Special Focus

REACH Is Coming: Are You Ready?

Aug 2006
Herbert Estreicher, Ph.D.

In 2003, the European Commission proposed a major overhaul of European chemicals legislation. The proposal called the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) will have far reaching effects not only on the European chemical industry, but also on non-European companies that ship products into the European Union (EU). Not only will manufacturers, importers and users of industrial chemical products be impacted, but also companies that produce non-industrial chemical products, such as food packaging materials, cosmetic ingredients, and biocide inerts. There is no question that REACH, as proposed, will impose excessive burdens and exaggerated costs on industry and generate an overwhelming bureaucracy. This would stifle innovation and have a major impact on employment and capital investment within the EU and elsewhere.

The REACH proposal is currently under intense discussion in the European Parliament and the Council of Ministers. Although some changes are expected to the text of the Proposal, the broad outline is likely to emerge intact from the EU legislative process. REACH is expected to come into force in the Spring of 2007. Companies will need to expend considerable resources to comply with REACH and advance planning is necessary. Companies should now begin evaluating the impact of REACH on the cost of doing business in the EU in the future.

The REACH SystemThe Four Legs of REACH

REACH is a four-part regulatory system comprised of:

• Registration of most chemicals, both new and old, that are manufactured or imported into the EU in quantities exceeding 1 metric ton. The registration obligation falls on manufacturers and importers, but downstream users will also need to ensure that their specific uses are registered. The amount of information and data needed for registration will depend on the quantities or tonnage of the chemicals with more data needed at higher tonnage levels. Built into the REACH system are provisions for avoiding unnecessary animal testing and for data sharing among registrants. Where new animal testing is needed to support registration, the registrant must first submit a testing proposal to the regulatory authorities. REACH also requires the preparation of a Chemical Safety Report (CSR), essentially a risk assessment report that describes the chemical, its uses, the hazard and exposure potential, and recommends practices for reducing risk and exposure.
• Evaluation of registration dossiers and animal testing proposals by the regulatory authorities, as well as special provisions to allow the call-in of additional data on chemicals of highest concern to the EU regulators.
• Authorization of substances of very high concern, defined as carcinogens, reproductive toxicants, mutagens, persistent and bioaccumulative toxicants, and substances that pose similar problems. The Authorization is user and product specific and depends in part on the availability of lower risk substitutes.
• Restrictions of high risk chemicals or uses where the risks can not adequately be managed.

REACH also establishes an European Chemical Agency (ECA), to be headquartered in Helsinki, Finland, that will administer the regulations with the assistance of the Competent Authorities within the various European Member States. REACH will also establish a classification and labeling inventory of all industrial chemicals, provide new enforcement authority to the Member States, and establish various administrative and legal procedures.

The Status of REACH

The Commission's proposal was simultaneously presented to the European Parliament and the Council of Ministers for a first reading. Following a passionate internal debate, the Parliament adopted on 17 November 2005 a list of amendments and submitted them to the Council. In parallel, the Council held a policy debate, on the basis of a compromise text prepared by the Presidency at the time, the United Kingdom, before unanimously agreeing on 19 December 2005 on a draft text setting out the content of its common position. Following the finalization of the legal text by the secretariat of the Council, the Council has now formally adopted its common position.

The text of the Commission proposal was revised extensively in the course of discussions carried out by the Council and Parliament. In the meantime, the Commission has endorsed the text agreed by the Council in December 2005. During this process, these institutions had frequent contact, which resulted in a substantial convergence of views on several aspects of REACH. Thus, although crucial elements still remain debated, various amendments from the European Parliament's opinion at first reading are reflected either in full, in part or in principle in the Council's common position.

The Council's common position has been adopted on 27 June 2006 and notified to the Parliament for a second reading, where it may be approved as it is. In that case, the legislative text will be adopted in the form of the common position. However, given the remaining disagreements, especially on "Authorization," the Parliament is likely to adopt, within three months, amendments to the common position. This possibility is, however, subject to limitations and the Parliament may only propose amendments that it has already adopted in first reading and only if supported by an absolute majority of its members.

The amended text will then be immediately forwarded to the Council and Commission for their opinion. Within three months, the Council might approve all of the Parliament amendments to the common position, in which case the act is deemed adopted. If not, the Council will inform the Parliament of its disagreement and both institutions shall convene, within six weeks, on a meeting of the Conciliation Committee. That Committee, which gathers representatives of both institutions, will have the task of reconciling the positions in a joint text within six further weeks. Indeed, the final agreement of the Council and Parliament is essential if the text is to be adopted as legislation. However, even if a joint text is agreed by the Conciliation Committee, the Parliament can still reject the proposed legislation by an absolute majority of its members, which is extremely unlikely considering the political impetus behind REACH.

Based on the above, the legislative procedure is now on a defined track. It results from its pre-established stages that the REACH Regulation should be adopted before the end of 2006 or, if a Conciliation Committee shall be convened, in the first quarter of 2007.

This schedule will depend on the possibility for the Council and Parliament to agree on the remaining controversial issues. In any case, REACH is inevitably coming and it is coming very soon. Implementation will be demanding and costly and any company around the world that does business in the EU should therefore make sure that it understands the impact of REACH on its business and take strategic decisions as soon as possible.

The Timetable for REACH Compliance

As currently formulated, Companies will have little time to comply with the core REACH obligations. New chemicals will be subject to the Registration provisions of REACH at 12 months after entry into force. For existing chemicals, there is a pre-registration phase that extends from Months 12 to 18 after entry into force. Companies that fail to pre-register their chemicals during that 6 month window of opportunity will lose the special benefits afforded existing chemicals. The Registration dossiers for pre-registered existing chemicals are due in three phases of 3, 6, and 11 years after entry into force, with high volume and high risk chemicals required to be registered first. Companies that manufacture or import substances in the first category will need to organize or join consortia or justify a stand alone registration. The CSRs will need to be drafted as part of the Registration process. REACH also envisions the creation of a candidate list of substances of very high concern that will trigger obligations for article producers and forms the basis for nominating substances to be subject to use authorizations. The candidate list will be developed within 2 years after entry in force. Obviously, companies that have an interest in substances that may be listed will need to take proactive measures to defend their products.