REACH Review Published

So, after 5 years of REACH regulation, what is the public perception of chemicals in Europe?

The European Commission ran a “Eurobarometer” survey on the public perception of chemicals. The target sample size in most countries was 1,000 interviews. In total, 25,557 interviews were conducted.

According to the survey, citizens are generally well aware of the wide application of chemicals. 61% of Europeans say that chemicals on the EU market today are safer than 10 years ago. Furthermore, 69% of Europeans consider chemicals unavoidable for their daily life and 75% relate them to industrial innovations.

More than half of the respondents agree that chemicals can help reduce the use of natural resources. Nevertheless, only 43% of respondents agree that chemicals can contribute to a better environment. In general, Europeans are split on who’s ensuring the safety of chemical substances, thinking it’s either industry who’s responsible or public authorities. Come to think of it, it’s fair to say many insiders are confused about that too!

Chemicals in Europe are safer under REACH. All this because on Feb. 5, ECHA released the published version of the 5-Year REACH Review.

ECHA is saying that the use of chemicals in Europe has become considerably safer since the REACH regulation entered into force. More readily available information about chemical substances on the market and better targeted risk management measures mean that risks from substances registered under REACH have significantly decreased. This trend is expected to continue as industry continues to work towards finding substitutes for the most hazardous chemicals.

Five years after REACH’s entry into force, companies have now registered 30,601 files with the European Chemicals Agency (ECHA), describing the uses and properties of 7,884 chemical substances manufactured or placed on the market.

Public opinion is still warm towards REACH and its effects, according to that Eurobarometer survey published today, mentioned above.

The REACH 5-Year Review upshot. The review concludes that while some adjustments are needed, no major overhaul is required. The main points to consider are as follows:

  1. The report makes recommendations to improve REACH implementation. These include improving the quality of registration dossiers, enhancing intelligent safety data sheet management as a central risk mitigation tool, and addressing issues related to cost sharing within Substance Information Exchange Forums (SIEFs).
  2. The report calls strongly on industry to improve the quality of dossiers submitted. Based on evidence gathered by ECHA relating to the identification of substances and determination of “sameness,” the Commission services will consider options to improve the situation, including legal measures.
  3. The Commission rules out any dramatic changes to the regulation of nanomaterials in the EU in 2013.
  4. There is insufficient information to decide now if certain types of polymers should be registered so no action is expected in 2013.
  5. There are no major overlaps with other EU legislation.
  6. Considerable  efforts to develop alternative methods to animal testing have been made and will continue:  since 2007, the Commission has made available € 330 million to fund research in this area.
  7. Enforcement could be improved. As this is the responsibility of the Member States, the report recommends that Member States reinforce coordination amongst them. See previous blog post on REACH penalties.
  8. Although the report identifies a need for some adjustments to the legislation, the EC wants to ensure legislative stability and predictability for European businesses. No changes to REACH’s main terms are proposed at present.
  9. The report recommends reducing the financial and administrative burden on SMEs in order to ensure the proportionality of legislation and to assist them to fulfil all their REACH obligations.
  10. To promote the competitiveness of the European chemical industry, the Commission will soon propose to reduce registration fees for SMEs.

Next steps. There are a few itemized next steps already moving forward:

  1. The Commission will discuss the outcomes of the REACH review with the Member States and stakeholders.
  2. In cooperation with Member States and ECHA, the Commission is developing a roadmap to assess and identify substances of very high concern (SVHC). It will set out clear milestones, deliverables and the pision of work between the Commission, Member States and ECHA to place all relevant SVHC on the candidate list by 2020.
  3. The Commission will also look into greater fee reductions to SMEs to spread the financial impact of registration more evenly.
  4. The next deadline under the REACH regulation is 31 May 2013, by when industry must register all phase-in substances manufactured or imported in the EU at or above 100 tonnes a year.

Background. REACH is the Regulation on Registration, Evaluation, Authorisation and restriction of CHemicals. The REACH review examines the overall operation of REACH and the attainment of its unique set of objectives – a high level of protection of human health and the environment, the promotion of alternative methods for assessment of hazards of substances, as well as the free circulation of substances on the internal market while enhancing competitiveness and innovation.

