the loss of revenues 3 years
Total loss of revenues for FN Herstal [100-1,000M](#1d-4)
Total loss of revenues for FN Herstal, discounted(*) [100-1,000M](#1d-5)
Table 26. Loss of revenues for FN Herstal related to the “non-use” scenario (*)
: considering a 4% discount rate over the 2018-2020 period
Taking into account an average gross margin rate of [10-100%](#1e), the total
loss of profits associated with the “non-use” scenario amount to € [100-
1,000M](#1f).
With a loss of profits of € [100-1,000M](#1g) over the 2018-2020 period, the
“non-use” scenario will generate significant impacts on the economic activity of FN
Herstal. Such impacts would jeopardise the recovery of the financial situation of FN
Herstal that was achieved over the last years.
Manroy
The average of Manroy’s forecasted revenues over the 2016-2018 period is
£ 19,6M (€ 24,9M). This figure is considered as representative of the company’s
revenues for the 2018-2021 period.
In addition, the two products concerned by Use-1 (GPMG in Erith and HMG in
Herstal) represent [10-100%](#1g-1) of the total revenues of Manroy.
As for FN Herstal, a 3-year loss of revenues is considered in the context of the
“non-use” scenario. This hypothesis, although not considered as realistic per se (it
does not, for example, take into account the fact that the very survival of the FN
Herstal would be jeopardised in case of a 3-year cease of activity), was elected since
it provides under-estimated figures for the present assessment. An uncertainty
analysis regarding the loss of revenues and the impact on employment is provided in
section 5.6.
In order to remain in the context of the realistic worst-case scenario, the
estimate of the loss of revenues generated by the “non-use” scenario is based on a
zero-growth hypothesis for the revenues of Manroy over the 2018-2021 period. For
uncertainty analysis purpose, an alternative estimate, taking into account the growth
of revenues of Manroy over the review period on the basis of the past years trends is
provided in section 5.6.
Based on the above assumptions, the calculation of the loss of revenues is
synthesised in Table 28 below:
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VALUE
Average annual revenues for Manroy € 24.9M
Share of revenues directly related to hard chromium plating [10-100%](#1g-2)
Relocation period considered for the loss of revenues 3 years
Total loss of revenues for Manroy [10-100M](#1g-3)
Total loss of revenues for Manroy, discounted(*) [10-100M](#1g-3)
Table 27. Loss of revenues for Manroy related to the “non-use” scenario (*)
: considering a 4% discount rate over the 2018-2020 period
Taking into account an average gross margin rate of [10-100%](#1h), the total
loss of profits associated with the “non-use” scenario amounts to € [10-100M](#1i).
With a loss of profits of € [10-100M](#1j) over the 2018-2020 period, the “non-
use” scenario will generate significant impacts on the economic activity of Manroy.
Total loss of revenues and profits
The cumulated loss of revenues and profits in the context of the “non-use”
scenario for Use-1 amounts to:
VALUE
Loss of revenues for FN Herstal discounted [100-1,000M](#1j-1)
Loss of revenues for Manroy, discounted [10-100M](#1j-2)
Total loss of revenues [100-1,000M](#1j-3)
Table 28. Total loss of revenues for Use-1
VALUE
Loss of profits for FN Herstal discounted [100-1,000M](#1k)
Loss of profits for Manroy, discounted [10-100M](#1l)
Total loss of profits [100-1,000M](#1m)
Table 29. Total loss of profits for Use-1
Cumulated for FN Herstal and Manroy, the “non-use” scenario for Use-1 will
generate a loss of revenues of € [100-1,000M](#1n) over the 2018-2020 period.
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5.1.2. Loss of markets
5.1.2.1. Loss of markets requiring the manufacture of firearms to be carried
out in the European Union
A significant part of FN Herstal and Manroy customers are European States. As
illustrated in section 3.1.4.2, and in order to ensure their security of supply for
military equipments, such States generally require that all the manufacturing and
assembly operations are carried out over the European Union.
In the context of the “non-use” scenario, such criteria will not be met and such
markets will therefore be closed for FN Herstal and Manroy, thereby involving a
significant loss of mid-term and long-term revenues for the company.
The loss of markets requiring the manufacture of firearms over the European
Union will generate a significant loss of revenues for FN Herstal and Manroy, for a
duration that would exceed the period of time needed to implement the relocation
itself
5.1.2.2. Loss of markets due to the increase of lead-time related to the
relocation-related logistics delays
The fact that FN Herstal and Manroy manufacturing capabilities are located in
the European Union constitutes a key commercial asset for the company’s activity.
Manufacturing in Europe allows FN Herstal and Manroy to be extremely reactive for
the processing of orders, which often constitutes a key criterion for customers.
Customer requirements in terms of supply time vary between four to six months for
spare parts and four to twelve months for firearms and systems.
In these conditions, a one to two months delay in the production cycle, as would be
generated by relocation in the context of the “non-use” scenario, would represent a
significant increase in lead-time for FN Herstal and Manroy.
As the Walloon and British legislations strictly govern arms trade, FN Herstal and
Manroy can only produce firearms or firearms parts after a firm order is provided
and a licence is granted. As a consequence, neither FN Herstal nor Manroy can stock-
pile firearms parts in order to anticipate future orders.
The increase in lead-time foreseen in the context of the “non-use” scenario
will close significant markets for FN Herstal and Manroy, for which the company’s
reactivity currently constitutes a strong commercial asset that would be lost in case
of relocation of the hard chromium plating activities.
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5.1.3. Lost investments
The inventory of all the investments made in favour of the hard chromium
plating lines at the site of Herstal has been carried out by FN Herstal’s accounting
department.
The assessment of the lost investments foreseen in the context of the “non-use”
scenario is based:
- On the identification of the investments still due for amortisation in 2017
and after, as well as the precise number of amortising years remaining;
- On the annualised costs method;
- On a 4% discount rate.
