This is the first in a four-part series on compliance with the European Union's REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) regulations, which took force June 1, 2007. Other columns will cover the identification of Substances of Very High Concern and the path leading to authorization, the authorization and restriction processes, and current issues in Substance Information Exchange Forums and consortia of particular relevance to the plastics industry.
(March 23, 2009) — Few companies planned beyond pre-registration. However, the next steps to ensure compliance under REACH are more complex and require not only technical skills but also legal advice, supply-chain management and adjustments in logistics. Compliance can also engender financial consequences that need to be carefully managed.
First, some reminders:
* Each manufacturer or importer of certain substances manufactured in, or imported into, the European Union in volumes — 1 tonne, alone, in preparations (formulations) or contained in finished products (articles) and intended to be released under normal or reasonably foreseeable conditions of use — must register that substance with the European Chemicals Agency (ECHA).
* Second, ECHA must be notified and certain specific information provided for each substance in an article meeting certain criteria and classified as Substances of Very High Concern (SVHC) included in the candidate list of substances subject to authorization.
* Finally, even substances in smaller quantities than 1 tonne may be subject to obligations under REACH, including those obligations concerning restrictions, authorization and safety data sheets (SDS).
REACH requires supply-chain communications among substance manufacturers, formulators, article producers, importers, distributors and downstream users both within and outside of the EU.
Suppliers of articles containing SVHCs that are on the candidate list must forward information on these substances, if the substances are contained above a concentration of 0.1 percent (weight by weight) to the industrial or professional user (or distributor) being supplied with the article. If a consumer requests such information, the supplier must provide the same information within 45 days of receiving the request.
In today's markets, companies must deal not only with formal regulatory requirements, but must also protect their markets by adequate and appropriate communications throughout the supply chain. Our next article will focus on product defense issues.
All competitors having pre-registered a phase-in substance need to organize themselves to provide or generate data required for registration. With Substance Information Exchange Forums (SIEF), a company might play a leading role when a substance is of great commercial value. With less-valuable substances, a more passive role might be appropriate. It will be important to assess the time and financial investment relative to the profile adopted.
The immediate priority during the current pre-SIEF period will be for all the pre-registrants for each substance to agree on substance sameness. This means agreeing that the substance has the same chemical identity and is thus sufficiently similar to be part of the same joint registration.
Cooperation with competitors in a SIEF is mandatory for phase-in substance pre-registrants. In contrast, participation in a consortium is voluntary, motivated by the mutual benefit of members. A consortium's duration and its relevant SIEF are not necessarily the same; the consortium may extend beyond the life of the SIEF, post-June 2018, or vice versa.
Companies need to analyze the business value of creating or joining a consortium and evaluate the financial demands. Companies will also need to ensure protection of their own intellectual property as data sharing mechanisms are implemented.
Legal agreements will need to be drafted concerning, among other things, confidentiality, data licensing, cost-sharing, lead-registrant obligations and work with contract labs.
Competition, (antitrust) compliance is an area that firms must examine in the context of meetings and appropriate behavior of employees. Professional guidance will be required to handle such areas as data evaluation and cost-sharing of existing data, or data to be generated by the group.
Data management will require a secure, user-friendly information-technology system for management of a company's complete compliance activities.
As this brief analysis illustrates, the phase after pre-registration is infinitely more complex than the first phase. Continued market access is at stake — not only from a regulatory perspective but also in terms of the broader commercial environment.
Nancy Russotto, former executive director of Brussels, Belgium-based PlasticsEurope, today is a Brussels-based European affairs adviser for Steptoe & Johnson LLP, an international law firm.