The EU Regulation on the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), and establishing a European Chemicals Agency, was adopted on December 18, 2006.1 The Regulation entered into force on June 1, 2007. The REACH Regulation replaces 40 legal acts that hitherto regulated EU chemical policy. It creates a single EU legislative framework for all chemical substances. The new EU chemicals regime differs significantly from previous EU chemical legislation which made a distinction between “existing” and “new” chemicals. Chemicals placed on the EU market before 1981 were referred to as “existing” chemicals, and did not require any rigorous testing. Only chemicals placed on the market after 1981, and referred to as “new” chemicals”, required such testing. It was the lack of data on the category of “existing” chemicals that triggered the legislative activity that, following years of intense discussions and lobbying within the EU as well as internationally, resulted in the adoption of the EU REACH Regulation, at the end of December 2006.
The features of REACH that will be of most direct impact to business are those pertaining to the ‘Registration’ and ‘Authorization’ process. ‘Registration’, as explained in greater detail below, concerns the process by which information on chemicals, produced or imported above a certain threshold, will need to be submitted for registration in a central database. ‘Authorization’ relates to the procedure whereby substances that are deemed to cause great concern will need to be expressly authorized before they can be manufactured or imported into the EU, and would even need to be progressively replaced, where they are found to cause unacceptable risks to human health and the environment.
The REACH Regulation establishes a new EU regulatory framework for the Registration, Evaluation and Authorization of Chemicals. It places the responsibility for managing both risks arising from the use of chemicals as such, as well as where they form part of other articles, upon industry itself. In addition, industry is responsible for providing safety information on the substances used in their products. REACH intends to achieve this through requesting manufacturers and importers to gather information on the properties of the chemicals they use. This information would be registered and collected in a central database intended to help manage those substances in a safer manner. The database will be managed by the European Chemicals Agency, based in Helsinki. The European Chemical Agency will play a key role in evaluating potential risks posed by chemicals. It will also be responsible for a public database that will include hazard information on each substance. REACH also requires that the most dangerous chemicals be progressively replaced by more suitable substances, where possible.
One of the key registration obligations is that manufacturers and importers will have to provide information in respect of substances produced or imported into the EU in quantities above one tonne per year. In addition, they will need to gather information proving that these substances are safe to use, as well as include this type of information in a registration dossier. This dossier would be submitted for registration to the European Chemicals Agency.
The submission of the necessary information for registration purposes is a condition that must be completed for chemicals manufactured in the EU and/or for their importation. The registration requirements apply to both the substance itself, as well as where the substance forms part of articles. The European Commission estimates that about 30,000 substances will need to be registered. A large number of these substances are produced or imported by more than one company. This means that, potentially, a much larger number of registrations might be made. Compliance with the REACH registration provisions requires that manufacturers and importers submit:
- A technical dossier for substances produced or imported into the EU in quantities greater than one tonne per year. This so-called “Chemical dossier” will need to explain how the registrant intends to manage the risk posed by the substance(s) concerned.
- A Chemical Safety Report (CSR) for substances produced or imported into the EU in quantities larger than 10 tonnes per year. The CSR is intended to document the safety assessment of the substances concerned. This means that this tonnage triggers the need to produce a CSR in addition to the technical dossier.
“Evaluation” is the procedure whereby regulatory authorities (the European Chemicals Agency along with the EU Member State authorities) analyze the information submitted by applicants to evaluate if it will provide the required safe management of the chemicals. The authorities may also conclude during the evaluation phase that the relevant requirements have not been met. If a risk to health or to the environment is suspected, the applicant may be requested to submit further information. Evaluation of the chemicals can also lead to the restriction of their use or to the conclusion that a particular use of a given substance requires authorization.
