REACH Heads Back to the Drawing Board

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The European Commission's proposals for reforming the EU's chemicals policy with its so-called REACH regime have created the biggest storm in over 30 years of EU environmental policy. The internet consultation on its draft legislative proposals attracted some 7,000 responses over the summer - and provoked a high-level political backlash which has thrown them back into the melting-pot.

Since the reform of EU chemicals policy was launched - on a UK initiative - in 1998, the issue has been very largely in the hands of EU Environment Ministers. But no longer.

Over the past few weeks, UK Trade and Industry Secretary Patricia Hewitt has warned that the proposals issued by the Commission in May were 'in danger of getting things disastrously wrong', and her German counterpart has voiced a similar sentiment. Meanwhile, the French government was describing the proposals as 'unbalanced' and in need of a thorough overhaul.

All three governments have made it clear that they regard the proposals as a competitiveness issue, and sure enough they figured on the agenda of the Competitiveness Council on 22 September. With the EU's big three aligned against it, REACH as currently conceived looks dead in the water.

The Commission was, indeed, reportedly redrafting the proposals during September. The question now is whether a draft legislative text will be formally tabled, as previously planned, in the autumn. Buoyed by its lobbying successes, the chemical industry is demanding that a business impact assessment going well beyond what has been carried out to date is prepared before any revised proposals are published.

The pressures on the Commission to retreat and delay are making for good media stories. Environmentalists who have watched events with dismay are scoring some successes in branding them as a case of political will weakening in the face of scaremongering by the chemical industry and threats from the US of a trade dispute over REACH.

Exaggeration of the potential impacts of REACH there certainly has been - from both sides. The industry's language has been forceful, and sometimes more - with the chlorine industry's trade body EuroChlor winning top spot with its accusation that the proposed authorisation process for the most hazardous chemicals was nothing short of 'totalitarian'. And there has certainly been strong pressure from the Bush administration - encouraged by European chemical manufacturers - for REACH to be watered down.

Yet, behind all the hyperbole, the shady tactics and the special pleading, the industry's arguments for a more 'workable' REACH system are far stronger than its critics admit.

Core issues
Responses to the consultation from only half the Member States had been placed on the Commission's website by late September. Even so, these give a strong indication of the way the wind is blowing - and suggest that most major elements of REACH are set for significant amendment.

Chemical safety assessments and reports: A cornerstone of the proposed regime, CSAs were to be prepared for all substances by manufacturers and downstream users. The findings and recommended risk reduction measures were to be incorporated in CSRs which, along with safety data sheets, would have to be passed along the supply chain on first delivery of a substance.

Chemical companies have reacted particularly strongly against the Commission's ideas on CSRs. With many formulations consisting of several substances and some comprising several dozen, downstream users would, they warn, be overwhelmed by CSRs, and essential safety messages would be lost in a blizzard of paper. Moreover, CSRs would seemingly have to be translated into the language of any EU country to which a chemical was exported - an unmanageable task for smaller firms.

Among the industry's proposed changes are that CSAs downstream of the manufacturer should only have to address those constituents of a formulation or 'preparation' which have safety or environmental implications, using the threshold values already set in EU legislation on dangerous preparations; and that much greater emphasis should be placed on safety data sheets - also subject to EU legislation - in communicating core safety messages.

Member States' responses show varying degrees of sympathy for the industry's position. The UK says that preparing CSRs would pose 'enormous challenges' for downstream users. It also suggests that one way of reducing the information flow would be to pass only the key conclusions of CSAs along supply chains, with full CSRs being available on the internet.

Likewise, Austria believes that CSAs may require 'too great an effort' from smaller companies, and suggests that safety data sheets - perhaps in an 'advanced format' - be used as the main means of communication. Germany agrees, but also proposes that CSRs should be made available to downstream businesses on request.

The Dutch government is more expansive, acknowledging that 'the requirement to perform a chemical safety assessment is rather complicated, especially for small niche-market manufacturers and small downstream users. This may lead to a shakeout of smaller chemical companies or to a trend in which these companies feel compelled to limit their activities to a smaller number of substances. This might result in a sharp reduction in the number of suppliers of specific substances to the EU market (oligopolistic tendencies) and might have a negative impact on investment in innovation.'