A synthesis of the investments amounts concerned by the assessment is
provided below:
LAST ANNUITY TOTAL AMOUNT IN AMORTISATION(*)
2017 € 100,616
2018 € 222,035
2019 € 12,793
2020 € 4,850
2021 € 4,850
2023 € 61,281
2024 € 78,768
2025 € 13,917
TOTAL € 494,260
Table 30. Detail of investments in amortisation, by year of last annuity (*) = Considering a 4% discount rate over the amortisation period
The total lost investments foreseen for the site of Herstal in the context of the
“non-use” scenario amounts to € 494,260.
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5.1.4. Relocation costs for FN Herstal
Cumulated relocation costs for Use-1 and Use-2 of the hard chromium plating
activities have been estimated by FN Herstal:
COST AMOUNT DEPRECIATION
PERIOD JUSTIFICATION
Land purchase and building construction
€ 3 to 6M 30 years Estimation based on the costs in Belgium
Chromium plating lines € 4 to 5M 15 years Estimation based on the costs of hard chromium plating lines in Herstal
Auxiliary equipments € 6M 15 years Ventilation system, wastewater treatment plant, ...
Other € 3M 3 years Creation of the legal entity, follow-up costs, industrialisation costs
Total, discounted € 16 to 20M - -
Table 31. Relocation costs for FN Herstal, for Use-1 and Use-2
On the basis of the annualised costs method and taking into account (a) the
lower bound of relocation costs (€ 16M) in order to remain in the context of the
realistic worst-case scenario as well as (b) a 4% discount rate, the total monetary
value of the investments made for relocation over the twelve-year review period
amount to € 12.1M.
Considering the land purchase, building construction, installation of chromium
plating lines as well as expenses for auxiliary equipments and other costs,
relocation costs are estimated to € 12M.
5.1.5. Increase of operating costs
5.1.5.1. Transportation costs
The “non-use” scenario will mechanically induce an increase in transportation
and logistics-related costs.
5.1.5.2. Packaging costs
Given the safety requirements related to the transportation of firearms, and in
order to adapt to the transportation steps foreseen with the relocation, the
“non-use” scenario will entail a significant increase in packaging needs.
5.1.5.3. Other costs
The “non-use” scenario will generate a significant increase of costs associated
with support functions, such as insurance and licensing fees.
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The “non-use” scenario will directly impact the competitiveness of FN Herstal,
even after the relocation of hard chromium plating activities is completed, due to
an increase of transportation costs, packaging costs as well as insurance and
licensing fees.
5.1.6. Regulatory issues
The “non-use” scenario will entail the need to transfer firearms and firearms
subcomponents to a host country located outside the European Union and back to
the European Union after their surface treatment. In the context of military
equipment, such import and export activities are subject to a stringent regulatory
framework.
In the case of FN Herstal, regulatory requirements related to import and export of
firearms outside the European Union are defined by the Walloon government’s
decree of 12 June 2012.
Export licenses are individual and are granted or rejected after their examination on
the basis of eight criteria81. Export licenses have a period of validity of 18 months and
can be renewed as often as necessary to permit the execution of the order.
Import license are as well delivered by the Walloon government and have the same
period of validity than export licenses.
In this context, the “non-use” scenario will entail strong impacts for FN Herstal,
notably regarding the obligation to export and import defence-related products on
the basis of individual licenses, thereby resulting in a significant increase in lead-time
and consequently in the imposition of contractual penalties.
Transfer of arms can furthermore be subject to the transmission of an end-user
certificate to the host country. In this case, the identity of the end-user country
would have to be disclosed, which would pose stringent confidentiality issues.
Another issue with relocation lies in the potential implementation of arms
control regulation by the host country, as is currently in effect in the United Stated
under ITAR (International Traffic in Arms Regulations) and EAR (Export
Administration Regulations). The following terms constitute criteria for most of
tender procedures, as a qualification of the safety of supply for customers:
- A technical data or service is qualified as “ITAR-controlled” or “ITAR-free”
depending on whether it includes a US-originated component requiring an
export license under ITAR or not.
- Similarly, a technical data or service is qualified as “EAR-controlled” or “EAR-
free” depending on whether it includes a US-originated component requiring
an export licence that amounts to more than 25% of its overall value or not.
81
Defined by the “Position commune 2008/944/PESC du Conseil du 8 décembre 2008 définissant les règles communes régissant le contrôle des exportations de technologie et d’équipements militaires”
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The potential implementation by the host country of ITAR/EAR-like regulation would
thereby endanger the overall security of supply of FN Herstal and therefore of the
company’s customers.
Finally, it has to be mentioned that legal and customs constraints that are very
stringent in the context of arms transfer will entail a supplementary administrative
burden for FN Herstal. In addition, experience has shown that legal and customs
requirements may vary from one country to another, which may constitute an
additional factor of risk.
Due to the regulatory framework on export and import of firearms and
firearms subcomponents, the relocation of hard chromium plating activities
outside the European Union in the context of the “non-use” scenario will generate
a strong administrative burden as well as risks for the safety of supply for FN
Herstal.
5.1.7. Potential financial opportunities
Even though the relocation host country has not yet been determined, it is likely
to be located either in northern America or Eastern Europe. Such countries are likely
to have a lower cost of labour than Belgium or the United Kingdom.
This situation, however, does not represent a potential financial opportunity for
the following reasons:
- Even though local production workers will have to be hired, supervisory and
European management staff will also have to be hired. Altogether, gains in
terms of global labour costs are foreseen to be low or nil.
- Even though the labour cost may be lower in northern America or Eastern
Europe than the current situation for FN Herstal or Manroy, productivity
rates are also known to be lower than in Belgium or the United Kingdom.