From 1999 to 2009 the EU chemical industry grew slightly higher than the average rate for all manufacturing sectors, and has largely recovered from the crisis of 2008. The industry generates a positive trade balance and is particularly well-performing in high margin sectors of specialty chemicals. In 2003, when REACH was proposed, the EU was the world’s largest chemicals market with approximately 30 % of global chemicals sales. Today it amounts to about 21 %, with China now being the largest chemicals market. However the EU remains the world’s largest exporter of chemicals and over recent years the industry’s turnover has increased in absolute terms.

Review is here:

Litigation: The Next Killer Ap?

Apple v. Samsung.

Cisco v. Tivo.

The EU v. Intel.

The lawsuits are piling up as tech heavies line up against each other and, in some cases, nations or even larger economic blocs.

If you are a market share leader, fending off (or filing) lawsuits is routine.

Apple claimed a victory in the US, where courts have banned Samsung’s Nexus smartphone and Galaxy Tab 10.1 after Apple complained of patent infringement. But Apple’s record on (in?) its home court hasn’t extended abroad. British courts have ruled HTC’s mobile devices did not infringe four of Apple’s touchscreen patents, China courts found for a nearly bankrupt company that claimed ownership of the iPad trademark, and Italian regulators have opened hearings over the company’s failure to meet domestic warranty laws.

As companies sue and countersue over technology that becomes ever more complicated, not only are the courts tied up by the endless legal maneuvering, but company engineers get dragged into the fray as well.

So too, it should be mentioned, do governments. But while the US debates measures that would ramp its anti-counterfeiting laws, Europe is taking the opposite approach. The European Parliament yesterday overwhelmingly rejected adoption of the Anti-Counterfeiting Trade Agreement, siding with critics who claimed the bill put too much power in the hands of bureaucrats. “With companies trying to gain any advantage within a fiercely competitive landscape, an increasingly litigious environment seems to be becoming a reality most companies need to get comfortable with going forward,” opined Sherri Scribner, a senior analyst with Deutsche Bank.

Still, as tech companies rely as much on the courts as the computer to wage their market share wars, one wonders: Will the next generation of engineers be pressed into battle to design products … or defend them?

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WEEE Recast Gets Electric

In Brussels, on Jan. 19, Environment Commissioner Janez Potocnik said he was pleased with the overwhelming support given by the European Parliament to an updated Directive on waste electrical and electronic equipment (WEEE). A majority of MEPs voted in favor of a deal.

Lots of excitement for this measure; you could say the atmosphere is electric.

WEEE — when executed — sets preconditions for professional recycling of valuable raw materials like:

  • gold
  • silver
  • copper
  • other rare metals contained in used TVs, laptops and mobile phones.

Currently only one third of electrical and electronic waste in the European Union is reported by EU Member States to be separately collected and appropriately treated.

Citing “challenging times” and “rising prices for raw materials,” Potocnik made a good point that resource efficiency is where environmental benefits and innovative growth opportunities for European industry come together.

“The waste stream with the greatest relevance in this respect is electrical and electronic waste,” he said. “Today, the European Parliament has given a great boost to this policy, raising the binding collection levels to 85% by 2019.”

WEEE work. The new Directive will force exporters to test and provide documents on the nature of their shipments when the shipments run the risk of being waste. Illegal shipments of WEEE disguised as legal shipments of used equipment, in order to circumvent EU waste treatment rules, are a serious problem in the EU. The new WEEE Directive will also give EU Member States the tools to fight illegal export of waste more effectively.

The so-called WEEE recast also calls for harmonisation of national registration and reporting requirements under the Directive. In collaboration with Member States, the Commission will endeavor to adopt a harmonised format to be used for the supply of information in registers for producers of electrical and electronic equipment.

Administrative burdens are consequently expected to decrease by around EUR 66 million per year.  For Americans and WEEE, not much has been said yet.  There’s a wait-and-see air about it, but respectfully so.

