CURRENT REGULATORY ISSUES FOR BRAZILIAN EXPORTERS

Transcription

1 CURRENT REGULATORY ISSUES FOR BRAZILIAN EXPORTERS São Paulo, June 17-18, 2010 Craig Simpson, Attorney 1

2 THE NEW BUSINESS ENVIRONMENT FOR CHEMICALS 2

3 Global Chemicals Regulation Future Trend for increased regulation Industry must prove safety of substances More hazard based systems, not risk based Concentration of markets: Marginal geographic markets dropped Viability of SME specialty chemicals? effects on DUs European REACH gold standard REACHïsation of world TASCA reform, China new regulatory framework Apply practical lessons from REACH Need for companies to understand, access and influence legislators and policy makers in jurisdiction where regulators framework still in formation 3

4 GLOBAL VIEW: CHEMICALS REGULATION IN THE MAJOR ECONOMIES 4

5 Chemicals Regulation In China Regulatory requirement for Brazilian companies importing chemical substances into the Chinese market or manufacturing in China New Measures for Environmental Management for New Chemical Substances in effect October 2010: Chinese Chemicals regulation influenced by EU REACH system But new substances only: NOT 45,000 substances in Catalogue of Existing Chemical Substances promulgated by the Ministry of Environment Protection (the "MEP") Government intention to regulate chemical substances more strictly through implementation rules/guidance Applying to raw materials and intermediates used to produce agricultural chemicals, food and food additives, drugs and cosmetic products ( product breakdown needed) In addition to product specific statutory and regulatory regimes Characteristics of the Chinese chemical regulatory regime: Law generally stated (vague) - implementation rules crucial; Opaque enforcement procedure No efficient administrative review procedure of regulator s decision 5

6 Chemicals Regulation In The United States - Current Most imported chemicals currently subject to the Toxic Substances Control Act (TSCA) Substances new to the US may require testing and registration under TSCA to assess health or environmental impact Does substance meet criteria of TSCA registration exemptions? Chemical substances regulated by other programs (not TSCA) include: Foods, food additives, drugs, cosmetics or devices regulated by FDA (Food and Drug Administration) Pesticides regulated by EPA (Environmental Protection Agency) Tobacco and tobacco products regulated by ATF (Bureau of Alcohol, Tobacco & Firearms) Radioactive materials regulated by NRC (The Nuclear Regulatory Commission) 6

7 Chemicals Regulation In The United States Future: TSCA REFORM Pending legislation in the US Congress to overhaul TSCA Burden of demonstrating chemical safety on manufacturer/importer, before placing on market (like REACH): Influence of EU REACH system (EPA: how we can make our law nimble ) Minimum data set required for new chemicals Transitional 5 yr period for manufacturers to provide data for existing chemicals already in Inventory New chemicals, or new uses of existing chemicals subject to safety standard determination based on production volume and, toxicological profile EPA to complete safety determination in 6 months and could prohibit chemical in U.S. Individual US states can establish stricter chemical management regulations, in addition to TSCA requirements 7

8 Chemicals Regulation In Europe: REACH Regulation Scope: Chemical substances manufactured and marketed in, or imported into, the EU whether on their own, in preparations /formulations, or in finished products ( articles ) where substances are intended to be released Key policy objective: responsibility on industry for proving safety of existing and new chemical substances on EU market through provision of data EU market access: Unless exempted or deemed registered under REACH, substances must be (pre)-registered with ECHA to be legally marketed on the EU ( no data, no market ) from June 1,

9 Chemicals Regulation In Europe: REACH Regulation Pre-registration prior to December 1, 2008 Extended registration deadlines according to hazard profile and volumes manufactured/imported into EU No pre-registration: limited options (sales illegal from June 1, 2008) Mandatory cooperation between competitors ((pre)-sief) Joint registration (OSOR) Authorisation and restrictions SVHC candidate list Eventual prior authorisation requirements ECHA may place restrictions on manufacture, use or marketing Supply Chain Communication ( new culture ) Communication for registration and risk management Manufacturers, formulators, article producers, importers, distributors and downstream users 9

10 REACH FOR NON-EU SUPPLIERS: MAINTAINING YOUR EU MARKETS 10

11 ONLY REPRESENTATIVE 11

12 Non-EU Suppliers Under REACH: Only Representative Option Non-EU based suppliers cannot register directly 2 options: Leave REACH compliance to EU importers Non-EU manufacturer, formulator or article producer (not non- EU distributors/traders or toll manufacturers) may appoint Only Representative ( OR ) for EU exports Advantages: control over presentation of EU markets/supply chain, avoid passing of CBI to downstream customers Separate registration by OR for each appointing non-eu supplier of same substance 12

13 Non-EU Suppliers Under REACH: Only Representative Function Assumes the responsibilities of a registering importer, including: Pre-registering and registering substances Participating in SIEF(s) Acting as a liaison within the supply chain Overseeing the preparation of registration dossiers and submitting to the authorities Managing and retaining documents for 10 years When OR used, the existing (true) importer becomes a Downstream User for REACH 13

14 Non-EU Suppliers Under REACH: Only Representative Criteria OR s should have sufficient background in the practical handling of substances and the information related to them : Specific legal/regulatory/technical expertise (including indirectly through external technical support (technical consultants, law firms) supporting EU-based entity) EU post box insufficient: recent Chinese OR investigation by Dutch authorities: address only - no real Community presence Unable to establish appropriate background Means substances not previously (pre)-registered knock-on effects for importers non-eu supplier Non-EU manufacturers and importers/ DUs should verify their OR credentials Appoint new OR? Registration already submitted: Submit update of registration dossier noting OR change, if original OR contract permits; alternatively, must submit new dossier (with assistance/data from previous OR?) Registration not yet submitted: OR contract permits takeover? Inform ECHA 14

