REACH Post Registration: Next Challenges. Presenters:

Transcription

1 REACH Post Registration: Next Challenges Presenters: Mr. Seth Goldberg Dr. Anna Gergely Mr. Jim Searles Mr. Darren Abrahams Mr. Craig Simpson Ms. Laura Atlee steptoe.com 15 February 2011

2 REACH Post Registration: Next Challenges Today s Agenda Appeals Authorisation Enforcement of REACH and CLP Moderator: Seth Goldberg, Partner, Steptoe & Johnson LLP 2

3 Seth Goldberg, Mr. Goldberg, a partner based in Steptoe s Washington office, has more than 30 years of experience in a broad range of issues centered on chemical regulation. In the US, his practice focuses on FIFRA and TSCA, and in Europe, on biocides, pesticides and REACH. Mr. Goldberg devotes substantial time to direct advocacy before regulatory agencies. He also is heavily involved in organization and management of data generation consortia, data compensation and advocacy on scientific issues. Clients often call on him to represent them in complex matters before administrative agencies and judicial challenges to agency decisions. 3

4 REACH Timeline 4

5 Jim Searles, Mr. Searles is a partner in Steptoe s Brussels office. His work concentrates on EU and international law, focusing on the fields of trade and environment. Mr. Searles has significant experience in substance regulation at the EU level. He is actively advising on the regulatory and international trade aspects of REACH/CLP, implementing Only Representative services as well as supporting Lead Registrants and Data Owners in their activities including ECHA Appeals and overall REACH compliance strategies. He has also assisted industry clients to address Annex XVII restrictions on uses of SVHC. Mr. Searles works with companies and trade associations in the agricultural, general and specialty chemicals, automotive, information technology, steel, textiles and general consumer goods sectors. 5

6 Darren Abrahams, Mr. Abrahams is an English Barrister and a partner in the Brussels office of Steptoe & Johnson LLP. His practice is focused on EU regulatory requirements and related commercial issues in the environment and life sciences area, for which he is consistently recommended by the PLC Which Lawyer? Yearbook, Legal 500 EMEA and Chambers & Partners Europe. Mr. Abrahams provides legal advice and representation to enable clients to authorise and place their products on the EU market (such as biocides, pesticides, GMOs and substances covered by the REACH and CLP regimes for chemicals). He also assists clients with the environmental aspects of international transactions and the structuring of regulatory compliance programmes. 6

7 REACH Post Registration: Next Challenges Jim Searles & Darren Abrahams Appeals under REACH steptoe.com 15 February 2011

8 Topics Covered Appeals architecture Board of Appeal The role of the General Court Access to documents Recommendations 8

9 Appeals Architecture ECHA has wide decision-making powers affecting your rights and obligations (both powers exercised already before the first registration deadline and powers it will exercise in the future). The REACH Regulation unusually for EU laws provides an express administrative Appeal mechanism: Board of Appeal followed by Appeal to the General Court (formerly CFI ) Potential for recourse is wider than expressly stated in the Regulation. Other ECHA action is potentially subject to challenge. Beyond litigation: our experience post first registration deadline is that ECHA may be open to constructive engagement to minimise the need for appeals. 9

10 BoA Composition BoA is housed within ECHA but required to be independent and not take instructions from any source. Members not permitted to hold any other role in ECHA. A multi-disciplinary 3-person panel: Chairman (legally qualified) Legally qualified member Technically qualified member One of them acts as Rapporteur, carrying out a preliminary study of the appeal. 10

11 BoA s Jurisdiction Six types of reviewable ECHA decisions for which the BoA route must be followed in the first instance. Appeal can be brought by any natural or legal person against a decision (applying old style Art. 230 EC test): addressed to that person, or of direct and individual concern but addressed to another person (potential for competitors, downstream users, etc.) 1. Rejects an incomplete registration where missing information not supplied by registrant within deadlines (Article 20) This generated the only Appeal decision to date: Specialty Chemicals Coordination Center s.a., case A and the only pending N.V. Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ, Borssele, case A

12 BoA s Jurisdiction 2. Evaluates dossier as regards testing proposals or overall compliance of registration dossier and requires, e.g., testing / information to bring registration into compliance (Articles 40, 41, 51) 3. PPORD substance registration exemption completeness check of notifier s information or decision to impose conditions limiting handling and control conditions (Article 9) 4. Designates which SIEF member will carry out testing for new studies not available in SIEF (Article 30(2)) where members can t agree (someone to inform ECHA using form available on website) 12

