Departing ECHA boss: ‘I don’t see myself joining a big lobby group’

Geert Dancet about chemical industry lobbying: "There was fear-mongering, of course. Leaving Europe was one of the big threats". [© European Union 2013 EP]

Geert Dancet, the executive director of the Helsinki-based European Chemicals Agency (ECHA), will retire at the end of the year. In a wide-ranging interview with EURACTIV, he comes back over the EU’s sometimes excruciating efforts to bring the powerful European chemical industry into line.

Geert Dancet is executive director of the European Chemicals Agency (ECHA), based in Helsinki. He will be replaced by Bjorn Hansen, a former head of unit at the European Commission who is appearing before the European Parliament on Wednesday (11 October) to answer questions from MEPs. Dancet spoke to EURACTIV’s energy and environment editor, Frédéric Simon.

You were responsible for REACH in the European Commission before joining ECHA and witnessed first-hand the heavy lobbying which took place at the time. One striking aspect was the conflicting impact assessment studies that were produced by various parts of the industry – at some point there were 36. And the final study by KPMG ended up confirming the Commission’s initial impact assessment. Reflecting on all this, how many of those studies do you think were honest contributions to policymaking and how many were simply delaying tactics?

The KPMG study, which was managed by a steering group including the European Commission, was an interesting experience. You had a well-recognised consultancy paid by industry doing an impact assessment that was as objective as possible. I found that a rather unique experience.

Ultimately, as you pointed out, it more or less confirmed the expected level of cost. It also confirmed that whenever a substance is important for the downstream industry, there would be enough pressure from the supply chain to keep it in production. If for some reason, the supplier could not afford the registration cost, the supply chain would ultimately make sure that the delivery is intact and that registration costs are passed on to the downstream users. All of this without intervention from the regulator.

So you think the KPMG study is a model that could be replicated in other areas of policymaking?

At the time, I felt it could be used more often, because it involves a much bigger group of stakeholders that are monitoring the whole impact assessment process and validating the quantification process.

Whoever undertakes impact assessments should ensure there is proper-follow up to stakeholders’ input and make sure there are no gratuitous statements being made. Statements need to be backed up by evidence or plausible estimations.

So you do think some of these stakeholder’s contributions were in fact just delaying tactics?

Some of them could have been delaying tactics. But it was also the member states that were afraid of being impacted more than other countries. Several countries did their own impact assessment – Holland, Austria, and different Eastern EU member states for instance – which was really quite unusual for a regulation like this.

What about the environmental and health NGOs: did they over-dramatise REACH or were they more reasonable than industry?

If one side exaggerates, the other side will do the same in order to balance things out. So there was pushing also from the NGO side, pretending chemicals were poisoning the young generation for instance. There was definitely some exaggeration that could be felt as being unfair, on both sides.

How did that make you feel as a policymaker at the time? Did you feel the weight of responsibility on your shoulders?

On our level, as officials, we did not feel so much pressure. It just adds up to the work, to the amount of briefings you need to do. But ultimately it’s the political level that makes the decisions. The final controversial part of the negotiation was done by the three EU institutions – the European Commission, Council and Parliament – at higher level.

What did you learn out of the impact assessment battle and how did this influence the work of ECHA afterwards? Did some trade organisations or corporations lose their credibility in that process?

We learned the importance of bringing stakeholders on board, not letting them try to influence you in a way that is not structured.

That’s why in ECHA we started very early on to work with accredited stakeholder organisations and keep a very close relationship with them. We now have 105, the highest number among all EU agencies. We send them an update every quarter and meet once a year in Brussels. They can apply to become observers in our committees and our enforcement forum – we try to involve them in all of our discussions. It’s very much focused on avoiding decisions to be made by surprise.

But in terms of impact assessment itself, the Commission made very clear it was their business and that ECHA should not get involved.

You mentioned the importance of accreditation for stakeholder input. Was it because you were approached by organisations that were not credible or not representative?

