Today the chemical industry and companies using chemical products are struggling to cope with the Registration, Evaluation and Authorization of Chemicals (REACH) legislation of the European Union (EU). Most experts regard REACH as the strictest law to date regulating chemical substances. Under REACH, all chemicals manufactured or brought into the EU in a quantity greater than one metric ton per year must be registered with the European Chemicals Agency (ECHA), Helsinki, Finland, regardless whether they are well established or completely new in the market.
To make things even more complex, the amount of data needed for registration depends upon the quantity of the chemical to be manufactured or imported. Additionally, the firm must specify usage and exposure scenarios for the material. This means that a company must register its substances with a maximum tonnage per year as well as define their intended uses.
Over the past few years, organizations affected by REACH have put a lot of effort into preparing for the regulation. The first hurdle was the pre-registration phase that ended on November 30, 2008. Pre-registration enabled companies to use a phase-in period before complete registration information had to be provided.
Whether the industry has met its pre-registration targets will only be known when enforcement begins. Nevertheless, the main workload of actual data gathering, data generation and registration of substances really starts now. Staying in compliance will be no less demanding a task.
Therefore, REACH requires a new approach to environmental compliance management (ECM), demanding enterprise-wide business process integration as well as up- and downstream integration of the supply chain.
Information technology (IT) is the enabler of these concepts. Providing an adequate IT infrastructure substantially impacts a firm’s ability to effectively meet the REACH compliance challenge.
The IT infrastructure must allow the company to efficiently manage the REACH registration process and implement a new integrated approach to environmental compliance. While a single REACH IT template can’t address the needs of all chemical companies because their requirements, existing infrastructure and resources vary greatly, the solutions we’ll discuss should provide a rough guideline for the time and effort required for implementation.
A New Approach
Compared to existing global chemical inventory regulations, REACH takes a much more holistic approach to environmental compliance. Substances’ registration with ECHA in Helsinki isn’t a one-off activity. Instead, REACH compliance must be continuously confirmed for all material movements up and down the supply chain. Therefore, a company must take a fresh look at how it manages environmental compliance. REACH must be met by a new comprehensive strategy, new processes and adequate ECM systems. Indeed, it demands fundamental changes in existing organizational models and modes of cooperation — both internally and across company borders.
So far due to the rather technical nature of environmental regulations, dedicated environmental, health and safety (EH&S) professionals often in separate corporate units handle compliance. Their typical work is event oriented, not transactional, i.e., integrated into logistical operations. From a company perspective, EH&S functions usually aren’t part of the supply chain organization and EH&S information systems rarely communicate with logistical execution systems.