13 BoA s Jurisdiction (ECHA last resort Decisions on data sharing disputes; mandatory underlying dispute settlement procedure) 5. Re data sharing under inquiry rules for already registered non-phase-in or non-preregistered substances, ECHA permits potential registrant to refer to existing data where parties have failed to arbitrate or otherwise agree on sharing (Article 27(6)) 6. Re data sharing for phase-in substances, ECHA permits potential other registrant to refer to vertebrate testing study where study owner in SIEF will not provide proof of cost or the study itself, and ECHA blocks the uncooperative Data Owner s registration or, if substance already registered, effectively obliges owner to turn over full study report to obtain compensation (Article 30(3)) Appears that BoA getting drawn into assessing if proposed costs or conditions respect the sharing rules ( fair, transparent and non-discriminatory ) Financial penalties (Article 126) on uncooperative data owner imposed by national authorities, not ECHA ( national appeal) Uncooperative data owner(s) may face competition law claims, again via national authorities or Commission in Brussels, not ECHA 13

14 BoA s Jurisdiction Note: mandatory ECHA dispute settlement procedure prior to ECHA Decision on data sharing dispute Most likely scenario: substance already registered, e.g., 2013 or 2018 registrants needing LoA for whole set of studies from Joint Submission; dispute on LoA cost Responsibility of all parties to make every effort to reach agreement on sharing of data and costs (fair, transparent and non-discriminatory) Strict documentary requirements to show each party s position (or use of available information ) ECHA Decision follows receipt of information from all parties and entails balancing and respect of interests of all parties Beware: ECHA interaction may involve just Lead Registrant, so data owners need to clarify rights / obligations on their studies vis-à-vis Lead Registrant 14

15 BoA Timing 3-month time limit to bring appeal from: date of notification or (if not notified) date on which it became known. There is no mechanism for extending the time limit. This is not long to prepare a properly formulated appeal (need to include all of the pleas in law and arguments of fact and law relied upon, plus any evidence offered). No Fee No Appeal : Appeal fee (max 6,600 Euro) must be paid to ECHA within time limit and is not considered lodged until this is done (reimbursed if decision rectified or appeal successful). ECHA defence within 2 months of service of notice of the appeal. Interveners (on either side) may participate to echo the parties positions within 2 weeks of publication of ECHA website announcement that notice of appeal submitted. 15

16 BoA Procedure An appeal has a suspensive effect : contrast with situation for legal challenges before General Court where suspensive effect is rarely granted. Admissibility is assessed within 30 days. (Contrast with position before ECJ.) If admissible and well founded, Executive Director of ECHA may rectify Decision within 30 days of appeal being filed (as in Specialty Chemicals Coordination Center). If admissible (and no rectification) there is a right to an oral hearing upon request by either party. Board of Appeal can exercise any power which lies within the competence of ECHA o remit the case to the responsible body of ECHA for further action. (Article 93(3)) Chair has cited wide powers to call meetings, request expert testimony, etc. at any time during the appeal. 16

17 General Court General Court actions: Article 263 TFEU annulment action within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be Article 265 TFEU failure to act Consider Court action under REACH: 1. to challenge BoA decisions (must be done within 2 months) 2. where no express right of appeal to the BoA for ECHA action and/or Commission action Issues to consider for challenges: is it a decision susceptible to challenge? Does it have legal effects [IBM case]? Standing? 17

18 General Court: New Rules Old Article 230 Any natural or legal person may institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. New Article 263 Any natural or legal person may institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures. Discussions about whether a REACH chamber will have to be established in the Court to deal with the volume of cases expected. Different standing tests before the BoA and General Court means companies might have a chance to challenge issues which they are not able to bring before the BoA (as well as those not subject to the BoA). 18

19 General Court To date there have already been a number of actions where no express right of appeal to the BoA, focused on whole or partial annulment of ECHA decision to place substances on candidate list: various borates (Case T-343/10 Etimine SA and Ab Etiproducts Oy, and Case T-346/10 Borax Europe Ltd) acrylamide (Case T-268/10 Polyelectrolyte Producers Group GEIE (PPG) and SNF SAS) pitch, coal tar, high temp. (Case T-93/10 Bilbaína de Alquitranes and Others) anthracene oil (Case T-94/10 Rütgers Germany and Others) and anthracene oil low (Case T-95/10 Cindu Chemicals and Others), anthracene oil paste (Case T-96/10 Rütgers Germany and Others) 19

20 Access to Documents Right to ECJ challenge to ECHA decisions on access to documents (under Regulation (EC) 1049/2001) held by it (Art. 118(1)). Alternative right to complain to Ombudsman. Consider exemptions (including): commercial interests of a natural or legal person, including intellectual property court proceedings and legal advice a document, drawn up by an institution for internal use or received by an institution, which relates to a matter where the decision has not been taken by the institution if disclosure would seriously undermine the institution's decisionmaking process, unless there is an overriding public interest in disclosure Access to document is useful in itself, and useful in any later appeal. 20