First and foremost, we wanted to avoid having to deal with an unlimited number of organisations. We wanted to have organisations operating at European level rather than national level or regional level – let’s say, Nordic countries or representing US or Japanese companies in Europe. We prefer working at the EU level. They have to demonstrate a clear stake in REACH or related legislation and be accredited as an interest group in Brussels.

Does that mean you were approached by organisations that were deceptive – representing fake grassroots interests, or similar?

We have been indeed. Whenever there is a campaign – for example recently on glyphosate – we have grassroots organisations approaching us that are not registered or accredited. So even though we enter into correspondence with them, we advise them to pass their message via an accredited stakeholder organisation to which they are affiliated.

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Looking at the first phases of REACH, and registration of high-volume chemicals, how much did ECHA receive in terms of registration fees? And what were the benefits in return that industry got out of it – if any?

For the first registration deadline, it generated far more work for us than originally planned. Industry was supposed to take care of registration in SIEFs (Substance Information Exchange Forum) according to the one-substance-one-registration principle. They were supposed to take care of that.

But it soon became complicated because they had no experience of the process or the legal format of documents. So we spent quite a lot of time with the biggest associations helping them set up mechanisms to establish SIEFs which could operate until 2018, as the legislation provided. So it was not only about meeting the first registration deadline but ensuring it worked for ten years afterwards. We had to clarify how registration worked with the lead registrant, etc. which created a lot of stress into the system. This means a lot of companies got their act together relatively late.

Did this have to do with bad quality of the data, incomplete dossiers, etc.?

Yes. Many registration dossiers were filled in a rush, using the lowest common denominator, which created problems during the compliance checks. We found out that the quality was below our expectations.

Chemical industry people would probably reply that the whole process was overly bureaucratic, and diverting attention from day-to-day business or innovation. Did ECHA also adjust its processes based on their feedback to make its processes simpler?

The simplification of the registration process happened very much after the second deadline, in 2013. Until then, we were still dealing with relatively high volume chemicals, so the same kind of business as before, which means there wasn’t time to change our systems too much. So we dealt with it in the same way as 2010.

But when the REACH review process came up, the Commission told us we had to work with SMEs in a very different way. And that’s when we prepared for the 2018 deadline and changed all our guidance, all our IT tools and all our website construction. We also had to translate much more than we originally intended and launched a programme to visit as many SMEs as possible, to learn what they really needed.

At the same time, our automated registration system was being criticised because it was letting too many so-called bad quality dossier through. Our new cloud service IUCLID6 is more demanding in terms of structured information and since July last year, we started performing manual checks on submitted dossiers coming in. This is actually also good for registrants because there is a lower risk of evaluation necessary afterwards if the incoming registration is good.

It’s clear from the REACH annexes what kind of standardised information is needed for every endpoint of a substance. But there are so many exceptions that industry can waive the tests or find good reasons not to provide the most adequate information. As a result, we got a very low number of testing proposals, which means alternative methods were used without proper scientific justification. That’s why we had to work on a Read-Across Assessment Framework (RAAF), by which we explained to industry that if they are not doing tests by reading across from one substance to another, this is the kind of analysis we will do ourselves.

Our hope was that the industry would then start re-working on their dossier but it didn’t yet happen, they argued they were too busy with registrations for the new deadline and couldn’t update old dossiers.

So ECHA does the updates itself?

We don’t do the updates. We have to make decisions to force industry to make additional tests, which is horrendously time-consuming. But we are in discussion with industry that they should take voluntary agreements on updating the dossiers. Because ultimately, REACH is about reversing the burden of proof so the industry is in charge of proving their chemicals are safe. And if they haven’t done a good job in the first place, they should tell us by which time they can do a more serious job.

And if they don’t, substances can be taken off the market…

Yes, or we will have to do it by force. In the worst case scenario, we will more easily conclude that the substance is of concern and then take more drastic action. Because if there is not sufficient information, we must follow the precautionary principle.

