Giving REACH Program A Consumer Face

It's catch-your-breath time for the chemical industry and its customers in the long-running saga of the European Union's REACH program for regulating chemicals.

REACH, which stands for Registration, Evaluation & Authorization of Chemicals, was first proposed by European regulators in 2001. That proposal became official in October 2003 and proceeded to be argued over for the next two years. The debate culminated late in 2005 with the European Parliament's acceptance of a heavily amended proposal and the EU Council of Ministers' acceptance of an equally heavily but differently amended proposal.

The action on REACH has now gone behind the scenes, as the European Commission translates the program into the various languages of European Union member countries for resubmission to the other bodies of the EU.

That interval gives the chemical industry time to gauge the likely impact of the policy on its R&D direction and its markets. And the same task exists for the chemical industry's direct customers, many of which are small and medium-sized enterprises.

For these downstream chemical sectors, the potential scope of REACH seems likely to overlap, and possibly conflict with, the legislative programs that already cover specific sectors. The few outstanding amendments that these users are still fighting for are limited, they say, but crucial to their industries' continued success.

The commission's work will take several months, points out Anne-Marie Rodeyns, deputy director of the International Association for Soaps, Detergents & Maintenance Products (AISE), in Brussels. At the same time, the commission is working with the parliament and council to iron out the differences between their two versions. If preliminary reconciliation is successful, parliament will vote REACH into effect this fall.

So the chemical industry and its customers accept that REACH will happen, if not by the end of this year, then by the first quarter of 2007, Rodeyns observes.

REACH has absorbed much of Rodeyns' time, in part because of her position at AISE, but even more through her role as chair of the Brussels-based Downstream Users of Chemicals Coordination group, or DUCC. The group was formed five years ago, following the commission's first publications on the regulation of chemicals.

"Two or three weeks after that publication, we had a little meeting around my table-the then-director of AISE, myself, and two people from Procter & Gamble. We chatted about what we would do. We knew we had to get our hands into the mud and do things," she recalls.

Clearly, a pan-EU chemicals policy was going to affect downstream users as well as basic producers of chemicals. That awareness led to what was originally envisaged as a one-shot meeting with sister associations to see if there was anything they all could do together. That meeting, Rodeyns adds, quickly showed that almost all of what each association wanted to see in a chemicals regulatory policy was common to all. The result was that DUCC officially came together during the course of 2001.

One of DUCC's first chores was restricting the group's scope to companies that make chemical formulations for sale directly to the end customer. "Our membership is very strictly defined," Rodeyns says. "We have a particular relationship with our upstream suppliers and our consumers." So DUCC has refused to take as members companies making other chemical-related products-or articles, as the legislative jargon has it-such as textiles and electronics.

"You can't get a consensus if you have too broad a membership," she points out. And that's important: "We must have full unanimity for any position going out on DUCC stationery."

Where DUCC has not been able to reach consensus, the trade associations that formed it make their own arguments. For example, at the European Crop Protection Association (ECPA), the concern is about the coformulants needed to make up a finished product for market.

Jean-Pierre Busnardo, DuPont's European regulatory affairs manager and head of the REACH team at ECPA, points out that in November 2005 the parliament accepted an amendment proposing that substances already covered by other regulatory regimens would be exempted from testing under REACH. This would include pharmaceuticals, veterinary products, food and feed additives, cosmetics, medical devices, plant protection products, and biocides. All are currently governed by segment-specific regulations. "That is extremely logical. Where something is already regulated, keep it out of REACH," Busnardo says.

However, the council did not accept that argument. Instead, it adopted another amendment, which specified that only active substances and coformulants used just for crop protection would be considered already covered.

The amendment is meaningless, Busnardo argues, because many active ingredients are used in sectors besides crop protection. Moreover, "there are no coformulation materials used only in plant protection," he says. Compounds such as surfactants and thickeners are almost always used in a variety of sectors, including paints, detergents, cosmetics, and biocides.

"When regulatory authorities evaluate acceptability of our products, they evaluate the composition, and can and do sometimes ask about coformulants," Busnardo says. "Also, the registration freezes the composition. It cannot be modified without a new registration. And sometimes the various countries don't even let us change the source of a product."

REACH, he says, would require the same kind of tests for coformulants that would be required for actives, a cost he estimates at $60 million to more than $100 million for each compound. "We just can't afford that. If we can't have a reasonable treatment of coformulants, we will have to reduce the number used and probably will have to rationalize severely."

DUCC itself submitted only 10 amendments to parliament, Rodeyns says. Many of the needs of DUCC's various sector groups would be met by broader amendments proposed by the European Chemical Industry Council (CEFIC), she explains. "We agreed to submit amendments specific to us." Out of the 10 submitted, eight were adopted by both parliament and council.

DUCC is still fighting for the two outstanding amendments. One would give a downstream user company the option to be involved in registering a chemical under REACH, from the beginning to final authorization. "If we have valuable information or data-on exposure, perhaps-we should be part of the process," she argues.

The other, probably more important, amendment DUCC is pushing for is the right to use safety dossiers from other international chemical testing programs in their original form. In this argument, DUCC is getting support from producers in the petrochemical and basic chemical sectors.

