03 April 2008 00:00 [Source: ICB]
The EU's Reach will have a profound impact on cosmetics and personal care exporters to Europe
Mike Penman and Guido Bognolo
REACH HAS now been on the EU statute book for more than a year, and the first actions with real regulatory consequence are required before the end of 2008. Yet there is still great confusion on the details of what to do and what impact it will have.
The effect upon the exporters to Europe of cosmetics and personal care-formulated products and ingredients will be profound.
Reach (Registration, evaluation and authorisation of chemicals) requires that the manufacturers and importers of chemical substances register them with the new European Chemicals Agency (ECHA).
Full registration starts in 2010 with substances manufactured or imported at 1,000 tonnes/year or more. Then smaller volume chemicals need to be registered in stages through 2018. So on the face of it, for the lower tonnage manufacturer or importer, there is not quite the urgency for action. Unfortunately, this is not the case.
AND NOW, SOMETHING NEW
Because of concerns about animal welfare brought up late in the legislation's passage through the European process, an extra step was introduced.
Called preregistration, it requires all manufacturers or importers who intend to register a substance at any stage, even in 2018, to inform the ECHA by December 2008.
The information required is minimal - the substance definition, the tonnage band intended for registration and who is going to do it - but it must be done this year to gain the benefit of the longer time frames of full registration. If preregistration does not occur, then full registration is due after December 2008.
Deciding what to preregister by whom is a major undertaking in its own right, with the preparation of inventories and developing an understanding of the cost consequence of preregistering substances.
There is little point proceeding if the future costs cannot be borne by the margins the substance generates. This aspect has driven many companies to try to determine, from their suppliers, their intention to register. Failure to supply a particular use in a critical area may have an adverse impact on downstream business.
The output of preregistration will come in the formation of Substance Information Exchange Forums (SIEFs) of potential registrants of the same substance.
The objective is for registrants to work together sharing vertebrate test data, agreeing on testing proposals if required, and deciding how the substance should be classified for health and environmental effects.
There is also a provision for mechanisms on how to share the costs of work done previously and that are needed in the future.
The management and representation of these groups will be a major challenge, especially to those not located in Europe, as they will need to be represented in the discussions and decision-making process.
Reach has the potential to exclude manufacturers or importers from the market. If they do not register, or if they cannot demonstrate that their substance can be used in a way that controls risk to workers, consumers and the environment, then the manufacturer cannot supply the chemicals for that intended use.
Finding this out only weeks before the deadline is not much use, as there will be no time to take corrective action, so companies need to quickly understand areas where they might have problems.
It is this element - the specific use - that gives Reach a great deal of its complexity. Consequently, it deserves attention to ensure that it does not impede business.
Reach challenges management - not only because it has the potential to be very costly in terms of testing, the preparation of dossiers and reports, and the management of the SIEFs and internal process - but because it also has an impact on the supply chain, sales and procurement.
There is a great need to understand or influence the needs and actions of both the supplier and the downstream user. This can be even more acute for non-EU based businesses as their suppliers may not even realize that the product goes to the EU and consequently is involved in the process at all.
There is some relief from the full requirements of Reach for the cosmetics and personal care industry. Reach states in Article 2.6 that: "The provisions of Title IV (Information in the supply chain) shall not apply to the following preparations in the finished state, intended for the final user: (a) medicinal products (b) cosmetic products as defined in Directive 76/768/EEC."
In addition, Article 16 states that: "The chemical safety report need not include consideration of the risks to human health from the following end uses: (a) in food contact materials within the scope of Regulation (b) in cosmetic products within the scope of Directive 76/768/EEC."
However, this is for the final formulated product and its specific use. Any other use of the substances contained within the cosmetic formulation will need to be registered.
In addition, the exclusion from the chemical safety report is only for human health, implying that a chemical safety report may be required for environmental or occupational exposure scenarios. In this case, the specifics, not the generalities, need to be examined and the application of the derogation together with the rationale documented.
There is also some relief for users of natural substances. Annex V lists exemptions from the obligation to register in accordance with Article 2(7)(b), including: "8. Substances occurring in nature other than those listed under paragraph 7, if they are not chemically modified, unless they meet the criteria for classification as dangerous according to Directive 67/548/EEC."
However, what exactly constitutes a substance occurring in nature is a subject for analysis. There is considerable guidance on the naming of substances that are subject to Reach, which helps to understand their inclusion or otherwise.
For example, many extracts of natural substances may be captured. Two examples - "Essential oil of lavandin grosso" and "Chrysanthemum oil and isomers isolated thereof" - are detailed in the extensive ECHA guidance documentation.
Registrations are per substance and per legal entity, so that any exported product may have a number of the ingredients that need to be considered for registration.
In addition, the legal entity that imports the products has to do the registration - not the non-EU exporter. This gives rise to questions on who will do it and what information may need to be given to the importer to make the registration.
To help in this, and the confidentiality issues that arise, there is a legal construction - the Only Representative - who can act for the exporter and avoid multiple registrations.
A number of firms are setting themselves up to offer services in this area. Other new service providers are appearing on the market to assist in the preparation for Reach with varying levels of skill and experience.
How can a company prepare?
The best advice is to give serious attention to Reach now and, like any change that will impact business, analysis is the key - of the products and substances impacted, the costs of doing nothing, of effort, testing, or market position.
Unfortunately there is no way of avoiding the details.
Mike Penman has over 30 years of experience in the chemical and oil industries on health and environmental affairs. His last two positions were as the senior toxicology adviser and Reach implementation manager for US energy giant ExxonMobil within Europe. He is the founder of Belgium's Penman Consulting, which provides services on toxicology, regulatory affairs and related aspects.
Guido Bognolo has over 35 years of experience in the technical and business management of surface active agents developed at Procter & Gamble and various companies of the ICI group. He has been director of innovation at UK oleochemical maker Uniqema and is the founder and managing director of WSA Associates, a consulting firm specializing in technology and business development.
For more information, visit Penman Consulting
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