21 Recommendations If you are an appellant, be alive to short deadlines for bringing actions. Immediate work needs to begin as soon as you are aware of a problem. Add BoA and General Court to your strategic toolkit of responses to any problem. If data owner, ensure protection of rights if Lead Registrant gets into data sharing dispute covering your study(ies). Ensure that you monitor appeals being lodged. Intervene in proceedings which are important to your business. Do not hesitate to find out if you have a good case: the BoA procedure is relatively quick and efficient. 21

22 Recommendations This is not about a day in Court : ECHA procedure builds in the opportunity to avoid an appeal and reverse a decision. Legal action may provide short-term suspensive benefit (where available on appeal to Board of Review). Where you must go through the Board, this will protect your position for an appeal to Court (damages etc.) Ensure you are making the best legal and technical arguments available. 22

23 Anna Gergely, Dr. Gergely, in a role equivalent to Partner, is the firm's Director of Environmental, Health and Safety (EHS) Regulatory in Steptoe's Brussels office. Dr. Gergely is Steptoe's Principal Scientist, with a PhD in analytical chemistry and in quantum chemistry, and is a registered European patent attorney. Dr. Gergely has more than 15 years of international law firm experience in Brussels, counselling companies on European environment, health and safety regulatory strategies. Her regulatory practice areas include chemicals, nanotechnology, agribiotechnology, biocides, food-contact materials, food and feed, medical devices, and a range of consumer and industrial products. 23

24 Laura Atlee, Ms. Atlee is a member of the New York Bar in Steptoe s Brussels office. Her practice focuses on both EU regulatory and international law, with emphases on environment and competition law. She is acknowledged by the Legal 500 for her regulatory advice in the environmental field. Recent representative matters in which she has been involved include: advice on REACH for the metals sector and for downstream users, and EU market access. 24

25 REACH Post Registration: Next Challenges Dr. Anna Gergely & Laura Atlee Authorisation steptoe.com 15 February 2011

26 Authorisation Objectives Main steps of the process Points of public intervention Compliance with competition law Recommendations 26

27 Authorisation: Title VII of REACH Objectives: Ensures the functioning of the internal market Assures that risks from Substances of Very High Concern (SVHCs) are properly controlled (SVHCs are CMR, PBT or vpvb, or equivalent concern) SVHCs are progressively replaced by suitable alternative substances or technologies where these are economically and technically viable Guidance on the preparation of application for Authorisation published in OJ on 28 January

28 Overview of the Authorisation Process Preparation of Annex XV dossier Action by applicant and/or any interested party Inclusion in Candidate List Prioritisation procedure Inclusion in Annex XIV Application for authorisation Authorisation granted / denied Authorisation review 28

29 Preparation of Annex XV Dossier Aim: Identification of substance as an SVHC for potential inclusion in the Candidate List (CL) Procedure: Member States competent authorities and ECHA (on the request of the EC) post intentions to submit Annex XV dossiers on the Registry of Intentions Advocacy: interested parties (manufacturers / importers of substance or alternatives) have the opportunity to contact the sponsor of the dossier and provide information 29

30 Inclusion of Substance in the Candidate List The submitted Annex XV reports are posted on the ECHA website Formal comments: interested parties have 45 days from the date of publication to provide comments to ECHA Comments should relate to the identification of the substance as an SVHC as well as further information related to use, exposure, alternatives and risks Member State Committee (MSC): unanimous agreement on inclusion (if not, final decision is by the Commission) 30

31 Effect of Inclusion of a Substance in the Candidate List (CL) Communication: articles with a CL substance >0.1% provide information right away Notification: within 6 months of inclusion but only starting from 1 June 2011 SDS is required for substances on CL Legal challenge: interested parties have chosen to challenge ECHA before the Court interim relief is unlikely 31

32 Prioritisation Procedure Aim: Recommendation of priority substances for inclusion in Annex XIV by ECHA Procedure: 2-tier system (improve efficacy and transparency): Scoring system (based on PBT and vpvb properties, widedispersive uses and releases, and high volumes) Regulatory effectiveness and coherence Draft recommendation is published on ECHA's website Formal comments: interested parties may submit comments within 3 months of the date of publication (CBI protected, if justified) 32