Overall competitiveness gains are not foreseen to be significant in the
context of the relocation of hard chromium plating activities.
- Given the significant investments and the increase in operating costs
triggered by the “non-use” scenario, the relocation of the hard chromium
activity will generate much higher detrimental financial impacts than
potential opportunities.
Potential gains in terms of cost of labour will not, by far, compensate the
impacts generated by the relocation of hard chromium plating activities.
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5.2. Human health or Environmental impact
5.2.1. Impacts on human health
It is reminded that, even though the Applicants will implement all necessary risk
management measures at the relocated site dedicated to hard chromium plating
activities, the “non-use” scenario does not involve an overall reduction of risk for
workers since it involves the exposure to Cr(VI) compounds outside the European
Union.
5.2.2. Greenhouse gas emissions
The “non-use” scenario involves an increase of transportation and therefore of
greenhouse gas (GHG) emissions. A rough estimate of such emissions is provided in
what follows, on the basis of the following formula:
With the following units:
- : kgCO2e
- : km
- : ton
- : kgCO2e/(ton.km)
5.2.2.1. Conversion factors
Conversion factors from the Bilan Carbone® database82 have been used for the
assessment of greenhouse gas emissions arising from the diverse transportation
journeys needed for the conveyance of parts from the Herstal and Erith plant to the
relocated hard chromium plating workshop:
TRANSPORTATION MODE CONVERSION FACTOR
21-ton truck 0.23 kgCO2e per ton.km
5,500 twenty-foot equivalent unit container ships 0.01 kgCO2e per ton.km
Table 32. Conversion factors for transportation modes. Source: Bilan Carbone v7.1.021 Nota: kgCO2e = equivalent carbon dioxide kilogram
5.2.2.2. Transportation journeys
Since the exact location of the relocated workshop is not defined at the time of
writing of the present AfA, average distances have been used to characterise the
outward trip of the transportation journeys associated with the “non-use” scenario:
82
The Bilan Carbone® is a tool developed by the ADEME (“Agence de l'environnement et de la maîtrise de l'énergie” or “French Agency for the Environment and the Energy Management”) dedicated to the calculation of greenhouse gas emissions.
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STEP MODE DISTANCE
1. Site to departure harbour Truck 500 km
2. Transportation by container ship Container ship 10,000 km
3. Arrival harbour to treatment plant Truck 500 km
Table 33. Characterisation of the outward trip of the transportation journey associated with the “non-use” scenario.
Nota: it is assumed that the return trip will be identical to the outward trip.
5.2.2.3. Frequencies
It is estimated that the transportation needs in terms of parts to be treated
amount to one 40-feet container per week from Herstal.
It is assumed that containers are to be loaded to their maximum load, i.e. 30.5
tons83.
5.2.2.4. Greenhouse gas emissions
On the basis of the parameters mentioned above, and taking into account the
need for both an outward and return journey as well as the share of activity related
to Use-1 and Use-2 of the present AfA, the total greenhouse gas emissions
associated with the “non-use” scenario for the site of Herstal amount to:
TOTAL GHG EMISSIONS
Annual greenhouse gas emissions 1,017 tCO2e
Total greenhouse gas emissions over the review period 12,200 tCO2e
Table 34. Greenhouse gas emissions associated with the “non-use” scenario for Use-1 Nota: tCO2e = equivalent carbon dioxide ton
Taking into account the increase needs in terms of transportation alone, the
“non-use” scenario will generate the emission of around 12,200 equivalent carbon
dioxide tons. This amount corresponds to the cumulated average annual
greenhouse gas emissions of around 1,400 citizens of Belgium84 or to 110% of the
overall greenhouse gas emissions related to the energy consumption of the site of
Herstal (11,243 tCO2e in 2012).
83
https://www.cma-cgm.fr/produits-services/conteneurs 84
Considering an average carbon footprint of 8.8 tCO2e per capita for Belgium (source : Source: World Bank, CO2 emissions (metric tons per capita), 2015)
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5.3. Social impact
5.3.1. Direct impact on employment
5.3.1.1. Loss of employment
The number of jobs affected by the “non-use” scenario for Use-1 was estimated
by FN Herstal and Manroy, with the following figures:
NUMBER OF JOBS LOST JUSTIFICATION
FN Herstal, Herstal 27
Employees concerned by hard chromium
plating, maintenance and support activities
for Use-1
Manroy, Erith 1 Employee concerned by hard chromium
plating
Overall Use-1 28 -
Table 35. Loss of employment in the context of the “non-use” scenario for Use-1
Please note that, as for the calculation of the loss of revenues and profits,
underestimating hypothesis have been made for assessment of the impacts on
employment, insofar as to only take into account the employees directly concerned
by hard chromium plating activities. Since a 3-year cease of activity is foreseen in the
context of the “non-use” scenario, this assumption does appear conservative. An
uncertainty analysis regarding the loss of revenues and the impact on employment is
provided in section 5.6.
5.3.1.2. Individual cost of unemployment
The individual cost of unemployment was estimated from the point of view of
the loss of revenues for the State related to unemployment benefits, i.e. direct
unemployment benefits but also, guidance and administrative costs as well as
potential loss of revenue for the State related to social contributions and taxes:
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TYPE OF COSTS BELGIUM UNITED
KINGDOM
Public intervention
Unemployment benefits € 9,493 € 3,561
Guidance and administrative costs € 1,683 € 1,746
Subtotal for public intervention € 11,176 € 5,307
Potential loss of
public revenues
Loss in social contribution of employers € 8,474 € 2,955
Loss in social contribution of workers € 4,104 € 2,539
Loss in direct taxation € 8,240 € 4,498
Loss in indirect taxation € 1,177 € 2,710
Subtotal for potential loss of revenue € 22,267 € 12,702
Total average annual cost of an unemployed person € 33,443 € 18,008
Table 36. Average individual social cost of an unemployed person in Belgium and the United Kingdom, 2010
85
In what follows, the values of € 33,443 and € 18,008 will be used to monetise
the costs of unemployment in Belgium and in the UK, with the following
adjustments:
- Adjustment for inflation based on the change in consumer price index: 8.6%
in Belgium and 11.8% in the UK on average over the 2010-2015 period86;
- Correction for the average duration of unemployment in Europe: 15.3
months87.
