The EU REACH Chemicals Regulatory Regime

1. The EU REACH Chemicals Regulatory Regime

2. REACH What does the acronym stand for ? • “R” = Registration • “E” = Evaluation • “A” = Authorisation • “CH” = Chemicals • The missing letter: “R” = Restriction

3. REACH What is it exactly ? • REACH is a new EU chemicals regulatory regime concerning businesses manufacturing in, or importing chemical substances into, the EU • Businesses affected by REACH have to “Register” their substances with a new EU agency, the European Chemicals Agency (“ECHA”) in Helsinki - each company in a group must comply, i.e a company group can’t generically “Register”

4. REACH What is the main requirement ? • As a market-prerequisite industry has to demonstrate, through “Registration”, that its substances are safe for human health and the environment, i.e: • No Data No Market !

5. REACH Is my business affected ? REACH affects a very wide range of businesses: Upstream: chemical substance manufacturers and importers - they have the main obligations to meet under REACH Downstream: professional users, re-formulators, distributors and retailers - they have lesser obligations to meet under REACH, but which are significant nevertheless

6. REACH What if my business is not located in the EU ? REACH affects businesses globally: Chemical substance manufacturers located outside the EU cannot themselves “Register” as such But, in order for such companies to be able to continue to sell their substances on the EU market such substances must nevertheless be “Registered” How can this be done ? Either, use importers, or, appoint an “Only Representative”, who will then do the “Registration”

7. REACH What does it mean if someone else “Registers” for my business ? “Importer”:-Ensure that you work with quality importers because otherwise you could face problems: Because it means handing over sensitive business and technical information to a party who may not necessarily be able to guarantee the confidentiality of the information Such a party may also be acting as an importer for a competitor of the non-EU based company raising other concerns (and the importer could even become a competitor itself)‏ Significantly, the importer becomes the owner of the actual “Registration” thus limiting not only the control of the non-EU-based company in the REACH process but also possibly limiting EU market access of the company's chemical substance

8. REACH What does it mean if someone else “Registers” for my business ? “Only Representative”:- What Is This ? A natural or legal person established in the EU to fulfil the REACH obligations of importers They must have: sufficient background in the “practical handling of substances”, and, the information related to them they must keep “available and up-to-date information on quantities imported and customers sold to”, as well as keep information “on the supply of the latest update of the safety data sheet”

9. REACH What does it mean if someone else “Registers” for my business ? Using an “Only Representative” has advantages and disadvantages: “Only Representatives” will become the downstream users of such substances, and thereby take on certain other REACH obligations The “sufficient background in the practical handling of substances etc” requirement is vague enough to allow a broad range of persons to put themselves forward as “Only Representatives” but also leaves open the risk that such persons are not sufficiently skilled in these areas The obligation to communicate with others in the supply chain may raise concerns that, for some supply chains, non-EU manufacturers will be wary of providing sensitive commercial information concerning their production and export plans to an “Only Representative” over whom they may have little control in reality

10. REACH Does REACH only concern chemical substances? • REACH covers chemical “Substances”, “Preparations” (mixtures of substances), and, “Articles” • What is an “Article” ?: • “ … an object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition”

11. REACH Are there any exclusions ? A small number of chemical substances are totally excluded, for example: - substances which occur in nature (“unprocessed or processed only by manual, mechanical or gravitational means, by dissolution in water, by flotation, by extraction with water, by steam distillation or by heating solely to remove water, or which is extracted from air by any means”)‏ A larger group of chemical substances are excluded from “Registration” and/or “Authorisation”, for example: food additives, cosmetics, medicinal products etc - the wording of these exceptions needs to be examined carefully before any conclusions can be drawn as to whether these exceptions apply or not

12. REACH What is “Registration” ? Businesses which manufacture or import substances caught by REACH in quantities of 1 tonne or more per yearmust “Register” their substances with the ECHA “Registration” essentially requires the submission of a significant amount of detailed technical material (using the “IUCLID” 5 software) about a given substance - the information requirements increase with respect to tonnage and/or the hazardous nature of a given substance

13. REACH What procedures apply to articles ?: “Registration” and “Notification”:- • Where the substance is present in an article in quantities of over 1 ton per producer or importer per year, and, it is intended that the substance will be released under normal or reasonably foreseeable conditions of use, it must be “Registered” • In addition, where the substance is present in an article in quantities of over 1 ton per producer or importer per year, and, the substance is present in an article above a concentration of 0.1% weight-by-weight, and, the substance is one of “Very High Concern”, and, the producer or importer cannot exclude exposure to humans or the environment during normal or reasonably foreseeable conditions of use of the article, it must be “Notified” to the ECHA

14. REACH What is “Pre-registration” ? Due to the many substances expected to be “Registered” there will be a transitional period for “phase-in” substances: “Pre-registration” - 1 June to 30 November 2008 (this also applies to “Articles”) - a special software tool will be available for this process (“IUCLID” 5 “Plug-In”)‏ The major advantage of “Pre-registering” is that it buys transition time for the eventual full “Registration” of a given substance, which operates in a time-phased manner Using an “Only Representative” for “Pre-Registration” should provide anonymity for the substance producer using an “Only Representative” (and thereby strengthen confidentiality)