33 Prioritisation Procedure MSC gives its opinion on updated recommendation ECHA makes its recommendation to the Commission (also considering MSC opinion) Commission uses regulatory procedure with scrutiny (later delegated act procedure) to issue decisions Substance is listed in Annex XIV (subject to authorisation) Opportunity to intervene? 33

34 Delegated Act Procedure COMMISSION consults experts appointed by the Member States (unless consultation not necessary) and informs them of its preliminary position COMMISSION prepares Draft Delegated Act COMMISSION adopts Draft Delegated Act and notifies PARLIAMENT and COUNCIL PARLIAMENT and COUNCIL revoke the delegation power Scrutiny Period: Suspends entry into force of the Delegated Act PARLIAMENT exercises right of objection voting by majority (time limit to be discussed) PARLIAMENT or COUNCIL opposes COUNCIL exercises right of objection voting by qualified majority (time limit to be discussed) PARLIAMENT and COUNCIL does not oppose DOES NOT ENTER INTO FORCE COMMISSION formally adopts Delegated Acts COMMISSION may Make legislative proposal Submit amended Draft Delegated Act 34 Depending on whether the underlying legislative act grants this power

35 Status of Annex XIV First recommendation of priority substances for inclusion in Annex XIV was adopted by ECHA on 1 June 2009 for 6 SVHCs. Draft Commission Regulation amending Annex XIV received a favourable opinion in the REACH Committee on 21 September Still subject to scrutiny by the European Parliament and the Council. The text of the draft Regulation is publicly accessible through the Comitology Register. 35

36 Application for Authorisation Required for substances on Annex XIV before placing them on the market or using Information that MUST be included: Identity of the substance and applicant; description of use(s); CSR (unless already submitted); analysis of possible alternatives; substitution plan (if alternative is available) Information that MAY be included: Socio-economic analysis Formal comment by interested parties on alternative substance(s) / technique(s) ECHA s Committees for Risk Assessment (RAC) and Socio-Economic Analysis (SEAC) will give their draft opinions within ten months based on information from the applicant, interested parties and other relevant sources Formal comment by the applicant; following written notice of the intention to comment 36

37 Authorisation Granted / Denied Granted, if: Risk is adequately controlled based on opinion of RAC (except PBT and vpvb substances and other SVHCs where no threshold can be determined) Socio-economic benefits outweigh the risk and there is no suitable alternative based on the opinions of RAC and SEAC Actions by authorisation holder: Include authorisation number on label Update SDS / inform downstream user (has to notify ECHA within 3 months of first supply) Submit review report 37

38 Compliance with Competition Law Rules Potentially sensitive issues when working in cooperation Same types of rules apply as during the registration process, but further: Do not share information which may prevent or restrict competition, such as costs and sources of supply, inventories, market design for substitution, etc. Be careful about sharing plans on switching to alternatives or discontinuing uses Document your discussions Use trustee when dealing with issues considered CBI 38

39 Recommendations Authorisation is a complex process; be aware of very tight deadlines and strict rules Be vigilant; follow Registry of Intentions as manufacturers / importers of a given substance as downstream user as manufacturers / importers of alternative Collect data and other information in readiness for action When working with other interested parties be aware of competition rules 39

40 Craig Simpson, Mr. Simpson is an English solicitor in Steptoe s Brussels office. His practice is focused on chemicals registration and authorisation under REACH, biocides, pesticides, pharmaceuticals, and medical devices. Recent experience has included representing a biotechnology company and a major trade association as interested third parties in high profile litigation before the European Courts of Justice and preparing Task Force and Data Sharing Agreements for collective dossier notification under the Biocidal Products Directive. Mr. Simpson is consistently recommended in PLC s Life Sciences Handbook. 40

41 REACH Post Registration: Next Challenges Craig Simpson Enforcement steptoe.com 15 February 2011

42 Enforcement Framework Basics National inspection authorities or courts (not ECHA) Member States shall maintain a system of official controls Member States shall adopt 'effective, proportionate and dissuasive' sanctions for infringements Sanctions implemented in national laws: criminal and/or administrative fines (EUR 5,000 to 55,000) injunctions (incl. market withdrawal) prison sentences (1 month to 25 years) 'naming and shaming' Wide search, sampling and seizure powers for health inspectors, customs officials 42

43 Enforcement Framework Basics REACH Forum for exchange of information on enforcement aim: cooperation, coordination and exchange of information between EU 27, ECHA and Commission use of a minimum inspection criteria, electronic information exchange 43