Where the European Chemicals Agency decides that the use of a given substance, because of its hazardous properties, requires authorization, applicants will need to formally apply for such authorization in order to be able to manufacture it in, or import it into, the European Union. Furthermore, the applicant will need to submit the relevant documentation, accompanied by an analysis of potential substitute substances. Where safer substances are available, companies should also submit plans for eventual substitution by those safer substances. REACH indicates the categories of substances that will require authorization, namely: Category 1 or 2 carcinogens, mutagens or substances toxic to reproduction (reprotoxins) (CMR); persistent, bioaccumulative and toxic (PBT) or very persistent and very bioaccumulative (vPvB) substances; and substances that, identified from scientific evidence on a case-by-case basis, may cause serious effects to human or the environment equivalent to the previous two categories (e.g., endocrine disrupters). The Agency will draft a list of substances that meet the above-described criteria.
The European Commission and the EU Member States (through the so-called “comitology” procedure2) will decide jointly which substances on the list of hazardous substances to be drafted by the Agency would require formal authorization, and which uses would be exempted from authorization (for example, because there is other legislation already in place that establishes sufficient control in respect of those substances).
Companies using or marketing a particular substance subject to authorization would be required to respect the relevant deadlines when applying for an authorization for the use of the substance concerned. In addition, an analysis of possible substitutes would need to be included as part of the submission. If the analysis shows that suitable alternatives are available, it would be necessary to include a substitution plan as part of the request for authorization. The REACH provisions state that the authorization will be granted if the applicant is able to demonstrate that “[..] the risk from the suggested use of the substances is controlled in an adequate manner”.
The ultimate goal of the authorization process established by REACH is that substances of very high concern are progressively replaced where they are known to cause unacceptable risks to human health and the environment and where there are no other reasons that justify their use. The European Commission explained that their use may still be justified in situations when exposure to human beings or the environment is very limited and when risks can be adequately controlled. Furthermore, in some other cases, the use of such substances may be considered as potentially having significant socioeconomic benefits that outweigh the risks associated with the use. One of the examples provided by the European Commission is a scenario in which the use of these substances would ensure the safety of equipment when there is no suitable alternative.
Business impact and obligations on industry
As regards the impact of REACH on business and the obligations that fall upon industry, we list some of the key points below.
Few pieces of proposed EU legislation have required such extensive deliberations within the EU, or caused such international debate before their final adoption, as the REACH Regulation. Many non-EU countries have followed the debate on REACH very closely, including the U.S., Switzerland, Norway, Canada, Japan, Korea, New Zealand, and China. In the U.S., Congress is currently debating whether current U.S. chemical legislation provides adequate protection to humans and the environment. REACH is referenced in these debates. It is indeed not unrealistic to conclude that REACH could inspire other countries around the globe to adopt new, more rigorous, legislative frameworks for chemicals that mirror REACH.
Apart from the registration process, which implies the need to generate and provide all necessary information, companies are directly affected by one of the key principles enshrined in REACH; namely, the principle that the risk of proving the safe use of chemicals is shifted from the public authorities to the industry. Although the provisions of REACH apply within the territory of the European Union and therefore, in theory, only impact directly on manufacturers and importers within the European Union, in practice, its impact is global. Considering the fact that many of the substances used in the European Union, either on their own, or in, or as part of, articles, are imported from non-EU Member States, the information that EU importers and manufacturers will need to receive from their suppliers is crucial for their ability to comply with the REACH requirements and the continued use of these substances.
In order to fulfill their obligations under the REACH Regulation, downstream users of chemicals in the supply chain will need to have at their disposal information on those chemicals. These downstream users are, therefore, likely to request their suppliers to provide them with such information. Downstream users would also have to consider whether the use they make of each substance is safe, and, where necessary, adopt appropriate risk management measures accordingly. In order to be able to comply with this legal requirement, downstream users are likely to have to establish effective exchanges of information with their suppliers. The more precise downstream users can be in their communication with their suppliers as regards the use they make of a particular substance, the more likely it is that the relevant supplier can submit comprehensive Chemical Safety Assessments (CSA), covering all uses of the substances made by the downstream user. A CSA is intended to assess risks arising from the manufacture and/or use of a substance and aims to ensure that they are adequately controlled.