WEEE all the way home?  The vote means that co-legislators agree on a common text. This will need to be formally adopted by the Council of Ministers in coming weeks.  Here’s what’s being asked:

Member States will be required to collect 45% of electrical and electronic equipment put on their markets by 2016, and then achieve 65% by 2019, or may opt alternatively for a target of 85% of waste generated. Some Member States will be able to derogate from these targets where justified by lack of necessary infrastructure or low levels of EEE consumption.

The existing binding EU collection target is 4 kg of WEEE per capita, representing about 2 million tons per year, out of around 10 million tonnes of WEEE generated per year in the EU. By 2020, it is estimated that the volume of WEEE will increase to 12 million tons. The new target, endorsed by Parliament, an ambitious 85% of WEEE generated would ensure that around 10 million tons, or roughly 20kg per capita, would be separately collected in 2020.

REACH Penalties: Belgium Found Guilty

Belgium is the first EU Member State to be condemned by European Court of Justice for breach of REACH.  This is the result of a May 5 judgment in Case 265/10 Commission vs. Belgium.

REACH has been very clear from the beginning that Member States have their own responsibilities and their own penalty structures.  For instance, the chart (above) shows comparative REACH compliance fines between countries across Europe.  Belgium has among the highest penalties in the EU.  Moreover, the chart shows the incredible discrepancies between how Member States choose to implement and moderate REACH compliance.  (The chart is from the EC December report on penalties, from a study conducted by Milieu Ltd. for the European Commission.)

Brussels fails to comply. REACH Article 126 imposes the obligation on EU Member States to adopt whatever measures necessary to ensure sufficient and correct enforcement of REACH.  Crucially, EU Member States were obligated to notify their enforcement/sanctions-systems to the Commission by Dec. 1, 2008.

Brussels-based Peter Kugel, Partner at Kugel Legal, a firm specializing in EU Law & Litigation, reports that “Belgium evidently failed to comply with that obligation because the Regions of Wallonia and Brussels-capital had not yet adopted any measures to comply with Article 126 REACH.”

REACH “cooperation agreement.” The Commission argued that Belgium failed to comply with Article 126 because there was no “cooperation agreement” in place between the Federal Government and the Regional governments.  A “cooperation agreement” would be an agreement that paves the way for cooperation between the different inspection services in a Member State, largely by implementing modalities of cooperation and information exchange pathways.

The Court dismissed the argument that lack of such an agreement would necessarily lead to lack of compliance.

The court found that, yes, such an agreement could certainly be an appropriate instrument towards the implementation of an effective sanctions-system in connection with violations of REACH (as foreseen by Article 126).

“However,” points out Kugel, “the Court ruled that neither Article 126 REACH nor any other provision of REACH oblige Member States to engage in such domestic ‘cooperation agreements’ for a correct implementation of Article 126 REACH.”

In other words:  it’s each country’s responsibility to figure out its compliance infrastructrue.  It is not up to any outside (federal) agent to coordinate or install procedures to ensure clear compliance processes for a Member State.

REACH breach ruling insight. Many were surprised that Belgium was the first to receive a judgement against their REACH compliance efforts.

Politically, in the longer term, to crack down on Belgium first could be a smart decision.  It shows lack of favoritism when it comes to compliance breach judgements.  In the short term, though, Belgium comes away with a bruised ego and a bruised Public Relations team.  Overall?  It’s nothing a month or two and a few more condemnations in other directions won’t fix.

In saying that, however, we must not be glib.  Businesses in America are watching compliance rulings on REACH like hawks.  Rightly so.  As court action heats up, so will fines, and then all import/export companies will really begin take REACH compliance risk management more seriously.

Apparently, and refreshingly perhaps, the “we didn’t know how to do it; we didn’t know what was going on” argument isn’t flying far in European courts.

Top 5 Questions About RoHS in 2011

Here are the top 5 things businesses need to know about RoHS in 2011.  And first, an overview of the RoHS directive.

RoHS overview

As of July 1, 2006, producers and importers of electrical and electronic equipment (EEE) in the European Union (EU) must adhere to the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations (RoHS).

