Report 1 – Regulation
Report 1 is an analysis and very focused reporting of actual Legal Framework at EU Level. The report analyse the impacts, occurred after the Regulation implementation, especially in relation to SMEs.
The report shows at first an overview on the main legislations applied to chemicals in the European Union which includes Reach, CLP and PIC (Prior Informed Consent) for importation/exportation of certain substances. Afterwards it describes certain enforcement issues related to the mentioned regulations and potential inspection levels like e.g. at national or at regional level.
The implementation of the Regulation has had and continues to have a significant impact on businesses that must adapt to a complex regulatory system. In detail:
- Competitiveness Impact – the cost of REACH registration discouraged many companies from competing on certain substances markets, with a consequent increased market concentration and prices rise. The registration has impacted also downstream users who are, in general, less aware of their role under REACH. Their situation has to be monitored further, especially in the context of future registration deadlines. In particular, attention has to be paid to the situation of articles producers and to the costs related to the administration of REACH issues. Given that a great majority of downstream users are SMEs, they should be a target in improving the implementation of REACH. It is believed that a significant number of SMEs are unaware about their role and obligations related to REACH, and those which are aware, may have a false impression of the exact scope of their duties, which calls to further action for support and guide for these types of companies.
- Information in the supply chain – in contrast to previous legislation, Safety Datasheets (SDS) can now be provided equally in paper or electronically, making IT-solutions, which are increasingly being applied by companies, easier to implement. Although the use of modern IT solutions is highly recommended to streamline efficiently the communication requirements of REACH, the practical implementation of electronic distribution systems is still a challenge. On average, SDSs have doubled in length and are now 12 to 20 pages long. The information has become more comprehensive and of better quality, especially for registered substances. However, this has resulted in additional workload, as the relevant information has to be extracted. Despite limited experience, early evidence points out that electronic Safety Datasheets (e-SDSs) are way far too complicated and often too extensive. The existing use descriptor system has proven to be useful for large companies, but often too demanding for SMEs, who often need external support resulting in higher costs. In this context, significant differences between suppliers of the same substance and their use conditions were reported. This area requires better guidance, especially targeting SMEs and less experienced companies.
- Authorisation – New problems arising from the new process of Authorisation particularly when compared to restriction process. Eg. Blacklist effect of Candidate List/Restriction more manageable by companies then authorization. Difficulties have been observed with regard to the lack of transitional periods after a substance has been identified as SVHC and included in the Candidate List. Once a substance is on the Candidate List, the information obligation applies immediately. Although measures such as the introduction of ECHA’s Registry of Intentions and fixed dates for inclusion in the Candidate List have already been implemented as a support, this should be further monitored. Potential shortcomings in some Member States and/or sectors were reported in respect to the requirement to inform consumers on SVHCs included in the Candidate List in articles on request. However, retailers and producers of articles have already started to use SVHC-free articles as a marketing tool. The means of communication used seem to be highly varied. Article 33 provides that suppliers of articles containing a substance included in the Candidate List in more than 0.1% weight by weight have to provide recipients of the article with sufficient information to allow safe use of the article. Consumers may also request this information from suppliers of articles, in which case the information must be provided, free of charge, within 45 days of receipt of the request. This provision seems to be a challenge for industry. The following difficulties have been reported: Six Member States and one EEA EFTA State disagree with the current interpretation of the 0.1% threshold and requested ECHA to inform industry and other stakeholders about this divergence via the Guidance for articles. As a result, the objective of harmonisation of the internal market has been compromised, which makes communication on the presence of Candidate List substances in articles even more complex and confusing for companies and Enforcement Authorities.
- REACH complexity – non-EU suppliers consider certain information requirements under REACH as breaching their confidentiality policies and often do not share this information – even to their appointed Only Representatives (ORs). In some cases non-EU suppliers have withdrawn from the EU market due to the demanding information obligations. When seen in total, costs arising from communication requirements are seen as the second largest share in REACH compliance after registration costs. The costs for SMEs seem to be relatively higher than for larger companies. Due to less knowledge and expertise, those companies have to rely on external help regularly.
Summarising, the main criticalities in the regulatory field, are the following:
- Difficulty in receiving information/lack of information (in the case of imports from outside the EU)
- Difficulty in the interpretation of legal texts and lack of consolidated texts
- Difficulty in transferring the information in the supply chain and lack of harmonized template for this information (arts. 32, 33)
- Lack of harmonization of inspections between national and regional level
- Lack of regulations harmonized between EU and extra-EU (eg. REACH like)