EU Chemicals Policy Review - An Update

Ursula Schliessner
Oppenheimer Wolff & Donnelly LLP

This article provides an update on the on-going work on the review of European Union (EU) legislation concerning chemicals, following the issuance of the White Paper on a Strategy for a Future Chemicals Policy (the "White Paper") last year. See COM (2001) 88 Final. For a summary of the White Paper, please refer Jean-Philippe Montfort's article, in the November 2000 issue of the International Environmental Law Committee Newsletter.

Reactions to the White Paper
The White Paper was forwarded to both the European Parliament (EP) and Council of Ministers. The EP adopted a Resolution Number A5-0356/2001 on Nov. 15, 2001, supporting the Commission's plan to establish a single system for the registration, evaluation and authorization of both, existing and new, chemicals replacing the existing regulatory regime.

The EP rejected the expansion of the range of substances subject to the authorization scheme (currently restricted to substances that are carcinogenic, mutagenic, toxic to reproduction (CMR) categories 1 and 2 and persistent organic pollutants (POPs)) but requested that the Commission consider whether the new REACH system should be expanded to selected other substances, e.g., PBTs (persistent, bioaccumulative and toxic chemicals).

As to the volume threshold, the EP requested that all chemicals produced in, or imported into, the EU as either substances, preparations, or in products above 1 ton be registered in the new system. For chemicals above 1 ton that are exclusively used in research and development or exclusively used as intermediates in manufacturing within closed systems, simplified registration should be envisaged. However, the EP demanded registration, irrespective of volume, of information for all chemicals (physical and chemical properties, persistence, bioaccumulation, acute toxicity, acute aquatic toxicity, corrosive and irritant effect, Ames test, intended uses). Also the EP qualified its threshold in Point 27 of the Resolution by stating that while tonnage thresholds based on production or import volumes by a single producer or importer are acceptable as a starting point for the future system, the aggregate tonnage has to be calculated. In all cases where the aggregate tonnage exceeds the next tonnage threshold for a single producer or importer, the data requirements for that threshold should apply. In order to prioritize the evaluation of substances, the EP requested that priority may be assigned by means of rapid and cost-effective screening methods, naming QSAR, Read Across and Common Sense, using existing data and information on user patterns, production volumes and potential exposure.

The EP also made a number of other significant demands. The EP clarified that failure to register a substance or incomplete or incorrect registration should render the production or import of the substance, preparation or article, in which it is found, illegal, coupled with dissuasive sanctions. The EP insisted that authorization of a particularly hazardous substance, on which there will ultimately be a complete ban, should be granted only as an absolute exception for a short, temporary period only where there is documentation to show that development work on alternatives is in progress. Most importantly, the EP stressed that the so-called Substitution Principle (replacement of chemicals with safer alternatives) should apply to all chemicals of concern, and not only to those that are subject to authorization. Simultaneously, the Commission was requested to come forward with a clear definition of the Substitution Principle.

The Council of Ministers (Council) adopted a Resolution on June 7, 2001. In its Conclusions, the Council confirmed the Commission's approach - that no chemical should be marketed in the EU if the information required under the REACH system is not provided by industry within the reasonable time periods, should be adopted. As to the issue of chemicals in products, the Council controversially declared that all uses of chemicals of concern in products must be covered by the new system. In this regard, the Commission should undertake further studies and present proposals as to how the aforementioned principle can be applied to products produced outside the EU.

The Council further requested that manufacturers and downstream users should develop an effective communication between producers within the production chain based on a shared commitment to safe use of their products. Access of information, including to the public, must be improved. In particular, there should be a duty requiring manufacturers, downstream users and to provide comprehensive information on the content of chemicals in their products and their hazards and risks, and to label products appropriately.

Like the EP, the Council favored a prioritization, based on the level of concern, in order to address the enormous workload ahead. Concerning thresholds, the Council demanded the Commission study the case for introducing within the REACH system a simple register including substances produced in volumes below one ton, with the aim of allowing, if possible, prioritization of substances of concern. The Council further requested that the Commission develop procedures that can be used both by authorities and by the industry to simplify the identification of the relevant testing strategies, including the use of decision trees and specific screening methods of all chemicals, such as validated computer modeling.