Taking these corrections into account, the final average individual present
values of unemployment are € 46,264 in Belgium and € 25,665 in the UK.
5.3.1.3. Total cost of unemployment for Use-1
The overall cost of unemployment, in relation with the actual number of job
losses foreseen in the context of the “non-use” scenario and the individual cost of
unemployment are synthesised in the following table:
PARAMETER HERSTAL ERITH TOTAL
Number of jobs lost 27 jobs 1 job 28 jobs
Individual cost of
unemployment € 46,264 € 25,665 -
Total cost of unemployment € 1.2M € 0.03M € 1.3M
Total cost of unemployment,
discounted(*)
€ 1.1M € 0.02M € 1.1M
Table 37.Total cost of the loss of employment for Use-1
85
Idea Consult, on behalf of European Federation for Services to Individuals (EFSI), Why invest in employment? A study on the cost of unemployment, 2012 86
OECD, Main economic indicators, Consumer Price Index – data and methods 87
OECD Stat, Average unemployment duration in Europe
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(*): considering a 4% discount rate over the 2016-2018 period
With a loss of around 28 jobs, the “non-use” scenario for Use-1 will have an
impact on the employment at the sites of Herstal and Erith.
It is reminded that this estimate only takes into account workers that are
directly related to hard chromium plating and therefore constitutes an
underestimated assumption that does not take into account the potential impacts
on employment for the 3-year cease of activity that is foreseen to complete the
relocation process.
5.3.2. Indirect impact on employment
A quantitative assessment of indirect employment impacted by the “non-use”
scenario is complex to achieve. It is however reminded that industrial relationships
involve partners all along the supply chain and are therefore based on a network of
suppliers and subcontractors.
A study88, based on data issued by the Belgian State89 estimates to 1.83 the
multiplicative coefficient for indirect employment in the armament industry sector.
In other words, based on this study, it can be estimated that, on average, one job in
the armament industry triggers 0.83 indirect jobs.
It was furthermore estimated that, since a major share of the GPMG is
manufactured by its supply chain of Manroy, the cease of its production would
impact 15 to 20 companies and result in job losses in the supply chain alone of over
30 people.
An estimate of the costs related to this indirect impact on employment of the
“non-use” scenario is provided in the table below:
PARAMETER HERSTAL ERITH TOTAL
Number of jobs lost 23 jobs 30 jobs 53 jobs
Individual cost of unemployment € 46,264 € 25,665 -
Total cost of unemployment € 1.1M € 0.8M € 1.8M
Total cost of unemployment, discounted(*)
€ 0.9M € 0.7M € 1.6M
Table 38. Detail of the assessment of indirect job losses foreseen for Herstal and Erith in the context of the “non-use” scenario
(*): considering a 4% discount rate over the 2016-2018 period
88
GRIP (Groupe de Recherche et d’Information sur la Paix et la Sécurité), Les rapports du GRIP – Répertoire des entreprises du secteur de l’armement en Belgique, 2014. 89
Bureau Fédéral du Plan, Les multiplicateurs de production, de revenu et d’emploi 1995-2005 – Une analyse entrées-sorties à prix constants, September 2013
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The “non-use” scenario will generate indirect job losses in the supply chain of FN
Herstal and Manroy. Since the knock-on effect can hardly be characterised, the
figures obtained for such indirect costs have not been taken into account in the
risks-benefits ratio for the AfA.
5.3.3. Complementary element of analysis: total cost of the loss of
employment for the AfA
As a complement to the values obtained for Use-1, an assessment of the global
loss of employment in the context of the “non-use” scenario for the overall AfA (i.e.
cumulated for Use-1 and Use-2) was also carried out, with the following results:
PARAMETER VALUE
Number of jobs lost 48 jobs
Total cost of unemployment € 2.2M
Total cost of unemployment, discounted(*)
€ 1.9M
Table 39. Global direct loss of employment and associated costs for the AfA (i.e. cumulated for Use-1 and Use-2
(*): considering a 4% discount rate over the 2016-2018 period
5.4. Wider economic impact
5.4.1. Impact on operational capabilities and sovereignty of States
Beyond direct impacts on FN Herstal’s and Manroy’s activity, the “non-use”
scenario involves the cease of supply of new firearms ordered by States and the
cease of maintenance in operational conditions of firearms currently in service
within armed forces.
Given the diversity of customers of FN Herstal, and the intrinsic stringent
confidentiality matters at play, a quantitative assessment of such impacts cannot be
provided. Key elements, however, can be provided to outline the scope of such
impacts:
- FN Herstal serves a worldwide market and FN Herstal firearm are in
operation within several tens of armed forces on all continents;
- Armed forces rely on FN Herstal firearms. The cease of supply or the cease of
maintenance in operational condition of such firearms will greatly impede
operational capabilities and therefore sovereignty of States.
- States will have to order replacement firearms to cover the cease of supply
and/or support of FN Herstal firearms, thereby inducing over-costs and early
investments.
As a complement, the maintenance in operational conditions and the supply of
spare parts constitute key elements of the FN Herstal activity. Customers favour FN
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Herstal for this very capability to support firearms over time and a cease of supply of
such parts, be it for the defined duration needed to relocate the hard chromium
plating operations, will strongly affect customer confidence.
The “non-use” scenario will involve strong impacts on the operational
capabilities of armed forces and the sovereignty of several tens of States on all
continents.