RoHS is a directive, not a regulation.  The difference is that a directive cares only about the result.  With RoHS, for example, the required result is the restricted use of certain toxic chemicals in electronics manufacturing.  How businesses achieve that result, or how member states handle governing that process, is up to each.

A regulation, on the other hand, delineates to each affected entity how to manage compliance with the law.  A good example of a regulation is the REACH regulation, which has a detailed process for substance registration, use, and data sharing.

RoHS restricts — and in some cases bans — the use of certain hazardous substances above a specified amount in the manufacture of electronics.  The key hazardous substances under RoHS are lead, cadmium, mercury, hexavalent chromium, as well as polybrominated biphenyl (PBB) and  polybrominated  diphenyl ether (PBDE) flame retardants.  Part of the RoHS objective is to prevent thousands of tons of banned substances from being improperly disposed of, thus protecting human health as well as the environment.

As of November of 2010, there was an update to RoHS called the 2010 RoHS Recast.  The restriction updates are best depicted in a table:

The product categories effected by RoHS include large household appliances, computer equipment, TVs, lighting, toys and video games, and vending and ATM machines. Two categories – medical devices and equipment and control and monitoring equipment – are currently exempt from RoHS compliance.  More details about effected and RoHS exemptions and categories can be found on the UK RoHS website.

Producers must now prepare documentation to show that their products are compliant before placing them on the market, and, if requested, provide the documentation to the RoHS Enforcement Authority within 28 days. Also, this documentation must be maintained for four years after the product is no longer made available on the market.

The effect of RoHS has extended well beyond the EU. Major electronics manufacturers have adopted changes on a global scale in order to comply with RoHS, regardless of where their products are sold. As a result, companies that supply parts to these manufacturers must also track and maintain accurate information about these components.

1. What is the RoHS – REACH Connection? REACH regulations restrict the use of Substances of Very High Concern (SVHCs) in Europe and the importation of articles containing these substances from outside of Europe. RoHS complements REACH by limiting the amount of hazardous substances that can be used to produce EEE in Europe and defines the proper disposal of EEE waste.

2. Who is exempt from RoHS regulations? Private individuals making purchases from outside the European market are not required to comply with RoHS. Because the first importer of a product to the European market is responsible for complying with the regulations, businesses acquiring products from within Europe are also not required to comply.  Again, specifics about effected and exempt categories can be found on the RoHS website or in last year’s RoHS articles on the Actio Blog.

3. What are the costs and benefits of RoHS? According to the March, 2008 Final Report of the “Study of the RoHS and WEE Directives”, published by the environmental consulting firm Ecolas for the European Commission, RoHS has resulted in a major reduction of hazardous substances found in various products, reaping both environmental and economic benefits. You can view the report here.

Although RoHS presents many benefits, some of the costs associated with RoHS compliance have included R&D and capital costs, averaging 1.9% of annual revenues. For small and medium companies (SMEs), a consultancy called RSJ crunched the data and found the average cost of compliance for SMEs was as high as 5.2% of annual revenues.  That’s quite high.

Future and ongoing costs are estimated to the European Commission to average 0.4% of annual revenues.  These costs are due, in part, to increased administration and testing for compliance, the use of more expensive lead-free solder, the higher cost to manufacture lead-free components, and the lengthy exemption process.

4. Are there environmental benefits to RoHS? There are measurable environmental benefits to a well-executed and enforced RoHS program. Such environmental benefits include:

•    reduction of lead (Pb) use in products by 82,700 tons in the EU
•    reduction of cadmium (Cd) use in products by 14,200 tons
•    reduction of mercury (Hg) use in products by 9,500 tons due to changes in copiers and fluorescent light bulbs
•    reduction of mercury in waste streams by 6,900 tons

5. What are the big-picture benefits? Much analysis has been done leading to projections on the potential benefits of RoHS on a global scale.  Reports seems to show that primary benefits include:

•    increase of communication across the supply chain serves as a platform for the implementation of REACH and other initiatives
•    less leaching in landfills because WEEE contains less hazardous material
•    the use of lead-free solder increases the incentive to recycle because it contains silver and gold
•    the push for other countries and industries, such as aerospace and IT, to move to cleaner processes and reduced use of hazardous materials.