Global Developments in Regulation of Chemicals. Implications of New EU Regulation of Biocides
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1 Global Developments in Regulation of Chemicals Implications of New EU Regulation of Biocides REACH: Recent Developments relevant to continuity of Supply Craig Simpson, Senior Associate Belgian Association of Chemical Distributors Weekend de la Chimie, Liège, 14 September 2012
2 Distributor s perspective Responsibilities as EEA or global distributors/importers Supply chain: Is you supplier compliant? Implications of distribution of non-compliant products: inherited liability issues contractual protection? supply continuity substance prohibition/supplier non-compliance 2
3 GLOBAL DEVELOPMENTS IN REGULATION OF CHEMICALS 3
4 Global Trends Increased Convergence Increasing regulatory hurdles in many jurisdictions International convergence on aims, but not methods Burden of proof on industry to prove substance safety Drivers: Lack of substance safety information Achieving voluntary 2002 World Summit Sustainable Development 2020 goals (GPS) Reduce animal testing Emphasis on transparency - public confidence National industry competitiveness: facilitates meeting world class safety standards of major export venues ( close the gap ) 4
5 Global Trends Increased Convergence Concentration of markets: Marginal geographic markets dropped Offshoring chemical manufacture/imports redirected but to where? Viability of SME specialty chemicals? effects on distribution and downstream uses 5
6 Global Chemicals Regulation International Cooperation Increased international cooperation between chemicals agencies: ECHA/EPA Chemical Management Technical Cooperation Agreement, November 2010 (substance information sharing) Anticipated ECHA/EPA/European Commission accord on development of chemicals policy OECD Mutual Acceptance of Data system: Ensuring that OECD countries share and trust each other s chemical safety test data for their regulatory purposes removes a potential non-tariff trade barrier. Adherence to OECD test methods and data quality standards Parallel Notification of new chemicals in multiple jurisdictions? OECD Clearing House (resource efficient) 6
7 REACH AS A MODEL? 7
8 Chemicals Regulation In Europe: REACH Basics Scope: Chemical substances manufactured and marketed in, or imported into, the EU whether on their own, in preparations /formulations, or in finished products ( articles ) Key policy objective: Industry proving safety of existing and new substances on EU market through data EU market access: Unless exempted or deemed registered, substances M/I over 1 MT/annum must be (pre)-registered to be legally marketed on the EU ( no data, no market ) from June 1, 2008 Authorisation: Control of risk from SVHCs, and their progressive substitution (prioritisation of substances for Annex XIV authorisation list inclusion) 8
9 REACH: an imperfect model? European REACH gold standard REACHïsation of world Proves that a minimum data registration (no data, no market) model is workable? CEFIC President, February 2011: 'REACH is the most demanding chemicals legislation out there, and other countries are looking to Europe as a model for how this type of regulation can work'. Pending/adopted REACH-like laws in other jurisdictions: Russia, South Korea, China, USA, Canada, Japan, Turkey, Taiwan Other jurisdictions laws avoid REACH problems 9
10 REACH: an imperfect model? Heavy hazard or tonnage (not exposure) based registration data requirement 'Companies need to collect all kinds of information [for REACH], and then it just sits in storage. It's not clear whether [substance] evaluation will take place, so that [in effect] it's very much selfregulation of those substances' (Chemical Industry Association of Canada) Limited dossier evaluation compliance check (minimum of 5% per tonnage band/500 dossier evaluations per year) Prioritisation, on basis of exposure only post registration: ECHA priority list ('CoRAP') During authorisation (recommendation of priority substances) 10
11 REACH: an imperfect model? Other jurisdiction trend (not exclusive) toward risk based controls REACH review: European Commission report by June 2012 on lessons from implementation of REACH: focus on costs and administrative burden and impact on innovation Still waiting 11
12 COUNTRY BY COUNTRY ANALYSIS OF CHEMICALS CONTROL REGULATION 12
13 Summary of chemicals legislation in jurisdictions No country has chemicals legislation exactly like REACH Two categories of chemicals legislation in relevant jurisdictions: REACH-like registration and test data submission requirement, combined with substance prioritisation system Including reviewing safety of chemicals already on market Hazardous substance prior permit requirement 13
14 Map showing legislation categories in jurisdictions 14
