In September 2008, EDF issued a report entitled “Across the Pond, Assessing REACH’s First Big Impact on U.S. Companies and Chemicals” (“EDF Report”), in which EDF purports to demonstrate that REACH will have significant impacts on companies manufacturing, importing, exporting, or using chemicals in, to, or from the United States. Soon after EDF released its report, the American Chemistry Council (ACC) issued a press release on September 30, 2008, suggesting that the reasoning and conclusions in the EDF Report are deeply flawed and misleading. While there is some merit to EDF’s conclusion, the report exaggerates the manner in which U.S. companies will be affected in the near term and obfuscates the ways in which companies may protect themselves from negative impacts.
The EDF Report is focused on REACH’s regulation of “substances of very high concern” and correctly observes that, once a chemical is determined to be a substance of very high concern under REACH, it is possible, and perhaps likely, that entities will be required to obtain authorization from the European Commission before manufacturing or importing the chemical in or into the E.U. EDF then attempts to demonstrate the likely impact of this process on U.S. companies by analyzing the extent to which chemicals that EDF believes should be substances of very high concern are pervasively used and manufactured in the United States.
If the purpose of the EDF Report is to outline the immediate impacts of REACH on U.S. companies, then the report significantly over estimates those risks because of the chemicals considered. For a chemical to be a substance of very high concern, the European Chemicals Agency (ECHA) or an E.U. member state must first place it on a candidate list; subsequently, ECHA will further evaluate the chemical and seek public comment to determine whether the chemical should be subject to authorization. Currently, no chemicals are subject to authorization, and ECHA has proposed that the first candidate list contain only 16 chemicals.
Notwithstanding these facts, EDF performed its analysis using a list of 267 chemicals that—according to The International Chemical Secretariat, a nongovernmental organization—exhibit the characteristics of substances of very high concern and may be, at some point, subject to authorization. The EDF Report, though, overstates the likely near-term impacts of REACH by deemphasizing the fact that nearly all of these chemicals must go through the designation process before they could be subject to authorization. Perhaps a more accurate assessment of near-term impacts would have focused on ECHA’s 16 proposed candidate chemicals and left the much longer list of chemicals to a discussion of possible medium- or long-term impacts.
Similarly, EDF casts its net too broadly when discussing the companies that could be impacted by REACH. Because REACH only regulates the manufacture of chemicals in, and the importing of chemicals into, the E.U., the only companies in the United States that will be directly affected by REACH are those that buy chemicals manufactured in the E.U., import chemicals into the E.U., or manufacture chemicals in the E.U. EDF, though, evaluates the impact of REACH by considering companies that use, manufacture, and import chemicals in the United States. EDF’s focus on that group renders its characterization of the early impacts of REACH inaccurate.
Beyond exaggerating the impact of REACH, EDF’s analysis of an arguably arbitrary list of chemicals and a group of companies selected without reference to the structure of REACH obscures the manner in which U.S. companies can insulate themselves from the impacts of REACH. If the EDF Report accurately portrayed the immediate, short-term risks of REACH, it would be clear that companies using the 16 nominated chemicals should—if they prefer to not change their chemical uses—seek to purchase those chemicals from a company that manufactures them outside the E.U. Similarly, companies manufacturing these chemicals might consider relocating their manufacturing operations outside the E.U. Therefore, while many U.S. companies may be impacted by REACH, and some may be significantly impacted, the impacts are not likely to be as pervasive, devastating, or inevitable as suggested by the EDF Report.
Indeed, that is the very conclusion that the ACC drives at in its press release. The ACC emphasizes that the accuracy of the EDF Report is undercut by the list of chemicals used in the analysis. Additionally, the ACC touts the potential benefits of two EPA programs that it supports, but that EDF failed to mention: The Chemical Assessment and Management Program (ChAMP) and the High Production Volume Challenge program. According to the ACC, “[T]he U.S. ChAMP program will produce screening level risk assessments on virtually all chemicals in commerce by 2012—assessments completed well ahead of the evaluation schedule anticipated under REACH.” The ACC also points out that the EDF Report neglects to mention that many of the chemicals discussed in the Report are currently regulated under the Toxic Substance Control Act, the Federal Food, Drug, and Cosmetic Act, and other regulatory programs, an omission that suggests to the ACC that the EDF Report was merely an attempt to drum up public concern.
What should not be lost in this crossfire, though, is that REACH may have a significant impact on a significant number of companies, but companies potentially affected by REACH should not be paralyzed by this possibility. Rather, companies should react by performing analyses of their operations that will likely divulge ways to mitigate impacts and take advantage of opportunities.