The EU prepares for a major review of chemicals legislation: the REACH proposal

The paper analyses the Commission’s new draft legislative proposal aimed at radically redefining EU chemicals legislation.

The European Commission has just published a draft legislative proposal aimed at radically redefining EU chemicals legislation through a new Regulation. At the core of the proposal is REACH: a single, integrated system for the Registration, Evaluation, and Authorisation of CHemicals. REACH will place a duty on companies which produce, import and use chemicals in Europe to assess the risks arising from their use, generate new test data in .justified. cases and take the necessary measures to manage any risks they identify. The new system will reverse the burden of proof from public authorities to industry for putting safe chemicals on the market. Under REACH, chemical substances must be registered and possibly evaluated or specifically authorised before being placed on the EU market.

The Commission’s draft proposal allows an 8-week period for public consultation ending on 10 July 2003. During the consultation, all interested stakeholders will have the opportunity to submit their comments. After the consultation period, and based on the comments received, the Commission is expected to finalize its proposal by the end of July 2003. Concerns have been voiced by industry regarding both the workability of the REACH system and its implications on trade. Participation in the forthcoming consultation on the legislative proposal represents a unique opportunity for industry to contribute to the shaping of future EU chemicals legislation.

THE CURRENT EU CHEMICALS REGIME – WHY CHANGE?

Today, a centralized system for the management of chemical substances does not exist in Europe. EU chemicals legislation, as well as its implementation at the level of each EU Member State, is relatively fragmented.

One important aspect of current EU legislation on chemicals is that it distinguishes between “existing substances,” i.e., all chemicals declared to be on the market in September 1981, and “new substances”. i.e., those placed on the market since that date. Currently, “new substances” must be tested and assessed before being placed on the EU market. Testing is, of course, lengthy and expensive. In contrast, “existing substances,” which account for more than 99 percent of the total volume of all substances present on the EU market, are not subject to such a review. As a result, there is a lack of knowledge of the potential risks for 99 percent of the chemical substances which circulate freely in the EU.REACH is intended to redress this situation.

REACH – WHAT DOES IT SAY?The main elements of REACH are summarized below.

Duty of Care

Under the duty of care obligation, all companies manufacturing, importing or using chemical substances either on their own or in chemical preparations (preparations include, for example, most household cleaning products or paints and varnishes, etc.) must carry out a safety assessment to identify the risks posed by the manufacture or use of the substance and to take “appropriate” risk reduction measures as a result of the assessment.

Registration

Registration involves the obligation of manufacturers or importers to notify an authority of the intention to produce or import a substance and to submit a dossier containing the information required, where necessary, by performing new tests. The registration dossier must include information on the identity of the substance, intended uses, estimated human and environmental exposure, production quantity envisaged, MSDS, preliminary risk assessment covering the intended uses, etc. The information required is based on volume produced or imported. Lighter regulatory requirements will apply to intermediates and polymers.

Evaluation

All substances exceeding 100 tonnes or, in cases of particular concern, a lower tonnage, wil l be subject to “evaluation,” which will involve the development of substance-tailored testingprogrammes focusing on the effects of long-term exposure.

Authorisation

Substances of very high concern, namely CMRs (carcinogens, mutagens and reproductive toxicants), PBTs (persistent and bioaccumulative and toxic) and vPvBs (very persistent and very bioaccumulative), will be subject to pre-market authorisations, involving extensive testing and administrative requirements. Here, enterprises will have the burden of proving that the risks posed by a particular substance can be adequately controlled.

Restrictions

Where a risk has been identified, substances may be subject to restrictions such as conditions for the manufacture, use(s) and/or placing on the market of a substance, or of the prohibition of these activities.

Substances in Finished Articles

Finished articles are objects containing chemical substances or preparations (e.g., a table surface which has been treated with paint-containing chemical ingredients). Some substances incorporated into finished articles will have to be registered if the substance in question:

• has not been registered in the supply chain;
• is in an article in quantities of at least one ton per year, per importer/manufacturer and per article type; and
• may be released during normal use and disposal in sufficient quantities so as to potentially adversely affect human health and the environment.

European Chemicals Agency

A new European regulatory agency will be set up to manage centrally the technical and administrative aspects of the REACH system at the community level.

Contributing to the Workability of the System

A number of measures are proposed by the Commission to contribute to the workability of REACH including:

• establishing the starting point for registration at one ton. No registration will be imposed on companies that manufacture or import substances below this threshold.
• encouraging the formation of consortia. Consortium membership will save companies money in preparation costs associated with the dossier and in reduced fees. In addition, information on animal tests will be shared, thereby reducing costs and time devoted to tests.
• sharing of authorisation granted to an enterprise with the enterprise’s customers if they abide by the conditions of that authorisation.

Deadlines

Substances already on the market will be phased gradually into REACH. Substances produced in high volumes and CMRs will have to be registered first. Registration deadlines will be calculated from the year the legislation becomes effective so that the new obligations will apply in:

• 3 years for high production volume chemicals (1,000 tonnes or more per year per manufacturer or importer) and CMRs in lower volumes;
• 6 years for production volumes in the range of 100 – 1,000 tonnes; and
• 11 years for low production volume chemicals (1 – 100 tonnes).

KEY CONCERNS FOR INDUSTRY

Industry generally supports the Commission’s objective of simplifying and updating the existing EU chemical legislation in order to guarantee a high level of protection of both human health and the environment. However, despite the Commission’s efforts to ensure workability of REACH, a number of concerns have been voiced within the industry in connection with the system’s workability. In particular, REACH is shifting the burden of assessing the risks of chemical substances from regulatory authorities to enterprises and is dramatically increasing the number of requirements and tests to be carried out by a large number of the companies that manufacture, import or use chemical substances on their own, in preparations or in finished articles. The cost to industry could be significant. Indeed, according to an independent Business Impact Assessment study presented by the Commission in 2002, the direct registration and testing costs for industry are estimated between €1.4 and €7 billion over 11 years.

Clearly, REACH could also result in a significant barrier to international trade, especially if testing methods and results obtained outside the Community were not properly recognized.

Who Should Participate in the Public Consultation on REACH?

The focus of REACH is on substances rather than on preparations. Thus, producers of chemical substances represent the industry segment most affected by the new legislation. However, importers of preparations and finished articles which contain chemical substances, as well as downstream users of chemical substances and preparations, are likely to become subject to a number of regulatory obligations established by the new system. Consequently, all producers and professional users of chemical substances have an interest in participating in the consultation.

The public consultation launched by the Commission on the draft REACH proposal represents a unique opportunity for interested stakeholders to contribute to the shaping of future EU chemicals legislation. Stakeholders can participate through industry trade associations, individually or through both channels.

Squire Sanders has been following the REACH proposal from its infancy. We would be happy to share with you our insight on REACH and assist you in the forthcoming stages of the legislative process.

For more information see

Squire, Sanders & Dempsey.