15 Multi-Jurisdictional Comparison of Chemicals Control Legislation Country / Jurisdiction Existing or Pending Legislation REACH-like substance registration/notification action and test data submission ( no data, no market ) requirement For what activities? Scope (certain substance categories only or general) Tiered Data Requirements Based on Tonnage or Risk Safety Data Sheet Requirement Substance prioritisation scheme (stricter control) Other substance reporting requirement Canada Existing Yes Manufacture and Import General Exceeding 10 MT per annum Significant exposure or aquatic release exceeding 50 MT per annum Yes, for hazardous substances Manufacture, import, use or disposal of substances assessed as toxic, restricted or banned None Tonnage based: Below 1 MT per annum (simplified declaration) China Existing Yes Manufacture, Import, Research, Processing and Use (it s the manufacturer or importer who must register) New substances (not on existing substances list) only Between 1 and 10 MT per annum Between 10 and 100 MT per annum Between 100 and 1000 MT per annum No Manufacture or import or use of substances on Catalogue of Hazardous Substances or Poisonous Substances List None Over 1000 MT per annum Japan Existing Yes Manufacture and Import New substances (not on existing substances list) only Exceeding 10 MT per annum Additional data may be required depending on substance prioritisation Yes, for hazardous substances Manufacture or import of Class I specified Substance Annual use and previous year volume notification requirement for manufacture of import of 1 metric tonne or more per annum Korea Existing Pending Yes Yes Manufacture and Import Manufacture and Import New substances (not on existing substances list) only New substances (not on existing substances list) and existing chemicals ( Assessment Chemicals ) designated for risk analysis Exceeding 1 metric tonne per annum Anticipated tonnage based requirements (not yet drafted) No No Manufacture, import, sale storage and transport of substance assessed as Poisonous, Restricted, Prohibited or under Observation Manufacture or import or use of substance designated as for Authorisation, Restricted or Prohibited Reporting whether substance falls under toxic chemical categories Annual reporting of manufacture or production volumes of previous year 15
16 Comparison of REACH-like legislation Country / Jurisdiction Existing or Pending Legislation REACH-like substance registration/notification action and test data submission ( no data, no market ) requirement For what activities? Scope (certain substance categories only or general) Tiered Data Requirements Based on Tonnage Risk Safety Data Sheet Requirement Substance prioritisation scheme (stricter control) Other substance reporting requirement No Taiwan Existing Requirements relating to hazardous substances only Manufacture or Import Pending Yes Manufacture or Import Hazardous substances only New substances (not on existing substances list) only Not applicable Anticipated (not yet drafted) Turkey Existing Yes Manufacture or Import General 1000 MT or higher USA Existing Pending Yes Yes Manufacture and Import Manufacture and Import New substances (not on existing substances list) only Substances on existing substance list (New substance notification requirement under existing legislation maintained) Additional data required where substance assessed to pose unreasonable risk of injury to health or environment Additional data may be required depending on substance prioritisation Yes, for Hazardous substances Yes, for Hazardous substances Yes, for Hazardous substances Yes, for Hazardous substances As per existing legislation None Prior permit requirement for manufacture, import, supply, employing workers handling or using controlled or priority chemicals Pending list of prioritised substances requiring further data submission and potential restrictions Manufacture or import of substances under Consent Order subject to conditions Manufacturers, importers and processors of substances designated as Priority Class 1-3 Not applicable Import notification and permit requirement for substances on existing substances list None Reporting every 4 years of import/manufacture of 25,000 lbs or more at a single site None 16
17 UNITED STATES OF AMERICA Authority Environmental Protection Agency (EPA) Occupational Safety and Health Administration (OSHA) Existing legislation: Toxic Substances Control Act 1986 (TSCA) Criticisms of existing TSCA legislation Unrealistic EPA burden of proof ( unreasonable risk to H+E) to ban EPA able to require safety testing in few substances Industry avoided data submission through excessive confidentiality claims Pending Legislation: 25 July 2012 Senate Committee approval of Safe Chemicals Act of 2011 (S.847) amending TSCA 17
18 UNITED STATES OF AMERICA New notification and minimum data set submission requirements for M/I of existing (in addition to PMN for new) chemicals EPA subsequently publishes list of substances under Priority classes: Class 1: limited activities involving substance to reduce exposure; Class 2: manufacturers and processors to provide further data - substance may be banned or subject to conditions; Class 3: substances that do not pose adverse risk at any stage. Narrower scope for confidentiality claims 18
19 CHINA Authorities Ministry of Environment Protection (the MEP ) Legislation Measures for Environmental Management of New Chemical Substances since October 2010 Obligations: Production, processing or import into China of New Substances (not on 45,000 substance MEP existing substance catalogue) subject to prior registration Prioritisation - Catalogue of Hazardous Chemicals or Poisonous Chemical List Future extension to existing substances? 19
20 CHINA Characteristics of the Chinese chemical regulatory regime: Law generally stated (vague) Monitoring of implementation practices crucial Opaque enforcement and limited appeal procedures Stricter than REACH data requirements Testing by Chines laboratories using local Chinese species! 20
