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Will REACH Snag U.S. Companies?

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The sizzle on the story about REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) may seem to have cooled down now outside the European Union, because the only thing going on is very hard work on tens of thousands of chemicals to justify their safety and continued use – and thats not very newsworthy.

Many U.S. companies are participating in REACH on behalf of customers who import their products into the EU, and if you work for one of the companies that preregistered chemical substances under REACH, you are probably aware of the massive reports that are being written and great cost to register these chemicals. If your U.S. company is not participating in this effort you may be thinking that there will be little impact on you. Think again.

We are in the information age and if REACH will do anything it will generate massive amounts of information. There will be a registration dossier from each registrant of each chemical substance in commerce in the EU, describing the hazards of the substance and the exposure and risks of every use. The registration dossiers will be submitted to the Helsinki, Finland-based European Chemicals Agency (ECHA) between 2010 and 2018 on a mandated timetable; at least one dossier is scheduled to be submitted in 2010 alone for each of 9,000 or more chemical substances.

In addition, for chemicals placed on the EU market by a firm in quantities greater than 10 metric ton per year, hazard and risk information will need to be fully described in a Chemical Safety Report (CSR) which will find its way to EU customers. The REACH regulations require that elements of the Chemical Safety Report be annexed into the EU-compliant Safety Data Sheet (SDS) – and key information from the CSR will be inserted into various sections of the SDS.

As this information is brought into the public domain, all segments of industry across the globe will need to deal with it. All this will occur while U.S. industry struggles with other industrywide obligations, such as the proposed adoption of the UN-authored Globally Harmonized System of Classification of Labeling of Chemicals (GHS) into the federal OSHA Hazard Communication rule for labels and SDSs, as well as the coming California Green Chemistry regulations. The information generated under REACH will be germane to these efforts and will greatly increase the burden of compliance.

Note that the proposed new OSHA Hazard Communication Standard, published Sept. 30, 2009, states that a person classifying chemicals shall identify the full range of available scientific literature and other evidence concerning potential hazards. In addition, REACH will have ramifications under the federal Toxic Substances Control Act (TSCA), its U.S. regulatory counterpart administered by EPA.

Opening the Data Floodgates

So how will the information generated by REACH participants be available to REACH nonparticipants outside of the EU?

REACH participants will be sharing information with all other registrants in Substance Information Exchange Fora (SIEFs) on each chemical substance. Due to this data-sharing, each registrant likely will learn something new about the hazards and risks of each chemical. A participant that is a U.S. company will fret that it needs to update its U.S. SDSs with new hazard information. It will not be happy with the fact its product will look more hazardous than its competitors.

So how might REACH participants deal with this? We believe many companies will voluntarily make certain portions of their registration dossiers and Chemical Safety Reports public, on their websites or perhaps a consortium website. They wont be quiet about this either. There will be a lot of public pressure from consumer activists to make this data public. So why not boast and take credit for this, get your product stewardship points and at the same time toss a hot potato to your competitors?

Hazard Communication Impact

ECHA will also be disseminating information. By the end of 2010, every registrant is supposed to send a hazard classification for every chemical substance under the EU version of the Globally Harmonized System. Under this EU Classification, Labeling and Packaging regulation, all chemicals placed on the market regardless of tonnage – not only those requiring REACH registration in 2010 – must be classified by the end of 2010. ECHA will change its computerized reporting system to accommodate this.

ECHA is required to maintain an inventory of hazard classifications of substances received. It is possible that big global companies at the end of the automotive, electronics and consumer products supply chains will pressure their suppliers to use the EU classification as the de facto global classification. The hazard classification criteria under the proposed U.S. Hazard Communication Standard also are very similar to those of the UN purple book and the criteria adopted by the EU. (After all, doesnt the H in GHS stand for harmonization?)

Transparency vs. Exposure

Transparency is one of the foundational elements of the EU REACH initiative. The regulations have a goal to convey full information regarding the intrinsic hazards as well as application risks of all chemicals placed in commerce. This information is to be provided to the ECHA.