There were fears that chemical companies would relocate abroad but that didn’t happen for high volume chemicals. Was that fear-mongering from industry or were there also some genuine concerns about loss of competitiveness?

There was fear-mongering, of course. Leaving Europe was one of the big threats of the chemical industry. But as I said earlier, the KPMG study concluded that industry would not move out of Europe just because of REACH. And indeed, this prediction was correct. On the other hand, there is quite a lot of investment by European chemical companies outside of the EU, not for regulatory concerns.

That is being dubbed “investment leakage”.

Yes. And that is mostly due to the fact that the chemical industry is getting more globalised. The big cracker installations are not only in Europe, there are increasingly located across the globe. Industry wishes to produce closer to the market. And they also take advantage of relative costs, investing in the US because of low prices due to shale gas. The gas-based chemicals are now produced more and more outside of Europe because of that.

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Taking stock on health and environmental benefits: How many dangerous substances were actually taken off the market? How many were substituted? And do you have any idea of the impact on healthcare cost savings, etc.?

On the impact, one has to look at what the Commission is publishing for the REACH review. So, they have done an update of the baseline study. Eurostat is looking at the same chemicals every five years to see how much the information has improved and whether safety measures have been put in place. And they really consider that REACH has had a colossal impact on these very hazardous substances. All these studies are being published now by DG Environment or DG Growth and they all show a significant impact.

REACH has also had a significant impact on consumer confidence, the latest Eurobarometer study demonstrates that. There is also improved knowledge about chemicals within companies and wider supply chains which allows companies to make better business choices.  Many companies rationalised their portfolios focusing on substances that are profitable and essential for their preferred customers, not registering classified substances. That is why the number of registered CMRs was so low in 2010.

In terms of actual substances, can you name a few examples of highly risky ones that were taken off the market because of REACH?

Watch out: First, restrictions have been made in the EU for over 30 years and these have now been included under REACH. Second, substances are usually not withdrawn entirely by the restrictions. Even for asbestos, the current restriction has a time limited exception. For other dangerous substances, only certain high-risk uses are prohibited or made safer by the restriction.

Authorisation is new under REACH. For every use of a substance on the Authorisation List that a company wants to continue, it needs to acquire or refer to an authorisation. There, the best-known one is chromium trioxide, which is mainly used in chrome plating but has many other industrial uses, each of which requires a separate authorisation. We have so far dealt with more than 100 industrial uses of chrome compounds and are now processing the last ones.

This really demonstrates that it is possible to go through all the different uses of chemicals that are widely used. ECHA can manage that and companies can organise themselves and get authorisations successfully approved. The authorisations are granted by the Commission for a limited time. Whenever applicants come back, they will have to demonstrate they have done the research in further substituting its use.

There are also seven substances on the authorisation list which had a deadline for submitting applications and for which we received none. Which means these substances have been totally eliminated from our market. These include for example two phthalates [Benzyl butyl phthalate (BBP) and Disobutyl phthalate (DIPB)]. Furthermore, in some cases, like for the flame retardant HBCDD, the substitute was known at the time of application. Industry just needed a couple of years to get the production volume up.

Regarding substances of very high concern, it’s not easy to get them on the candidate list and the authorisation list. As you are aware, the number of substances that got on this list up until now is lower than originally predicted. Every time ECHA or an EU member state puts a substance forward for the candidate list and in particular for the Authorisation List, there is huge pressure from industry to block that. Because they exaggerate the fact that they cannot substitute. And it takes a lot of convincing in order to get member states to vote in favour of adding substances on the authorisation list.

So it’s not easy to get a substance on the list. But once it gets there, the system works.

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Some in the metal sector have voiced concerns about a “stigmatisation” issue when substances are put on the authorisation list. The mere fact that a metal is placed on the list scares off others in the supply chain, who then start looking for substitutes, even if authorisation is granted in the end. Do you see this happening?