Raymond S. Calamaro, a lawyer with Hogan & Hartson in Washington, D.C., who has been involved with REACH lobbying, says petrochemical producers have supported a similar amendment to permit data from international programs in the original format.

Examples of programs generating relevant data include the high-production-volume chemical assessment programs of the U.S. Environmental Protection Agency and the International Chemical Council Association; the Organization for Economic Cooperation & Development's (OECD) program for the production of internationally agreed Screening Information Data Sets for a wide variety of chemicals; the Human & Environmental Risk Assessment Project of chemicals used for laundry and household cleaning; and the monographs of the European Toxicology & Ecotoxicology Center on individual chemicals.

One of the main proponents for this amendment has been the U.S. National Petrochemical & Refiners Association, Calamaro's client. When he and his colleagues first argued their case before parliament, he recalls, the initial reaction was that the amendment was not needed, because acceptance of original safety dossiers was implied. "But we argued no, it really should be spelled out," he says.

Calamaro's team was able to show that the OECD requirements for high-production-volume chemicals, in particular, were in essence the same as those of REACH. Moreover, the amendment tied in with a drive by animal rights activists to reduce animal tests.

"We were amazed by how well it sailed, and how the European Parliament reflected the concerns we had," he says. "This amendment succeeded by more than 100 votes." However, the council is reserving its decision on this point, he adds.

Underlying the concerns of DUCC's member associations, Rodeyns says, is the impact of REACH on the industry's small and medium-sized enterprises, or SMEs. REACH is more challenging for these firms than it is for large multinationals, she points out, "but SMEs are the companies putting niche products on the market. They need specific raw materials to fulfill those roles. If those raw materials are taken away, then those compositions are threatened."

Smaller firms have less bargaining power with suppliers, she frets, and finding another supplier can be extremely difficult. And if chemicals serve only niche markets, it is possible that suppliers will pull them from the market rather than spend the money to register them.

Managers at the specialty chemical maker Lubrizol are analyzing the impact of REACH on lubricants, hydraulic fluids, and similar products. Mick Wragg, Lubrizol's manager for product stewardship in Europe, notes that REACH will have at least one positive outcome: There should be more hazard data available in the supply chain to enable formulators to make better choices about which ingredients to use in their products.

However, "loss of key components is a real threat under REACH," he says. "Even with the recently proposed concessions to help SMEs, the cost of complying with REACH for smaller companies is expected to cause some lower tonnage substances to disappear for economic reasons rather than because they are hazardous."

That loss would have a decided impact on the lubricants industry, Wragg predicts. "Lubricant formulators know that it is often these lower volume substances that provide the enhanced technical performance that differentiates their products in the marketplace. So some tough choices lie ahead."

As with most legislation, the devil is in the details, and that will be particularly true with REACH. As Rodeyns observes, REACH consists of 132 articles packed into more than 100 pages, plus nearly 800 pages of annexes. "Everyone has concentrated on the articles, not on the annexes," she says.

And even though the process has seemed to outsiders to be interminable, that assessment is not really fair, Busnardo contends, for a program as complex as REACH. From its introduction in 2001 to its anticipated adoption this year, he says, "there has not been a significant delay. It has all been handled very professionally.

"REACH is based on a sound principle-that you should appropriately document your chemicals. We should not fight against that principle," Busnardo says. "Let reason prevail. That's what we're asking for, a system that is reasonable."

CHEMICAL CUSTOMERS

DUCC Group Pulls Together Downstream Users

The Downstream Users of Chemicals Coordination group, or DUCC, was formed in 2001 by seven European industrial associations and one permanent observer. The group's aim is to ensure that European legislators keep in mind its members' needs and capabilities when shaping the REACH regulatory program.

The seven associations are:

AISE, the International Association for Soaps, Detergents & Maintenance Products. Its European membership totals 34 national associations in 31 countries, covering more than 900 companies in the consumer goods and industrial and institutional markets.

CEPE, the European Council of the Paint, Printing Ink & Artists' Colours Industry. It includes national associations in 20 countries representing more than 1,100 paint and 75 printing ink companies and 20 artists' colors manufacturers representing more than 85% of the European market.

Colipa, the European Cosmetic, Toiletry & Perfumery Association. It represents more than 2,000 companies, ranging from family-owned small and medium-sized enterprises to multinational firms.

EPIA, the European Photo & Imaging Association. Membership includes nine large companies and four national associations, which represent small and medium-sized companies throughout Europe.

FEA, European Aerosol Federation. It represents 20 European countries and 650 companies active in the aerosol industry.

FECC, the European Association of Chemical Distributors. Membership encompasses 60 member organizations, national associations, and individual companies.

FEICA, the European Adhesives Industry Association. It represents 15 national adhesive industry associations linked to 480 mostly small and medium-sized adhesive manufacturers.

The permanent observer at the DUCC table is EuroCommerce, which represents the retail, wholesale, and international trade sectors in the European Union. It was founded in 1993 from the merger of organizations covering the three separate business sectors. It includes more than 100 members, including commerce federations in 28 European countries.