Select Committee on Science and Technology Written Evidence


APPENDIX 12

Memorandum from the Confederation of British Industry

  1.  The Confederation of British Industry (CBI)—with a direct company membership employing over four million and a trade association membership representing over six million of the workforce—is the premier organisation speaking for business in the UK. The CBI represents companies operating in all areas of the chemicals supply chain, including producers, importers, distributors, downstream users and consumers.

  2.  We share the aims of the proposed Regulation in protecting the environment and human health, and point to existing environmental and health and safety legislation and voluntary action as having already achieved improvements in this area. We do, however recognise that more needs to be done, especially in relation to the effective enforcement of this current regulatory regime.

  3.  We recognise that many of the important details of the proposal require further development and offer the following comments to focus on measures that will improve the workability of the proposal for business, Member States competent authorities and the proposed Agency and secure the sustainable competitiveness of European industry.

GENERAL COMMENTS

  4.  We appreciate the significant improvements that have been made to the proposal since the "2003 internet consultation" and highlight these in our detailed comments later in this document. It is essential that these improvements are maintained during the future negotiations of REACH as business needs to make its plans from a secure base. However, we believe that there are still a number of issues relating to the workability and proportionality of the proposal that need to be addressed before REACH can be agreed and implemented and we look forward to working with the UK Government, the European Commission and other institutions to provide information and assistance.

  5.  The CBI believes that the most important general tasks to be addressed now are:

    —  Risk based approach to prioritise the targeting of substances for Registration;

    —  Macro and focused supply chain impact assessments to reveal challenges and improve workability;

    —  Securing European competitiveness generally and in particular related to dealing with articles;

    —  Addressing authorisation and substitution in a way that contributes to sustainable development;

    —  Clarifying the scope and definitions and minimising duplication and conflicts with other legislation; and

    —  Ensuring appropriate confidentiality and intellectual property rights.

Risk based approach to prioritise the targeting of substances for registration

    —  Priority for substances to go through the REACH process should be based on risks as opposed to hazard. Resources must be used to ensure that substances of highest concern are assessed first. Although the phase-in of substances into the REACH process could be seen as a form of prioritisation, with tonnage being an indicator for exposure, we feel that this approach will leave some substances of concern until later in the registration process, whilst substances which have been shown to be safe for many years are dealt with first. There is sufficient information and agreement at European level on enough substances that are known to pose higher risks for these to be addressed in a practical way in the first time-frame envisaged under the regulation. Industry would wish to work with the Commission to gain consensus to identify these substances that will be given priority in the first phase of Registration through the REACH process. This initial phase will give the practical experience and information to allow a more efficient process for prioritising substances to be addressed in the future time-frames envisaged. Subsequent decisions about the management of registered chemicals should also be based on a holistic view of environment and public health and safety risks.

Macro and focused supply chain impact assessments to reveal challenges and improve workability

    —  The impact assessments performed to date by or on behalf of the Commission have taken a limited and closed view of the impact on European businesses even though an extended impact assessment has been produced to accompany the publication of the REACH proposal. We do not feel that this assessment adequately reflects the potential effects to downstream users of the loss of certain substances from the supply chain, the effects of increased competition from outside the EU, and the increased costs associated with the implementation of the REACH system. Chemicals are a global business and a deeper assessment is needed to examine the impact of REACH on the European economy as a whole. The REACH proposal envisages a simplistic model for the production and use of substances that does not exist in reality. The chemicals supply chain is complex, involving many different actors operating at many levels within the chain. The ways in which chemical substances are synthesised, formulated and used are complex, and rarely linear. More focused impact assessments on particular supply and use chains should be performed to gain insight into the complexity of such chains, the cost of unintended consequences on businesses and could identify where action is needed to improve the workability of the system.