There is, however, a serious problem with a risk communication system which relies on safety data sheets - though one which CSRs would hardly help to overcome.

According to recent research by the Health and Safety Executive among smaller downstream businesses with elevated levels of chemicals-related ill health, 35% of safety data sheets reaching these firms contained significant inaccuracies. Workers rarely used them because they were too technical. Another major obstacle was that 23% of managers and 40% of employees had reading ages below 11 years.

The findings were so startling that the HSE abandoned its plans to deliver new messages through safety data sheets. They are also a salutary warning that, without much improved enforcement and communication, REACH alone will not deliver on its promise.

On one further point relating to CSRs there is almost universal agreement. The Commission's proposal would require CSRs to be passed to customers on first delivery of a substance very shortly after the legislation entered into force. This duty is regarded as both hugely onerous and not particularly valuable, since many hazard data will not emerge for some years until substances have been registered and, if necessary, tested. The chemical industry is pressing for the duty to be deferred until after the last registration deadline some time in the mid-2010s.

Agency: The Commission has proposed the establishment of a European Chemicals Agency to act as the hub of the REACH system, collecting, processing and publishing the vast amounts of data the regime will generate.

However, limited decision-making powers would be vested in the ECA, and there would be complex procedures for soliciting and taking account of Member States' views at many stages of the REACH process.

The chemical industry has demanded a complete overhaul of these arrangements, arguing for all decision-making powers to be centralised in the ECA.

However, there are acute political sensitivities here. A centralised model of this kind would remove decision-making on chemicals from democratic control and impose severe limits on Member States' influence over its priorities and conduct.

Not surprisingly, no Member State appears ready to go along with the industry line. The UK acknowledges that the ECA will have to play a 'key management role' and that decision-making procedures will need to be more streamlined than proposed by the Commission - but no more. Ireland says that 'further consideration' needs to be given to the ECA's role.

Some Member States go further. Austria suggests that the ECA should have sole responsibility both for the registration phase and so-called 'standard' evaluations in which companies' proposals for testing are assessed. Germany proposes that the ECA's decisions on the adequacy of registrations should be final. But the Netherlands, in a shot across the bows, warns that it will be 'not acceptable' for the ECA to have sole decision-making power over which chemicals should go into the authorisation process.

Scope: Much of REACH's burdens on industry will depend on what substances are within its scope. The Commission said it was lightening the load by proposing the exemption of some polymers and intermediates - though this still left, by its own estimates, around 130,000 chemicals to pass through the registration process in one way or another over 12 years.

Some of industry's strongest criticisms are levelled at this aspect of the proposals. Companies argue that requiring intermediates and polymers to enter the system will be costly in terms of registration, testing and, for polymers, difficult analysis, swamping the regime for little safety or environmental benefit. Some polymer producers have also suggested that each manufacturer will register many polymers individually in a bid to protect confidential data, generating up to 200,000 polymer registrations.

Piggybacking on these concerns, some parts of the chemical industry are pushing for the one tonne per year per manufacturer threshold for registration to be raised to 10 tonnes, so eliminating 15,000 of the 30,000 mainstream substances from the system.

Member States are unlikely to go along with the latter idea, but most are sympathetic to the industry's arguments on polymers and intermediates. The UK has proposed that polymer registration should be phased over a lengthy period, with an initial focus on the small numbers of hazardous materials. Germany has proposed a full exemption for the time being, with registration being introduced at a later date once suitable scientific criteria are developed.

On intermediates, the balance of opinion is that registration should not be a priority even for substances transported between sites in large quantities, while those transported in lesser quantities or used on the site of manufacture in a process other than the one in which they were produced should be subject to only very simple notification requirements at least for the time being. Germany has proposed scrapping a trigger allowing intermediates to be transported to only two sites before registration is required - a proposal which attracted particular criticism from smaller speciality chemicals businesses who regard it as discriminating in favour of large companies with complex sites.