15. REACH What are “Phase-In” substances ? “Phase-in” substances are defined as those: Either: listed in the European Inventory Of Existing Commercial Chemical Substances (“EINECS”)‏ Or, manufactured in the EU (or in 1995 or 2004 EU accession countries), but not placed on the EU market by the manufacturer or importer, at least once 15 years before the entry into force of REACH (1 June 2007)‏ Or placed on the market (by a manufacturer or importer) in the EU (or in 1995 or 2004 EU accession countries) before entry into force of REACH (1 June 2007) and was considered as having been notified under (the relevant provisions of) EU (classification and labelling) Directive 67/548, and does not meet the REACH definition of a polymer

16. REACH Do I have to share data ? Once “Pre-registration” has been undertaken it is then mandatory for businesses to formally get together in groups known as “Substance Information Exchange Forum” (“SIEFs”) in order to share existing animal test data on substance so as to minimise further testing that may be needed for “Registration” The SIEFs will in effect operate as consortia with one company in the group taking the lead and submitting the required “Registration” information to the ECHA

17. REACH What information must be submitted ? For substances of 10 tonnes or more per year on the EU market, a “Chemical Safety Report” must be submitted to the ECHA which will contain a “Chemical Safety Assessment” This exercise is essentially a risk assessment where the “Registrant” takes account in particular of the life-cycle risk management measures that will be implemented, either for the “Registrant’s” own uses and/or for those uses which will be proposed to users further down the supply chain for their own particular uses Upstream manufacturers and downstream users need to work closely together on this exercise, especially as regards so-called “Exposure Scenarios”

18. REACH What is “Evaluation” ? There are two types of “Evaluation” A dossier completeness check where the ECHA will check a percentage of the dossiers submitted under “Registration” to ensure that the dossiers contain the right information - requests for further information may follow For certain “priority substances” so identified by the ECHA a fuller substantive dossier appraisal will be carried out (for which more information will probably need to be submitted by companies), following which such “substances” may need to follow either the “Authorisation” or the “Restriction” processes

19. REACH What is “Authorisation” ? All uses of chemical substances with intrinsic properties of “Very High Concern” must be “authorised” before they can be placed on the market (“SVHC”)‏ (Substances of) “Very High Concern” essentially means that the effects of the hazardous properties of the substance in question on living organisms are usually irreversible - notably, this will include substances that are carcinogenic, bio-accumulate, or persist in the environment (“CMR”, “PBT”, “vPvB”)‏ The ECHA will compile and publish a “Priority List” of substances that will go through “Authorisation”

20. REACH What does “Authorisation” consist of ? “Authorisation” will apply to particular uses of a chemical substance (including articles) and will only be granted if the manufacturer or importer can demonstrate that the risks from the uses concerned can be adequately controlled, or, that the socio-economic benefits of the use of the chemical outweighs the risks and there are no suitable alternatives Businesses will need to submit a substitution plan when applying for “Authorisation”, i.e a plan for eventually replacing the given “Authorised” substance “Authorisation” will be valid down the supply chain, with certain regulatory obligations on users

21. REACH What is “Restriction” ? Separate to the “Authorisation” process, depending on the circumstances, certain substances may have “Restrictions” imposed on them, for example, limiting the uses of the given substance (which may even amount to a ban)‏

22. REACH Is there any other other legislation/material ? Further EU legislation will supplement REACH to specifically deal with classification and labelling issues, namely the (Draft) “EU Regulation On Classification And Labelling Of Substances And Mixtures Based On The Globally Harmonised System”, which is expected to be agreed in 2008 Further supplemental REACH legislation is also needed in a few other areas, for example on testing, which is also expected to be agreed in 2008 A range of EU REACH technical support documents also exist and are being developed, notably the “REACH Implementation Projects” (“RIPs”) and the “Technical Guidance Documents”

23. REACH What is my company’s liability ? There is a general obligation to ensure that the manufacturing, placing on the market, importation or use of chemicals does not adversely affect human health or the environment Sanctions may be imposed for infringements of REACH, including this above-mentioned obligation

24. REACH How much will it cost my company ? Scientific testing, data-compensation etc may prove costly, especially for substances that have little or no information background There will be fees to be paid for “Registration” and aspects related to it - this is expected to be finalised in 2008

25. REACH What legal aspects need to be considered ? Scope - upstream or downstream, and, “substances”, or, “preparations”, or, “articles” Setting up consortia (contractual/corporate document) - data-sharing provisions, data-sharing compensation mechanisms, and, anti-trust provisions Data protection, confidentiality, and, intellectual property aspects Customs issues Possible appeals (The Board of Appeal, and, the European Court)‏ Use of access to information legislation Revision of supply agreements (obligations, liability etc)‏ Overall compliance strategy Insurance (policy)‏

26. REACH What other consequences might there be ? Environmental/health issues may come to the surface that have either lain dormant or which have been hitherto unknown Some substances will disappear from the market as REACH will be an expensive process Likewise, due to the cost of compliance with REACH, some businesses may be up for sale

27. REACH The End Thank You For Your Attention André Bywater