15 Non-EU Suppliers Under REACH: Only Representative Criteria OR paper trail vital if compliance investigation: Separate OR appointment contract between each separate non- EU entity in same group and OR Where appropriate, evidence of agreement between appointing entity and non-eu customers that OR covering their volumes (indirect exports) OR to hold up to date list of EU importers and volumes purchased by each (Chinese OR investigation) OR to hold up to date SDSs Have you informed new importers (directly or through non- EU distributors) of OR appointment? (REACH requirement) 15

16 Non-EU Suppliers Under REACH: Only Representative Trade Concerns Practical effect of REACH on non-eu supply chain not properly considered OR requirement a discriminatory trade barrier for non-eu suppliers (vis-à-vis EU based competitors)? Pressure from non-eu based industry on Commission and ECHA to (re)-interpret Regulation fairly (for example, reversal of tonnage aggregation rule) «Third country concerns have not been factored into the legislative process» (U.S. Ambassador to the EU, C. Boyden Gray, 8 June 2006) 16

17 REACH AND CORPORATE STRATEGY 17

18 REACH As Part Of Corporate Strategy: Opportunity For Positioning In A Competition Market Turn a legal obligation into a competitive advantage? Executive Director for Product Stewardship of Dow Corning, global silicones leader We are using REACH in a positive manner, as a driver for internal innovation programmes. REACH compliance an opportunity for businesses to position themselves as industry leader and enhance customer loyalty Show high level of compliance Assist downstream supply chain with own obligations (for example, production uses inquiry) Saudi Basic Industries Corporation (Sabic), REACH programme manager: Because REACH is a common EU effort, you come into contact with the full value chain suppliers, co-producers, distributors and customers as well as with authorities, policy-makers, NGOs and trade associations. It gives us the chance to demonstrate what Sabic does and what its values are. 18

19 REACH As Part Of Corporate Strategy: Opportunity For Positioning In A Competition Market Implement product stewardship programs for hazardous products Alternatively, use of non-hazardous products a selling point? EU Environment Commissioner Stavros Dimas, 18 December 2006: REACH will also encourage innovation in the chemicals industry and increase consumer confidence in their products. 19

20 REACH As Part Of Corporate Strategy: Leading Rather Than Following REACH requires an unusual coordination of knowledge of supply chain relationship management, legal skills and technical/scientifical input not just regulatory Effective REACH compliance requires clearly assigned responsibilities for compliance activities: Involved those who understand the science Involved those who understand the markets Involved those who properly understand legal requirements 20

21 REACH And Product Stigmatization Products defence/stewardship REACH implications: Strategic commercial, not legal, considerations Candidate list blacklisting provisions of REACH: Duty to inform and notify SVHCS, authorisation requirements SIN (Substitute it now ) list: SVHCs that NGOs and International Chemical Secretariat propose be priorities for candidate listing Market awareness leads to pressures from consumers/commercial initiatives to restrict use of listed substances Avoid deselection of your products by the market (encouraged by NGOS) Interaction with policy makers and your customers required Reformulate or support!! 21

22 IMPLICATIONS OF REACH NON-COMPLIANCE 22

23 Implications Of REACH Non-Compliance Failure to demonstrate REACH compliance may have the following consequences: Immediate commercial withdrawal of relevant substance from the EU market; OR/importer being held liable by national enforcement authorities or downstream user customers for the illegal import into the EU of a non-compliant substance; Liability of EU downstream user customers for their use of noncompliant substances after 1 June 2008; Imposition of substantial fines or even imprisonment of individuals from OR/importer or downstream user entities; Full registration required prior to resumption of marketing a non-(pre- )registered phase-in substance, resulting in significant marketing gap; and A negative effect on company reputation and its relationship with its EU-based customers (customers seek alternative suppliers?). 23

24 You Failed To Pre-Register? No-one in supply chain pre-registered your EU export volumes: Create a new EU legal entity - first time EU importer or manufacturer after Dec. 1, to benefit from the late pre-registration provision; Tax considerations? Late pre-registration deadline passed? Swap to an existing importer who has pre-registered your substance at a sufficient tonnage threshold to accommodate your tonnage (preregistration numbers for sale?) Cannot appoint an Only Representative after December 1, 2008 if already sold substance in EU after 1 June 2008 Cease marketing the substance in the EU; or Continue marketing, in the knowledge that this constitutes an infringement of the REACH (not advised!) 24

25 EXPORT OF FINISHED/ END USE PRODUCTS ( ARTICLES ) 25

26 Overview of Obligations re Finished Products ( Articles ) REACH creates OBLIGATIONS for articles (finished products) Registration of substance intended to be released from articles under normal or reasonably foreseeable conditions (as part of functionality of article) SVHCs in candidate list (a moving target): From 2011, notify to ECHA certain concentrations in articles where possibility of exposure to humans On inclusion in list, article supplier to provide recipient (industrial/professional/downstream) user/distributor), and any consumer which requests, with substance information Packaging is itself an article with distinct REACH requirements! SVHCs Normally no intended release But, for example, packaging releasing corrosion inhibitors 26

27 Articles How could your production life cycle expose or protect your product from additional REACH requirements? Registration Only if intended to be released under normal or reasonably foreseeable conditions of use. Art. 7(1) Qualification as article usually removes biggest REACH cost/administrative burden of substance registration Better to import articles than substances/preparation Notification SVHCs with exposure to humans or the environment during normal or reasonably foreseeable conditions of use including disposal. Art. 7(2) Are there any SVHCs (over concentration limits)? Can you exclude exposure and avoid notification? Is it more expensive than notification calculate! What about substitution? 27

28 What is an Article? Substance/Preparation v. Article An object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition. Article 3(3) REACH Open to interpretation/grey area Dividing line between substance and article not obvious 28