Very importantly, the Council, more strongly than the EP, demanded that PBTs and VPVBs (very persistent, very bioaccumulative) be added to the groups of substances of very high concern that will be subject to authorization as soon as the necessary criteria for their identification have been established. Likewise, the Council envisaged the addition of known endocrine disrupters to the authorization system once these methods and criteria are established. Moreover, the Council even demanded to study whether other substances with properties of concern, such as sensitizers and chronic toxic substances should be included into the authorization system. Finally, the Council confirmed that all authorizations having an impact on the Internal Market should be decided at Community level.

Industry gave a mixed response to the White Paper, raising concerns such as the issues of intermediates, confidentiality of data, protection of sensitive business information, thresholds, rights and obligations of secondary notifiers, prioritization of substances, details of risk assessment, down-stream user problems, inclusion or exclusion of products, trade barriers, and in general, the workability of the system and the enormous workload ahead.

Environmental NGOs voiced concerns that the REACH system as envisaged by the Commission was far too lenient, that low volume substances should be included, the authorization system be expanded, liability provisions be established, the substitution principle and precautionary principle rigorously applied across the board, and products included in the REACH system.

Work Ahead
The European Commission, with DG Enterprise as "chef-de-file" this time, has for the last year held extensive consultations with all players and has throughout this exercise kept a genuinely open attitude, asking for detailed input on a variety of issues. A lot of its work had to focus on explaining and clarifying its approach, as the issues involved are rather complicated and interdependent. Further studies have been engaged, in particular on the economic aspects and impacts of the REACH system. A final stakeholder meeting, focusing on the conclusions of the economic study, will be held on May 21, 2002.

As of the end of April, the Commission expected to begin the drafting of the actual legislative proposals. Given the complicated nature of the topic, interservice-consultation and additional discussions with the Member States, realistically, adoption of the proposals cannot be expected before the end of 2002 at the earliest.

As to the specific points of concerns, the following might emerge in the legislative proposals:

• A new Community agency will be set up that will deal with the technical part of the authorization (evaluation of risk assessments submitted, compilation and dissemination of information, etc.) procedure. Its tasks will be comparable to the EMEA (European Agency for the evaluation of medicinal products) and the recently established European Food Authority. Due to the shortcomings of the EC Treaty, any decision-making will have to remain with the European Commission and possibly Council and EP.
• The authorization and registration of substances will likely be regulated in the form of a Regulation (directly applicable) rather than in the form of a Directive (directed to Member States and requiring implementation into the national law of the EU Member States).
• REACH will be a phased system, dealing first with substances of high concern or produced in high volumes. The prioritization criteria will likely be very disputed (see the discussion for a list of priority substances under the Water Framework Directive).
• It is likely that the Commission will want to keep/incorporate existing Directive 76/769 on marketing and use restrictions for dangerous substances and preparations in some format and will allow for its application to additional substances of concern. This seems the only practicable way to regulate substances in products. For the rest, REACH will not be dealing with products. In order to be workable, the system for introduction of new substance restrictions in Directive 76/769 will have to be improved and Directive 76/769, in line with the general approach, should be restructured to become a Regulation.
• There is a huge debate going on as to whether there should be some scope for authorizations/registrations at national level, e.g., for substances only marketed in one Member State, or those below a certain tonnage. The outcome of this debate is completely open.
• It is likely that the authorization procedure will initially be applicable to CMRs 1 and 2, and POPs only.
• As to testing and data requirements, it would be sensible if the Commission were to propose decision-trees setting out a tiered approach of the amount of data to be provided and testing to be conducted. This tiered approach would be organized on the basis of the danger category of the substance, its intended uses, and the volumes produced/imported.
• There will be a pre-registration phase allowing for manufacturers and/or downstream users to team up and decide on joint registrations or joint submission of risk assessments.
• The system will be use rather than user-specific, providing, however, for the obligation that all producers producing/importing a substance have to be registered. Secondary notifiers will be able to benefit from the data submitted by the first notifier against the payment of a fee, the latter likely to be determined according to a schedule by the European Commission.

Completely open points at this stage are the division of responsibilities between down-stream users and chemical manufacturers and the detailed regulation of the protection of confidential business information and intellectual property.