5.5. Distributional impacts
Due to the uncertainty related to the assessment, no distributional impacts
(international trade, competition and economic development) are considered in this
AfA, even though consequences on the overall territory’s dynamism and
attractiveness are to be foreseen.
5.6. Uncertainty analysis for both the “applied for use” and
the “non-use” scenario
5.6.1. “Applied for use” scenario
5.6.1.1. Preliminary observation: uncertainty of exposure and risk values
The assessment of exposure to Cr(VI) is mainly based upon ART modelling. In
order to reduce the uncertainty on these values, it was chosen to rely on values for
the 90th percentile of exposures.
The exposure data and therefore the excess of risk of cancer used all along this
AfA for the monetisation of impacts are considered to reflect the actual exposures of
workers; no further uncertainty analysis was carried out concerning these
parameters.
5.6.1.2. Uncertainty analysis of the Value of a Statistical Life-Year
Uncertainty analysis of the costs associated to mortality and morbidity was
carried out using the lower and upper bounds of Value of a Statistical Life-Year
defined by NewExt90: respectively € 27,240 and € 225,000. Please note that these
two values are considered as less robust than the central value used for the
assessment because they are based upon survey results derived from smaller sample
sizes.
Taking into account the correction for inflation over the 2003-2015 period, the total
costs associated to mortality and morbidity for these two values amount to:
90
NewExt, New Elements for the Assessment of External Costs from Energy Technologies, 2003
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COSTS ASSOCIATED TO
MORTALITY AND MORBIDITY
Considering the upper bound of
Value of a Statistical Life-Year (€ 225,000) € 4,305
Considering the lower bound of
Value of a Statistical Life-Year (€ 27,240) € 521
Table 40. Uncertainty analysis for mortality and morbidity, Use-1
5.6.1.3. Other parameters: qualitative uncertainty analysis
A qualitative uncertainty analysis of the main hypothesis, assumptions and
parameters used for the assessment of the “applied for use” scenario is provided
below:
APPLICATION PARAMETER UNCERTAINTY ANALYSIS
Mortality and
morbidity
- Standard life expectancy
- Mean age of lung cancer death
- Mean age of lung cancer diagnosis
Medium uncertainty: data used are based on the situation in France as well as on European averages and therefore do not directly relate to the situation in Belgium and the U.K.
- Disability weight Low uncertainty: the value used is specific to lung cancer
Medical
treatment
- Costs of medical treatment Medium uncertainty: the value used is specific for lung cancer but is related to France and is therefore not specific to Belgium or the U.K.
- Survival rate
Herstal - medium uncertainty: the values used are specific to lung cancer but are related to France and therefore not specific to Belgium.
Manroy - low uncertainty: the values used are specific to lung cancer in the U.K.
Table 41. Qualitative uncertainty analysis of the main parameters of the “applied for use” scenario
5.6.2. “Non-use” scenario
5.6.2.1. Uncertainty analysis of the loss of profits: growth of profits over the
review period
As stated in section 5.1.1, the assessment of the loss of profits associated with
the “non-use” scenario is based on a zero growth hypothesis over the review period.
In order to carry out uncertainty analysis over this value, a secondary assessment
was carried out taking into account a positive growth rate of revenues for FN Herstal
and Manroy over the review period.
This assessment is based on the average annual growth rate of FN Herstal over
the 2011-2014 period (12%). Considering this hypothesis and 4% discount rate, the
overall loss of profits foreseen over the review period amounts to € [100-
1,000M](#1o-1).
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5.6.2.2. Uncertainty analysis of the loss of profits and the impact on
employment: alternatives assumptions for the “non-use” scenario
As stated in sections 5.1.1 and 5.3.1, the estimate of the loss of revenues and
the impact on employment in the context of the “non-use” scenario is based (a) on
the hypothesis of a 3-year loss of revenues during the relocation process and (b) the
assumption that the loss of employment will only concern workers directly related to
the hard chromium plating line. In the light of the “non-use” scenario and the
criticality of Use-1 for the activity of FN Herstal and Manroy, these two assumptions
appear very conservative.
In order to put into perspective the monetised results obtained on the basis of
these assumptions, two alternatives scenarios are outlined in what follows:
- Alternative scenario 1: 3-year loss of revenues and temporary
unemployment of 30% of FN Herstal and Manroy employees;
- Alternative scenario 2: inability to maintain a financial balance during the
three years required for the relocation and bankruptcy of FN Herstal and
Manroy.
Alternative scenario 1
The alternative scenario 1 is based on the fact that, in order to optimise personal
expenses, a 3-year loss of the majority of FN Herstal’s and Manroy’s revenues and
would be accompanied by temporary unemployment of a significant share of
FN Herstal and Manroy employees. In the context of this uncertainty analysis, the
figure of 30% of workers temporarily unemployed is considered.
On the basis of these hypotheses, the total costs of unemployment would
amount to € 44M. This amount will be added to the economic impacts of the 3-
year loss of revenues already calculated.
Alternative scenario 2
The alternative scenario 2 considers that the “non-use” scenario generates a too
strong discrepancy between the strongly degraded financial incomes and the
maintained operational costs to ensure the overall sustainability of the activity of FN
Herstal and Manroy.
In this scenario, it is estimated that 90% of the activity will be lost and 90% of the
employees will have to be laid off.
Under these assumptions, and considering a 4% discount rate, a loss of
revenues of € [1-10B](#1o-2) over the review period and unemployment costs of €
67M are foreseen.