21 JAPAN Authorities Ministries of Economy, Trade and Industry (METI), Environment and Health Chemical Management Center Legislation Act on the Evaluation of Chemical Substances and Regulation of their Manufacture ( Chemical Substances Control Act ) Act on Confirmation of Relevant Amounts of Specific Chemical Substances in the Environment ( Chemical Substances Management Act ) Obligation Manufacture in, or import into, Japan of New Chemical Substances in volumes over 1MT/annum subject to prior notification 21
22 JAPAN Same substances also subject to separate annual volume notification Manufacturers and users of Class I Designated Chemicals to notify annual environmental release and transfer amounts Prioritisation: Class I Specified Chemical Substances subject to METI prior M/I licence Guidance: shifting chemical safety management from a hazard to a risk (exposure) based approach 22
23 KOREA Authorities Korean Ministry of the Environment, Chemical Management Division (MoE) Korean Customs Service Korean Chemicals Management Agency ( KCMA ) National Institute of Environmental Research ( NIER ) Existing Legislation: Toxic Chemicals Control Act (TCCA) Pending Legislation: K-REACH Draft Act on Registration and Evaluation of Chemical expected passed early 2013, in force 2015 Pending Obligations: Report: bi-annual report of quantity of production or import of Existing Chemicals and their uses 23
24 KOREA Registration: Staggered registration deadlines (2016, 2019, 2022) for volumes over 1 MT/annum of: new substances existing substances specified by MoE for assessment Prioritisation: toxicity assessment of registered chemicals => Restricted, Prohibited and Authorisation chemicals Authorization: subject to prior authorisation from MoE (hazardous/over 1,000 MT/annum) Restriction: specific marketing and use restrictions apply 24
25 CANADA Authorities Federal Department of the Environment Health Canada Legislation Canadian Environmental Protection Act 1990 Obligations Submit notification and test data prior to M/I of Non-Domestic Listed Substances over 1000 kg per annum Substances on Toxic, Prohibited, Substances Notification or Restricted Substance List are more strictly controlled Prioritisation: manufacture, import or use of toxic substances restricted or banned 25
26 TURKEY Authorities: Department of Chemicals Management of the Ministry of Environment Legislation Regulation on the Inventory and Control of Chemicals 2008 Obligation M/I prior registration requirement Substance marketed 3 year pre had registration deadline of Other substances to be registered within 13 months of first marketing Prioritisation: pending published list of priority substances => further data requirements and restrictions 26
27 SPECIFIC COMPLIANCE ISSUES ACROSS JURISDICTIONS 27
28 Specific Compliance Issues in Different Jurisdictions Which jurisdictions have more or less burdensome compliance requirements? Application of certain registration/notification exemptions require express authority clearance rather than self-assessment: Korea and the United States resource intensive Data submission requirements: risk or tonnage based? risk, rather than tonnage, based data submission requirements better if low risk Testing and laboratory standards members of OECD Mutual Acceptance of Data programme require compliance with OECD Test Guidelines and GLP (Canada, Japan, Korea, and Turkey) 28
29 Specific Compliance Issues in Different Jurisdictions other countries: GLP alone China: specific requirements for certain testing by Chinese laboratory using Chinese native species Compliance by third country supplier except in USA and Taiwan, local presence (subsidiary or appointed only representative) required legal responsibility for compliance assumed by representative in China, elsewhere remains with appointor conditions for appointment of representative most stringent in China (technical competence with handling substances, minimum registered capital etc.) trade barrier? foreign direct registration (no OR requirement) lobbying (failed in Korea) 29
30 Specific Compliance Issues in Different Jurisdictions Enforcement and sanctions highest fines in Canada (BRL 1.7 million), Turkey, Japan and the United Arab Emirates dedicated non-compliance appeal board procedure in Qatar, China, Japan and Taiwan (faster, cheaper and less public than court administrative review action) discretion to permit grace periods for remedying? proactively approaching authorities concerning non-compliance may avoid or reduce sanctions self-reporting advisable? 30
31 Specific Compliance Issues in Different Jurisdictions Obtaining required data package prepared by consortium or trade association, where possible voluntary less resource intensive than individual data negotiations or own testing facilitated in jurisdictions which encourage joint submission and/or related data sharing: China, Turkey Publication or other disclosure of information submitted to authority confidential? customer lists, manufacturing or processing procedures confidential treatment application procedures in most (but not all) jurisdictions 31
32 IMPLICATIONS OF THE NEW EU REGULATION OF BIOCIDES 32
