EU's New Chemical Policy Will Hurt U.S. Competitiveness

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On May 7, 2003, the European Commission (EC) issued draft regulations for its New Chemical Policy (NCP). An eight-week comment period, which ended on July 10, attracted responses from chemical manufacturers around the world.

    The draft regulations, based on policies that the EU outlined two years ago (CP, January, p. 7) would change, fundamentally, the basis for regulating chemicals. Traditionally, the burden of proof for demonstrating product safety has fallen upon the government. Under the NCP, the onus would shift to suppliers and downstream users.

    NCP rests upon a hazard-based chemicals review process. As drafted, the regulations could be exceedingly burdensome, impractical and costly to implement. Not only could they result in use-specific authorizations on certain chemicals, but the current draft regulations would:

  • Mandate expensive testing, without providing for data protection.
  • Pressure manufacturers to reformulate products, particularly those containing chemicals that are believed to pose high risk.
  • Lead to more intense scrutiny of the chemicals used in some consumer products.
  • Result in chemical substitutions or deselection.
  • Severely hinder the ability of chemical manufacturers outside the EU to export to that market.

    The NCP would define "new" chemicals in the European Union (EU) as those that were not sold commercially as of September 1981. Information about the production, use, properties and potential adverse effects of these chemicals would have to be submitted to regulatory authorities for approval prior to their marketing.

    Existing chemicals would not need pre-market approval. However, the EU would require an initial risk assessment of the more-than-100,000 existing chemicals now in use, with the goal of identifying those substances that pose the greatest environmental or health risks.

    NCP's Genesis

    The NCP stems from a white paper that the EU issued in 2001, outlining a system that would subject both existing and new chemicals to the same review, under one system. Called REACH (for the Registration, Evaluation and Authorization of Chemicals), the system would set testing requirements depending on the properties, uses, exposure and volumes of chemicals produced or imported.

    The REACH system consists of basic registration information for approximately 30,000 substances, namely most "new" chemicals, and all existing and new substances that are produced in excess of one tonne (1.1 tons) per year. Registration information would be evaluated for all substances produced in volumes exceeding 100 tonnes. However, for substances deemed to be hazardous, evaluations would be required, even if the chemicals were produced in lower volumes. In addition, member states would determine, on a case-by-case basis, how to authorize substances of "very high concern," a category that would include suspected carcinogens, mutagens or reproductive toxicants (CMRs), persistent organic pollutants (POPs), and the broad category of possible endocrine disruptors.

    Draft Regulations

    Currently, the NCP draft regulations closely follow the framework outlined in REACH. A duty of care would be imposed on all manufacturers, importers and downstream users, excluding distributors and consumers of chemical substances. They'd be required to manufacture and use the chemicals in a way that avoids reasonably foreseeable adverse effects on human health and the environment.

    Safety Assessments Required

    The burden would be on the manufacturer and downstream users to perform safety assessments, and to mitigate any risk identified in those assessments. Under the proposal, downstream users would rely upon assessments performed by their suppliers, and expand on them to address use-specific applications that their suppliers had not anticipated or that are unique to their applications.

The proposed regulations identify a series of total and partial exemptions. Total exemptions would apply to:

  • Substances in preparations, i.e., a mixture or solution composed of two or more substances.
  • Articles in transit and subject to customs inspection.
  • Intermediates used in closed-loop syntheses that are never stored.
  • Certain radioactive materials.
  • Certain genetically modified organisms.
  • High-molecular-weight polymers.
  • Certain substances used exclusively in food additives, flavorings, or in animal feeds or nutrition.
  • Other chemicals specifically listed in the proposed regulations.

A limited exemption from regulation would apply to:

  • Substances manufactured for certain R&D activities.
  • Certain polymers used in the production of plastic materials, detergents and a variety of other products

    In general, the exemptions would be narrowly defined. However, it is clear that broad categories of chemicals and uses would not be exempt.

    Critics have repeatedly expressed major concerns with the current draft regulations. Although the EC's goal is to address the need for more data on the potential health and exposure effects of existing chemicals, the draft regulations are not the best solution. The problems?

  • The testing resources required to meet the program's ambitious goals simply do not exist.
  • Even if chemical companies could generate the data required, the sheer amount of data would overwhelm the government's capacity to review and manage it.

    A European FIFRA

    Second, the concept of the government imposing use authorizations is troubling. As drafted, the regulations would resemble the U.S. FIFRA (Federal Insecticide, Fungicide, and Rodenticide Act), imposing a product registration scheme that depends heavily on use-specific hazard and exposure data.

    Some of the companies that would be required to gather the information -- smaller downstream users and specialty chemical producers -- are ill-suited to prepare such data. An almost certain consequence would be product substitution.

    Third, the regulations would have a significant impact on trade between the EU and the rest of the world. In fact, many critics have argued that the draft regulations, in their current form, would violate provisions of the World Trade Organization.

    Finally, many companies are concerned that the regulations have not provided for data protection. As anyone who has worked with FIFRA knows, generating toxicology and exposure data is costly and time consuming. Protecting that investment is not easy, and the draft regulations do not clearly outline any process for doing that. It is unlikely that the whole issue of data-protection will be clarified soon.

    Despite these problems, legislation based on the current draft regulations is likely to be enacted. The question is when. Due to the imminent addition of new member states to the EU, many believe the regulations will not be reviewed, at least not in earnest, until 2004 or later, thus further delaying the process that will result in final legislation.

    However, despite its major flaws, the NCP is likely to prevail, and chemical producers, processors and distributors exporting to the EU should watch developments closely and prepare in advance. For more information, please see europa.eu.int/comm/enterprise/chemicals/chempol/whitepaper/REACH.htm.

    Lynn L. Bergeson is a founding shareholder of Bergeson & Campbell, P.C., a Washington, D.C. law firm concentrating on industrial agricultural chemical, medical device, and diagnostic product approval and regulation, product defense, and associated business issues. The views expressed herein are solely those of the author.

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