The EU Chemicals Review: How to Deal With the "Burden of the Past"?

Jean-Philippe Montfort
Keller and Heckman LLP
Brussels, Belgium

Introduction
European Union ("EU") legislation on chemicals is undergoing a major review. This process, initiated by the European Council in Chester in April 1998, has yet to lead to new legislative proposals. However, the intentions of the EU regulators are already known: industry will face increased responsibility for ensuring that the production and use of chemicals conforms to high standards of protection of human health and the environment. The final orientation of the reform will be known by the end of the year, when the Commission publishes its "white paper" on EU chemicals policy.

The EU Chemicals Review
The declared aim of the so-called "EU Chemicals Review" (the "Review") is "to develop a new, integrated and coherent chemicals policy adequately reflecting the precautionary principle and the principle of sustainability and specifying the obligations incumbent on the parties involved." It is based on the finding that thirty years of EU chemicals policy allowed industry to operate within a common European market but failed to ensure that only safe chemicals are being produced and marketed within the EU. In particular, the Review aims at streamlining and simplifying the four major EU legislative instruments in place on chemicals, namely, Directive 67/548/EEC on "dangerous substances," Directive 88/379/EEC on "dangerous preparations," Regulation 793/93/EC on "existing substances," and Directive 76/769/EEC on the "marketing and use" of certain dangerous chemicals, as amended.

The purpose of this article is to address one aspect of EU chemicals policy that is at the center of the Review: the declared intention of the European Commission to deal with the "burden of the past," namely the tens of thousands of chemical substances that have been placed on the EU market prior to 1981 without pre-market governmental control, and that can still be marketed in the EU today, subject only to labeling and packaging requirements. To understand how the Commission intends to address this challenge and what is at stake for industry, it is necessary to review existing EU legislation on "dangerous substances" and "existing substances."

The Dangerous Substances Directive: a "Dual System" for "New" and "Existing" Chemicals Substances
The "Dangerous Substances Directive," Directive 67/548/EEC ("Directive"), was adopted in 1967 to provide a harmonized system for the classification, packaging and labeling of dangerous substances. It has been amended eight times and its annexes are regularly modified. As it stands today, the Directive organizes the classification, packaging and labeling of dangerous substances and requires competent authorities of a Member State to be notified of "new" chemical substances prior to their being placed on the European market. Notably, the Directive requires the persons responsible for placing chemical substances on the EU market to classify them based on their intrinsic hazardous properties (e.g., flammability, toxicity, carcinogenicity) and to label them accordingly, indicating the risks involved and the safety measures to be taken when using the substance. The classification of a chemical substance may also have repercussions on its use in that classification, serving as a basis for regulators to adopt restrictions on the marketing and use of dangerous chemicals.

The Sixth Amendment to the Directive organized the reporting of "existing" substances (i.e., those on the market on 18 September 1981) and their listing on the European Inventory of Existing Commercial Chemical Substances ("EINECS") as well as the requirement for any manufacturer wishing to market a "new" substance (i.e., a substance not reportable for listing on EINECS) to notify the national competent authorities prior to the marketing of that substance in the EU. The notification requirements currently in place are specified in the Seventh Amendment (Directive 92/32/EEC) to the Directive. It organizes the submission of a technical dossier with extensive data on the production, use, physico-chemical, toxicological and ecological properties and adverse effects of the substance, and a proposal for its classification and labeling. The data requirements vary depending on the volume of the substance to be placed on the EU market. By contrast, in 1981, data need neither be collected nor reported for the listing of "existing" chemical substances on EINECS. Today, these substances can still be marketed in the EU without required toxicological testing or pre-market notification, subject only to their compliance with the provisions on classification and labeling of the Directive. A "dual system" is therefore in place in the EU today with very different requirements for "new" and "existing" chemical substances.

The Operational Failure of the Existing Substances Regulation
In March 1993, however, the EU adopted Regulation 793/93/EEC ("Regulation") regarding the evaluation and control of the risks of existing substances, motivated by concerns over the marketing of a great number of substances (the EINECS contains 100,106 substances, a majority of which is believed to be currently marketed in the EU) for which little data are available. The Regulation organized the collection of data starting with high volume existing chemicals and the assessment of the risks they pose, so that appropriate measures can be taken, if necessary, to regulate their protection and use. The Regulation’s basic principle is that the evaluation and control of hazardous chemicals must be based on an assessment of their actual risk to human health and the environment rather than solely on their intrinsic hazardous properties.

