It's Here ... and It Ain't Pretty

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On May 6, 2003, the European Commission (EC), which "embodies and upholds the general interest of the [European] Union [EU]," issued its long-awaited draft legislation to implement its 2001 Strategy for a New Chemicals Policy (white paper). The proposed regulations are available at http://europa.eu.int/comm/environment/chemicals/whitepaper.htm. The EC said it would accept public comment on the proposed legislation until July 10, 2003.

White paper review

EC's white paper proposed a radical and far-reaching new framework for regulating existing chemicals in the EU that largely would mirror the way new chemical substances now are regulated.

The proposed Registration, Evaluation and Authorization of CHemicals (REACH) system consists of three core elements. First, it calls for the registration of basic information for approximately 30,000 substances (all existing and new substances exceeding a production volume of 1 ton). Second, it calls for evaluation of registration information for all substances exceeding a production volume of 100 tons and, in cases of concern, for substances of a lesser tonnage. Finally, it requires use-specific authorization of carcinogens, mutagens or reproductive toxicants (CMRs) and persistent organic pollutants (POPs). The white paper proposes that the system be phased in by 2020.

Many chemical producers and users have expressed great concern with the core elements of the white paper. Cost is one issue. The program is expected to cost between $5.5 billion and $9.6 billion to implement.

Many people believe the REACH program would impose serious trade barriers on countries importing into EU member countries. Many people believe the approach is flawed in that it is hazard-based, not risk-based. Therefore, certain chemicals could be targeted needlessly for excessive testing ," and thus risk de-selection. Decisions could be based purely on hazard information regardless of the risk ," or lack thereof ," the chemical poses when it is used as intended in particular applications.

Draft legislation concerns

Under the May 2003 draft legislation, 30,000 chemicals would need to be registered, and 5,000 of these chemicals would require extensive testing. If enacted, the legislation would replace approximately 40 current directives or regulations.

A new agency, the European Chemicals Agency, would be established to manage the REACH system. The Council of Ministers and the European Parliament must approve the legislation; the approval process is expected to take at least two years.

The draft chemicals legislation appears to mirror the white paper; thus, many of the same problems are apparent. The draft legislation continues, for example, to reflect a principally hazard-based approach to chemical regulation.

As currently written, the regulations are inflexible and mandate extensive testing based on only chemical hazard information, despite the absence of any meaningful risk when the chemical is used as intended. The draft legislation contains requirements that, if adopted, would favor EU producers over non-EU producers, which many industry representatives claim would lead to World Trade Organization (WTO) violations.

Other competitive issues also are cause for concern. For example, because the system is based on certain volume-based thresholds for testing, the draft regulations could potentially force exporters of small quantities of chemicals to bear the cost of significantly increased ," and expensive ," testing. The competitive implications for downstream chemical users also could be significant.

Speak up now

What is going on in Europe is by no means a distant, esoteric debate. In a few short years, the white paper we have all heard so much about could become a reality, and its enactment could have commercially negative impacts on U.S. chemical exporters and others.

Because the world economy is so integrated ," and the sharing of information is so immediate ," chemical testing in Europe would have ripple effects in the United States and elsewhere. Product de-selection, commercial raw material disruption, tort liability and adverse public relations are only a few of the immediate implications. U.S. chemical manufacturers and users, therefore, should monitor the EU chemical legislation closely and comment on it as appropriate. In addition, global chemical manufacturers should assess their chemical product lines. Downstream chemical users should be appreciative of the not-too-distant impact the EU chemicals legislation will have on the availability and projected costs of the chemicals on which their product lines now depend.

Bergeson is a founding shareholder of Bergeson & Campbell, P.C., a Washington, D.C.-based law firm concentrating on industrial and agricultural chemical, medical device and diagnostic product approval and regulation; product defense; and associated business issues. Contact her at lbergeson@lawbc.com. The views expressed herein are solely those of the author.

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