Breaking New Regulatory Ground
Passed by the EU in 2007, the REACH regulation is a groundbreaking policy for regulating chemical substances.
Since the early 1990s improving the regulatory environment in the European Union (EU) has been at the center of EU lawmaking. The resulting philosophy and approach to regulating industry have led to the REACH Regulation (Registration, Evaluation and Authorization of Chemicals). Groundbreaking in its purpose and design, REACH regulates chemical substances produced in or imported into the EU.
As early as the Edinburgh European Summit in 1992, heads of state and government committed themselves to the political objective of “better regulation,” an approach that would protect EU citizens and the environment while promoting competitiveness and productivity within industry. Following the recommendations of a group of advisors from the European Commission (the EU’s executive arm) and from the member states, the Commission adopted a series of measures that revolved around three primary goals: to promote the design and application of better regulation tools; apply the regulations in close cooperation with the member states; and reinforce the constructive dialogue between all stakeholders and regulators.
The REACH Regulation, which went into effect on 1 June 2007, was born in this environment of “better regulation.” The process of developing REACH embodied the characteristics endorsed by that philosophy by engaging stakeholders in discussion with the regulatory body, the European Commission. The European Commission initiated the proposal for a new chemical policy with the overall aim of improving the competitiveness of the European chemical industry while protecting human health and the environment.
The Commission found itself challenged to acknowledge emerging research that links exposure to chemicals with adverse affects on human health and the environment while simultaneously maintaining the strong and competitive position of the European chemical industry. With objectives seemingly so at odds with each other, the REACH Regulation has naturally become a contentious issue in the EU, resulting in intensive lobbying by both the business community and environmental and public health organizations. After years of discussion among the various stakeholders, 1 June 2007 became a landmark not only in the history of the chemical policy of the EU but also in the history of the EU itself.
Before REACH became law chemical regulation in the EU employed a two-tiered system that distinguished between “new” chemicals placed on the market during or since September 1981 and ”existing” chemicals that were on the market before that date. While new chemical substances faced stringent testing, existing substances were not bound by the same measures. Of all substances on the market in 2001, 99% were registered as existing substances. In the same year the Commission argued that the system, which lacked both coherence and transparency, was doubly a failure in that it produced insufficient safety information about the majority of existing chemicals and discouraged research and innovation by imposing stringent requirements on only new products. To correct this problem the European Commission declared that the new policy needed to shift the burden of proof and liability for undertaking risk assessment from public authorities to the manufacturer in a new, single piece of legislation that covered new as well as existing substances.
In contrast to the earlier two-tiered system, REACH mandates three categories of scrutiny for manufacturers and importers of chemical substances. Registration obliges producers and importers of chemical substances who are responsible for more than 1 metric ton per year of any number of chemical substances to submit a so-called registration dossier to the European Chemicals Agency. This agency is responsible for evaluating the dossier and deciding on further testing requirements. Under this plan, approximately 80% of the 30,000 chemical substances on the market require registration. Evaluation is the process whereby substances exceeding a production or import volume of 100 tons per year require evaluation by authorities. It is estimated that around 15% of the 30,000 substances require evaluation. Authorization of hazardous substances relates to substances deemed by the European Chemicals Agency to be of very high concern in terms of their potential risks to the environment and human health. These substances are only allowed to be continuously used with special approval—that is, they must receive authorization. It is estimated that around 5% of the 30,000 substances require authorization.
With REACH the European Commission has attempted to establish a comprehensive legal tool with which it can control the manufacture and import of chemicals in the EU. Additionally, the EU hopes to use the rigorous REACH standards to create a reputation for European chemicals and chemical products as meeting the highest standards of product performance and safety. The creators of REACH hope that its successful implementation will generate confidence and predictability for the European chemical industry and for its trading partners.
A great number of stakeholders, ranging from the EU itself, to environmental and industrial organizations, to national governments within the EU and abroad, published a vast amount of impact-assessment studies in which they analyzed the potential outcomes of REACH. But because stakeholder studies by their nature focus on issues of concern to a given constituency, the studies have used a variety of methodologies and have generally focused on costs, not benefits. According to the renowned economist Jacques Pelkmans, these studies were drafted “not with the purpose of assessing the analytically possible [or] likely impact but with pure lobbying objectives in mind.” REACH has undoubtedly been the object of fierce lobbying; however, the cacophony of voices heard in the process is a reminder that the regulatory regime ought to foster a healthy dialogue between the regulator and all stakeholders in the interest of transparency.
While it is yet unclear what impact the “better regulation” mindset will have on European policies, REACH is undoubtedly a landmark and a comprehensive piece of legislation. What effect will REACH have on the chemical industry in the EU, or globally? Do REACH’s unique features represent the next phase in environmental and health regulation, or will these same innovations make the program costly, ineffective, and ultimately unenforceable? Perhaps it is best to view the process of constructing and implementing REACH as an elaborate experiment designed to find new ways to protect human and environmental health while also creating a nurturing environment for industry. The results are still in the making.