The data collection exercise organized by the Regulation was completed in 1995. Five years later, however, the risk assessment process has been completed for only two dozen chemicals out of the 100,000+ EINECS listed substances. This failure is certainly the principal justification for the EU Chemicals Review. As recognized by both EU regulators and industry, a number of factors explain the operational weaknesses of the Regulation, including the complexity of the procedure in place that requires the establishment of priority lists, extensive data collection, and detailed review by the technical experts of EU competent authorities. Also, the comprehensiveness of the risk assessment process organized by the Regulation (a very ambitious program as compared to the assessment programs in place in other parts of the world), is being questioned.

Addressing the "Burden of the Past"
In its initial review of the operation of the EU legislation on chemicals, as published in November 1998, the Commission identified the need to restructure the Dangerous Substances Directive to give it additional clarity and transparency and to streamline and simplify some of its provisions. It also declared its intention to review the provisions of the Directive on the notification of new substances to find the "right balance" between ensuring the safety of consumers and users of chemicals and the need to encourage development of new and safer substances, which could replace more toxic substances.

With respect to the latter, the Commission’s 1998 report explored several options to expedite the ongoing assessment of substances on the priority list of substances for review under Regulation 793/93/EEC and to launch the assessment of other existing chemicals through mechanisms that would shift the principal onus of the "burden of the past" from the regulator to industry. The Commission has pursued its work in that direction and it is understood that it is considering the launching of a fundamentally new regulatory system whereby industry would be provided with a fixed time period (e.g., ten to twenty years) in which to collect data on "existing substances" and "notify" authorities, in a process similar to that currently in place for "new" chemical substances. Hence, as is often presented, the Commission is seeking to abolish the distinction between "new" and "existing" chemicals.

Obviously, the requirement to "notify" data similar to that required for "new" substances on all 100,000 existing substances would have a considerable impact on the chemicals industry. By all counts, ten years would not be enough for that purpose, when considering that only 2,400 "new" substances have been notified since 1981 (about 100 per year). Hence, discussion continues with respect to the threshold quantities of substances marketed in the EU that will trigger data requirements (e.g., 1 ton, 10 tons, etc.), the type of data that will have to be generated, and the system that will be set up for its reporting and collection – all elements that will directly impact on the scope (and therefore on the cost) of the review of existing substances.

Also, many questions remain as to the possible shape of the new system. For example, if the Commission seriously intends to abolish the current "dual" system to regulate "new" and "existing" substances, does that mean that it intends to force every manufacturer and importer of an existing substance to notify data to authorities, as the system provides today for new substances. Or, rather, does it intend to permit any subsequent user of a substance already notified to market it freely with no notification obligation, as is possible today for EINECS-listed substances? Also, if new tonnage triggers are defined for the notification of existing substances, are they going to also apply for new substances, which would seriously facilitate the introduction of new substances in the EU?

The respective roles of the regulator and industry in the new system are also at the center of the debate. The Commission’s Directorate General ("DG") Environment favors a review of all collected data by a EU-centralized body, built on the current European Chemicals Bureau, while DG Enterprise favors a system that builds on industry’s responsibility to review the data collected and take initial risk management measures.

Another fundamental aspect of this debate should be its international dimension. Indeed, most of the "existing" chemicals that are currently marketed in the EU are also marketed in the U.S., Japan, Canada and other countries that are EU trade partners. These countries have the same or similar safety concerns. It would therefore make a great deal of sense that the Commission actively coordinate its action on the subject with that of its trading partners. In its review of the EU legislative instruments in place on chemicals, the Commission did note that the restructuring of the EU chemicals legislation should keep pace with the relevant international initiatives, but little has been done so far to find an international solution.

To maintain its competitiveness, European industry is likely to insist that the Commission fully integrate the "international dimension" into its Chemicals Review. In the meantime, however, whether the "burden of the past" becomes an international debate or not, the above demonstrates that it will force a substantial review of the EU legislation on chemicals and have far reaching consequences on chemical manufacturers and users.

Editor’s Note: Jean-Philippe Montfort is chair of the Chemicals Working Group

of the Environment Subcommittee of the EU Committee of the American Chamber of Commerce in Brussels, Belgium.