We do see some of that happening, definitely. But on the other hand, you can also see the application process as a way for industry to take the responsibility of managing and substituting the substances of very high concern by making a well justified application.

Furthermore, forward-looking industry players also want to know early on whether we’re going to work on a particular substance of concern. So there is pressure from the manufacturers and users of chemicals who want to know early on if the substance is going to be a problem, and whether it can be substituted. As soon as a substance is on the candidate list, there is enormous activity – including R&D activity – from companies large and small trying to find a substitute for each use.

So you say it’s quite positive?

It’s enormously positive! And the fact that the process is fairly slow – identifying a substance, putting it on the candidate list, getting a recommendation and then the REACH committee vote, deadline for application, and so on – means that others in the supply chain have the time to demonstrate commercially that there are viable alternatives thus leading to fewer or no applications.

In some cases, metals cannot be substituted however.

They can. Chromium compounds are a good example. We have seen both those companies that have applied and their competitorsinvesting and trying out alternatives. I am convinced that in the next decade or so, most of the uses of hexavalent chromium compounds will have been substituted.

How many endocrine disruptors were taken off, for instance? How many do you expect to be caught in the future phases of REACH?

So far we have identified 11of them [e.g.: Bisphenol A (BPA), Benzyl butyl phthalate (BBP), Bis (2-ethylhexyl)phthalate (DEHP), Dibutyl phthalate (DBP), Diisobutyl phthalate].

And more will come once there is an agreement on the criteria to define endocrine disruptors in biocides and pesticides. We are in charge of the biocide part. And every active substance used in biocides now needs to be screened, which is going to generate a lot of activity from ECHA and the member states in doing that type of work. We’re talking about hundreds of substances which have to be examined. And the testing methods have evolved, which means they can more easily be traced.

Another aspect is for industrial chemicals. We have asked for testing to be undertaken for endocrine disrupting properties. Under the substance evaluation we have ordered 21 tests. And there will be many more as we are systematically screening our databases for potential endocrine disruptors. Substances for which there is such a concern are further assessed. Because this frequently requires the generation of further information in order to enable a conclusion on the endocrine disrupting properties of a substance, the suspicious ones are placed on the Community Rolling Action Plan (CoRAP) and subjected to Substance Evaluation.

Currently the Substance Evaluation process is on-going for 37 substances for which the initial concern was endocrine disrupting properties. For 23 more, Substance Evaluation is planned to start within the next two years. Frequently, targeted testing with animals is necessary to identify whether a substance is an endocrine disruptor. The tests usually take a couple of years.

However, if there are other substances which are structurally very similar to one that has endocrine disrupting properties it may be possible to group these substances when identifying substances as endocrine disruptors by using a conservative approach. In such cases, it would be in industry’s interest to provide additional information in order to avoid consequences that identification as an endocrine disrupter would have on the use of such a substance.

ECHA also has an endocrine disruptor expert group, which is now up and running. And we ask every member state to first consult that group, which brings together experts from member states, industries and NGOs.

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Do you know broad categories of substances that will come under scrutiny in this way in the coming two years?

We have worked very hard on phthalates. Denmark has just proposed classifying DINP – the one phthalate which industry calls a “good phthalate” – as toxic to reproduction. The entire plastic industry is currently substituting the old phthalates with this new one.

But if that one is also toxic to reproduction, they would be left wondering how to continue manufacturing soft plastics. So this is a very threatening evolution for the plastic industry. And it will be very interesting to follow what the REACH committee will conclude.

If DINP is also restricted, what will be the options for making soft plastics?

The possible classification of DINP as toxic to reproduction does not mean that it cannot be used in the future. Any restriction needs to take into account the risks of continued use and the risks of alternatives, as well as the technical and economic feasibility of alternatives. There are some alternatives to DINP. The question is how well they perform technically in different applications and how much the costs would differ.