29 Borderline Cases Up to importer/or/non-eu supplier to decide if article or not Borderline Area 1: when, in processing of natural or synthetic materials into final articles, does substance or preparation become an article? Is shape/surface/design more relevant than chemical composition? In case of doubt: Guidance gives indicative questions, e.g. Does the material in question have a function other than being further processed? Yes => indication that it is an article Does the seller place the material on the market? Yes => indication that it is an article 29

30 Example Aluminium { no normal end use function Articles Guidance p.82 30

31 Borderline Cases Borderline Area 2: substances/preparations in special containers/on special carrier material versus substances/preparations being (integral) parts of an article Substance in special container/carrier material: If object merely acts as a container/carrier material to deliver a substance/preparation, for example, spray can with preparation or cleaning tissues containing chemicals Container content subject to normal substance requirements (intended release test irrelevant) Container subject to normal article requirements Example: Import car ( complex article ) with brake fluid inside Integral post of complex article, with no intended release (no registration) Import bottle of brake fluid Preparation in container (registration of substances) 31

32 Registration Importer/OR of articles to submit registration (general deadlines for pre-registration and registration apply) to Agency if substance contained in those articles: Present in those imported articles in quantities totalling > 1 t per importer per year; and Intended to be released under normal or reasonably foreseeable circumstances ECHA residual power to require unintentionally released substance if risk to human health or environment Intended to be released means: Release is deliberately planned Release has a specific function for the article Release contributes to the added value of the article, which is not directly connected to the end use function If the release would not happen, that function could not be fulfilled. Example: Release of perfume from a perfumed eraser (function = to erase, added value / function for convenience = quality to smell good). 32

33 Registration Normal or reasonably foreseeable conditions means Conditions of use that are not as originally intended by the article producer or importer (normal use) but which can be anticipated as likely to occur because of the form, shape or function of that article Reasonably foreseeable Not reasonably foreseeable Accidents of high likelihood, e.g. fragile containers Misuse (not in accordance with the function but still predictable, e.g. by a child) Extremely intensive use Uses clearly excluded by the producer or importer Uses clearly advised to be avoided by product design or warning labels Clear misuse 33

34 Notification Importer to notify if SVHC present in all articles: If imported in an amount totalling over 1 metric tonne per year If present in such articles above a concentration of 0.1% weight by weight (w/w) Notification exemption if producer of importer can exclude exposure to humans or the environment During normal or reasonably foreseeable conditions of use Including disposal (implications for end of life treatment) Alternative duty to supply appropriate instructions to the recipient of the article. Debate over meaning of w/w requirement: ECHA says requirement applies to the article as imported Certain Member States (Austria, Belgium, Denmark, France, Germany and Sweden) say applies per individual component in complex article = more easily satisfied Certain Member States will require notification where others do not Resolution only by legal challenge? 34

35 Present above a Concentration of 0.1 % Weight by Weight Austria, Belgium, Denmark, France, Germany & Sweden 35

36 Notification timing: Notification Timing No later than 1 June 2011 for SVHCs included in candidate list prior to 1 December 2010 Not later than 6 months after inclusion in the candidate list for substances included after that date 36

37 Information Requirements Suppliers of articles (including importers, distributors and others in supply chain) containing SVHC in a concentration above 1% w/w to inform industrial/professional downstream users of name and safe use of information immediately on inclusion in Candidate List Obligation to provide same information to requesting consumers within 45 days of request No minimum tonnage trigger Debate over 0.1% w/w REACH silent on fees - could charge consumers? 37

38 DOWNSTREAM USERS 38

39 Downstream Users Who is a DU? Natural/legal person established within EU Who uses a substance, on its own or in a preparation In the course of his industrial or professional activities Could include formulators of preparations, producers of articles, etc. Not importer (except in OR scenario) distributor (including retailer) or consumer 39

40 Downstream User Supply Chain Obligations Downstream users (substances and preparations): Check that SDS with annexed exposure scenarios ( ESs ) from supplier covers uses Pass relevant information on hazards, risk management measures to supplier Check that you comply with any Risk Management Measures in ESs Prepare and supply SDS to DU customers (with customers identified uses) Pass information for non-dangerous substances (Art. 32 no SDS required) on Risk Management Measures to industrial and professional customers Articles: information obligations to customers (Art. 33) 40

41 Downstream Users: Safety Data Sheets (SDS) DU will receive a safety data sheet (SDS) from a supplier when a substance (or preparation) is: Classified as dangerous; Persistent, bio accumulative and toxic (PBT) or very persistent and very bio accumulative (vpvb) (criteria in REACH Annex XIII); or Included in the candidate list of substances subject to authorisation (for a reason other than either of the above two). A SDS may be requested from a supplier when a preparation is not dangerous, but contains: In an individual concentration of 1% by weight of non-gaseous preparations and 0.2% by volume for gaseous preparations at least one substance posing human health or environmental hazards; or In an individual concentration of 0.1% by weight for non-gaseous preparations at least one substance that is PBT or vpvb (criteria set out in Annex XIII or has been included for reasons other than those referred to in point (a) in the list of substances subject to authorisation; or A substance for which there are EU workplace exposure limits. 41

42 Downstream Users: Information Where No SDS Required Any supplier of a substance/preparation who does not have to supply a SDS must provide the recipient with the following: The registration number(s), if available, for any substances for which information is communicated under points (b), (c), or (d); If the substance is subject to authorisation, and details of any authorisation granted or denied in this supply chain; Details of any restriction imposed; Any other available and relevant information about the substance that is necessary to enable appropriate risk management measures (RMM) to be identified and applied 42

