On July 4, 2020, new restrictions on the use of PFOAs entered into effect. The important changes to the restrictions’ calendar -previously managed under the REACH Regulation- introduced by way of amendment to the POP Regulation- lead us to address the interaction between those two legal systems and the insecurity it generates for the industry.
The Stockholm Convention on Persistent Organic Pollutants (POPs) introduced an international restriction regime for POPs, substances characterized by their long persistence in the environment and their capacity to bioaccumulate. The Convention entered into force in the EU in May 2004 through Regulation 850/2004. The Regulation was then subject to a recast, establishing the so-called ‘POP Regulation’ (Regulation 2019/1021), which has since been amended several times as new substances were added to the Convention’s annexes.
Under the POP Regulation and its amendments, the EU has implemented successive additions to the Convention’s list of prohibited substances and related exemptions as agreed between the Convention’s parties. While the 2004 Regulation initially operated within an open legislative context in the pre-REACH period, the 2019 recast highlighted a need to ensure coherence between the POP Regulation and the REACH Regulation. Indeed, the two frameworks give delegated powers to the European Commission to enact phasing-out goals while preserving operators’ ability to employ the substance for specific uses when no alternative exists or is available at the time when the restriction is approved. However, while the 2019 recast addressed coordination at the institutional level on the matter through greater involvement of the European Chemicals Agency, it failed to address the relationship between the two texts.
The coexistence of such frameworks has proved to induce unexpectedly wide-ranging regulatory changes in the case of the amendment to Annex I of the POP Regulation regarding perfluorooctanoic acid (PFOA), its salts and PFOA-related compounds (together PFOAs) through the Delegated Regulation 2020/784 (PFOAs Amending Regulation). The PFOAs Amending Regulation gives us an insight into the risks generated by the coexistence of the REACH Regulation and the POP Regulation.
PFOAs Amending Regulation was introduced as an implementation of Decision SC-9/12, enacted by the Conference of the Parties to the Stockholm Convention. Yet, since the entry into force of Commission Regulation 2017/1000, PFOAs had already been covered by Annex XVII of the REACH Regulation, which restricts the manufacture, placing on the market and use of certain dangerous substances. Annex XVII also includes derogations and exemptions for specific uses to allow undertakings across the supply chain to adapt to the upcoming restrictions.
The PFOAs Amending Regulation put at stake this entering in direct contradiction with some of the Annex XVII provisions on PFOAs. The Commission claims having gathered in the PFOAs Amending Regulation the type of exemptions and derogations granted under both the Stockholm Convention and REACH Regulation. However, in practice, it did grant pre-eminence to the exemptions under the Stockholm Convention as regards deadlines. This is highlighted by the fact that the transitional derogation deadlines in the PFOAs Amending Regulation are much shorter than previously granted under the REACH Regulation. For instance, medical devices (other than implantable medical devices) were subject to a derogation until July 3, 2032, under the REACH Regulation but are now subject to a phase-out obligation by December 3, 2020, under the POP Regulation. Companies have a much smaller window to adapt to a twelve-year shorter derogation.
Companies may not claim any pre-eminence of the REACH Regulation over the POP Regulation. Indeed, the European Commission in its Common understanding of 2014 assessed that, when Annex XVII already contains a restriction in relation to a substance subsequently listed under the Stockholm Convention, “the practice is to implement the listing in the ‘[Stockholm] Convention by means of amending the appropriate Annex(es) to the POP Regulation and to remove the restriction from Annex XVII to REACH”. Entries in the POP Regulation “should cover at least the bans under the Stockholm Convention and existing restrictions in Annex XVII,” which implies that more drastic restrictions may be imposed. Compliance with the REACH Regulation is thus not guaranteeing compliance with the POP Regulation, which puts at stake legal certainty and legitimate expectations. Companies have developed their business strategies based on the deadlines set out in the REACH restrictions. However, their ability to place products on the market that contain POPs can be easily overturned by a different regime, in clear contradiction with their previous expectations.
While the POP Regulation brings into EU law obligations imposed under international law, the REACH Regulation consists of a purely European policy framework. Accordingly, the POP Regulation’s primacy is, as a matter of fact, and despite all the uncertainties it generates, a mere implementation of them within the EU. Under paragraph 2, Article 216 of the Treaty on the Functioning of the European Union international agreements concluded by the European Union (EU) are binding on EU institutions. From this provision, the Court of Justice of the EU deducted that international agreements binding the EU have priority over community secondary law. Consequently, European institutions may not adopt an act of secondary law that would breach international provisions nor act themselves in breach of such agreement by allowing forbidden exemptions. As a consequence, the European Commission shall exclude any REACH Regulation provisions that would be in breach of the Stockholm Convention. Nevertheless, both the REACH and POP Regulations remain subordinated to the EU Treaties.
The European Commission has been put in charge of the implementation of amendments to the Stockholm Convention in the EU, by means of delegated regulations. With these inconsistencies between the two regimes, it could have made use of the flexibility mechanisms offered by the Stockholm Convention. Two main such mechanisms are:
- Any party that is unable to accept additional amendments to the annexes shall notify it to the amendment’s depositary within one year from the date of communication of the amendment. As a consequence, the amendment will not enter into force for such a party.
- The other mechanism solely enables parties to rely on exemptions granted within the annexes’ amendments, by registering themselves. No such registration has been reported so far.
The European Commission has decided not to employ any of these mechanisms.
Consequently, companies are fully bound by the PFOAs Amending Regulation with no other flexibility clauses than the ones included in the amended Annex itself, with no means of invoking the REACH Regulation against such obligations. While it is expected that the PFOAs restriction will be removed from Annex XVII, no such decision has been taken yet, leading to potentially more confusion for corporate entities.