House of Commons - European Scrutiny

Select Committee on European Scrutiny Ninth Report

12 Registration, evaluation and authorisation of chemicals (REACH)

(25115)

15409/03

COM(03) 644

Draft Regulation concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency and amending Directive 1999/45/EC and Regulation (EC) [on Persistent Organic Pollutants]

Draft Directive amending Council Directive 67/548/EEC in order to adapt it to Regulation (EC) concerning the registration, evaluation, authorisation and restriction of chemicals

Legal base Article 95 EC; co-decision; QMV

Department Environment, Food and Rural Affairs

Basis of consideration Minister's letters of 26 October 2005 and 4 November 2005

Previous Committee Reports HC 42-ix (2003-04), para 2 (4 February 2004) and HC 42-xviii (2003-04), para 1 (28 April 2004)

To be discussed in Council 28 November 2005

Committee's assessment Politically important

Committee's decision Cleared following debate in European Standing Committee A on 16 June 2004

Background

12.1 It has long been recognised that certain chemicals can cause serious damage to human health and the environment. Consequently, their production, marketing and use within the Community is governed by a number of legal instruments, which regulate their testing, determine risk reduction measures, and establish duties regarding the safety information provided to users. However, concerns that these measures do not provide sufficient protection led the Commission to review the situation in February 2001, in a White Paper[40] which identified a number of major problems.

12.2 In particular, it pointed out that the present system distinguishes between "existing substances" (declared to be on the market in September 1981) and "new substances" (placed on the market since that date), and that there was a general lack of knowledge about the properties and uses of those substances in the former category, due to the slowness and resource-intensive nature of the risk assessment process, and the fact that, although manufacturers and importers are required to provide information about them, this obligation does not apply to downstream users. The White Paper also highlighted two major procedural flaws. First, industry can be asked to carry out further testing of a substance only after the relevant authorities have demonstrated that it may present a serious risk, but, without test results, it is almost impossible to provide such proof. Secondly, current liability regimes are insufficient to remedy any problems found, as they require a causal link, which is often impossible to establish.

12.3 The White Paper therefore suggested that both existing and new substances should become subject to a new system called REACH, based upon the registration of the basic information which manufacturers would be required to provide; an evaluation of those substances whose production exceeds 100 tonnes, as well as of those of a lower tonnage where there is cause for concern; and the special authorization of substances giving rise to very high concern. In the case of existing substances, the White Paper envisaged this new system being phased in over a period, but with provisions enabling it be applied more quickly where there is cause for concern. The main aim would be to provide a reliable basis for deciding on adequate safety measures, based on a chemicals hazardous properties and potency, and the exposure arising from its use, thus enabling chemicals to be classified, and decisions to be taken on the appropriate labelling and other measures needed to protect consumers and the environment.

12.4 The White Paper was debated in European Standing Committee A on 12 June 2002, but, following the circulation of draft legislative proposals, the Commission brought forward in October 2003 the current document, which contains two key elements, set out in our predecessors' Report of 4 February 2004. First, both existing and new substances would become subject to the REACH system, along the lines outlined in the White Paper, and secondly, a European Chemicals Agency would be established to manage the technical, scientific and administrative aspects of the system, and ensure consistency of decision-making at Community level. The proposals were accompanied by an extended impact assessment, in which the Commission suggested that, although benefits would eventually extend to improvements to human health and the environment, it was not possible at that stage to give a quantitative assessment, since much of the information needed to provide this would only become available once the proposals had come into operation.

12.5 Our predecessors noted that the Government strongly supported the principles set out in the White Paper, and the overall objective of REACH; that it believed that the proposals could be made to work in a cost-effective way; and that the UK had three key objectives in the negotiations on them.[41] They also said that, notwithstanding the earlier debate on the Commission's White Paper, the current proposal should be considered as well in European Standing Committee A. That debate duly took place on 16 June 2004.