I suppose this would be a classic case for granting an authorisation to DNIP, right?

Yes, it would. But at the moment, the issue is about getting a harmonised classification, not about restriction or adding DINP to the authorisation list. Only afterwards comes the question of deciding whether and what further measures are needed – restriction or authorisation.

Looking ahead to the last phase of REACH, the next big deadline is coming in 2018 when tens of thousands of chemical compounds produced in low volumes (1-100 tonnes per year) will have to be registered. How many registration dossiers do you expect to receive over that period? How has ECHA prepared for this?

The deadline is 31 May next year and we are fully busy with it. We can tell you the number of how many registrations we received already – it’s 11,000. On average, we receive a couple of hundred every week.

Unexpectedly, most of the dossiers we received are in the 10-100 tonnes production bracket. The lower volumes, produced in 1-10 tonnes per year, is behind predictions at the moment.

Is this a surprise?

We were expecting a lot of registrations in the 1-10 tonnes bracket. If registrants can demonstrate that their substance is not hazardous, they can get their registration for free under certain conditions, benefitting from a fee waiver. And for the others, the fee is extraordinary low.

But the problem is the cost of data-sharing, especially for lowest volumes. This is something we’re discussing currently in the director’s group – what can be done to get the cost down for SMEs that need to share data with high volume producers because they cannot afford the high price of the letter of access to the data. Similarly, if the substance is not yet registered at higher volumes, the scientific work to register the substance should have been started already and SMEs may shy away from this.

Predictions in terms of the number of registrations for SMEs is far below what we expected. Many are actually threatening to withdraw from the market altogether rather than registering. This is a standoff that we’re dealing with in the director’s contact group with industry associations, including SME representatives, to see what can be done to help small businesses.

So this is an area where there is a threat of a de-industrialisation process?

Yes, there is a risk there. But again, that all depends on whether the substance in question is produced by SMEs only or also by large companies. We don’t have data on this. There were no real statistical data on the low-volume chemicals. So basically, we were making predictions which were not based on solid knowledge. We were calling for specific sectors with many small volume chemicals to contact us early on to assist them in their preparatory work. Apart from essential oils and textile dies, no others stepped forward.

As you may remember, we had much more pre-registrations than thought. So how serious were these pre-registrations from SMEs? Was it because they wanted to be on the safe side? We are actually quite in the dark. We expected about 40,000-60,000 registrations next year 40% of which would come from SMEs, but this is unlikely to happen.

We’re doing our best to help SMEs – we just issued a cloud service specifically for them to take care of their IT costs. We’ll update their data automatically for them in the future. So we’re doing everything we can to help SMEs and make it as easy as possible for them to stay in business. But the challenge is, will they stay after all?

Downstream users of chemicals may not even be aware that REACH applies to them. Or they might feel overwhelmed by the bureaucracy. How can small companies be aware of the risks they face and manage their supply chain?

For the users of chemicals REACH does not bring much additional bureaucracy. Rather, REACH stimulates the producers of chemicals to give better information to the companies on how to use chemicals safely. This element is new under REACH and not yet working as was envisaged.

On the awareness side, we have worked with industry to address this supply chain problem. We have also worked specifically with the organisations representing downstream users to gain better understanding where the problems are and how to best address them.  We rely very much on national authorities and national industry sector organisations to help out in this. Because many small companies are not active across the whole of Europe.

Another category of small companies are small importers of chemicals from China, India or other countries, which compete with chemicals produced in the EU. Here we need to ensure the imported chemicals are properly registered, too. This naturally means that the manufacturers outside the EU need to provide this information to their European importers. This is why we need to speak with third countries – I travelled to China recently and I’m going now to India – to ensure they understand their obligation to register their substances in the EU.