With that said, there are provisions for a registrant to flag submitted information as confidential. Justification for the claim of confidential business information, or CBI, is required and a fee will be extracted for exercising this option.

To what extent will registering entities make a CBI claim? While most firms will wish that their competitors have access to the same hazard information, many firms are very concerned about passing other information regarding applications and formulations down the supply chain, for confidentiality reasons.

With the advent of the internet, some progressive firms years ago began to post their MSDSs on the internet for consumption by the public, or more applicably, their customers. This concept was not embraced initially by many firms. Some were of the opinion that competitors would gain an advantage by having quick and easy access to these documents. By now this reluctance has dissipated.

Significant concern remains, however, regarding the disclosure of all ingredients within a formula, or even with indication of composition ranges.

How will this concern for CBI manifest itself as REACH and GHS statutes are implemented? EU GHS has very strict limits on claiming the identity of a hazardous chemical as confidential on an SDS, but allows for the petitioning of an alternative name for such components in limited circumstances. In the United States, OSHA did not propose to limit the more generous trade-secret protections in its proposed new Hazard Communication Standard language – but it should be noted that a U.S. company cannot claim a trade secret for an ingredient in a product that is disclosed in another country as being present in the same product.

Companies will spend a great amount of scientific effort to define the risks of all uses of the chemicals they manufacture, import or export into Europe. Again the question is, to what extent beyond the mandated SDS will companies release this information as part of a product stewardship effort? And will companies import the information into their non-EU documents?

Global Echoes

REACH is a big part of a new wave of regulation on existing chemicals around the world. Canada and Japan are implementing aggressive programs to identify and restrict very hazardous chemicals. EPA announced on Sept. 29 the frame-work for a new regulatory effort on existing chemicals under TSCA. Under the new administration, EPA is deemphasizing voluntary programs and is expected to use regulatory authority under TSCA Sections 6 and 7 to ban or limit chemicals of concern. There will be an unprecedented amount of information-sharing between governments as these programs go forward.

An example of the domino effect of global chemical regulation that can be expected is the current activity on chlorinated paraffins. Canada has expressed concern about potential environmental persistence of short- and medium-chain (C10-C20) products for several years. This led to ECHA naming short-chain chlorinated paraffins (C10-C13) as one of the first 15 chemicals to be placed on the REACH List of Substances of Very High Concern (SVHC), and subsequently on the Annex XIV list of chemicals requiring the very onerous authorization process for any use to be retained in the EU.

In turn, in its September announcement, EPA indicated that short-chain chlorinated paraffins would be among the first substances for which it will provide an action plan under TSCA to control use. EPA said it would be following information coming out of the REACH program very closely. In December, EPA announced that all chlorinated paraffins would be reviewed.

Other Sticky Wickets

Exposure scenarios also are to be developed under REACH, which consider the applications of every registered substance. These can be developed by an individual registrant or as a Generic Exposure Scenario by a group of firms. It is possible that not all uses will be supported under these generic scenarios, leaving smaller registrants to fend for themselves with exposure and risk assessments to support niche uses of many substances. It is possible that many uses will be dropped altogether. EU suppliers will indicate uses for which the chemical is registered on the SDS, and may indicate specific uses which are advised against.

What will be the effect in the United States if a use is not supported by industry under REACH – or worse yet, not accepted by ECHA or even identified as a non-recommended use? Will product liability attorneys start class-action suits alleging certain uses are unsafe? Will labor unions negotiate into their contracts an effective ban of uses of substances which are not supported under REACH?

One can also predict that the dissemination of REACH information to U.S. companies will increase TSCA section 8(e) reporting for new information that can be construed to fit under EPAs conservative definition of substantial risk.

REACH will provide a lot more information about chemical substances and their uses. It would be desirable if workers and consumers could benefit from the intent and all the information generated by REACH.

In order to do that, all elements of global and particularly U.S. industry will need to do their part to use this information to assure that their current products are safe and their future products are even safer.