44 Enforcement Trends under REACH- EN-FORCE-1 REACH-EN-FORCE-1: First Coordinated REACH Enforcement Project of Forum (over 20 Member States) started 2009, extended to April 2011 'no data, no market' principle focus: pre-registration, now registration, SDS format and language provisions Project report on REACH-EN-FORCE-1: 1,600 entities inspected: EU manufacturers, importers and ORs main target sectors: manufacturers / wholesalers of chemicals / chemical products, minerals and basic metals 2 obvious inspection scenarios: importer of products (or clearing agent) entering EU (examples in Netherlands and Belgium) or premises of EU-based downstream user 44

45 Enforcement Trends under REACH- EN-FORCE-1 Intelligence on site inspections practices vary, but typically: warning letter 1 week before, request to prepare REACH compliance overview review of documents (invoices, receipts, records of tonnages manufactured / imported / supplied, safety data sheets, certificates of analysis, confirmatory letters / s from suppliers) focus on non-eu country products request supplier contact details: notification of preregistrations, application of exemptions identification of non-compliance (e.g., incorrect preregistrations) 45

46 Enforcement Trends under REACH- EN-FORCE-1 OR credentials: Dutch Prosecution of Chinese OR threatened with EUR 1 million/week fine detailed investigation: comparison of OR s importer quantity and use information inconsistent with importers own records insufficient background or Community presence ( address only) (Article 8) threaten to request ECHA to delete relevant preregistrations knock on effects for downstream users Substance-specific approach: UK HSE: amounts of PAHs in tyres (restricted substance) and pre-registration of ammonium dichromate (120 actions by September 2009) 46

47 Are You Non-Compliant? Examples Manufacturing / importing without first deadline registration? ECHA statutory obligation to report late registrations to Member States ECHA: Estimate 400 late first registration deadline registrations Incorrect or incomplete dossier? ECHA plans several hundred first registration deadline compliance checks in 2011 Failure to notify classification and labelling by 3 January 2011? 47

48 Are You Non-Compliant? Examples Potential consequences of failure to demonstrate REACH compliance: withdrawal of substance from the EU market and significant marketing gap prior to registration OR / importer being held liable by national enforcement authorities imposition of substantial fines on EU based manufacturers, importers, downstream users, ORs, and/or imprisonment of relevant individuals negative effect on company reputation and relationship with its EEA-based customers (customers seek alternative suppliers?) 48

49 Remedying Non-Compliance Scope for approaching authorities pragmatic approach in certain cases? reliance on others in supply chain complex legislation: scope for inadvertent infringement possibility of grace periods? Enforcement agency as educator as well as prosecutor: UK HSE: 'Enforcement...includes a variety of different approaches to securing compliance including issuing enforcement notices to change behaviour, as well as approaches to help companies understand their legal duties and how to meet them'. Director's Contact Group (Commission, ECHA, industry reps) incomplete registration permitted in 'exceptional cases' 49

50 Remedying Non-Compliance case-by-case, complete discretion of ECHA not a solution if done nothing C&L notification deadline: 'notify without delay' if missed (ECHA) 50

51 Non-Compliant Competitors? REACH compliance costs passed on to customers? avoided by non-compliant companies Right to operate on a level playing field Some enforcement authorities (UK HSE) specifically encouraging companies to raise noncompliance of competitors 51

52 Future of Enforcement: REACH-EN- FORCE 2 Future REACH-EN-FORCE 2 to begin May 2011: target downstream user formulations of mixtures focus: substance (pre-)registration and CLP notification inform downstream user customers of SDS requirements and use-related obligations development of electronic tools permitting communication between ECHA, CAs and enforcement agencies RIPE tool: enforcement agency access to registration dossiers 52

53 Are You / Is Your Supply Chain Prepared for Inspection? Avoid business interruption and possible sanctions Can you / your importer / your OR / your downstream user produce necessary documents if inspected? Do you understand REACH enforcement priorities in EU jurisdictions where market? Importance of verifying OR credentials need to change OR? 53

54 Are You / Is Your Supply Chain Prepared for Inspection? How Steptoe can assist: user-friendly internal compliance manual: likely enforcement scenarios for your company, practical procedures on inspection, specific responsibilities of supply chain actors pre-inspection audit, identify and remedy compliance gaps on-site support during inspection experience in liaising with enforcement agencies in case of infringement avoid / minimise sanctions or business interruption advising on the ground enforcement practices in different Member States liaising with enforcement agencies concerning noncompliance of your competitors 54

55 Steptoe REACH Services For additional information, please contact a member of the REACH services team: Seth Goldberg: sgoldberg@steptoe.com Jim Searles: jsearles@steptoe.com Darren Abrahams: dabrahams@steptoe.com Anna Gergely: agergely@steptoe.com Laura Atlee: latlee@steptoe.com Craig Simpson: csimpson@steptoe.com Or visit: 55