Recent developments

12.6 We recently received two letters — one dated 5 October 2005 from the Parliamentary Under-Secretary of State (Sustainable Farming and Food) at the Department of Environment, Food and Rural Affairs (Lord Bach), and the other dated 20 October 2005 from the UK Metals Industry Reach Group (Annex A). The Minister said that the European Parliament was expected to give the proposal a First Reading on 14-17 November, and that the UK Presidency would be seeking to reach a political agreement at the Competitiveness Council on 28 November on the basis of a text aimed at finding a workable compromise which protects public health, the environment and industrial competitiveness. In particular, this aimed to rationalise the registration process, and to focus first on substances of concern; to redefine the division of responsibility between the Member States and the proposed Agency; and to make all authorisations subject to a review, which would enable consideration to be given in the future to the availability of alternatives. However, the Metals Industry Research Group drew to our attention its concerns about the impact of the proposal on minerals, ores and concentrates, and in particular the fact that, although the Government had responded to these by exempting them from registration and evaluation, this had not extended to authorisation. The Group claimed that this would damage unnecessarily, not only the competitiveness of the UK and the Community, but also that of many developing countries heavily dependent on export revenues from their mining sector.

12.7 In view of these concerns, we wrote to the Minister on 26 October, inviting him to comment. We have now received his reply of 4 November. This stresses the benefits to the industries concerned from the proposed exemptions from the registration and evaluation requirements, but says that, because certain minerals and ores could contain carcinogenic compounds above a certain level, they could meet the criteria requiring their authorisation. He adds that the Government appreciates that substitutes for these compounds are not easily found, which is why the proposal allows for a pragmatic and proportionate approach to authorisation, and provides for the most dangerous substances to be dealt with first. He also says that uses and categories of uses may be exempt from the authorisation process, and that the Presidency text enables the establishment of exemptions to take account of the proportionality of the risk to human health and the environment, for example, where it is modified by the physical form. He suggests that this could apply to metals in "massive form" if appropriate.

Conclusion

12.8 Given that this proposal was debated in June 2004, and that the UK Presidency is seeking to reach political agreement on it in the Council at the end of this month, we can probably do little more at this stage than draw the attention of the House to the present position, including the representations we have received from the UK Metals Industry Reach Group (and the Government's response to these). We would, however, be glad if the Government could continue to keep us informed of developments, and, in particular of any indication that the Commission may be considering revising its original proposal in the light of either the views reached by the Council or any amendments proposed by the European Parliament at its First Reading.

Annex: Letter to Chairman from the UK Metals Industry REACH Group (MIRG)

REACH and the Metals Industry

Since I first wrote, on behalf of the UK Metals Industry REACH Group (MIRG), to the European Scrutiny Committee in February this year, MIRG has been actively engaged in dialogue with the UK Government, seeking to secure their broader understanding of the likely impact of REACH on the UK and EU metals industry.

MIRG fully supports the drivers behind REACH, but to be workable for metals, the proposal must be amended to reflect the special properties of metals and alloys. Without amendment it will have the unintended effect of hindering the effective use of metals compared to less sustainable alternatives. This discrimination will result in socio-economic harm to the UK metals and alloys industries, with no net benefit to the EU environment and health. In its current form, REACH will also distort international trade, undermine EU competitiveness, hamper African development, and that of other developing nations.

One clear illustration of how REACH directly creates competitive market distortion is that the current proposal exempts the raw material feedstock for the plastics industry (oil, coal, natural gas, and polymers) from Registration & Evaluation under REACH, but does not exempt the raw material feedstock for the metals industry (minerals, ores and concentrates). Taking this one step further, it stigmatises metals versus plastics because only metals will require a Chemicals Safety Report. Users will therefore see metal and mineral products as hazardous, but not the competing plastics. Is REACH intended to promote plastic containers over (recyclable) steel and aluminium?