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5.6.2.3. Other parameters: qualitative uncertainty analysis
A qualitative uncertainty analysis of the main hypothesis, assumptions and
parameters used for the assessment of the “non-use” scenario is provided below:
APPLICATION PARAMETER UNCERTAINTY ANALYSIS
Loss of revenues,
profits and orders
- Revenues impacted by the AfA
FN Herstal - low uncertainty: the values used to estimate the loss of revenues are based on a comprehensive inventory of the categories of products concerned by the AfA, on average over the 2000-2015 period as well as on the average of the revenues of FN Herstal over the 2011-2015 period
Manroy - low uncertainty: the values used to estimate the loss of revenues are based on the revenues for the year 2016 that are considered as representative of the economic situation of Manroy over the 2018-2021 period
- Operating margin
FN Herstal - low uncertainty: the value used is based on the financial data of FN Herstal.
Manroy - medium uncertainty: the value used is the same as FN Herstal’s. Both companies are considered as having the same operating margin.
Loss of
employment
- Average individual cost of an
unemployed person
FN Herstal - low uncertainty: the values used are specific for Belgium
Manroy - low uncertainty: the values used are specific for the United Kingdom
Table 42. Qualitative uncertainty analysis of the main parameters of the “applied for use” scenario
5.6.3. Conclusion
The results of both the quantitative and qualitative uncertainty analysis
presented above do not seem to invalidate the overall results of the AfA: (a) the
assessment of the impacts of the “non-use” scenario appears underestimated as
compared to more realistic assumptions and (b) the variability for the parameters
assessed does not call into question the order of magnitude of the risk-benefits
ratio for the AfA.
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5.7. General conclusion on the impacts of granting an
authorisation
A synthesis of the monetised impacts of the “non-use” scenario is provided
below:
MONETISED IMPACTS
Economic impacts
Loss of profits € [100-1,000M](#1p)
Lost investments € 0.5M
Relocation costs € 12.1M
Social impacts Loss of employment € 1.1M
Total monetised impacts of the “non-use” scenario € [100-1,000M](#1q)
Table 43. Synthesis of the monetised impacts of the “non-use” scenario
As a complement, other impacts of the “non-use” scenario are synthesised in
the table below:
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IMPACTS ORDER OF MAGNITUDE
Economic
impacts
Loss of markets requiring the manufacture
of firearms to be carried out in the
European Union
The loss of markets requiring the manufacture of firearms in the European Union
will generate a significant loss of revenues for FN Herstal, for a duration that
would exceed the period of time needed to implement the relocation itself
Millions to tens of
millions of Euros
Loss of markets due to the increase of
lead-time related to the relocation-related
logistics delays
The increase in lead-time foreseen in the context of the “non-use” scenario would
close significant markets for FN Herstal, for which the company’s reactivity
currently constitutes a strong commercial asset that would be lost in case of
relocation of the hard chromium plating activities.
Millions to tens of
millions of Euros
Increase of operating costs The “non-use” scenario will generate a significant increase of transportation costs,
packaging costs as well as other costs related to insurance and licensing fees. Not assessed
Regulatory issues
The potential relocation of hard chromium plating activities outside the European
Union in the context of the “non-use” scenario will generate a strong
administrative burden as well as risks for the sustainability of FN Herstal’s
activities related to the regulatory framework on export and import of firearms
and firearms subcomponents.
Not assessed
Human health or
Environmental
impact
Impacts on human health From a global point of view, the “non-use” does not involve an overall reduction of
risks for workers. -
Greenhouse gas emissions
Taking into account the increase needs in terms of transportation alone, the “non-
use” scenario will generate the emission of around 12,200 equivalent carbon
dioxide tons.
12,200 tCO2e
Social impacts Indirect employment Along with direct loss of employment, indirect job losses (suppliers, sub-
contractors) are foreseen in the context of the “non-use” scenario. Not assessed
Wider impacts
Impact on the operational availability of
firearms for armed forces as well as lost
investments and loss of sovereignty for
States
The “non-use” scenario will generate strong impacts on the operational
capabilities of armed forces and the sovereignty as well as a loss of investments
for several tens of States on all continents.
Not assessed
Table 44. Other impacts of the “non-use” scenario
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6. CONCLUSIONS
6.1. Comparison of the benefits and risks
On the basis of the foregoing assessment, the socio-economic benefits outweigh
the risks arising from the use of the substance by a factor of approximately [100,000-
1,000,000](#1r).
It is reminded that this ratio only covers monetised impacts and is based on
underestimating hypothesis, notably in terms of loss of revenues and loss of
employment.
In addition to these monetised impacts, the “non-use” scenario will generate
significant other impacts, including: the loss of markets that will be closed to FN
Herstal and Manroy due to the relocation outside the EU, an increase of operating
costs, stringent regulatory issues and safety of supply issues, impacts on human
health, greenhouse gas emissions as well as a loss of sovereignty and loss of
investments for sovereign States that are customers of FN Herstal and Manroy.
6.2. AoA-SEA in a nutshell
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APPLICATION FOR AUTHORISATION
APPLICANTS:
SUBSTANCE:
FN Herstal and Manroy
Chromium trioxide
USE: Use-1
Industrial use of chromium trioxide in the hard chromium coating of military small- and medium-caliber
firearms barrel bores and auxiliary parts subject to thermal, mechanical and chemical stresses, in order to
provide hardness, heat resistance and thermal barrier properties, as well as corrosion resistance, adhesion
and low friction properties
ANALYSIS OF ALTERNATIVES
The main functional properties sough-after by FN Herstal and Manroy with chromium trioxide include: hardness, heat resistance and thermal barrier properties,corrosion resistance, efficient coverage of complex or inner shapes, preservation of tolerances, as well as chemical barrier properties, adhesion properties andfriction properties.
SOCIO-ECONOMIC ANALYSIS
As per Art. 60(4) concerning the Socio-economic assessment route, evidence
was provided that the socio-economic benefits outweigh the risks arising
from the use of the substance by a factor of approximately
Non-monetised impacts of the “non use” scenario involve include the loss of
markets that will be closed to FN Herstal and Manroy due to the relocation
outside the EU, an increase of operating costs, stringent regulatory issues
and safety of supply issues, impacts on human health, greenhouse gas
emissions as well as a loss of sovereignty and loss of investments for States
that are customers of FN Herstal and Manroy.
