Complying with REACH: Why We Need Better Communication in Supply Chains
REACH regulates the production and use of chemical substances in EU and EEA territories.
Recent announcements regarding the regulation of SVHC under REACH have shown, once again, how important it is for companies to understand which chemicals are contained in the products they supply. However, long supply chains and multiple components can make this a difficult and complex task.
We encounter a wide variety of chemical substances constantly throughout our daily lives. REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) is the European Union (EU) regulation designed to help protect human health and the environment from the harmful effects of some chemical substances, while encouraging commercial competition and innovation in European industry.
Administered by the European Chemicals Agency (ECHA), REACH entered into force in 2007, with a phased implementation over the following decade. It requires businesses operating in the European Economic Area (EEA) to register with the ECHA information on the hazards, risks and safe use of chemical substances they manufacture or import. It places the burden of proof on companies to prove that a chemical substance can be used safely. A long-term objective of the regulation is the removal of hazardous substances from products and their substitution with less dangerous alternatives.
The 0.1% Threshold
As part of its mission, ECHA identifies substances of very high concern (SVHCs). These are substances that are known to be carcinogenic, mutagenic, toxic for reproduction or persistent, bioaccumulative and toxic. The ECHA includes these substances on its Candidate List (Annex XIV of REACH), a list which is expected to contain between 400-500 substances by 2020.
According to Article 7(2), an economic operator must notify the ECHA if an article they manufacture, or import, contains an SVHC on the Candidate List when it meets the following conditions:
- Substance is present in a concentration above 0.1% w/w
- Substance is present in the articles in quantities equaling or exceeding 1 metric tonne per producer or importer per year
In addition to notifying the ECHA, Article 33 of REACH also requires suppliers of articles that contain an SVHC at a level above the threshold, to inform recipients about the SVHC, and, when requested, to make the same information available to consumers within 45 days.
This creates a problem of interpretation. If the 0.1% threshold is to be enforced, does it apply to the whole article or the component parts that form the article?
Article 3(3) of REACH defines the term ‘article’ as, an “object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition”. In most cases, therefore, products we find in the home will be defined as articles. At the same time, in complex articles such as a bike, the term will also apply to the individual components of the article – each component is, in effect, an article as well. In terms of a bike, this means the seat is both an article and a component.
According to a ruling from the European Court of Justice in 2015, the 0.1% threshold applies to, “each of the articles incorporated as a component of a complex product.” Manufacturers and importers of articles, therefore need to understand how the rules apply to the items they are importing as different rules may apply.
Ensuring a Level Playing Field
According to data from Eurostat, in 2015 the EU produced and sold in excess of EUR 3 trillion worth of products in EEA markets. During the same year, products worth EUR 1.7 trillion were imported into and sold within the EU. The application of REACH, however, does create the potential for an economic imbalance weighed against European manufacturers and this goes against one of the primary objectives of REACH – the promotion of EU industry.
REACH applies to the production and use of chemical substances within the EU/EEA. It is therefore applicable to chemical substances that are imported into the EU but not to articles that are produced outside the EEA and which incorporate SVHC. Articles, and articles that are components in complex articles manufactured in the EU, are therefore exempt from the requirements for SVHC authorization. It should be noted, however, the rules related to substances restricted in Annex XVII do still apply. These are frequently found in RAPEX reports as a reason for a product being withdrawn from the market.
To correct the problem of application of SVHC restrictions on imported goods, it has been suggested the authorization requirement regarding SVHC should be extended to covered imported articles. Following a legal appraisal by the German Environment Agency (UBA), it has been deemed that this extension would be in accordance with World Trade Organization (WTO) rules since it would neither violate the principles of national treatment and most-favored nation treatment, nor constitute an unnecessary obstacle to trade.
The enforcement of this extension would mean economic operators importing articles into the EU/EEA would need to be certain their products or components containing SVHC do follow the same rules as EU/EEA based manufacturers.
New Database for Candidate List Substances
It was announced in July 2018 that the ECHA would establish a new database to give waste treatment operators and consumers better information on the presence of hazardous chemicals in the products they discard or recycle as waste. This latest change forms part of the EU’s revised waste framework directive, which entered into force in July 2018.
The database has multiple objectives:
- Better risk management of chemicals during waste recovery
- Promotion of non-toxic material cycles
- Better consumer information to allow more informed choices on safer products
- Increased pressure to replace substances of concern
For manufacturers and importers of articles, the new database reinforces the importance of good supply chain communication. Companies must ensure information concerning hazardous substances is communicated accurately along their supply chains, whatever the supply chain’s country of origin, to ensure the correct information is transferred to the ECHA.
Supply Chain Communication
REACH has been described at the most complex piece of legislation in EU history.1 Its scope and intricacy mean it can be difficult for economic operators to navigate. The enforcement of the 0.1% threshold, the proposal to extend the requirements concerning SVHC to include articles imported into the EU/EEA, the restricted substances listed in Annex XVII, and the announcement of a new database covering articles containing SVHC on the Candidate List, all highlight the importance of understanding what chemical substances are contained within a product.
To ensure compliance with the rules regarding SVHC, economic operators must firstly understand the way the rules are being enforced and any changes that are being proposed. Secondly, they must ensure the correct information is passed along their supply chain regarding the incorporation of SVHC into products and articles.
For more information, please contact:
Dr. Udo Krischke
Global Technical Manager RSTS & Operational Integrity Manager
SGS Germany GmbH
t: +49 (0)6128 - 744 235