Securing european competitiveness generally and in particular related to dealing with articles

    —  Robust measures must be in place to ensure that importers are effectively covered by the legislation not just EU producers. Whilst on the surface the trade implications associated with the REACH proposal appear to have been adequately dealt with, with importers of substances facing the same requirements as those manufacturing them in the EU, we still believe that some trade issues remain to be addressed. Those importing finished articles, for example, will not have to use substances that have been through the REACH process, putting them at a competitive advantage to those manufacturing the same product within the EU. Some substance manufacturers and importers may not be able to afford to or may choose not to register substances at all, or not for certain uses, and will take them off the market. This would have a domino effect through the supply chain, again putting manufacturers at a disadvantage to their non-EU counterparts who will still be able to obtain the substance from non-EU sources. The cumulative effect of the REACH proposal, along with other pressures, will lead manufacturers to move their operations outside the EU. This would represent a serious drop in EU productivity and innovation and would result in the export of environmental and health and safety challenges to countries that are less equipped to deal with them. The only effective solution is to ensure a globally harmonised system and the EU should seek to work towards this. In the long term, tackling this process now is a more effective use of industry and regulatory resources. It may also help to prevent legal challenges to the REACH process by the EU's major trading partners.

Addressing authorisation and substitution in a way that contributes to sustainable development

    —  Substitution should be encouraged in applications where less hazardous and lower risk alternatives are commercially available for the appropriate use. To deliver sustainability, decisions on substitution must take a holistic view of all relative hazards and risks on a case-by-case evaluation, engaging downstream users as well as producers. Business has been involved in Human and Environmental Risk Assessment initiatives that can be used as a basis for more holistic risk assessments. Availability and performance criteria must be adequately considered alongside environment and health issues. The justification for requiring and accepting substitutes should be transparent so that consistent principles can be developed for future decisions.

Clarifying the scope and definitions and minimising duplication and conflicts with other legislation

    —  By seeking to make the scope of REACH all embracing to cover all manufacture, importation, placing on the market and downstream use of all substances and preparations and to cover articles there are unnecessary duplications and conflicts of REACH with other regimes such as those for worker protection and waste minimisation. These make the proposal unnecessarily complicated unworkable in some aspects and undermine other policy objectives for example for recycling and sustainable development. We would like to see these overlaps investigated further and resolved. One solution is to confine REACH to substances and preparations placed on the market (with a suitably robust definition of placing on the market). Another option is to provide exemptions eg for waste, on the basis that there is extensive legislation already addressing the main environmental and health issues.

    —  In the event that substances may be lost from the market this will have considerable consequences for compliance with manufacturing processes, product standards and stock holdings for components, some of which are critical and mandated under European product legislation. Deeper examination of focused supply chains will assist in understanding the implications and being able to address the challenges.

Ensuring appropriate confidentiality and intellectual property rights

    —  Some of the information required under the proposed system, especially that in relation to production tonnages, is extremely commercially sensitive. Competition law prevents companies from exchanging this information directly. In order to do so imposes further costs on business requiring management by a mediator. Further consideration needs to be given as to how commercially sensitive information is managed and stored securely. We suggest that the requirements for this type of data be minimised and that they be held in a separate, secure system to the data that may be made publicly available. No link should be shown between company names, CAS numbers, EINECS or ELINCS numbers and product or trade names as these have commercial and intellectual property implications. For reasons of personal security of company staff, further consideration should be given to the desirability of making publicly available the fact that testing on vertebrate animals has been carried out in relation to a substance and registration.

Comments on the Details

Further details required

  6.  Many of the important details of the proposal are yet to be developed. These include:

    —  guidance relating to the incidental release of substances from articles;

    —  risk management procedures for downstream users; and

    —  criteria for the prioritisation of substances for evaluation

  This lack of detail seriously impedes discussion of the workability of REACH. We would like to see these additional details and guidance developed as soon as possible in order to inform the on-going policy debate on REACH.

Scope

  7.  We note and support the improvements made so far for polymers and some intermediates. However the position for all polymers and intermediates, waste, minerals and ores, alloys and treated natural fibres should be clarified. A single provision on scope should appear at the beginning of the regulation.

    —  If polymers are to be fully exempted from REACH they should be included in Article 2 (1).

    —  In a risk based system the position of intermediates would resolve itself as their exposure potential would not make them a priority and existing legislation would provide adequate control.

