Select Committee on Science and Technology Written Evidence

Annex 1

CIA comments on One Substance: One Registration


  In general the CIA support the principle of one substance: one registration as a means of minimising the amount of animal testing that will be necessary to meet the requirements of the REACH regulation. We also believe that in an ideal situation the creation of a single data package would improve workability, decision making and increased transparency.

  The CIA believe that wherever possible, the principle of one substance: one registration should be encouraged and that this be delivered through appropriate incentives for companies to work together in consortia. However, there must be flexibility in the system to allow companies to operate outside of consortia and to register separately when there are real business reasons for doing so.


  The consortia that have been in existence for the longest (20-25 years for some) are those for agrochemicals where some of the disadvantages did not become obvious for many years. The types of question which invariable arise are exemplified below.

  The question of late joiners and free riders is the most complex. In essence a late joiner gains all the advantages of the programme with none of the risks. The studies are complete and there is therefore no risk that they will fail, the outcome is known and registration guaranteed. The costs have also already been paid so on a discounted cash basis there is every incentive to be a late joiner as opposed to a founder member. Existing consortia control this by the application of a "risk premium" (usually 20-25% ) to incurred costs and the addition of interest at an agreed rate to the payments made. This is not "a barrier to entry" but rather an acceptance of the enhanced value of the accumulated data, not to apply it is in effect subsidising the competition. This is reasonable for a company which joins at the end of a specific programme and most will agree that it is fair.

  A separate problem comes later. Completed studies are actually a depreciating asset, much like any other. However there is a marked reluctance to recognise this and consortia keep on adding interest to the cost so that in (say) 10 years it would be much less costly to repeat the study (to modern guidelines—experience suggests that they will have changed) than to buy into existing studies. This can be controlled in principle but requires the imposition of a discount rate on accumulated cost.

  The question of late entrants is critical to success or failure of consortia. Under the current proposals there could be advantages of referring everything possible to the ombudsman as a matter of course—advantages from joining the consortium at the outset are limited to current producers, competitors gain potentially significant benefits from being late joiners.

  The question purity is also crucial to the one substance: one registration principle for example if a company manufactures and uses/sells at 60% purity (crude) for some applications and 97% purity for others. Currently these are regarded as two chemicals. Will this change? If so what exactly will be tested as representative? When there are two or more routes to the same chemical the impurity profiles will differ. What will then be tested if the chemicals are considered to be the same? Impurity profiles can also be symbolic of a novel processing route, how will this be kept confidential? IF an "effect" had occurred which required regulation, and on further investigation this related solely to an impurity from one route of synthesis, how would the costs then be divided? The manufacturers using other routes would have been significantly disadvantaged by the whole exercise; would they still be expected to share the cost? Should they be compensated? If so how and by whom? These question invariably arise during consortium formation and later. Guidance is needed, especially if such a relatively short time is to be allowed for formation.

  The paper rightly recognises that consortia move more slowly than single companies and so workability and timing is an issue of meeting the one substance: one registration principle through a requirement for mandatory consortia. Experience shows that even to agree where to place a study and what doses to apply can take two to three months for a large group whereas a single Company can generally arrange this within a week or two. Contract labs know this and always give pessimistic estimates for start dates etc, to incorporate the inevitable delay. A programme will need one to two years added if consortia are involved and we see no way in which legislation can significantly reduce this—it is not possible to legislate agreement.

  Finally there is the question of use. Consider the case of an HPV chemical used as an intermediate by most producers but 15te/annum is used in a consumer application. How are the costs then to be allocated within a consortium. It helps little to make membership compulsory without any guidance for such matters. The question would doubtless be referred to the ombudsman, but on what basis would that body decide? If the costs were shared by all then the small company producing for the consumer use would soon be out of business, as the competition could probably produce more economically and would have all relevant supporting data. If cost are borne by the appropriate producer how are conflicting study requirements resolved to avoid duplication?


  2.  General Approach

    "industry will be expected to prepare guidelines for cost sharing"

  We question the legality of this statement in a system of mandatory consortia formation. Industry cannot be responsible for the drawing up guidelines for a mandatory process, as "industry" is not homogeneous.

    "the Agency should establish a Ombudsman"

  An Ombudsman is to be supported, but it should be independent and not set up as an office of the Agency.

  3.  Consortia Framework—a proposal


  We support the concept of a pre-registration phase to aid the formation of consortia and data-sharing. We also support the data requirements proposed. However we believe that 18 months for this phase would be a more realistic timescale.


  Cost-sharing—we do not believe that "industry" should be responsible for drawing up cost-sharing guidelines in a mandatory process for the reasons stated above.

  Timing—a timing aspect not considered in the paper is that if the prioritisation at registration remains based on volume, then manufacturers producing in the 1-10T level will not need to register until seven years after manufacturers producing in the >1,000T band. The principle of one substance: one registration delivered through mandatory consortia formation will disadvantage lower tonnage producers as they will have to chose either to register early, or buy use of the dossier already registered even though they may have all data necessary for registration.

  4.  Role of the Agency

  We are concerned at the proposal that the Ombudsman should be an Office within the Agency. This should be a separate body as it will be adjudicating on the Agency's policy and there will be a conflict of interest.

  5.  The legal case

  We are concerned with the "we believe" language in this section and would like to see the Office of Fair Trading's response on the competition aspects of working in consortia. Companies are legally forbidden to disclose sales volumes. Name plate capacity can be disclosed, but then this would open the question of what cost sharing criteria could be used for importers who do not have a name plate capacity.

  We do not believe that the use of third party consortia managers will the anti-competitive aspects of consortia formation as not only being an added expense, there is also the question of if there will be adequate numbers of qualified managers available to assume such a role for the thousands of consortia that could be set up.

  6.  Experience to date

  This section lists the positive benefits that have arisen through working in consortia under voluntary programmes, but recognises that such experiences cannot easily be realised when working in a regulatory framework, such as the biocides directive. As this paper proposes a mandatory consortia framework, we would like to see a more of the justification for the one substance: one registration proposal based on experience gathering from regulatory, rather than voluntary programmes.

  The comment that " the quickest packages have been created where company's have acted alone" should not be overlooked.


  On balance we believe that compulsory consortia would be a recipe for substantial delay in the whole process and lead to significant legal wrangles. The problem is the "usual". If this is left as a "framework" requirement the details will be resolved only slowly and at high cost. This has been borne out in the guideline development to support 91/414 over the last 10 years. If on the other-hand guidelines are specified in detail then it requires very careful framing to avoid anomalies—and there is probably insufficient time for this to be achieved.

  We believe that if the requirements in the current Commission's proposals included greater incentives for companies to work in consortia then the one substance: one registration principle would more easily be met through a "voluntary" workable approach. In a majority of cases where real cost savings could be achieved, then consortia would form as a matter of self-interest. In the few case where this did not happen, the aim of minimisation of animal testing could be achieved through a process of "mandatory" sharing of animal test data under a system similar to that already outlined in the Commission's proposals.[2]

  The offer of an Ombudsman service to aid this could be useful, and if voluntary, this service could probably survive with a staff of 20 or so. If compulsory consortium formation is required we would expect the Ombudsman to need a staff of at least 500 and even then the entire process could probably be delayed by one to two years.

2   The CIA's Chemicals Policy Task Force will make further proposals on how the mandatory sharing of animal test data could work and on incentives for consortia formation in the near future. Back

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