Chemicals (REACH)

The REACH Regulation (Regulation 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals) has revolutionised the way in which environmental law has been formulated and applied in the EU. The Regulation itself entered into force on 1 June 2007, although its key requirements on economic operators kicked in one year later, with several obligations rolling out in a phased fashion from then on.

The European Chemicals Agency (ECHA), the EU Agency in charge of this important EU legislation located in Helsinki, has published on its website a list of substances that have already been pre-registered by legal entities, so as to pave the way for the creation of so-called Substance Information Exchange Forums (SIEFs), where entities will have to gather together and exchange as well as assemble data on their substance(s) of interest.

The list of pre-registered substances compiled from submissions has revealed that around 2.75 million substances were pre-registered. Despite the extended deadlines for registration, permitted for pre-registered phase in substances (the first such deadline is 30 November 2010), the amount of information and testing that are required for each substance in order to meet the registration requirements can still be overwhelming – and costly – for the companies concerned.

In order to accomplish successful registration, each potential registrant will have to, typically, participate in a joint submission of data to ECHA, for its substance. In layman’s terms, the data will mainly be intended to demonstrate the effect of the substance on soil, air, human beings, animals and the aquatic environment. Each of these will, in principle, need to be supported by extensive studies. This requires a vast amount of research and expenditure, to say the least. It will obviously be a tremendous financial burden as well as a time-consuming obligation for companies to fulfil their registration obligation.

Objectives and means of data sharing

The REACH Regulation expresses the need for reducing the duplication of studies, especially those carried out on vertebrate animals. Since many registrants will be registering the same substance and carrying out the same studies, it seemed logical to create a mechanism that would allow sharing of the data by potential registrants of the same substance. This is spelt out by means of the obligation, laid out in the Regulation, to create and then participate in Substance Information Exchange Forums (SIEFs) for each substance. A SIEF will promote cooperation among potential registrants of the same phase-in substance, the intention being that one SIEF be created per pre-registered substance. The publication of the list of pre-registered substances was the official flag for commencing SIEF formation.

Another issue of importance has been how to determine a substance’s exact identity. Since the purpose of a SIEF is to promote data sharing, it would be counterproductive to allow different SIEFs to be formed for the same substance. Therefore, REACH requires that only one SIEF be formed per substance with the same chemical identity. The key to formation of a SIEF is therefore the “sameness” of a substance. “Sameness” goes beyond a simple identity in identification codes. Given the independent nature of the SIEFs, ECHA will not intervene to verify that the substances contained in a SIEF are indeed identical. However, participants may refer to the ECHA Guidance on substance identification.

Information about SIEFs can be circulated through REACH IT, the dedicated REACH website. This website allows the posting of messages between pre-registrants.

Organisation of SIEFs and creation of consortia

The setting up of SIEFs raises a number of additional questions, such as how they should be organised. REACH does not require a specific arrangement. A SIEF is likely to contain participants from different parts of Europe; therefore maintaining flexibility is key to successful discussions. Companies trading in the same substance have frequently found it useful to form a consortium, by means of an agreement, which must set out the details of its organisation, data gathering, generation, ownership, cost-sharing and confidentiality, as well as of how best to comply with the EU’s competition law.

As for who may take part in a SIEF, first, of course, are the potential registrants. These include, on the one hand, manufacturers, importers and only representatives of non-Community manufacturers who have pre-registered their phase-in substances. It should be noted that, to avoid disclosure of their interest in a substance, importers or EU manufacturers may act through a Third Party Representative who will act as their agent and represent them (this “Third Party Representative” is not to be confused with the only representative).

Competition law concerns

All of this information no doubt provides ample food for thought. However, despite the benefits of this forum for data sharing, the creation of SIEFs (and consortia) raises a number of problems, including how to manage and share the costs of data, and competition law concerns. By requiring companies, often competitors, to cooperate and share information about a particular substance, participants may be tempted to start sharing a little more than just scientific data. Since a SIEF will often bring together direct competitors, they may decide to take advantage of this opportunity to orchestrate anti-competitive behaviours, which is strictly forbidden by the EU’s competition law. Therefore, communications must be strictly limited to technical and scientific properties of the substance to be registered.

How Van Bael & Bellis can help you

Van Bael & Bellis has gained extensive expertise in virtually all of the EU’s environmental and product safety sectors. Reshad Forbes, a partner at Van Bael & Bellis and specialist on all aspects of the EU’s environmental laws including REACH, continues to advise global clients on a range of issues relating to the environmental and health and safety regulatory framework. Our lawyers are routinely in contact with Commission and Member State officials, in order that we can provide up-to-the-minute assistance to our clients.

We provide below the list of services that we are routinely furnishing to our clients with regard to REACH:

• Company Training on REACH (workshops and training covering legal and regulatory aspects).
• Identification of appropriate structure (consortium/cooperation agreement) to implement REACH.
• Negotiation and drafting of consortium/cooperation agreements.
• Identification of the applicable regulatory regime.
• Advice regarding compliance with the REACH Regulation.
• Selection of technical assistance.
• Management of relationships with authorities to register the substances concerned and to obtain the required authorisations.
• Strategic advice with regard to registration issues.
• Compliance with all aspects of antitrust law.
• Handling of IP/IT issues.
• Handling data cost-sharing and protection issues.
• Resolution of liability issues among members/partners.
• Resolution of corporate governance and termination issues.
• Advise in relation to confidentiality issues.
• Portfolio Audits: helping companies to structure the review of their product portfolio in order to:
  - identify applicable REACH requirements and data gaps;
  - identify priorities and address possible weaknesses; and
  - estimate workload and necessary resources.
• Advise on Communications to Suppliers and Customers.

It is imperative that companies affected by REACH, be they EU manufacturers, importers, non-Community manufacturers or Downstream Users, become acquainted with the thousands of pages of legislation including guidance from ECHA.

Do not forget: the clock is ticking, the first registration deadline, applicable to high volume substances (reaching 1000 tonnes or more per year per legal entity) or substances that fulfil certain hazard criteria, is 30 November 2010. For lower volumes the registration deadlines are 31 May 2013 and 31 May 2018. Missing these deadlines could well disrupt your trade to and/or within the European Union.

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