43 Downstream Users: Chemical Safety Report Basics A chemical safety assessment (CSA) must be performed and a chemical safety report (CSR) completed for all substances subject to registration in quantities >10 MT per year No CSA needed for substance in preparation if the concentration of substance in preparation is below certain de minimis thresholds If substance dangerous, CSA must include exposure assessment with resulting exposure scenario (ES)* * ES: recommendation to downstream uses on how to control health and environmental risks 43

44 Are DU (And DU S Customers) Uses Covered By SDS? DU should: Identify the substances and preparations used in their industrial processes Check that uses already covered by ESs annexed to supplier s SDS Where uses not covered by SDS, 3 scenarios: DU informs supplier of use ( identified use ) and supplier updates SDS with ES for relevant use; or DU prepares own CSR and notifies ECHA (where necessary, Articles 37(4) and 38): Where supplier will not develop ESs to cover identified use; Where DU wants to avoid revealing use to supplier for confidentiality reasons DU switch to supplier which has ES covering use 44

45 Are DU (And DU S Customers) Uses Covered By SDS? Grace period for DU to ensure that use is in line with SDS (12 months from receipt from supplier of registration number in SDS) Time limit for supplier to update SDS with additional exposure scenarios: For registered substances, before he next supplies For non-registered phase-in substance, prior to registration deadline (provided receives identified use request 12 months before deadline but why refuse?) NB: Applies to all suppliers (importer DU, DU DU Customer) 45

46 Commercial Pressures On Suppliers DU continuing access to EU markets may depend on REACH compliance of other actors in supply chain Are suppliers aware of, and addressing, their compliance requirements? Risk of disruption in supply network? May lose customers to compliant supplier? DU insist on REACH compliance clause in purchase orders stating supplier guarantees, accepts liability/indemnities: Substances supplied pre-registered/registered Continuing information on SVHCS in articles Continuing notification on SVHCS in articles to ECHA Commitment to discuss approach to authorisation application 46

47 Downstream User: Issues Communication of identified use in a complex supply chain: Only communicate to direct supplier Message may not reach registrant how to ensure? Identified use to supplier inclusion in joint dossier Liability for non-reach compliant use of substance Defence of best efforts? Director s Group: DUs of substances not registered will be given a window post registration deadline to register themselves No basis under REACH for this (DUs cannot be registrants)? 47

48 CLASSIFICATION LABELLING AND PACKAGING 48

49 CLP Summary Of Implications For Industry As if REACH first registration deadline obligations not enough Further deadlines imposed by end of year under Regulation (EC) No 1272/2008 on Classification, Labelling and Packaging of Substances and Mixtures ( CLP Regulation ) Classification: Inventory of substances (including those not currently classified under DSD/DPD) Gather information re substances properties/hazards, generate new information for physical hazards Training of appropriate technical/regulatory staff Generation of new labels Repackaging Update SDSs (service provider with software-steptoe?) Significant cost burden and resources needed Combine with REACH compliance programme for efficiencies CLP wider scope than REACH: Includes hazardous substances (on own, or above certain thresholds in mixtures) imported below 1 metric tonne per annum Includes some REACH exempted substances (for example, classification of hazardous polymers) 49

50 Basis: UN Globally Harmonised System (UN GHS) UN Globally Harmonised System for Classification and Labelling of Chemicals (last amended 2009) Basis for harmonised rules and regulations on chemicals at national, regional and worldwide level a collection of building blocks from which to form a regulatory approach (UN, 2007) UN GHS = non binding international agreement EU Member States choose which hazard classes/categories they want 50

51 Basis: UN Globally Harmonised System (UN GHS) Establishment of: Harmonised classification criteria to determine if substances should be classified (has properties damaging to health or environment?) Harmonised hazard communication elements (requirements for labels and SDSs) Aim More accessible consumer information on physical hazards and toxicity Worldwide trade facilitation avoid need to reclassify and relabel for different jurisdictions achieved in practice?! Plan of implementation of the World Summit on Sustainable Development (WSSD), 2002: EU should implement by

52 CLP Regulation Entry into force: 20 January 2009 CLP Regulation incorporates GHS criteria into EU law Replaces regimes in EU Directives 67/548/EEC ( DSD ) and 99/45/EC ( DPD ) concerning dangerous substances and preparations: DSD/DPD currently apply in parallel with CLP Replaced gradually until 2015 Amends REACH Regulation Rationale: Harmonised classification criteria and labelling rules = competitive advantage for European industry Exemptions: drugs, cosmetics and foods in finished state 52

53 Classification: What Must be Classified? Classification of: Substance and mixtures before being placed on market, irrespective of tonnage (M/I or DUs, as appropriate) Substance not placed on the market, but subject to registration or notification under REACH: (M/I) Monomers On site isolated/transported isolated intermediates (not nonisolated intermediates) PPORD substances (incl. in articles) Explosive articles (M/I) Substances in articles intentionally and foreseeably released or subject to ECHA notification (SVHCs) under REACH (M/I) DU or distributor can rely on supplier s classification, as long as does not change composition of substance on mixture 53

54 Classification: Criteria Classification Criteria for substances/mixtures CLP Regulation applies all GHS hazard classes (more hazard classes than before) = type of hazard Only adopts previously existing hazard categories = severity of relevant hazard Alignment of test methods and criteria for assessment of physchem properties with UN Recommendation on the Transport of Dangerous Goods, Manual of Tests and Criteria Other existing test methods (e.g. eco-toxicity and toxicity) remain New GHS criteria => future classification of some substances not previously required under DSD/DPD Effect REACH obligations registration deadline 54

55 Classification: Self-Classification Classification by one or both of the following approaches: Use of harmonised classification (existing or proposed); Self-classification by application of the criteria (= supplier s decision on a particular classification) when no (mandatory) harmonised classification for specific hazard Title II of CLP Regulation Substances Self-classification only where no harmonised classification exists Mixtures Self-classification has always to be done (any available harmonised classifications of substances contained in mixture must be taken into account) 55