REACH aims at the progressive substitution of certain dangerous substances by less dangerous ones. Industry has almost unanimously maintained that the costs of such substitution will be excessive and will most likely push certain players, particularly Small and Medium-sized Enterprises (SMEs), out of the market.
Deadlines and important dates for industry
The European Commission has indicated that registration is a pre-condition to placing new substances on the market. The first important deadline for industry, as outlined and explained more in detail below, is November 30, 2008. This is the date on which applicants must pre-register so-called “phase-in substances” (see third bullet point below for a definition of “phase-in substances”). However, it is important that companies begin to consider the possible impact of REACH on their business now. They would have an interest in examining their portfolio of chemicals, and checking the scope of their obligations, role and tasks under REACH. Below is an outline of the most relevant dates and deadlines that business operators would need to consider.
Intended by the EU to create a smooth transition to the REACH system, the registration provisions establish a step-by-step format. Deadlines are thus based on different tonnage ranges are established for the chemical substances. Such deadlines are also included in the scheme reproduced below.
- June 2007: entry into force of REACH Regulation
- June 2008: The European Chemicals Agency becomes operational
- 1 June 2008 - 30 November 2008: Pre-registration of so-called phase-in substances (i.e., substances listed in the EINECS list (the European Inventory of Existing Commercial Chemical Substances) or those that have been manufactured in the Community but not placed on the Community market in the last 15 years, or the so-called “'no-longer' polymers” of EU Directive 67/548EEC).
- November 2010: Registration deadline for substances manufactured or imported in quantities of 1000 tones and above, as well as carcinogens, mutagens and substances toxic to reproduction above one tonne per year, and substances classified as very toxic to aquatic organisms above 100 tonnes.
- June 2013: Registration deadline for substances manufactured or imported in quantities of 100 tonnes and more.
- June 2018: Registration deadline for substances manufactured or imported in quantities of one tonne and more.
At present, the European Commission’s Working Group on the Practical Preparations for REACH is in the process of preparing for full implementation of REACH. Guidance and support tools are essential to assisting stakeholders to understand their tasks and fulfill their obligations. So-called REACH Implementation Projects (RIPs) are well under way. These cover the development of IT systems, guidance documents for industry, guidance documents for authorities, setting up the Agency, process descriptions, guidance for downstream users, guidance on data-sharing, guidance on dossier evaluation, guidance on the preparation of chemical safety reports, etc. The RIPs are coordinated by the European Chemicals Bureau of the Joint Research Centre (JRC).
The impact of REACH is significant and far-reaching and will affect manufacturers and suppliers within, as well as outside, the European Union. It is critical that companies gain a sufficient understanding of the implications of REACH, of the mechanisms that would need to be put in place, and of the timelines that will need to be respected. The REACH Regulation is also causing significant concern among certain industry sectors that fear that the impact of REACH has not yet been sufficiently clarified.
Additionally, critics have questioned the effectiveness of the Commission’s efforts to avoid any overlap with existing legislation, particularly in fields that are expressly excluded from the scope of REACH. For example, concerns have been expressed that for pharmaceuticals, some REACH provisions are confusing in that they appear to require the same chemical to follow different procedures depending on the product into which it is incorporated, or its intended use.
A formal review of the Regulation has been scheduled to take place five years after its entry into force. Clearly, in anticipation of such a review, it would be important to determine well in advance potential consequences and/or opportunities of any changes to the REACH Regulation. This is highly important, especially if one takes into consideration that one of the aims of REACH is not to overlap with any legal regime already existing for some industrial uses of certain chemicals, and the fears that such overlap may, somehow, already be a reality. If such fears are justified, the effectiveness of REACH and the need for legal certainty would be dramatically undermined.