Pre-registration: As a means of promoting the sharing of existing test data between companies so as to minimise testing costs and duplicate tests on animals, the Commission proposed that there should be a pre-registration stage before each of the proposed three tonnage-determined deadlines for registering substances. During this stage companies would notify existing studies to a central database, and the information would form the basis for efforts to agree data-sharing arrangements among manufacturers and users.

Again, it is widely agreed that this will not do the trick. The problem is that, since a company's registration deadline is determined by the annual tonnage of a chemical which it manufactures, a low-volume producer who holds a large body of test data may not need to register until phase three, while a high-volume producer of the same substance who holds little or no test data will have registered in phase one and may already have been told by the authorities to carry out further tests. A single pre-registration stage for all substances is the widely suggested solution - though this may create its own difficulties because of the huge amounts of information involved.

Registration and data sharing: Official preoccupations with getting REACH to identify the most hazardous substances swiftly are much in evidence in Member States' responses.

The UK, Netherlands and Ireland have all proposed that the three-stage approach to registration based on tonnage should be further refined to take account of hazard criteria - with the Netherlands suggesting that substances with particular hazard classifications and used in consumer products, as well as those identified by Member States as meeting specified criteria of persistence, bioaccumulation and toxicity and with widespread uses or emissions, should have priority.

The same three countries also argue for a single registration per substance rather than the Commission's starting model of one registration per manufacturer per substance. Their grounds for doing so are to minimise the burden of registrations and to push all companies into data-sharing consortia, minimising opportunities for anti-competitive behaviour. To meet manufacturers' concerns about disclosure of commercially confidential information in mandatory consortia, the UK has proposed that sensitive data could be held by independent third parties.

A different issue has been raised by Austria, Germany and the Netherlands. All argue for the need for formal arrangements to control the quality of companies' registration data so as to minimise downstream burdens on competent authorities. Germany has proposed that registration dossiers should be subject either to internal quality control with external verification of companies' systems, or to independent review.

Evaluation: Similar concerns surface at the evaluation stage. The UK is most outspoken in arguing for prioritisation by tonnage, hazard and exposure data using rapid electronic screening of registrations - with substances of the highest concern proceeding directly to authorisation. ECETOC, the chemical industry's toxicology and ecotoxicology centre, has put forward proposals for a targeted approach to risk assessment for use at this stage.

Most Member States are also critical of the Commission's proposals for initial standard evaluations, questioning their value if companies' justifications for not proposing any tests cannot be checked by scrutiny of their registration dossiers. The Dutch want to be able to stop a standard evaluation of 'rubbish' dossiers, either rejecting a registration or passing immediately to the next, priority evaluation stage to decide whether further testing is necessary.

The Commission's proposals said nothing about how many priority evaluations should be carried out by Member States or how quickly, leaving this entirely to their discretion. Those which have responded are unhappy that this will perpetuate the current unequal burden of risk assessment efforts, with the Dutch suggesting that there should be formal burden-sharing criteria.

Authorisation: The chemical industry has persisted with its demands that only class 1 carcinogens, mutagens and reproductive toxicants should be subject to authorisation - but it has received no support from Member States.

Most of the government submissions focus on the detail of the authorisation process. For example, the UK argues that the socio-economic impact appraisals which will inform authorisation decisions should not, as the Commission proposed, be prepared exclusively by the companies concerned, since the views of other stakeholders need to be taken into account. It suggests that there should be a standard format for such appraisals, while the Dutch want formal criteria for weighing socio-economic costs and benefits and the Austrians argue for these not to have priority.

Substances in articles: Almost every party stresses the importance of regulating the import of products containing hazardous substances, for health or environmental protection purposes or to give EU industry a level playing-field, or both. However, nobody is convinced that the Commission's proposals are practicable - and all are worried about the difficulties of detecting such imports.

The REACH proposals raise an enormous number of other issues - among them compatibility with global free trade rules, the balance between protection of commercially confidential data and public access to information, the lack of enforcement obligations on national authorities, the emphasis given to alternatives to animal testing, and business rights of review of authorities' decisions. It looks like being a long time before any of these are resolved.

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