It’s an extra burden also for those countries because some of the substances are contained in a mixture or a polymer. And if a mixture is made purely from substances produced in Europe, the substances will already be registered so those making formulations don’t need to do anything. But as soon as the mixture is imported from countries outside of the EU, they need to make sure the substances that compose the mixture and are above the threshold of 1 tonne are registered. So there is need for a strong awareness-raising effort that goes beyond our borders. I have asked the Commission to brief the EU delegations of all our important trading partners on this.

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Are special derogations foreseen for SMEs who arrive late in the process?

They can reach out to our helpdesk or national helpdesks. We have in the past helped quite a large number of SMEs to register at the last minute before the 2010 and 2013 deadline. And it depends on the member state whether they should fine the latecomers – most don’t bother too much as long as they register. Inspection authorities regularly find business entities that haven’t registered. At that point, they can force them to do so and they can stop the sales activity of these substances or mixtures.

Strikingly, we still receive today registrations for high volume chemicals – every week in fact. Are these companies that forgot to register or new businesses that have only now started importing or producing a new substance in the EU?  We don’t really examine that, we just process the registration and provide access for Member States to these registrations. So I’m sure there will be continued demand for registrations in the future in every tonnage band.

For those who come at the last minute, we or our directors’ contact group can help. If the substance has already been registered, it’s easy – you just have to get a letter of access from the lead registrant and use the cloud service to register.  We can work that out.

But if they forgot to prepare the registration of a chemical not previously registered and still need to collect data, do the tests, etc., we will then bring in the director’s contact group solutions. They can then contact ECHA to inform that the dossier is incomplete , flagging what’s missing and the ongoing plans to generate the information. And we will then consider what is the suitable time for the case. As long as they ordered the tests, we let them come in and offer a longer timeframe to complete the process.

All these tests imply costs. Industry association CEFIC claimed last year that chemical companies were now spending more money on REACH compliance than innovation. Is it a price worth paying?

The point is that there is an interaction between R&D and regulatory information. And regulatory information can actually help R&D very strongly. Because companies get far more information on chemical substances, which we publish. And a lot of R&D is also done on existing chemicals – so-called process and product-related R&D. With little money and little information, you can get an exemption of registration, which makes R&D easier. The same goes with new chemicals – you can register them more cheaply than before REACH. So there are elements of REACH, conceptually and practically, which have actually rendered R&D cheaper – for new products or new applications of existing substances. And that should not be forgotten.

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Pesticide makers often complain that they have fewer active substances available now than a few decades ago. They’re not blaming REACH for all of it but they say it has made the situation worse by raising the pressure to withdraw more active substances from the market. Do you share this observation?

It’s definitely something that we hear – we hear it also on biocides. It is true that companies come to us complaining that the cost of investing in a new active substance is enormous. And if we were to take a negative stance on the hygiene substances, there wouldn’t necessarily be enough incentives for industry to keep investing in different new ones. The overall cost and time from substance to market could be so much that fewer and fewer companies would be willing to invest. It’s an industrial logic we understand.

But ultimately, we still believe there is a market effect: If a product is still needed – weed control or other – I’m sure there will be companies with the help of researchers that will want to invest in finding alternatives.

One last question: When will you be retiring? And what are your plans after that?

I’ll retire at the end of the year. They will choose my successor this month (i.e.: September). And then the elected candidate will have to face Parliament for a hearing. It won’t be an official confirmation hearing but it’s a legal requirement for the candidate to appear before the European Parliament to answer questions from its members.

I think I’ve given the best I could to build a strong organisation, which is resilient against turbulences coming from changes in senior management. It’s a strong organisation that doesn’t rely on my presence, which allows me to do more travelling now than five years ago.

Is it a definitive retirement or are you moving on to other types of activities?

It’s a definitive retirement. But I’m interested to working further with my knowledge.

Can you say which other types of activities you’ll be pursuing?

Not at this point in time. But I am aware of the rules – there is a two-year cooling off period. And let me reassure you, I have never worked for industry and I don’t see myself joining a big lobby group. I’m more interested in trying to convince the rest of the world that our chemicals legislation is the best.