UK Government has partially taken on board this issue, by proposing, in its Sept 05 REACH Compromise Text, that ores and concentrates be exempt from Registration and Evaluation, but not from Authorisation. In the original Commission proposal, Authorisation is a risk-based policy, intended to ensure proper control of the risks associated with certain hazardous substances OR encouragement of eventual substitution. The UK Government however, is strenuously promoting a hazard-based approach to Authorisation, seeking eventual substitution on the basis of hazard, even if the risks are properly controlled. Recent proposals by the EU Environment Committee go further, stipulating "proper control and progress towards phase-out after a single non-renewable 5 year authorisation period".

Intrinsic hazard classification alone is an inadequate indicator of actual risk for metals and alloys. It is important for future value-added innovation in the metals sector that REACH adopts a policy on authorisation that is practical and risk-based. The driver should be net risk reduction, not simply hazard.

If ores and concentrates remain liable to Authorisation, it will prejudice against the development of future metal-based enabling technologies for society — such as fuel cells, photovoltaic energy systems, advanced telecommunications, bio-fuel plants, pollution control and remediation equipment, etc. The current inadequately sophisticated Authorisation policy must be re-designed to ensure that these innovative technologies, which support the EU wider global sustainable development objectives, are encouraged, not destabilised.

Both the Commission and UK Government have advised us not to be unduly concerned, as ores, concentrates and metals are not the prime target of the legislation and it would be many, many years before Authorisation may be sought to apply. This provides no comfort, as the stigmatisation of our products would be immediate. It suggests that our industries are to be targeted and prejudiced, as described above, for no tangible benefit, or reduction in risks to society, other than compliance with tick-box bureaucracy.

Persisting with an inadequate Authorisation policy for metals will unnecessarily damage not only UK and EU competitiveness, but also those of many developing nations, such as those of South Africa and Chile. The Heads of State of those nations have recently directly appealed to Prime Minister Blair to take action on the fact that metals don't fit within the simple regulatory concepts of REACH. The social and infrastructure development programmes of developing countries, heavily dependent upon mining sector export revenues, will be needlessly prejudiced by an EU Regulation for which no credible evidence has been advanced to show that including minerals and metals will bring any benefit to human health and the environment over and above already existing legislation.

REACH threatens to disrupt global trade flows of key materials for the still present strategic European industries (i.e. aerospace, automobile, electronics, engineering, etc). Europe will have to compete even more aggressively for its raw material feedstock in a world marketplace with markedly more severe entry barriers for Europe. The majority raw material source for the metals sector is outside the EU. Non-EU suppliers will simply desist from supplying into the EU because they have multiple customers for their raw materials elsewhere (i.e. China, India, etc).

In summary, to be workable for both the Authorities and the metals industry REACH must properly accommodate the special nature of metals and alloys — anything less will be a huge disservice to UK competitiveness and global trade flows. The Authorisation issue described above, plus the other key concerns indicated in Annex I [not printed], must be adequately reflected in REACH to permit metals and alloys to continue to play vital roles in further EU sustainable development policies, e.g. long-life products, increased recycling, efficient resource use, whilst still remaining internationally competitive and value-adding businesses based in Europe. Much is at stake.

To conclude on Authorisation, the appropriate treatment for ores and concentrates under REACH is:

Exemption from Registration and Evaluation
Exemption from Authorisation

(The above does not totally place ores and concentrates outside the Scope of REACH, because they remain liable to the restriction clauses)

MIRG greatly appreciates the continuing concern shown by the House of Commons European Scrutiny Committee to properly address these issues, and the opportunity you represent to convey this matter to the attention of UK Members of Parliament.

Members of the UK Metals Industry REACH Alliance

Anglo American

BHP Billiton

Corus

Inco Europe

Johnson Matthey

Rio Tinto

Aluminium Federation

British Non-Ferrous Metals Federation

British Stainless Steel Association

Cast Metals Federaton

Cobalt Development Institute