56 Classification: Self-Classification Normally 4 basic steps: Prepare inventory of substances as such in mixtures or in articles (start with REACH list?) Evaluation of adequacy and reliability of available classification information (including within REACH SIEF) Generate new information for physical hazards if not available Review of information against classification criteria Decision on classification Alternatively translation tables Annex VII CLP Regulation (existing DSD or DPD classifications to CLP classifications), if 2 cumulative conditions are met: Substance has been classified according to DSD before 1 December 2010 or a mixture has been classified according to DPD before 1 June 2015 No further data available 56

57 Classification: Harmonised Classification All previously harmonised substance classifications under (DSD (substances) or DPD (mixtures) converted into CLP harmonised classifications New Procedure: Scope: Industry (M/I/DU) as well as MS, can submit proposals to ECHA new harmonised C&L or propose to MS new information re amendment to existing harmonised C&L MS submits to ECHA ECHA s Committee for Risk Assessment issues opinion on proposal to Commission Commission proposes decision on harmonised C&L, for adoption Most dangerous: CMRs/respiratory sensitizers Category I Biocides or pesticides Others on case by case basis (where can t agree on classification) Greater transparency and opportunity for industry to provide new information on substances and mixtures 57

58 Labelling Supplier must label substances or mixtures in accordance with CLP rules before placing them on the market (separate information provisions for articles under REACH (Article 33)) Labelling if: Substance or mixture itself classified as hazardous; or Mixture contains one or more substances classified as hazardous above certain thresholds Explosive article Distributors and DUs can normally rely on classification of supplier in labelling Specifics: Details of supplier Official language of Member States where marketed Specific labelling for certain products (aerosols, alloys, etc.) New hazard symbols (pictograms) & signal words ( warning, danger ) 58

59 Label Example 59

60 Packaging Single packaging meeting labelling requirements of transport legislation must be labelled in accordance with CLP Regulation and EU transport of dangerous goods legislation If package consists of inner and outer packaging where outer packaging must be labelled according to transport legislation, then: (i) inner packaging must be labelled according to the CLP Regulation, and (ii) outer packaging may be labelled according to CLP Regulation If package consists of inner and outer packaging where outer packaging does not need to be labelled according to transport legislation, then the inner and outer packaging must be labelled according to the CLP Regulation. If the outer packaging is transparent, then the outer packaging does not need to be labelled at all. Expect questions from customers not familiar with the relationship between the two regimes 60

61 CLP Regulation Timelines Classification and Labeling Timeline for Mixtures & Substances? Mixture Must classify, label and package in accordance with Directive 99/45/EC** May classify, label and package under CLP *** Must classify, label and package under CLP? Substance Must classify, label and package in accordance withdirective 67/548/EEC & May classify, label and package under CLP*** Label and package only under CLP* Classify under both Directive 67/548/EEC and CLP Must classify, label and package under CLP REACH Entered into Force 1 June 2007 REACH Pre - Registration Deadline 1 Dec CLP Entry into Force 20 Jan st REACH Registration 1 Dec nd REACH Registration 1 June 2013 Directive 67/548/EEC Repealed 1 June rd REACH Registration 1 June 2018 Annex I of Directive 67/548/EEC Repealed 20 Jan June 2015 Directive 99/45/EC Repealed 1 June 2015 * If the substanceis placed on the market before 1 Dec. 2010, then it is not required to be re- labelled and re-packaged under CLP until 1 Dec ** If the mixture is placed on the market before 1 June 2015, then it is not equired r to be re-labelled and re-packaged under CLP until 1 Jun *** Labelling and packaging of DSP/DPD replaced (not as well as) 61

62 Effect on REACH SDS Requirements New Annex II (SDS) REACH published end May 2005 to reflect CLP classification criteria Confidentiality issue over registration number on SDS: Omit last 4 digits to prevent formulators DUs tracing source of supply Last 4 digits must be supplied to enforcement authorities on request Existing SDS may require an update when: A substance or mixture has been classified, labelled and packaged according to CLP which had already been classified according to DSD / DPD New knowledge on hazards becomes available; Substances or mixtures which were not classified under the DSD and DPD are now classified as hazardous or contain one or more component substances classified as hazardous above specified threshold 62

63 SDS Deadlines Deadline The Safety Data Sheet until 1 December 2010 shall contain the classification of a substance according to DSD. However, if a substance is already classified, labelled and packaged according to CLP, the Safety Data Sheet for the substance shall also contain the CLP classification of the substance. until 1 June 2015 shall contain the classification of a substance according to DSD. After 1 December 2010 the CLP classification shall also be provided. until 1 June 2015 shall contain the classification of a mixture according to DPD. However, if a mixture is already classified, labelled and packaged according to CLP, it shall also contain the CLP classification of the mixture. from 1 June 2015 shall contain substance and mixture classifications according to CLP. 63

64 Notification: What And Why? Manufacturers/importers (not distributors or DUs) must notify to ECHA Classification of substance under CLP criteria Label elements together with any supplemental hazard statements Inventory in form of a public database established by ECHA Purpose: Information on classified, and registered non-classified, substances placed on the market for information of public, Member states and suppliers Highlights substances where disagreement on classification and labelling (list with state existence of different entries) harmonisation SIEF objective: participants to try and agree classification and labelling for conclusion on inventory Inventory may have several different C&L entries for some substance because: Different test data used Different impurity profiles (compatible with REACH sameness) 64

65 Notification: Which Substances? Which substances have to be notified? Substances which are subject to registration under REACH ( 1 tonne/year) and placed on the market (including substances contained in mixtures and certain substances intentionally and foreseeably released from articles ) Substances classified as hazardous under CLP and placed on the market irrespective of the tonnage (including those not subject to registration, e.g. polymers) Substances in mixtures classified as hazardous under CLP and present above the concentration limits specified in Annex I of CLP or DPD 65