    —  Process waste is still subject to registration, although exempt from authorisation. It is not practical to characterise and register every constituent of processed waste. As substances or preparations and identification of the manufacturer of waste throughout the waste processing chain ( and hence the person who registers) will also be a problem.

    —  Substances produced for export only are controlled under REACH and additionally controlled in the country where they are being exported. They should be treated in the same way as intermediates transported.

Definitions

  8.  The definition of substance, preparation and article need to take into account materials such as polymers, alloys and treated natural substances and fibres, whose fit with the current definitions is unclear.

Articles

  9.  We appreciate the drivers behind the proposal that substances in articles be registered if they are put on the market in quantities exceeding 1 tonne per year, are classified as dangerous (according to Directive 67/548/EEC) and they are intended to be released under normal and reasonably foreseeable conditions and also if this release in not an intended function of the article. The intention as it is drafted is seeking to satisfy many objectives

    —  the competitiveness of European business versus the global competition in the importation of articles;

    —  WTO concerns; and

    —  environmental and health concerns from certain imported articles containing substances.

  Specific marketing and use legislation has so far not successfully addressed this latter issue.

  The way the current proposals are drafted means that the definitions are open to subjective judgement and will be difficult to enforce. It is virtually impossible that they will be able to achieve all the above objectives. The CBI believes that the Commission should reconsider what could and should be achieved by the REACH proposal on articles, sufficient guidance to provide interpretation for business to achieve compliance and for authorities to be able to enforce the obligations. Other instruments may be much more appropriate to achieve certain of the objectives and stakeholders should be invited to explore these issues. If the Commission continues with the present proposal clear examples are needed about what this regulation is intended to control and the CBI would like to see criteria developed as to the threshold releases at which a notification will be required. This will also be needed in order to set release detection levels for enforcement. Realistic and robust arrangements for enforcement will have to be in place for these requirements to achieve their intended objective.

Research and Development

  10.  The Agency must be notified of substances to be used for research and development (R&D) and they will be exempt from registration for five years. The Agency can extend this exemption for a further five years. The CBI is pleased that the tonnage restriction for R&D has been removed.

Phase in substances

  11.  The use of the term "phase in substances" has added confusion to the registration priorities. It should be removed as it is an expression of a registration timetable that is currently arbitrary and should, in any case, be justified on a cost, availability of resources and workability basis.

Registration

  12.  Substances manufactured or imported in quantities over 1 tonne per year must be registered with the central Chemicals Agency. Substances classified as Category 1 or 2 CMRs and those produced in quantities over 1,000 tonnes must be registered after three years, substances produced at over 100 tonnes after six years, and the remaining 1-100 tonnes after 11 years. The Commission have stated that this phase-in of the registration process according to tonnage represents a prioritisation within the system as production tonnage is seen to reflect exposure potential. The CBI would like to see more emphasis on prioritisation based on risk within the system.

  13.  Prioritisation may be more manageable if a pre-registration phase is introduced for all substances at the same time so that the scale of the task ahead can be defined and managed. Issues of commercial sensitivity and confidentiality will have to be adequately resolved, and pre-registration, within an agreed time period may provide a simple option to identify what companies have an interest in what substances by providing information such as:

    —  Company name (or representative);

    —  Chemical name / CAS Number;

    —  Volume;

    —  Animal tests available; and

    —  Wish to join consortia Y/N.

  Those companies not wishing to be revealed to other members of a consortia would be expected to make available results of animal test to the consortia to ensure that duplication of animal testing is limited. Alternatively they could participate "anonymously" by using an agent to represent their position.

Registration consortia

  14.  The REACH proposal allows for the formation of consortia for the purposes of registration, with one manufacturer or importer acting as the lead party and submitting the substance information for registration. The CBI welcomes the flexibility within the registration process to allow for the formation of registration consortia. The way in which a consortium is structured will influence the cost of putting that substance through the REACH process and this cost will be passed to the downstream user, who, as it currently stands, has no direct influence in the consortium. We suggest that the workings of the consortia be considered further, including a more defined role for downstream users. Whilst consortia should be promoted as a means of reducing costs and minimising data duplication, the decision to join them should remain voluntary in order to preserve competitiveness, flexibility and to protect intellectual property rights where there are business needs to do so.

