Understanding REACH

“I think, obviously in Europe, it is the REACH regulation, which is requiring significant testing of chemicals to be provided by the chemical companies to insure the safety of the chemical and the environment in its use.  That particular regulation in some form will probably move to toward the US, hopefully not in its current form. The chemical industry will have increasing costs associated with environmental sensitivity issues related to our products.  If you want to single out one regulation that will impact the chemical industry, it would have to be REACH  and the increasing trend to regulate the environmental impact of our products.” 
– Barry Phillips, Senior Vice President, Manufacturing Sites Americas, NAFTA, HSEQ and Future Business, Bayer Material Science, LLC

What is REACH?
Effective 1 June 2008, the European Commission’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) program requires that chemical substances be registered before they are brought into the European Union (EU) market. Under REACH, all chemical substances manufactured or imported into the EU in quantities exceeding one ton per year must be registered with the European Chemicals Agency (ECHA). Failure to register means that the substance may not be imported. Non-EU manufacturers have do not have to meet REACH registration obligations although they will have to provide the EU importer with information necessary to make the registration. A non-EU manufacturer not willing to disclose potentially confidential information to an importer or place the burden of registration on the importer can register substances through an “only representative” statement.

The pre-registration process for REACH was completed during 1 June 2008 through 1 December 2008. The pre-registration process was free and requires limited data. Now, companies that are affected by REACH must comply to be fully registered between 2010 and 2018, depending on the substance and amount imported. Full registration requires information about the substance, safety sheets, analysis of the goods, to name a few of the requirements. Failure to register a substance will imply it cannot be manufactured in or imported into the EU.

What is the purpose for the legislation?
The purpose of the legislation is to improve the protection of human health and the environment from the risks that can be posed by chemicals, the promotion of alternative test methods, the free circulation of substances on the internal market, and enhancing competitiveness and innovation. REACH holds the industry accountable for assessing and managing the risks posed by chemicals and providing appropriate safety information to their users. In parallel, the European Union can take additional measures on highly dangerous substances, where there is a need for complementing action at EU level.

Who is affected?

• Manufacturer/importer: Manufactures or imports a substance on its own or in a preparation of greater than one ton per year.
  
• Producer/importer or supplier of articles: Produces or imports articles which contain substances included in a list of “substances of very high concern” or released during their use.
  
• Distributor: Stores and markets a substance through their own initiatives or during preparation.
  
• Downstream user: Processes chemicals, formulates preparations for end use, or uses formulated products professionally.

How do chemical companies comply with REACH?

• Companies that manufacturer or import one ton or more of any chemical substance per year should have completed the pre-registration process with ECHA between 1 June and 1 December 2008. Failure to meet the deadline will prohibit a company from producing or importing the substance until the full registration requirements are completed.
  
• Companies that met the pre-registration requirements are now required to fully register between 2010 and 2018.

How Deloitte can help?

• Impact assessment: Assess and scope the impact of REACH on a business, determining which legal entities in the supply chain may be affected.
  
• Registration support: Design and coordinate the registration program that identifies the most valuable and cost effective compliance strategy.
  
• Compliance support: Navigate and manage regulatory compliance and product liability risks for a sustainable and efficient program.
  
• Technology enablement: Identify and implement information technology (IT) solutions to ensure efficient management via a central IT system.
  
• Supply chain optimization: Analyze the supply chain and recommend optimization improvements including tax saving opportunities.
  
• People change and learning: Implement a people and communication strategy to assist employees through the regulatory requirements.
  
• Tax alignment: Identify potential tax savings opportunities as a result of the required registration process.  Exemptions may apply or substances can qualify for a lower registration fee. Deloitte has developed an electronic scan that will provide the optimum result

Related content: 
Countdown to REACH 

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