66 Notification How? Industry predicts 10 million notifications Submission tools are still under development Industry has different options to notify through REACH-IT IUCLID 5 For SMEs (but not only), an on-line submission through a userfriendly data entry form (reduced number of fields, use of default values, on-line help functions and compulsory fields) Bulk submission of XML files to enable the submission of many notifications in one go (only suitable for substances that: have a CAS or EC number; are of single composition; are not hazardous, but subject to REACH; do not require additional evidence to be provided) Each substance notification would require companies to fill in around 200 data fields! 66

67 Notification Deadlines Deadlines for notification For substances placed on the market on 1 December 2010 itself 3 January 2011 For substances placed on the market after 1 December month from the date they are placed on the market C&L notification is not necessary if the required C&L information in accordance with CLP has been provided to ECHA as part of a REACH registration For first registration deadline substances should therefore include CLP classification, in addition to mandatory DSD classification 67

68 Issues Only Representative cannot notify to C&L inventory Oversight in CLP only EU importer can notify BUT: OR s REACH registration of a substance by 30 November 2010 can validly waive an importer s C&L notification obligation IF the importer in question is expressly identified in the OR s individual registration dossier ORs cannot submit a proposal for harmonised C&L Only importer will importer understand? ALL REACH registerable substances (hazardous and non-hazardous) subject to notification Logic? Inventory not classified Substances newly classified as CMR Cat. 1 or 2? Suddenly registerable by November with little time Importer who receives: Only DSD classifications or SDS translation tables No information from non-eu supplier threaten switch to different supplier? Requirement to classify substances in articles subject to notification under REACH Will importer know what is in article? (supply chain issue) 68

69 MANAGING REACH COMPLIANCE ACTIVITY 69

70 Status Of Progress Towards First Registration Deadline Clock ticking for November 30, 2010 deadline high volume (>1,000 tonnes)/dangerous substances CEFIC: SIEF not working : behind CEFIC anticipated timetable: Sameness discussions finished? SIEF yet in existence? Time running out to register 2010 deadline substances Concern leads to Directors Contact Group on registration formed in February 2010 Representatives of European Commission, ECHA and industry associations (Cefic, Eurométaux, REACH Alliance, Concawe, FECC, and UEAPME). 70

71 Status Of Progress Towards First Registration Deadline Director s Group Purpose Practical Functioning of the SIEF : Monitoring overall preparedness of companies to meet the 30 November, 2010 registration deadline Identifying and solving priority issues of concern Kick start progress towards first registration deadline Accelerate process of formation and corporation in SIEFs Secure supply of first registration deadline substance (>1,000 tonnes/dangerous substances) Communication to pre-registrants re SIEF preparedness: Is there a Lead Registrant? Assist DU s to identify risk to continued supply 71

72 Status Of Progress Towards First Registration Deadline Director s Group Priority potential show-stopper issues preventing registration: Prolonged disputes on cost/data sharing and SIEF/consortia operational rules Inactive SIEF member waking up (suggests cut-off date for changes to joint dossier) No lead registrant (difficult for OR/importer to adopt role for non-eu only substances) Registrants left stranded by failed joint submission Now too late to get results from certain studies not started sufficiently in advance 72

73 Current SIEF Cooperation Problems Previous focus or Consortium/Lead Member activity: Now focus shifts to managing interrelationship with registrants outside consortium Interactions of various parties involved in registration dossier complicated! 73

74 The Various Players In Preparation Of The Registration Dossier 74

75 Current SIEF Cooperation Problems Re Registration- Lead Registrant Perspective From perspective of SFF/Lead Registrant Time pressure to forge ahead with dossier presentation (consortium/sief Agreements, data availability questionnaire, etc.) YET Reliant on voluntary cooperation of other registrants Critical gap between cooperation REACH requires in practice and means to achieve this SIEF obligations (requesting vertebrate studies available in SIEF, providing proof of study costs) not binding until SIEF formed SIEF participants don t have to join consortium or sign a SIEF agreement: only comply with basic REACH obligations 75

76 Current SIEF Cooperation Problems Re Registration- Lead Registrant Perspective SIEF Agreement Purpose of SIEF Agreement: Non-Lead Members not contractually bound by consortium agreement Certain provisions of consortium agreement (data cost sharing) dependent on agreement of Non-Lead members Formal election of Lead Registrant (Article 11 (1), 2 nd paragraph) Legitimises Non-Lead Members participation in joint registration dossier Respective obligations re preparation of joint registration dossier Rights to join registration data on payment of data/administrative costs Confidentiality and competition law issues Terms must not discriminate compared to consortium members 76

77 Current SIEF Cooperation Problems Re Registration Non-Cooperation LR experience very low SIEF participant response rate: 15% (LR conference Brussels, 11 September 2009) Consequences of refusal to sign (silence)/non adherence to SIEF Agreement: Can Lead Registrant be elected by default (without positive affirmation)? Ensure window to object, with cut-off date No response to SIEF Agreement? Not contractually bound if does not sign NLM must still share its data relevant to joint registration and pay equal share of costs under REACH LR must still file joint dossier on NLM s behalf but how to recover administration costs? No obligation on NLM to grant LR rights to sub-licence data to other registrants prevents centralisation of rights on Lead registrant 77

78 Current SIEF Cooperation Problems Re Registration NLM Perspective From the perspective of non-consortium Member Are terms fair, transparent and non-discriminatory? How to fight unfair terms A breach of a specific provision of the REACH Regulation? A breach of competition laws? (various arguments) Both? Costs comparison: join consortium v. purchase letter of access to joint registration dossier? Worth joining consortium if no data? (Economic downturn) liquidity issue postpone up-front consortium costs by buying data from consortium at later date But may finally pay more ( Sweat Equity / Additional charge) as late member or non-member buying letter of Access 78

