Introduction
REACH stands for Registration, Evaluation, Authorisation and Restriction of Chemical Substances. Global production of chemicals has grown from 1 million tonnes in 1930 to over 400 million tonnes today. In response to the risks inherent in handling chemicals, the EU has passed new legislation which will overhaul the regulation of chemicals and articles containing chemicals in the EU. The total cost to chemical manufacturers, importers and users of compliance with the regulation over the next eleven years is estimated at between €2.8 billion and €5.2 billion. However, the regulation is expected to improve occupational and public health and reduce the environmental impact of the use of chemicals.
The extent of the potential impact of the REACH regime is far wider than the existing regime, particularly for end users who use chemicals as part of their own industrial or professional activities.
Legal Background & Enforcement
The EU regulation on chemicals and other substances was agreed by the Council and European Parliament on 18 December 2006, and came into force on 1 June 2007. It replaces the current EU regulatory system for chemicals, and will replace over 40 pieces of existing legislation. The Health and Safety Executive is the "Competent Authority" for REACH within the UK and will work closely with Defra, the Environment Agency, other government departments including DBERR, and liaise with the new European Chemicals Agency in Helsinki.
Proposals for UK enforcement of REACH are still being prepared and must be in place by 1 December 2008.
The Requirements Of REACH & Practical Steps
REACH introduces new registration requirements covering all substances supplied in a quantity above one tonne per year, and a new authorisation requirement for substances of very high concern. REACH transfers responsibility for gathering data and carrying out initial risk assessments from the regulatory authorities to the chemicals industry.
Registration – substances manufactured or imported above 1 tonne per company per year must be registered. As part of registration, a technical dossier and a chemical safety report will need to be prepared, recording a chemical safety assessment of the substance that is being registered. This will require chemical manufacturers to form consortia or joint ventures to share information. Substances and articles containing substances must be registered by the relevant deadline. The information contained in the chemical safety assessment must be passed down the supply chain, and all chemical safety assessments and registrations must be implemented and kept up to date.
Evaluation – there are two types of evaluation: dossier and substance. The new Chemicals Agency will carry out dossier evaluations, while competent authorities within member states will carry out substances evaluations.
Authorisation – Around 1,500 substances of very high concern must be authorised. Authorisation will be granted by competent authorities if the risks of a substance are under "adequate control". The industry will be required to make efforts to find safer substitute substances as part of the authorisation process.
Impact on End Users of Chemicals – most of REACH covers manufacturers and importers of chemicals, but end users also have rights and obligations. Users have the right to join a substance information exchange forum, and the right to request that their suppliers' chemical safety assessment covers their uses. Users are, however, obliged to implement risk reduction measures recommended by their suppliers, and under certain circumstances a user may be obliged to carry out a risk assessment covering their particular use of a chemical.
Small and Medium Enterprises – many of the substances subject to REACH registration are supplied by SME's. There are special provisions to help SME low tonnage suppliers, including reduced information requirements and delayed registration.
Conclusion
REACH will have an impact on clients. Clearly, companies who are involved in the manufacture, importation or supply of chemicals within the EU, who will need to work with competitors to assess risks and disclose what would usually be commercially sensitive information.
Such companies may deal with compliance in-house through health and safety or compliance departments. However, there will be an indirect effect on owners and investors in industrial property through tenants being required to comply with the legislation.
In addition, compliance with REACH will form part of the due diligence exercise on acquisitions of relevant companies and assets. There is unlikely to be reliance on warranties as to compliance, such is the critical impact of REACH. There may be increasing consolidation within the chemicals industry as small operators either go out of business or sell their business to a larger organisation to avoid the costs and additional compliance burden.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
