REACH pilot trial highlights need to shift mindsets

Industry and regulators need to change their mindsets in order to make the EU's proposed legislation - REACH - work, a pilot trial involving industry, regulators and policy-makers has concluded. Participants made 39 recommendations to improve the workability of REACH. A separate study of the impact on downstream users in the UK has annoyed some users by adding weight to the view that it will be manageable for most.

An unprecedented level of preparation has gone into REACH, signalling its momentous nature. A massive public internet consultation was organised by the European Commission to discuss its first REACH proposal; some 50 impact studies have now been completed; technical guidance and IT support are already being prepared even though the Regulation remains in draft form; and a pilot trial involving nine countries has just ended.

The European Chemical Industry Council (CEFIC) proposed the idea of a strategic partnership on REACH testing (SPORT) last year (ENDS Report 351, p 54 ). It was driven by industry suspicions that many aspects of REACH could prove unworkable.

The strategic partners behind SPORT reported their findings in July (see box ).1 They cagily point out the "different perspectives" of the partners. It lists five statements that it feels sums these up.

One conclusion is the need to allocate time and resources to achieving the "paradigm shift" in mindset necessary to implement REACH. This need became most obvious during disputes over differing Member States' objectives in evaluating the registration dossiers submitted to them.

Another view is that REACH will provide the opportunity to develop tailor-made solutions in a diverse market. But others felt that the exercise had shown that significant clarification of the legal text of the proposal would be necessary. The most pessimistic conclusion was that "the proposed system is very complicated and will not be workable in practice."

Some 39 recommendations were made by participants to improve the workability of REACH. Some of these are discussed below:

  • Manufacturer/user relationships: REACH requires manufactures to provide risk management advice for all identified users of their substances in chemical safety reports. A mirror duty is placed upon downstream users to notify suppliers of their uses of substances, and make it known if they disagree with the advice given. However, they may regard their use of a substance as commercially sensitive, in which case they can choose not to notify the supplier but prepare their own chemical safety report with risk management advice for further users.

    SPORT participants ran up against legal issues. For example, questions were raised over who should carry out safety assessments and make sure they are applied, and under what circumstances manufacturers have the right to turn down the inclusion of uses they regards as inappropriate. Such questions were particularly difficult in cases where supply chains were very deep or broad, and distributors were identified as "bottlenecks" in the process of information gathering.

    Guidance is needed on the timeframe in which downstream users must communicate information on uses to manufacturers, and how much they need to say. Participants called for a lexicon of standard terms to facilitate communication.

  • Registration dossiers: These were found to be large and difficult to organise. It was difficult to decide how to register groups of substances. A system of pre-registration using limited data might help to bring together manufacturers of related substances, participants suggested.

    Companies and Member States also ran into disputes over the applicability of existing test data. They clashed too over reading across existing data to apply to other "similar" substances, which companies are keen to do to save resources.

    The IT system being developed for companies to host their data should strike the right balance between the need to standardise inputs and the need for flexibility. Standardised and IT-readable technical phrases should be agreed, particularly to facilitate translation into other languages. The system should be designed to accommodate inputs from several different companies within a consortium.

  • Exposure data:
    Standardising the language used to describe usage scenarios and the risk management measures necessary for these would help to alleviate some of the commercial confidentiality issues feared by users. Exposure scenarios could be generic or specific.

  • Compliance issues: What happens if a company misses a deadline to submit a dossier or any supplementary information that might be requested after submission? What happens if a Member State considers a dossier not to comply with REACH? SPORT participants felt that clarity on such issues would contribute to a better understanding of the system.

  • Monitoring transported intermediates:
    Companies found it "practically and legally impossible" to monitor their customers in order to comply with a requirement under Article 16 of REACH to submit limited registration data for certain isolated intermediates, particularly where transported quantities exceed 1,000 tonnes per year and where they are transported off-site. Instead, they propose a system of contractual commitments.

    The SPORT report notes that resolving differences in interpretation of REACH proved to be a time-consuming exercise. It points out that some textual uncertainties were resolved by referring to the Commission, others were clarified as projects continued under the trial, but others remain open.

  • Consortium formation: Under SPORT one consortium was formed by Cognis for the purpose of registering a group of alkyl sulphates. The experience confirmed the great deal of concern over commercially sensitive information.

    There is also nervousness about falling foul of anti-trust laws. Companies concluded that consortia formation should be undertaken voluntarily. Participation would be encouraged by authoritative and standardised guidance on how to form consortia and on their legal status in relation to competition laws.

    In conclusion, the SPORT partners felt that many but not all of the problems identified could be resolved through the guidance and tools under preparation, as well as by the creation of Member State helpdesks.

    However, to make REACH work in practice, it would also take clarification of the legal text, a change in structure within companies and authorities to facilitate cooperation, and more assistance to downstream users. It urged companies and authorities not to lose time in bringing about such changes.

    In a separate press statement CEFIC emphasised that clarification and simplification of REACH would be necessary in addition to guidance documents. Environmental group WWF disagreed, saying that most of the recommendations from SPORT could be dealt with through guidance which is already being prepared. It described as "unique and very promising" the fact that, four years before the first real dossier evaluations are to take place, companies and authorities are already nailing down practical and compliance issues.

    The fact that six complete dossiers were submitted for evaluation, WWF concludes, "shows that REACH works".

  • Also in July, the UK Government released findings from a regulatory impact assessment looking at the potential impacts of REACH implementation on downstream users. This complements earlier studies looking at the direct costs of REACH and the impacts of potential product portfolio rationalisation (ENDS Report 344, pp 22-23 ).

    Consultant RPA found that for the three sectors studied - food can coatings, silicon wafers and fragrances - the potential annual costs of complying with REACH would be less than 1% of turnover in most scenarios.

    But for one "very much a worst-case" scenario in the fragrance sector, it could amount to 8% of turnover.

    A key determinant of costs for downstream users will be the extent of substance withdrawal or substitution.

    Mid-stream formulators could feel the biggest squeeze on profits as large upstream suppliers try to pass the costs of registering substances down the chain, while large downstream customers refuse to accept any price increases.

    The study also found that REACH may add to the mounting pressures in some sectors to relocate manufacturing operations outside of Europe.

    However, on a more optimistic note than it sounded in its earlier impact assessments, RPA concludes that in most cases industry should "be able to absorb the majority of the costs of REACH without impacting significantly on the competitiveness, location or market structure in the UK."

    Some industry groups have taken issue with RPA's findings. At a meeting of the UK Chemicals Stakeholder Forum, the British Chemical Distributors and Traders Association said it felt that the studies selected were "grossly under-representative" as a picture of chemical distribution in the UK, particularly in assessing the impacts on SMEs.

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