Perspectives from Outside of the United States REACHs Lesson - - PowerPoint PPT Presentation

Perspectives from Outside of the United States

REACH’s Lesson – Transparency is Key

September 18, 2013

Arnold J. Guikema Tetra Tech, Inc.

None of the information contained in this presentation is to be construed as legal advice.

Agenda

2

• What is REACH?
• Transparency :
• Data generation and supply chain

communication

• Information on existing chemicals
• Harmonized enforcement
• Transparency for all stakeholders

What is REACH?

• Registration, Evaluation, Authorization and

Restriction of CHemicals

• Why REACH?
• 100,000 chemicals in EU commerce lacking

hazard/exposure data

• Existing chemicals are favored versus new chemicals
• Uneven requirements and enforcement approaches

across EU

• Lack of critical data for consumers and regulators,

predictability for businesses, and level regulatory playing field for all actors

3

What is REACH?

• How does REACH address these issues?
• across EU

4 100,000 chemicals in EU commerce lacking hazard/exposure data Existing chemicals favored versus new chemicals Uneven requirements and enforcement approaches Implement an EU‐wide harmonized enforcement approach amongst Provide EU public with information on existing chemicals already in commerce Task EU industry with data generation and supply chain communication REACH is largely an effort to engage all stakeholders in a collaborative endeavor to increase transparency

• Substance Information Exchange Fora (SIEFs)
• Mandated data sharing and cooperation for generating

hazard and exposure data for products containing chemicals

• Third party trustees for confidential information
• Resource-sharing benefits
• Levels playing field for SMEs
• Create sensible (and favorable) best practices and

interpretations

• Authorization Consortia have emerged – although not

legally mandated

5

Transparency:

Data generation and supply chain communication

• Supply Chain Communications Responsibilities
• SDS requirements enhanced – exposure scenarios for

high volume uses

• Requirements for supply chain to communicate

upstream and downstream regarding uses

• Although technically not REACH, per se, CLP creates

new harmonized classification, labeling and packaging requirements, and certain other requirements even for non-hazardous substances

• Article 33 of REACH is a completely new type of

requirement

• Must disclose presence of SVHCs in articles if greater than

0.1% concentration, and must provide safe use information

• Huge increase in scope of communications requirements,

for articles although companies subject to RoHS and ELV aren't taken by surprise 6

Transparency:

Data generation and supply chain communication (cont’d)

• How would data generation work in the US?
• Voluntary consortia have long existed
• US companies with global presence have SIEF experience
• US industry may benefit as a “free-rider” on EU-generated

data - although we all paid for the data generation

• California SCP (as proposed)
• Alternatives assessments
• Look like REACH authorizations
• Priority products as a proxy for exposure
• Producer responsibility concepts abound
• Direct links to EU SVHC lists

7

Transparency:

Data generation and supply chain communication (cont’d)

• How would supply chain communications work in the US?
• SDS - US is adopting GHS, but not requiring quite as

extensive supply chain communications regarding uses and exposures

• Hazardous substances in articles communications
• Automotive and electronics industries are prepared due

to ELV and RoHS requirements

• REACH has prepared other industries due to the

globally interconnected nature of the supply chain

• California did not adopt much from REACH’s article 33

concept

• We are still largely risk-focused in the US

8

Transparency:

Data generation and supply chain communication (cont’d)

• How would supply chain communications work in the US? (cont’d)
• We do have facility-based communication – e.g. TRI
• But for product-based communication, information must flow

from upstream producer to downstream actors

• The current status quo in US is that most product-based

hazardous chemical information communication stops at Actor 3, unless there is a potential release from an article

• Focus of communication is on occupational exposure and on

immediate risks to consumers 9

Transparency:

Data generation and supply chain communication (cont’d)