AoA – SEA IN A NUTSHELL
Monetised impacts of the "non use" scenario:
€Monetised impacts of the "applied for use" scenario:
€ 1,106
A significant work of research carried out internally and through partnerships with external research centres led to identify two potential alternative processes to
hard chromium plating for the surface treatment of firearm barrel bores and auxiliary parts: deposition of chromium from a Cr(III) electrolyte (Alternative 1) and
vacuum process with Physical/Chemical Vapour Deposition process (Alternative 2).
The level of maturity of Alternative 1 and Alternative 2 is low. No potential alternative will be developed,
industrialised and qualified before the sunset date of chromium trioxide and a twelve-year review
period is needed to achieve substitution.
Loss of profits94%
Loss of investments0.2%
Relocation costs5%Loss of employment
0.5%
Use-1
Medical treatment3%
Mortality and morbidity97%
Use-1
(#1u)
[100,000-1,000,000](#1s)
[100-1,000M](#1t)
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6.3. Information for the length of the review period
On the basis of the arguments put forward, and in order to develop,
implement and qualify a substitution process, FN Herstal and Manroy apply for a
twelve-year review period.
6.4. Substitution effort taken by the Applicants if an
authorisation is granted
If an authorisation is granted, FN Herstal and Manroy will pursue the
substitution process described in section 4.2.
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8. ANNEX – JUSTIFICATIONS FOR CONFIDENTIALITY
CLAIMS
Confidential business information was blanked out in the public version in order
to preserve the confidentiality of strategic data of the present AfA.
The following table provides a justification for confidentiality of the blanked out data
of this document.
BLANKED OUT
ITEM REFERENCE
PAGE
NUMBER JUSTIFICATION FOR CONFIDENTIALITY
#1 8, 62, 64, 65,
79, 81, 83
Strategic data: the blanking of these data is made
necessary by the blanking of data concerning the
profits of the Applicants.
#2 25, 33 Strategic data: the blanked out data are strategic
process parameters.
#3 50, 51 Strategic data: the blanked out data concern future
innovations and cannot be publicly disclosed.
Table 45. Justifications for confidentiality claims
Please note that, wherever possible, and in order to not affect the
understanding of the application, an effort was made to provide range of values for
key confidential data. These data ranges are presented in square brackets, e.g.
[10-100].
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9. APPENDIXES
9.1. Main competitors of FN Herstal
COUNTRY COMPETITOR HANDGUNS RIFLES MACHINE
GUNS
Abu Dhabi Caracal X X
Austria Glock X
Steyr X
Brazil Taurus X
Imbel X
Canada Colt Canada X X
Czech Republic Ceska Zbrojovka X X
Croatia IM Metal Company X
Finland Valmet X
Sako-Beretta X
Germany
Heckler & Koch X X X
Sig Sauer X X
Walther X
India Ordnance Factory Board X X
Italy Beretta X X
Israel IWI X X X
Japan Howa X
Korea Daewoo X X
Malaysia SMEO X
Poland Fabryka Broni Łucznik X
Singapore ST Kinetics X X
South Africa Denel Island X X
Switzerland KRISS Arms AG X
United States
Colt Defense X X
General Dynamics X
Manroy USA X X
Barret X
US Ordnance X
Sig Sauer USA X X
Smith & Wesson X X
Springfield Armory X
ADCOR Defense X
Lewis Machine & Tool X
Ruger X X
Knight’s Armament X
LWRC & Rock Rivers Arms X
Ohio Ordnance Works, Inc. X
Table 46. Main competitors of FN Herstal, by country and product categories
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9.2. Focus on barrel failure modes
The decreased hit probability may arise from three types of barrel fatigue failure
modes91,92,93:
- forcing cone wear,
- copper deposit,
- Muzzle wear.
These three failure modes are illustrated in Figure 7 below and described in
what follows:
Figure 12. Barrel fatigue failure modes
❶ Forcing cone wear
The forcing cone is the beginning of the rifling in the barrel bore and the
interference between the projectile jacket and the barrel (called swaging). The main
purpose for rifling the barrel is to stabilize the projectile by rotation when it exits the
barrel. Before the forcing cone, the projectile has a “free” fly; it is not constrained
and hence it is accelerated without being guided.
In case of wear of the forcing cone, the projectile is not sealed anymore in the barrel.
Combustion gases can escape around the projectile, resulting in a decreased
projectile velocity at the muzzle. Additionally, since the projectile is not constrained
and has a “free” fly, when the rifling eventually starts it is possible that the projectile
is not aligned anymore with the barrel axis. Hence, when exiting the muzzle, the
projectile rotation is not aligned with its symmetry axis and the projectile loses
stability. At short striking distance, it is noticed by an obliquely striking mark. At
longer range, the projectile drag coefficient increases rapidly and the projectile is not
stable anymore.
This phenomenon is best described by barrel diameter measurements and
barrel endoscopic pictures.
Barrel diameter is measured with reference (barrel diameter 0) at muzzle. As
described in Figure 13 below, the barrel wear is progressing from the chamber
towards the barrel muzzle.
91
Allsop and al, Brassey’s essential guide to military small arms - Design principles and operating methods, p89. Londres: Brassey’s, 1997 92
Hypervelocity guns and the control of gun erosion, Washington: National Defense Research Committee, 1946 93
Handbook on Weaponry, Rheinmetall Gmbh, 1982
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Figure 13. Barrel wear as a function of barrel length, for new and end-of-life barrels
The corresponding barrel bore pictures are represented below.
