9 April 2007
After years of controversy and intense lobbying, the European Parliament and the Council of the European Union adopted the new regulatory framework for the safety assessment and authorisation of chemicals in December 2006. The 'Reach' regulation will come into force on 1 June this year.
The new rules are likely to give rise to a number of legal questions and conflicts concerning the relationships between different producers of the same substances, the protection of business confidentiality and the level of evidence required from the authorities for them to limit the marketing and use of any given chemical substance within the EU.
The most significant innovation of the new regulation, as opposed to the existing European Commission rules, is that all substances imported, manufactured or placed on the European market above the thresholds of one ton per year fall within the scope of the regulation and are obligated to be registered with the newly created European Chemical Agency (ECHA) based in Helsinki.
Other significant novelties relate to the information to be provided to downstream users via a safety data sheet. This contains the results of the chemical safety assessment that downstream users are required complete to verify that the relevant exposure scenarios are consistent with their use and, if not, to report to the agency about their uses.
Reducing the burden
Since the Commission first mooted the idea of introducing a generalised obligation to register all substances in 2001, concerns have been raised over the burdens the regulation would impose on industry, public authorities and international trade. Throughout the legislative process every effort has been made to reduce the costs associated with the regulation, providing for the pooling of resources and the submission of joint registrations by all the producers of any given substance with the aim of reducing the costs and limiting the amount of tests on animals.
This laudable intention is, however, likely to bring about delicate legal questions, as companies may be reluctant to cooperate with their competitors in the submission of registration dossiers in order to avoid disclosing their business secrets. This is all the more so as the regulation does not detract from the full applicability of competition rules, so companies may be wary of disclosing information concerning their productions or cost structures in a way that may fall foul of the prohibition of anticompetitive agreements or practices.
The regulation provides for the right to rely on data submitted by other registrants, providing a 'fair compensation' is paid, and for the unfettered right to rely on such data from 12 years after their first use. A key role will therefore be played by the non-legally binding guidance from the ECHA and case law of national and European courts in case of litigation.
The regulation, in line with EC and international environmental legislation, provides for wide-ranging disclosures to the public, via the internet or upon request, of the information provided to the ECHA by industry. While the regulation provides for a presumption that information concerning the exact chemical composition of a substance and trade relations of the registrants with the downstream users are to be considered confidential, the presumption is rebuttable, and the agency is in any case entitled to disclose such information in case of emergency.
Producers located outside the EU are not bound by the regulation. They would have a choice as to whether to appoint a representative within the EU to register the substance they export to the EU on their behalf or whether to leave the burden to do so to each importer.
Registration must occur before a substance is put on the market and a substance is deemed to be registered if the ECHA does not raise objections within three weeks after submission of a registration dossier. Registrants are required to pay a fee to the agency.
While the ECHA is going to become one of the largest EU agencies, the sheer amount of expected notifications (some 30,000 are expected in relation to existing substances during the transitional phase) would make an immediate assessment of all dossiers or substances unrealistic. The agency will therefore effect only a computer-based completeness check of the files submitted and will review compliance of the dossier for only 5 per cent of registrations.
A substantive review of the safety of registered substances will be carried out on priority substances carrying a greater potential hazard with the involvement of national competent authorities according to a revolving action plan to be established at EU level. During the review the authorities are entitled to require additional information or studies.
In case of disagreement between authorities, the Commission will take a legally binding decision under a so-called 'comitology' procedure, during which, should the measures envisaged by the Commission not receive majority approval from a committee of member state representatives, the Commission is required to submit a proposal to the EU Council.
The most hazardous classes of substances are subject to a fully fledged authorisation procedure, under which a risk assessment is performed by the ECHA and a decision is taken by the Commission. Contrary to other products, which can be authorised only if they are safe, chemicals can be authorised not only where the risk to human health or the environment is adequately controlled, but also where the socio-economic benefits outweigh the risks.
This provision represents a significant departure from the 'zero risk' approach of most current authorisation procedures. It is likely that this could make the courts more inclined to review substantially the use of the Commission's and EU Council's discretionary powers in an area where so far they generally deferred to the institutions' evaluation and where most court challenges of health-related bans by producers did not succeed.
The regulation also provides for the possibility to impose restrictions on any substance presenting particular risks, including those that are not to be registered. Obviously the burden of proving the existence of a hazard lies on the Commission or the national authority proposing the restriction. The ECHA is required to provide a scientific risk assessment, on the basis of which the Commission can decide on the restriction.
The regulation bars member states from further regulating substances with the aim of protecting public health of the environment, ie once a substance complies with the regulation it can be marketed throughout the EU. Member states are required to designate national competent authorities to perform the many tasks assigned to them by the regulation, and to put in place a system of official controls to monitor its application and a system of effective, proportionate and dissuasive sanctions for its violations.
With the 1 June deadline drawing near, it is unclear whether member states will be ready. In Italy, for instance, while it can be expected that the Istituto Superiore di Sanità, a technical body of the Italian Ministry of Health, will continue to be Italy's competent authority, no specific preparation seems to be underway in relation to the forthcoming enactment.
•Francesco Ruggeri Laderchi is a partner at Labruna Mazzioti Segni
but are EU member states ready? By Francesco Ruggeri Laderchi