• 1. Raw material

supplier

• 3. Article

component producer

• 4. Article

assembly producer

• 6. Retailer
• 2. Formulator
• 5. Distributor
• 7. Consumer

• Industry transparency mandates ultimately provide

consumers with hazards and exposure information

• n existing chemicals via:
• SIEF data generation
• Supply chain communications (directly via Article 33.2)
• Equal protection for all EU citizens is an aspiration
• f harmonized enforcement
• The claim is made that favoring existing chemicals

hinders innovation

• At any rate, it is fairly defensible to assert that there are

some market distortion effects of requiring higher barriers for new products to enter the EU market

10

Transparency:

Information on existing chemicals

• EU = 28 member states, plus

3 EEA countries

• Sovereign jurisdictions
• Differing politics and economies
• Differing enforcement agencies

11

Transparency:

Harmonized enforcement

NORDIC REGION UK RECENT ACCESSIONS CENTRAL EU THE SOUTH

• REACH is a regulation, as opposed to a directive
• Self-executing, does not require implementing

measures

• Member states are prohibited from obscuring the direct

effect

• However member state authorities are responsible for

enforcement

• Effective, proportionate and dissuasive (Article 126)
• Enforcement Forum
• Information exchange amongst regulators
• Inspector exchange program
• Trainings and workshops on best practices
• Adjudication at ECJ level

12

Transparency:

Harmonized enforcement (cont’d)

• This presentation will spare you the dreaded US

“Patchwork Map”

• As in EU, we have regional distinctions and

regulatory “coalitions”

13

Transparency:

Harmonized enforcement (cont’d)

PACIFIC NORTHWEST NEW ENGLAND PEOPLES REPUBLIC OF CALIFORNIA GREAT LAKES

• Federalism vs. central coordination of interstate

commerce

• Chemicals are products manufactured, distributed, sold

and consumed across jurisdictional boundaries

• Facility environmental impacts (air, water, waste)

generally are local issues

• Reasonably well-defined stakeholders
• Hazards and exposure generally known
• Responsible parties easy to find (and sue)
• Products (including chemicals) are very different
• Exposure is much more difficult to control
• Negative externalities much more widely dispersed along

vast supply chains

• Consequences very difficult to predict
• Hence, centralized coordination of enforcement for

product environmental compliance is preferable 14

Transparency:

Harmonized enforcement (cont’d)

• When information is available to all stakeholders,

they are empowered to make decisions with knowledge of trade-offs and consequences

• Industry gets
• Resource-sharing
• Level playing fields
• Predictability
• Control over interpretations
• Consumers get
• Information on hazards/risks
• Information about companies/brands
• Increased innovation (?)

15

Transparency:

For all stakeholders (cont’d)

• Consumers
• Purchasing decisions based on potential harm to self/family
• Desire to support socially responsible brands
• Investors
• Need knowledge of risks material to company’s financial

health

• Socially responsible investors
• Executives
• Need predictability for long-range resource planning
• Need a true understanding of compliance risks
• Employees
• Occupational risks may exist based on downstream users not

fully understanding safe use scenarios

• Regulators
• How to enforce for supply chains which span jurisdictional

boundaries 16

Transparency:

For all stakeholders

• In the US, product feature representations and

financial disclosures already require high levels of transparency

• Ignorance is not an excuse
• Political consensus is (in theory) achievable
• Appreciable level of industry support for federally

harmonized enforcement

• Requiring transparency and allowing market to regulate

itself presents lower barriers for legislative initiatives

• Much of the groundwork has been done
• EU REACH data-generation
• EU producer responsibility requirements prepared

automotive/electronics for supply chain disclosures

• Supply chain transparency game-changer:

DODD-FRANK , Section 1502, a.k.a. Conflict Minerals

17

Transparency:

For all stakeholders (cont’d)

• Questions to be resolved
• Who interprets raw data?
• How are disagreements about results reconciled?
• What are legal implications of increased knowledge?
• Will transparency mandates require companion

legislation to fix perverse incentives?

• Confidentiality of trade secrets will always be an issue –

how can this best be dealt with?

18

Transparency:

For all stakeholders (cont’d)

A.J. Guikema Tetra Tech, Inc. reach@tetratech.com 734-213-4095