REACH's Impacts

"Duty of care" obligations must be high on the agenda of companies producing or importing chemicals—or even products containing chemicals—under provisions of the European Union's new REACH legislation for the registration, evaluation, and authorization of chemicals.

That's one of the conclusions of a new report from the European offices of Marsh, a risk and insurance services firm. The study outlines the increased business risks that come with REACH, which will be in force on June 1.

REACH, which covers more than 100,000 chemical substances used in the EU, is expected to cost the chemical industry $3 billion over 11 years. Its direct impacts are clear, the report notes. Any company active in the EU that either supplies chemicals in the EU or has chemical-related investments in the EU will have to comply with it.

The report also points out indirect impacts. For example, if testing costs are too high, chemicals may be withdrawn or restricted, thereby triggering product reformulation and reengineering.

Moreover, REACH's "duty of care" obligations will affect the entire supply chain of manufacturers, importers, downstream users, and distributors, says Christopher Bryce, Marsh's industry practice leader for chemicals and life sciences in Europe. These provisions require firms to communicate use and exposure data to people working with chemicals and to keep records for 10 years after a product is last used.

Bryce says companies "need to evaluate how they may be affected by the REACH regulation, understand what the risks are, and decide on the action they should be taking to ensure that they can comply with the wide obligations that REACH will impose."