Figure 14. Barrel bore pictures, for new barrel (left) and end-of life-barrel (right)
This failure mode encompasses nearly all barrels fatigue failures encountered.
❷ Copper deposit
Copper deposit is related to the composition of the projectile jacket, made of
brass. Due to the high temperature flame, the brass sublimates from the projectile
jacket and deposits on the barrel. The deposits preferably fill the barrel groove, and
could lead to a reduced bore diameter. Because the copper is filling the grooves, the
rifling is not effective anymore. Projectile stabilisation by rotation is harmed. A
similar phenomenon to the one described in “① Forcing cone wear” occurs,
projectile becomes unstable.
This phenomenon is best described by the following pictures (copper deposit is
the blue part of the picture).
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Figure 15. Copper deposit (blue part of the picture)
Barrel failure due to copper deposit is very rarely encountered. The main
parameter that leads to excessive copper deposits is ammunition characteristics:
brass and powder composition. It can also be avoided by appropriate barrel
maintenance.
❸ Muzzle wear
Muzzle wear occurs when the projectile centrifugal forces become very
important, when the projectile jacket is hard or when the projectile jacket is worn
out and the hard projectile core rubs the barrel. The centrifugal forces are
proportional to the projectile velocity. The projectile velocity is at its maximum at the
muzzle. When the muzzle erodes at a faster rate than the rest of the barrel, the
conical shape of the bore is inversed: the projectile is not guided (swaged) when
exiting the barrel muzzle. Similar phenomenon to the one described in “① Forcing
cone wear” occurs and projectile becomes unstable.
Muzzle wear occurs for hard jacket projectiles with velocities larger than
950m/s. Such conditions are rarely encountered for the ammunition calibers used at
FN Herstal.
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9.3. DGA’s position for the maintained use of hexavalent
chromium for barrel bore hard chromium plating of
small-calibre firearms
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9.4. Framework for the export of armament
9.4.1. Belgian and European legal framework
LAW CONTENT
Loi du 5 août 1991
On the import, export, transit and the fight against the trafficking of arms,
ammunition and equipment intended specifically for military use or law
enforcement and related technology. This law establishes the general
framework of export transactions, import and transit of weapons and
military equipment in Belgium.
Arrêté royal du 25 mars
2003
Amending the law of 5 August 1991 on the import, export, transit and the
fight against the trafficking of arms, ammunition and equipment intended
specifically for military use or law enforcement and the related technology.
This law regulates brokerage operations.
Loi du 26 mars 2033
Amending the law of 5 August 1991 on the import, export, transit and the
fight against the trafficking of arms, ammunition and equipment intended
specifically for military use or law enforcement and the related technology
Arrêté royal du 2 avril
2003
Amending the Royal Decree of 8 March 1993 regulating the import, export
and transit of arms, ammunition and equipment intended specifically for
military use and related technology.
Arrêté royal du 16 mai
2003
Relating to the license under section 10 of the Act of August 5, 1991 on the
import, export, transit and the fight against the trafficking of arms,
ammunition and equipment intended
specifically for military use or law enforcement and related technology.
Loi spéciale du 12 août
2003 Amending the Special Law of 8 August 1980 on institutional reforms.
Décret du 21 juin 2012 On the import, export, transit and transfer of civilian weapons and defense-
related products
Directives européennes
91/477/CEE et
93/15/CEE
On all firearms, ammunition and spare parts with the exception of arms and
ammunition, their parts and military equipment. These guidelines allow the
introduction of simplified procedures in the context of transactions within
the EU, on hunting, sports and defense weapons (including parts,
components and ammunition).
Directive européenne
2008/51/CE
Amending Directive 91/477 / EEC. This Directive establishes a system of
traceability for civilian use weapons.
Directive 2009/43/CE Simplifying terms and conditions of transfers of defense-related products
within the Community
Règlement européen
428/2009
Establishing a Community system of export control of goods and dual-use
technologies
Règlement 1232/2011
Amending Regulation 428/2009.
This Regulation introduces five new General Export Authorisations of the
Union and provides more uniformity regarding the use and control of such
authorization.
Règlement 258/2012
Implementing Article 10 of the UN Protocol against the Illicit Manufacturing
of and Trafficking in Firearms, Their Parts and Components and
Ammunition, supplementing the UN Convention against transnational
organized crime (Protocol on weapons fire), and establishing export
authorization and measures regarding the import and transit of firearms,
their parts and components and ammunition.
Table 47. Belgian legal framework related to the export of armament
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9.4.2. European Code of Conduct on Arms Export
The European Code of Conduct on Arms Export defines eight main criteria for
the arms export:
CRITERION CONTENT
Criterion 1
Respect for the international commitments of EU member states, in particular the
sanctions decreed by the UN Security Council and those decreed by the Community,
agreements on non-proliferation and other subjects, as well as other international
obligations.
Criterion 2 The respect of human rights in the country of final destination
Criterion 3 The internal situation in the country of final destination, as a function of the
existence of tensions or armed conflicts.
Criterion 4 Preservation of regional peace, security and stability.
Criterion 5
The national security of the member states and of territories whose external
relations are the responsibility of a Member State, as well as that of friendly and
allied countries.
Criterion 6
The behaviour of the buyer country with regard to the international community, as
regards in particular to its attitude to terrorism, the nature of its alliances and
respect for international law.
Criterion 7 The existence of a risk that the equipment will be diverted within the buyer country
or re-exported under undesirable conditions.
Criterion 8
The compatibility of the arms exports with the technical and economic capacity of
the recipient country, taking into account the desirability that states should achieve
their legitimate needs of security and defence with the least diversion for
armaments of human and economic resources.
Table 48. Criteria of the European Code of Conduct on Arms Export94
94
European Union – The Council, European Union Code Of Conduct On Arms Exports, 5 June 1998