Reach progress underplayed as ECHA focuses on negatives - Cefic DG

Source: ICIS News

2018/03/05

BRUSSELS (ICIS)--The money that EU chems have spent in complying with Reach regulation has been worthwhile but companies feel the regulator ECHA focuses too much on the negatives and falls short on praising the efforts made so far, according to the director general (DG) at trade group Cefic.

Marco Mensink praised Reach and said the regulation is set to become a global standard for the chemical industry, but also demanded from the 28 EU member states better enforcement policies in order to stop unauthorised materials produced overseas entering the Single Market.

Cefic’s DG, who is soon to mark his second anniversary at the helm of the trade group, added that time is running out for the UK to negotiate its departure from the EU, arguing that the country “needs to make up its mind" on the type of relationship it wants with the other 27 countries post-departure.

The European Chemicals Agency (ECHA) has repeatedly complained that companies are not filing fully compliant registrations dossiers, the documents they send to the regulator detailing the properties of a substance, including risks to human health and the environment.

The Helsinki-based regulator last urged companies to fully comply with the regulation on 28 February.

While Cefic’s Mensink conceded that chemical firms will need to work on improving the quality of the dossiers, he also said that companies could do with a pat on the back every now and then after the enormous amounts of money they have spent in implementing Reach since it first came into force more than 10 years ago.

“We need to do work on the dossiers from past registrations. For me, this is a discussion about seeing the glass half-full or half-empty, and it is important that ECHA stresses what is good rather than what has not been done yet: it is a matter of nuance and tone,” he said.

“We depend on ECHA being trusted, so I think it is important that it also states all the dossiers which are in order or those which are almost there [in compliance terms]. It would be good for ECHA to also give some of the good news – describe it as ‘We need to do improvements’ rather than ‘It’s not good enough yet’.”

Asked whether he thought it was acceptable for companies not to follow the regulation, as incomplete dossiers delay the implementation of Reach, Mensink said that registrations deadlines should be taken as a “starting point” from which to build on.

“The registrations is work in progress. I see the deadlines not as an end, but as the start for the next round of work. We have done an enormous amount of work, we have spent hundreds of millions of euros to implement Reach in a relatively short period of time, and now we have the final deadline coming up: everything required from the industry has been done,” said Mensink.

Like in prior Reach deadlines in 2010 and 2013, industry players had suggested that there could be an extension for the May 2018 deadline affecting substances produced in amounts between 1 and 100 tonnes, completing the regulation’s journey started in 2007.

The small amounts required to be registered by May would imply many small- and medium-sized (SME) firms could stop producing certain chemicals because the cost of registration could make it unprofitable, industry players have warned.

However, an extension to give more time to struggling companies would require a legal modification for which time would have already run out, as explained in an interview with ICIS in January by the new executive director at ECHA, Bjorn Hansen, in his post since 3 January.

Mensink was equally clear about the impossibility of an extension to the May deadline and, in his characteristic optimism, he said that so far he is not aware of major problems regarding the upcoming deadline.

“We don’t hear that much noise now and it seems to be going well. We did everything we could, we worked with ECHA on specific SME programmes, on information and workshops for companies, and we tried to support SMEs throughout Europe,” he said.

Cefic’s DG would always refer to Hansen as ‘Bjorn’, and claimed the pair’s personal and professional relationship is “very good” – just like the one Mensink had with the previous ECHA executive director, Geert Dancet.

The latter used to park aside the amicable terms when in a public environment. At Mensink’s first Cefic annual assembly in Florence in 2016, Dancet did not fall short of criticisms to an audience composed of very quiet chemical executives.

Hansen also said that there will always be a “natural friction” between a certain industry and its regulator, an assertion that Mensink thought of as very reasonable, adding that the Hansen is someone he can work with, as shown in a first round of talks for restrictions on microplastics.

While ECHA’s job is to give homework to companies, Mensink also set out some requests for the regulator: after all the money spent implementing Reach, chemical producers in Europe are worried that substances banned under the law are entering the EU Single Market, either directly or through manufactured products.

Better law enforcement is badly needed, said Mensink, a task that would fall on to each of the 28 EU member countries.

“I have told Bjorn a few times, and he agrees, that we need to improve enforcement. If you impose strict rules on EU companies, the other side of the medal would be that you make sure the competition doesn’t land with substances which are not compliant,” said Mensink, pictured.

“A second step there would be substances in articles: products made with substances that are not compliant, like what we have seen with toys for example, is the same part of the problem. Our agreement between industry and the Commission is that we comply with Reach, but we also need to make sure competition is fair.”

A hot topic at ECHA’s Helsinki offices as of late has been how the regulator will finance itself once most substances registrations fees dry out, the way it gets most of its funding currently. Hansen, and before him Dancet, have warned about a potential lack of funding for the regulator to regulate.

Hansen set out clearly the two methods to avoid depriving one of its star agencies of funds: either the EU allocates more direct subsidies from the EU budget or companies may face higher registrations fees to register substances in the future.

Mensink would much prefer, naturally, the first option.

“If the Commission is taking ECHA and Reach seriously, it needs to take funding for the regulator seriously, it is part of good governance. Funding should come from the next MFF [multiannual financial framework - the EU’s seven-year budget due to start in 2020]. The majority of registrations have been done [so obtaining funds from those would be difficult],” he said.

“I understand where Bjorn and Geert [Dancet] are coming from, it is their job to make clear they need proper funding to do their work. But I don’t think funding will come from increased fees. We are just before the real debate on the next MMF and funding for EU agencies has to be part of that.”

A wider hot topic for the whole of the EU chemical industry is how the UK will fare once it leaves the 28-country bloc in March 2019.

The need for a transition period after the official departure date seems to be a common denominator to which both the UK and the EU agree, but apart from some ‘divorce settlement’ accords signed in December 2017 little more clarity has come out of the negotiations.

Manufacturing sectors in the UK are growing increasingly worried that the powerful financial services could get a decent deal post-Brexit in detriment of industrial sectors like chemicals.

The CFO at German chemical major BASF, with operations in the UK, said it eminently in an interview with ICIS in February: the UK’s unclear road to Brexit is deterring investment and the lack of answers is causing a lot of discomfort.

While the interview with Mensink took place at the same time the UK’s prime minister disclosed on 2 March that the country would seek an “associate” membership to ECHA post-Brexit, leaving the Single Market and the wider customs union seems to be a done deal, after the government has insisted the UK would not be bound by any supranational court which underpinned those jurisdictions.

In that case scenario, the impracticalities for the chemical industry would be large, according to Cefic’s DG.

“The real challenge here is that if the UK leaves the customs union. Currently, paperwork follows the truck [when trading goods] but if you reverse that the truck will follow the paperwork, which in turn could mean a hiccup in paperwork, causing trucks to stand still: that’s one of the biggest risks we face,” said Mensink.

“The challenge [for an immediate trade deal post-Brexit] is that free trade agreements take a long time to negotiate: our biggest issue at the moment is time. Everyone is worried about time. However, as the Dutch say: ‘If there is a will you’ll find the way’, that’s the art of politics.”

On Reach, he concluded, there is not much of a debate: anything that the UK chemical industry brings into the Single Market post-Brexit will have to continue being Reach-compliant.

Pictures sources: imageBROKER/REX/Shutterstock and Cefic

Interview article by Jonathan Lopez

ICIS will be publishing on Tuesday 6 March the second part of Cefic’s DG interview, with his views on plastics recycling, the circular economy and the EU’s Emissions Trading System (ETS)