One registration per substance

  15.  There is a proposition for one registration per substance, essentially leading to the need for the formation of consortia for the majority of substances where there is one identification for the substance and one registration. The benefits of this approach are the minimisation of duplicate animal testing, better substance identification and characterisation so reducing burden on the Agency and Member States in limiting the number of registrations that require completion checks and dossier evaluations. Ideally the creation of a single data package would improve workability, decision-making and increased transparency. Forcing industry to join consortia shifts additional administrative burdens onto industry, and raises problems about the sharing of commercially sensitive information such as production tonnages. The proposal has many attractions provided the competition and confidentiality aspects can be managed and the CBI would be happy to discuss the practicalities further. Appropriate incentives for companies to work together in consortia would have to be provided. However, there must be flexibility in the system to allow companies to operate outside consortia and to register separately when there are real business reasons for doing so. An arrangement of "One registration per substance" would substantially alter the architecture of much of the Regulation and would affect many details, solving some of the current problems but introducing others. The CBI will continue to input to the developments and analysis.

Information and testing requirements

  16.  The REACH proposal sets out information and testing requirements for registration depending on the annual production tonnage of the substance in question. The CBI welcomes the reduced testing requirements for substances produced in quantities of less than 10 tonnes. However,

    —  Requirements should be driven by the need for information to prepare the risk assessment (and not only based on tonnage).

    —  The proposed test programme in Annexes V-VII is still too excessive and goes beyond the White paper particularly for mutagenicity and reproductive toxicology.

    —  The provisions on QSARs are welcome, but the text only allows their use in the 1-10t band. They should be applicable to all volumes.

  17.  Procedures for data sharing and exchange are set out in the proposal. The CBI welcomes these provisions, especially in relation to SMEs, who otherwise may not have access to this information. We are concerned, however, that firms who have invested in testing will be penalised if they cannot come to an agreement with other potential registrants over the division of costs. As written, any company with the registration data can charge another making use of it at 50% of the cost. If many companies use the data from the original company then there will be a substantial profit to the original company. There needs to be further consideration of this arrangement in terms of market distortions and equity. Further detailed consideration of "one substance one registration" and the consortia formation may overcome this.

Confidentiality of information

  18.  A list of information that will be considered as confidential is set out in the proposal, including the composition of preparations, production tonnages, detailed uses and links between suppliers and users. The identification of confidential information is very important and a welcome addition to the proposal. However, there are still many opportunities in REACH for confidential information on substances to become "public". For example, the classification and labelling inventory will be publicly available and it enables a link between manufacturer/importer and the precise chemical identity of the substance. Also, the Agency will apparently grant access to information which is not regarded as "non-confidential" to others who have submitted information on the substance. Hence, competitors may find out information the original company may not wish them to know.

Chemical Safety Assessment (CSA) and Report (CSR)

  19.  A chemical safety assessment must be conducted and a chemical safety report completed for all substances produced in quantities over 10 tonnes. Where a substance is identified as dangerous the CSR must also include an exposure assessment and risk characterisation. The CBI is pleased that the requirement to conduct a CSA has been removed for substances produced in quantities of below 10 tonnes. We would still like to see more streamlining of the requirements of the CSA and CSR with current environmental and health and safety regulation. There is a substantial body of occupational health and safety requirements that still needs the development of practical guidance for business, integrated with the developing framework for REACH. There is an urgent need for this to be supplemented with practical guidance for businesses to address environmental risks.

Safety Data Sheets (SDS)

  20.  The REACH proposal requires manufacturers or importers of substances and preparations to provide downstream users with a safety data sheet for the purposes of managing their risk when using the substance. The SDS must be consistent with the CSA. The CBI is pleased that industry comments during the internet consultation regarding the use of CSRs in the supply chain have been taken on board. The use of extended SDSs will reduce the burden on downstream users compared to dealing with CSRs.