33 Legislation Basics Biocidal Products/ anti-microbials : insecticides, preservatives, disinfectants, repellants, anti-foulants, antibacterial paints, wood preservatives, fibre, leather, rubber and polymerised materials preservatives, biocides in paper coating and finishing, metal working fluids, machine cleaners A Regulation: directly applicable in EEA Already in force since July 2012; applies 1 September 2013 (+ transitional measures) Key Issues: Pre-Market authorisation and substitution issues New dossier requirements Biocides in treated articles Product Labelling and claims 33
34 Biocidal Product Types Group 1 * Disinfectants Group 2 Preservatives Group 3 Pest Control PT1: Human hygiene PT2: Disinfectants and algaecides not intended for direct application to humans or animals PT3: Veterinary hygiene PT4: Food and feed area PT5: Drinking water Excludes cleaning products that are not intended to have a biocidal effect, including washing liquid, powder and similar products. PT6: Preservatives for products during storage PT7: Film preservatives PT8: Wood preservatives PT9: Fiber, leather, rubber and polymerized materials preservatives PT10: Construction materials preservatives PT11: Preservatives for liquid-cooling and processing systems PT12: Slimicides PT13: Working or cutting fluid preservatives PT14: Rodenticides PT15: Avicides PT16: Molluscides, vermicides, and products to control other invertebrates PT17: Piscicides PT18: Insecticides, acaricides, and products to control other arthropods PT19: Repellants and attractants PT20: Control of other vertebrates (previously PT23) Group 4 Other biocides PT20: Preservatives for food or feedstocks* PT21: Antifouling products PT22: Embalming and taxidermist fluids Because now covered by specific EU legislation 34
35 Pre-Market Authorization and Substitution Still EU level for active, national level for biocidal product: based on ECHA Opinion following MS evaluation Expanded exclusion/substitution powers for active and products Commission may review active approval at any time when significant safety concerns (cancellation or amendment) Excluded actives (CMR, PBT, vpvb, endocrine disruptors) approved only exceptionally for 5 years if negligible risk, disproportionate negative societal impact of non-approval Candidates for substitution (excluded substances, respiratory sensitisers, specific exposure concerns) approval considers ECHA consultation on substitutes (NGOs?) maximum 7 years approval/renewal, earmarked as candidate: blacklisting effect on downstream sales 35
36 Pre-Market Authorization and Substitution Comparative assessment during approval/renewal of product containing candidate substance: prohibit or restrict marketing or use if lower risk effective substitutes, no significant economic/practical disadvantages, low resistance risk (4 years delay) if no substitute, maximum 5 years product authorization /renewal 36
37 Proactively defending active substances and products in your supply chain Are substances in your supply/distribution chain marketed in the EEA susceptible to substitution? carcinogenic, mutagenic or toxic classification under CLP regulation endocrine disrupting PBT or VPvB Fighting your corner: proactive and well structured advocacy strategy including dialogue with European Commission, national authorities and ECHA for; maintaining or obtaining approval of threatened actives or products? resisting restrictions on marketing or use of biocidal products 37
38 Proactively defending active substances and products in your supply chain Studies/data and arguments showing: negligible exposure or how exposure may be reduced through mitigation measures absence of suitable and sufficient alternative substances which do not present significant economic and practical disadvantage and low risk of resistance in target organism severe negative impact on society of non-approval when compared to the risk on health influencing harmonised classification decision through ECHA Risk Assessment Committee, Commission and national authorities involved in classification procedure to avoid substance meeting exclusion criteria 38
39 Pre-Market Authorization Procedures But new (more efficient) product authorization procedures Simplified product authorization (low risk, not nano) Mutual recognition of product authorization: in parallel with first authorization (time efficient) dedicated procedures for Commission to resolve MS deadlock not needed where Union or Simplified authorisation used Parallel Trade permit: where identical to product already sold on relevant MS market Union authorization (except for high risk actives) phased in by PT until January 1, 2020 Dedicated Board of Appeal for certain decisions 39
40 Pre-Market Authorization Procedures Nanomaterials: not covered by active approval unless specified separate risk assessment requirement for products containing 40
41 New Data Requirements EU M/Is of actives and importers of biocidal products placed on EU market must submit active dossier or LoA to ECHA by 1 September 2015 from September 1, 2015: active (or product) supplier must be on published source list (1 year existing stocks phase out period) exceptions for low risk Annex I actives end to free riding non-participants in existing active review New role of ECHA Biocidal Products Committee 41
