EU emission rules increase motor recall risk: Sedgwick

New European rules on automotive emissions are already impacting vehicle recall numbers and will increase the number of incidents during the months and years ahead, according to Sedgwick, which also warned that a whole swathe of industries currently face rising recall risk. Sedgwick explained in its latest recall index that while European automotive recalls fell 14% during the third quarter of this year, environment-related recalls were up an eye-watering 600%. Speaking at the launch of its Q3 European report, Sedgwick recall consultant Luke Evans said the EC’s commitment to enforcing new automotive emission standards, which came into effect in August, is expected to result in more recalls within the industry. “We expect an increase in the coming months and years in response to the EC’s recently expanded authority to recall vehicles across the EU’s 27-country bloc if they breach EU emission limits,” Evans said. The new regulations also bring new financial and legal risks, with the EC able to revoke a vehicle’s certificate of roadworthiness for breach of emissions limits. “It opens the door to compensation claims for owners of impacted vehicles,” Evans said. Further EU motor regulations will follow next year, with manufactures required to implement new safety measures in cars, including warning systems to detect driver drowsiness and distractions, intelligent speed assistance and reverse sensors from July 2022. Sedgwick said that while automotive recalls decreased in Q3 2021 to 152, levels remain above the last pre-pandemic quarter and sit 141% higher than the quarterly average of the past 15 years. Germany led the number of notifications with 84 recall alerts, although that was down by one third, followed by France, which saw notifications double, and then Portugal. Germany was also the leading country of origin. European food and beverage recalls increased for the third consecutive quarter to 1,178 events in Q3, which Sedgwick said puts full-year 2021 on track to set a new record at an estimated 4,500. Non-bacterial contamination was the leading cause of recall, at 441 events or 38% of the total. The most common contaminant was ethylene oxide. It hit the headlines last year after the EU’s Rapid Alert System for Food and Feed recorded a 492% rise in pesticide-related recalls, to 166, for food originating in EU member countries, and 667 notifications from products originating in non-EU countries, with about half citing ethylene oxide. Sedgwick said the food industry is under pressure from supply chain disruptions and labour shortages as Covid-19 restrictions lift and demand surges. But it added that the “biggest threats to the industry are traditional food safety risks”. “Food safety risks and recalls are only becoming more prevalent, putting more risks on brands than we have seen in recent history. Companies need to prepare now for any number of risks facing the brand, whether regulatory, legal, operational or reputational in nature,” Sedgwick said. European pharmaceutical recalls fell by 29% to 75 recalls in Q3 2021, but this followed increases during previous quarters and the total has now already exceeded the whole of 2020 by 11%. Safety was the most common reason for recall, followed by foreign materials and contamination. One third of recalls were related to pharmaceuticals manufactured in France. Sedgwick said 2021 will be marked as a year of increasing reputational risk from product recall across all sectors. Product safety is facing risks from business interruption and supply chains, to regulatory changes and cybersecurity, it warned. “Companies across all industries need to closely re-evaluate all manufacturing processes and vet supply chain partners. We urge you to invest some time and resources now to prepare your recall management, crisis and communications plans. Review your insurance policies to ensure they protect you in the event of a recall or safety inquiry,” Sedgwick said. Four other sectors reported recall figures for Q3: Medical device recalls were up 6% to 709 in Q3 this year, against an average 515 across 2020, to already exceed last year’s total by 40 events. Software was the leading cause of recalls, followed by manufacturing defects. Clothing recalls halved to 30 in Q3 from Q2, but the year to date is still set to exceed 2020’s total number of 142 recalls. Children’s clothes accounted for one third of Q3 notifications, led by injury risk. Electronic recalls fell in Q3 by almost 7% to 71, but the year-to-date levels are still running higher than last year. USB chargers were the most recalled product, followed by extension leads, with the dominant cause of recall being electric shock. Toy recalls were in line with Q2 at 81, but Sedgwick said this could climb during the festive period. Choking risk was the leading cause for one third of recalls across a wide range of products, with plastic dolls the most recalled toy in Q3.

EU emission rules increase motor recall risk: Sedgwick

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