79 Current SIEF Cooperation Problems Re Registration NLM Perspective Price Discrimination: Different membership charges without justification Fees for late Members or Non-members accessing consortium data exceeds historic generic costs + reasonable Sweat Equity (early commitment of resources of other members) uplift? Advantage compensation permissible? Take it or leave it standardised data package terms Data owner cannot make sale of required data conditional on other data Registrant can t be forced to buy data doesn t need Not required to pay for studies = before actually require them for registration deadline (although may agree to data/costs sharing method now) Yet in practice, few consortia offering different fee options for <1000 MT/year or intermediate abbreviated dossier: One fee for token, irrespective of specific registrant data needs Illegal but no time to challenge pre Nov. 30, 2008 Challenges in national courts next year? 79

80 Current SIEF Cooperation Problems Re Registration NLM Perspective Should all consortium administration costs be recoverable from non- lead members? grey area Establish direct benefit of costs incurred to NLM? Where no Lead Registrant yet proposed? Any choice but begin preparation of own dossier to meet registration deadlines? Lead Registrant by default? Liability for joint dossier? 80

81 DOSSIER PREPARATION 81

82 Registration Dossier: Basics OR submits separate substance registration dossier (IUCLID5 online file) for each legal entity it represents which imports that substance (as such, in preparation or (released from) article) OR is the registrant liability Registration dossier : combination of common parts ( joint registration dossier ) prepared by Lead Registrant and company specific parts completed by individual registrant Dossier in electronic form only and generated through IUCLID5 software Lead Registrant elected by SIEF participants submits joint registration dossier (common hazard data parts of technical dossier) and normally joint CSR (optional) 82

83 Registration Dossier: Basics Individual registrant (OR) joins consortium or requests a letter of access to common parts/joint registration dossier Individual registrants need joint submission token for individual registration: LR joint submission => generation of token number by REACH-IT LR communicates token number to registrants who have paid for access to data Registrants register themselves as part of joint submission team On joint submission of technical dossier by Lead Registrant, all registrants receive registration number for quoting in dossier. Fee indications: registration fee of EUR 23,250 (US$ 28,800) (BRL 51,500) per substance and letter of access fee EUR 5-100,000 (US$ 6, ,000) (BRL 11, ,000)) 83

84 REGISTRATION COMPLETENESS CHECK General rule: ECHA must undertake completeness check of a registration dossier within three weeks of the submission date BUT: ECHA must undertake completeness check of a registration dossier within E.g. Registration deadline of 1 Dec months after deadline 1 Dec months before deadline If submitted during this period, 3-months rule (starting 1 Dec 10) applies If submitted before, general 3- week rule applies Arti cle 20( 84

85 REGISTRATION COMPLETENESS CHECK Registrant may continue manufacture/import of substance or production/import of an article, if 1. No indication to the contrary from ECHA within 3 weeks after the submission date => general rule or, 2. No indication to the contrary from ECHA within 3 months from applicable registration deadline 85

86 REGISTRATION COMPLETENESS CHECK Incomplete registration dossier ECHA must inform registrant, before expiry of the given period, as to what further information is required within a deadline Further completeness check Reject registration if registrant fails to submit further information (no reimbursement of registration fee) Complete registration dossier REACH IT automatically assigns registration number and date (to be communicated without delay) Article 20(2) REACH 86

87 First Registration Timelines 87

88 Outline Of IUCLID5 Online Form Joint Technical Dossier prepared by Lead Registrant (Sections 4-13) Agreed Classification and labelling as use in dossier IUCLID Sections 4-13, which include: Physical and chemical properties Environmental fate and pathways Ecotoxicological information Toxicological information Analytical methods Effectiveness against target organisms Guidance on safe use Literature search Assessment reports Chemical Safety Reports for full dossiers 88

89 Outline Of IUCLID5 Online Form Company-Specific information (Sections 1-3) General Information (substance id, composition), including: Responsibility (company, OR, TPR) Substance information (including Certificates of Analysis) Identifiers for Regulatory programmes (REACH pre-registration number) Analytical Information (NB!) Classification and Labelling determined by the Lead Registrant, but may be adapted based upon specific composition of company supplied substances (if hazardous impurities are present) Manufacturing, Use and exposure Estimated quantities Estimate of imported tonnage for registration year (NB! tonnage calculation for registration deadline) 89

90 Outline Of IUCLID5 Online Form Form of substance in the supply chain Form (substance, preparation or in article) made available to DUs Concentration in preparation/quantity in article Identified uses and exposure scenarios Where specific uses identified by the registrant not addressed in the LR dossier/csr Physical/chemical data (Checking the data already completed by LR as registrants will also have to provide any specific aspects (e.g., proprietary uses not covered in the LR CSR)) 90

91 Registration Dossier Emerging Issues/Problems Still no information from consortia secretariat (not specified in Agreement) re essential details of joint registration dossier: Letter of Access Fee? Cheaper than consortium membership? Differentiated fee for <1000mt on abbreviated dossier? Includes access to CSR? (not subject to mandatory cooperation) Includes access to data to enable registrant to develop separate CSR for unique uses not covered by joint dossier? Timing of completion and submission of joint registration dossier? 91

92 Registration Dossier Emerging Issues/Problems Need for robust analytical data to prove sameness Information referred to in Annex VI of the REACH regulation must be provided in IUCLID section 1.4, including: Information on optical activity and typical ratio of (stereo) isomers (if applicable and appropriate) Spectral data (ultra-violet, infra-red, nuclear magnetic resonance or mass spectrum) High pressure liquid chromatogram, gas chromatogram Description of the analytical methods or the appropriate bibliographical references for the identification of the substance and, where appropriate, for the identification of impurities and additives. Data from a suitable characterization method 92