42 Biocides in Treated Articles BPR explicitly covers treated article : any substance, mixture or article which has been treated with or intentionally incorporates, one or more biocidal products. [Art 3(1)(l)] Examples of products in your supply chain?: detergents or polymeric colorants with in-can preservatives, treated wood, film, fibre, funghi resistant paints, textiles, furniture, shoewear, treated clothing containing insect repellents, antibacterial tissues, mouldproof sealant and building material preservatives Current legislation requires use of EU approved active substances for articles treated within the EEA but not for treated articles imported from outside the EEA discrimination in favour of importers 42
43 BPR on Biocides in Treated Articles Treated article with a primary biocidal function (e.g. impregnated biocidal tissue wipe) require full biocidal product approval: significant resource burden (submission of scientific dossier, authority approval) Treated article without primary biocidal function must be treated with an EU approved active substance to be legally placed on market Transitional periods for treated articles already on the market New labelling requirements for treated articles without primary biocidal function: biocidal claim made, or conditions of approval of AS require labeling because of conditions of use 43
44 BPR on Biocides in Treated Articles Mandatory label content: statement that the article incorporates a biocidal product biocidal properties attributed to the AS contained therein name of the active substances name of all nanomaterials in the BPs followed by [nano] any relevant instructions for use and precautions 45 day information obligation to consumers on biocidal treatment of articles free of charge (like REACH on SVHCs). 44
45 REACH AND CONTINUITY OF SUPPLY 45
46 ECHA Dossier Review ECHA Evaluation Report 2011 (February 2012) Essential reading for 2013 registrants and call for action for [existing] registrants, ECHA Executive Director 75% dossiers fail 2011 evaluation compliance checks: Ambiguous substance identity (lack of analytical information) (72%) Insufficient scientific support for read across Chemical safety reports (inadequate risk identification and RMMs) Perception of insufficient quality of registrations overall Quality observation letter ( QOBL ) requiring update if error Draft decision to submit missing info by deadline Member States informed and may take enforcement action. Do registered intermediates actually meet strictly controlled conditions of use? 46
47 Authorisation Basics Rationale: SVHCs(CMR, PBT, vpvb) progressively replaced by suitable alternative substances or technologies where economically and technically viable. Procedure: introduction of substances into Annex XIV List of Substances subject to authorisation via Candidate List (Proposal Dossier to Identify SVHCs) industry Application for authorisation of Annex XIV substances for defined uses European Commission Decision (based on ECHA scientific opinion) to accept/refuse authorisation (with conditions?) 47
48 Authorisation Opportunities for Advocacy Short comment period re SVHC proposal dossiers Industry authorisation dossier: chemical Safety Report (if not already submitted in registration dossier) analyse availability of alternative substances and technical and economic feasibility of substitution (substitution plan if alternatives available) show risk adequately controlled; or if risk cannot be adequately controlled (PBT, vpvb and CMR without threshold effects), prove why socio-economic benefits outweigh risk and no suitable alternative substances ( socio-economic analysis ) fee for each application per substance and per use 48
49 Consultation re Proposals to Identify SVHCs 49
50 REACH And Product Stigmatization Black lists: registry of intentions, Candidate list black listing (regulator) NGO SIN (substitute it now) list Should regulator actively stigmatise? Commission promise 106 substances on Annex IV by 2012 CEFIC: need for proactive product stewardship educate supply chain why risk adequately controlled counter media/ngo pressure hazard based analysis avoid market deselection of your products interaction with policy makers Turn a legal obligation into a competitive advantage? accurate information on substances in product on website assurances re substitution of candidate list substances 50
51 Conclusions New legislation which may threaten continued ability to place on market products which you currently distribute or import Knock-on effects for distributors and DUs Prioritisation and prior authorisation: general ban or for certain uses currently permitted Enforcement: no or inadequate registration dossier lead to business interruption ( no data, no market ) Viability of specialty chemicals? Other compliance factors making current markets no longer attractive for suppliers Biocides: (and pesticides) new wide carte blanche powers to elect for substitution new approved suppliers list and dossier requirement imported treated articles now subject to full product authorisation or approved active substance requirement and specific labelling 51
52 Conclusions Be aware of opportunities for proactive product defence within legislative procedures and use them Manage regulatory stigmatisation of substances (in products or as such) in your supply chain Are you sufficiently protected from liabilities to your customer arising from business/supply interruption resulting from upstream non-compliance or substance bans/restrictions? 52
53 STEPTOE SERVICES For additional information about our services, please contact or visit our website 53
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