EU Regulation Forces Companies to Manage Chemical Risks

Kenneth Bergroth & Theresa Repaso-Subang for The Lawyers Weekly

January 22, 2010

Lawyers advising companies exporting to European Union (EU) countries need to know about the upcoming deadlines for complying with the EU's new chemicals regulation known as REACH (Registration, Evaluation, Authorization and Restriction of Chemicals).

REACH is intended to provide enhanced protection to human health and the environment by making industry responsible for assessing and managing the risks posed by chemicals and providing safety information to users along the supply chain. All manufacturers and importers of chemicals in Europe must identify and manage risks linked to the substances they manufacture and market.

For substances manufactured or imported in quantities of one tonne or more per year per legal entity, manufacturers and importers need to demonstrate that they have appropriately identified and managed those risks by means of a registration dossier, which must be submitted to the European Chemicals Agency (ECHA). In parallel, the EU can take additional measures on highly dangerous substances, where there is a need for complementing action.

This means that all suppliers to EU countries, including companies exporting to the EU, will have to provide documentation and support to the European registrant on the effects of their products, in each use for which they are intended.

The REACH regulation, which came into force on June 1, 2007, included a pre-registration deadline of Dec. 1, 2008, which allowed companies some additional time to prepare the final registration dossier to be submitted before the deadline by which their product would need to be registered. Companies that missed that pre-registration deadline are now forced to submit a full dossier before they can continue their business in Europe. REACH requirements are complex and extensive testing of toxicity and other effects is required.

Working with competitors

Fortunately, companies don't have to do it alone. REACH allows for the formation of consortia, as formally established groups of companies that have pre-registered the same chemical substance. These consortia work tightly together toward the final registration and are also part of the whole group of pre-registrants, the so-called Substance Information Exchange Forum (SIEF). Many of the chemical companies that normally compete with each other will now work together with a joint registration as their goal.

The REACH legislation stipulates that no toxicity testing on vertebrates should be duplicated. As a general rule, every pre-registered phase-in substance has its own SIEF.

Early in the REACH implementation process, companies that normally compete with each other joined forces to carry out research on the effects that their common substance have on the environment and on human health. In this way, groups of companies that have determined that they produce the same substance share the cost of research related to the effects of that particular substance.

In most cases, the membership fees they pay to the SIEF are based on the tonnage per year they produce or import into the EU. Companies in the SIEF nominate one of their member companies as lead registrant, which will take responsibility for making sure that the research is done correctly, and which will submit the completed joint registration dossier.

The lead registrant collects an administrative fee from the other SIEF members. This fee could be seen as a down payment and part of the final costs to be paid in order to legally refer to the common registration.

The SIEF is intended to facilitate data sharing for the purposes of registration, and for member companies to agree on the joint submission of data related to the chemical safety assessment and the chemical safety report as well as the classification and labeling of the substance concerned. Within some SIEFs, member companies have formed several groups or consortia, sometimes because of the alliances and relationships among chemical producers.

For some substances, there may be SIEF groups cooperating, but no lead registrant has stepped forward to take the wheel and start the registration work, with the challenging testing process. This can provide a big manufacturer an opportunity to make sure that the registration process is initiated. The companies sharing the work for a common registration may contribute with data they own and benefit from their past investments in testing the human health and environmental effects of the substance in question.

Companies based outside of the EU cannot be SIEF members, as they cannot register a substance under REACH. However, they can work through the entity that imports their product into the EU or through a designated representative that manages their obligations under REACH.

Complying with REACH is not a short-term endeavour. New products and new uses of existing products are always developing, so for companies exporting to the EU, developing skills in meeting REACH requirements should become a major area of competitive advantage.

Kenneth Bergroth heads the REACH compliance initiative of the global environmental consulting firm Golder Associates, and is based in the company's Helsinki office. Theresa Repaso-Subang is a board-certified toxicologist in the Mississauga, Ont. office of Golder Associates Ltd. by can help you find a Canadian Environmental Lawyer.
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