93 Registration Dossier Emerging Issues/Problems Reasons why not technically possible or not scientifically necessary to give information on one or more of the items above. ECHA is rejecting registration dossiers where there is a lack of evidence on sameness to LR s substance Supply Chain Communication difficulties Obtaining analytical evidence from suppliers to register an imported preparation, where supply chain complex or where the supplier views analytical data as proprietary information Problem for registrant (importer or OR) and NEUM OR black box solution? 93

94 Registration Dossier Emerging Issues/Problems Prospect of large number of substances not duly registered by November 30 deadline: Effects on DU supply chain (especially for speciality chemicals) No data, no market prejudicial to EU economy (EU-Brazil raw materials programme)? Scope for arguing that delay of registration deadlines in EU s economic interests? Delay of registration deadlines possible? Precedent in other EU regulatory frameworks Director s Group already agreed: to permit DUs to register (after November 30, 2010 deadline) substances which discover at late stage not registered by importers ( case by case ) Short registration extension if Lead Registrant fails to submit dossier (permit another Lead Registrant to take over LR role and submit same dossier? Fines for late pre-registrants? ( free riders ) 94

95 ENFORCEMENT 95

96 Legal Basis REACH Enforcement is on a national basis: Member States shall maintain a system of official controls (Article 125) Member States shall set up an appropriate framework for penalties and adopt effective, proportionate and dissuasive sanctions for infringements (Article 126) Member States had to notify enforcement provisions to the Commission no later than 1 December 2008 Spain not yet notified national enforcement legislation National inspection authorities or courts (not ECHA) enforce: Late registration (remove from market? Fine?) Costs sharing disputes in SIEF cooperation/registration 96

97 Some Potential Offences Manufacturing/importing without (pre-) registration Incorrect/incomplete data in registration documents or late registration Placing on the market or use of a substance requiring authorisation or not compliant with restrictions OR obligations (sufficiently detailed records of importers, SDS, sufficient background ) Supply chain obligations (information on articles, SDSs) Records maintained for 10 years 97

98 Co-ordination of Enforcement REACH establishes Forum for Exchange of Information on Enforcement ("the Forum") Aim: Cooperation, coordination and exchange of information between Member States, ECHA and Commission Tasks: Develop minimum criteria for enforcement inspections Coordinating harmonised enforcement projects and joint inspections (27 different systems/cultures!) Exchange of inspectors Identifying enforcement strategies Developing working methods and tools Developing an electronic information exchange procedure Liaising with industry and other stakeholders 98

99 Joint REACH Enforcement Project REACH-EN-FORCE 1 : First Coordinated REACH Enforcement Project started in April 09 (more than 20 Member States) Aim Co-ordination of national inspections Wide-ranging national authority search, sampling and substance seizure investigation powers (customers officials, health inspectors) Use of a common inspection questionnaire, including questions on General company data Company obligations under REACH Implementation Non-phase in substances Supply chain information requirements Collaboration with customs authorities: Inclusion of (pre)-registration number in customs declaration form Focus on substances subject to restriction or authorisation 99

100 Joint REACH Enforcement Project ~ 850 inspections in 28 countries National inspectors across Europe agree to enforce core no data, no market principle, focusing on: Proof of pre-registration numbers and SDS Products from third countries Proof of OR appointment Future REACH-EN-FORCE 2: target downstream user formulators (on-site inspections scheduled for 2011) 100

101 Well prepared Inspections 2 obvious inspection scenarios: Importer of product (or clearance agent) entering European Union requested to provide evidence of compliance (pre-reg numbers/sds) Examples in Netherlands and Belgium Premises of EU based DU holding product request for REACH compliance documents Site inspections usually pre-announced, around 30 days and notes taken of product labels 101

102 Site Inspection - Examples Experience so far France Request for site inspection Review of licences and certification Review of list of substances subject to registration, justification of exemptions, proof or pre-registration Review list of substances subject to restrictions and lists of SVHCs in company products Request to Downstream Users to provide certificates of REACH compliance from suppliers (excessive!) Review of SDS Belgium Sending of warning letter one week before the visit Visit to warehouses, particular focus on third country products Verification of preregistration numbers and SDS (follow-up of enquiries up the supply chain) Satisfied by best efforts? 102

103 Sanctions National sanctions vary considerably in Nature (criminal (fines and imprisonment) or civil) Amount Commission Dec 2009:! Fines in some countries are not high enough to be dissuasive! All Member States impose fines for infringements, ranging from a maximum amount of below Euros in Latvia and Lithuania to Euros in Belgium and an unlimited fine in the UK Some Member States provide for periods of imprisonment, with maximum periods ranging from 1 month to 25 years (averaging 2 to 3 years) Very high High Mid Low UK, Belgium, Poland, Ireland and Portugal Czech Republic, Liechtenstein, France, Greece, Germany, NL Bulgaria, Cyprus, Hungary, Italy, Luxembourg, Slovakia, Slovenia Austria, Latvia, Lithuania, Malta, Romania 103

104 Sanctions Milieu Study for Commission (Dec 2009) 29 countries (all EU Member States and EEA countries except Spain) Penalties independent of whether infringer is high or low tonnage producer Criminal v. administrative law 3 countries base legislation entirely on criminal law (UK, Malta, Ireland) 12 countries apply only admin penalties 14 countries apply mixture Type of penalties: Fines Injunctions (incl. market withdrawal) Prison sentences Naming and shaming 104

105 Enforcement Practice Recognition of common inadvertent infringement, complexities of REACH legislation Worst fines (criminal) reserved for deliberate non-compliance More likely letter of formal notice with grace period for compliance fines if do not comply within period Voluntary approach to authorities where infringement recognised may avoid penalties altogether 105