The Agency

  21.  The Agency to be set up under the REACH proposal will be responsible for the registration process and an associated completeness check, before passing registration details on to the relevant Member State. We are pleased that a board of appeal has been included within the structure of the Agency. The process however is still too complex with many decision-making bodies involved that may introduce inefficiencies. The Central Agency must have powers to oversee/manage the entire REACH process to ensure consistency and timeliness of decision-making whilst ensuring that those who have to comply and on whom costs will fall are involved in ongoing consultation.

Downstream Users

  22.  Downstream users are required to pass information up the supply chain on the appropriateness of risk management measures that have been suggested by the supplier. Downstream users have the right to inform their supplier of a use and supply the appropriate exposure scenarios for use in the CSA. The CBI welcomes the removal of the requirement to register a substances for 90% of its uses, but is concerned that downstream users could still be cut out of the supply chain if the supplier chooses not to register the substance for their use for commercial reasons. A downstream user can also choose to conduct the CSA themselves for their use. The CBI welcomes the flexibility in allowing downstream users to conduct their own CSAs and this should be aligned with current legal requirements with further practical advice for those aspects of environmental risks that are not currently covered. The risk assessment requirements for downstream users, as set out in Annex XI, demand development of exposure scenarios, which includes estimating exposures and levels and fate of substances in the environment [Annex I, section 5] This is a challenge both to direct chemical users and SME's in the downstream user supply chain. Guidance must be developed so that SMEs are able to comply with the requirements. Guidance targeted at SMEs has been found to be helpful for all organisations, as the risk of becoming too specialised increases the risks of non compliance.

Evaluation

  23.  The competent authority of the relevant Member State may conduct an examination of the testing proposals contained in the registration and/or a compliance check of the technical dossier submitted at registration. In both cases the registrant may be required to submit additional information. The CBI welcomes the distinction between testing and dossier evaluation and substance evaluation. However the system is still unnecessarily complex and burdensome, with significant risk of legal uncertainty. It is envisaged that Member states will be responsible for the evaluation of the Dossier (testing proposals and compliance checks) as well as for further Substance Evaluation. Although criteria for further evaluation will be established there is still the freedom for any Member States to initiate further evaluation. The Agency will develop criteria for the harmonisation of the substance evaluation process and the prioritisation of substances within that process. It is essential that criteria are developed as to the conditions that might lead to the evaluation process being initiated for a given substance. Once the evaluation process has been initiated by Member States there is no indication of the end point of the process. The aims, objectives and end point of the evaluation process need to be clearly stated and defined within the Regulation. We would like to see these criteria developed as soon as possible as we feel that prioritisation is vital to make the REACH process work in practice. It is also crucial that Member States work closely and coordinate with the Central Agency to take a harmonised approach to evaluation to prevent inconsistencies.

Authorisation

  24.  Authorisation aims to ensure that the risks from substances of very high concern (category 1 and 2 CMRs, PBTs and vPvBs and others such as endocrine disrupters) are controlled, or that suitable substitutes are found. The scope of the authorisation process in particular to "substances of equivalent concern" provision (Article 54) is too broad and subjective. Only chemicals selected on the basis of sound scientific evidence should be subject to authorisation. Authorisations are granted by the Commission where risks are adequately controlled, or where the socio-economic benefit outweighs the risk. We are concerned that the need to include substitution plans for substances authorised for socio-economic reasons could be used to effect a time-limited authorisation and ultimately lead to the substance being restricted, whether a suitable substitute exists or not. Substitution should be encouraged in applications where less hazardous alternatives are available but for substitution to work in the context of REACH, substitution plans must be realistic, holistic and engage downstream users as well as producers if they are to be implemented effectively. Inflexible imposition of substitution plans on EU producers will only cause down stream customers to switch sourcing of ingredients rather than cooperating with a substitution process.

Restriction

  25.  Substances which are considered to pose a risk to the environment or human health and where the risk is not adequately controlled may be restricted or banned on a Community-wide basis. We would like to see detailed criteria for the imposition of restrictions drawn up as soon as possible in order to assist harmonisation.

Information flow

  26.  It is not clear from the proposal what the language requirements will be for information to be generated, exchanged and disseminated. Most firms, especially SMEs, will not have the resources to translate or deal with multiple language submissions. It is suggested that this is another area for which the Agency could have greater input.

January 2004



 
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