BW2_Chemicals

Changes to the EU’s chemicals policy would cause divergences with the UK and should be avoided, says the EU chemical industry lobby Cefic.

Such ‘freezing clauses’ were typically used in international investment agreements to fix parts of legislation in time.

Cefic is now asking for something similar – it wants to freeze REACH on the pretext of avoiding divergence with the UK. It also says that any future change of rules should be done in cooperation with the UK.

This demand goes against the spirit of the negotiating mandate adopted by Member States in February 2020. They envisaged a form of dynamic alignment between the EU and UK, ‘with Union standards as a reference point’.

Questioned by Members of the European Parliament on this subject, Environment Commissioner Sinkevičius said the EU cannot hold back the implementation of the European Green Deal because others choose to go another way.

In the past, Cefic has argued that the UK should remain within REACH. This would help companies, protect people and the environment.

But regulatory divergence on chemicals has become unavoidable:

• the UK has put in place a much weaker chemicals regime (the so-called BREACH) which will not have complete safety data for almost 7 years;
• the EU is set to strengthen its chemicals safety regime with the recently published Chemicals Strategy for Sustainability; and
• unless the UK agrees to align with EU chemical laws.

European Parliament, Environment committee public hearing, Cefic’s position at minute 14:23 

European Parliament, Environment committee meeting, Environment Commissioner Sinkevičius’ answers to Member of European Parliament questions

CHEM Trust published a briefing on EU-UK chemicals management cooperation scenarios post-Brexit. In addition to remaining part of REACH and as an associate member of ECHA, along the same lines as EEA countries, Articles 106 and 120 REACH, as well as the operating procedures of ECHA’s bodies, provide other mechanisms for partnership.

ECHA can share confidential business information (i.e. ECHA’s database) with the UK, under Article 120 REACH. There is no precedent for the use of this article and ECHA has not adopted a general approach on how it can be applied. Sharing the database would save businesses considerable costs from duplicating data required by the UK-REACH registration system (estimated at around EUR 1 bn). The UK database is currently empty and will not have full information on substances until 31 December 2022 (the deadline for businesses to submit full information to the UK database), with some signs this deadline may be relaxed. The EU would in any case have to consider sooner or later how to share ECHA’s data with third countries. After the transition period ends, REACH will still be applicable to Northern Ireland and Northern Ireland (which will then be a third country) authorities will need to access ECHA’s data base to enforce the regulation.

According to Article 106 REACH, the UK can also participate in the work of ECHA, more specifically in ECHA’s committees (e.g. risk assessment and socio-economic analysis committees). ECHA has previously granted such partnerships to Croatia (before accession) and to Switzerland (cooperation on biocides). The main criteria for allowing such participation is the third country’s chemicals management legislation close alignment with EU-REACH.

Other forms of cooperation include participation in certain ECHA’s entities such as the HelpNet or peer chemicals agencies collaboration based on a memorandum of understanding (e.g. between ECHA and the US Environment Protection Agency).

While the EU position on this is unclear at the moment, the UK wants a chemical annex in the future trade agreement that would provide for data and information-sharing. The UK is also interested in developing a memorandum of understanding with ECHA similar to those ECHA has with Australia and Canada. CHEM Trust and stakeholders across the industry are advocating for a partnership that is significantly closer than these agreements – that would ensure close alignment with REACH and active participation in ECHA. The briefing demonstrates the existing precedents for and legal mechanisms by which such a partnership could be secured.

CHEM Trust, briefing on Models of Cooperation with ECHA, based on research provided by Ioana Bere from Stefan Scheuer Consulting

There is a danger the UK will end up with a hollow system, said Dr. Michael Warhurst (CHEM Trust) in his evidence to the Environment Bill Committee. Alongside Nishma Patel from the Chemical Industries Association and Bud Hudspith from the trade union – UNITE, Dr Warhurst expressed his concerns about the UK having to start building a chemicals’ safety database from scratch. Bud Hudspith and Nishma Patel felt it would take the UK years to catch up with ECHA. The lack of resources for and personnel of the Health and Safety Executive (ECHA’s equivalent in the UK) is an important issue. Restarting the process of registration and providing data behind the chemicals will put the UK behind the EU REACH. The amount of work to be done is considerable, especially because the chemicals market is constantly on the move, with industries usually going for a substance alternative once one substance is banned. There is also concern that the enforcement in the UK must be improved to cope with an even bigger task ahead.

Evidence in the Environment Bill committee
Chemical Watch article

Following the outcome of the UK general election, the UK chemical industry has reiterated its willingness to stay aligned with the EU’s regulatory system. This is considered to be an essential point for ensuring frictionless access to the EU’s internal market post-Brexit. This position is echoed by UK NGOs, who have reiterated the importance of safeguarding ECHA membership.

The global chemicals giant BASF estimated that complying with requirements for a UK REACH replica will cost the company around 75 million euros. For certain substances, the cost of registration would be seven times higher than the profit it can generate per year. Due to the high costs for a relatively small market, BASF may decide not to register some substances in the UK. As other competitors are also taking into account this option, it might leave UK chemical users with a smaller palette of substances to choose from compared to their EU counterparts.

Former Prime Minister May’s intention was to seek associate membership of ECHA, but it is unclear if this will be prioritized under Johnson’s government. Although ECHA is still mentioned in Johnson’s revised Political Declaration, the subsequent sentence on aligning with Union rules was removed. Further, “level playing field” references on environmental standards have been deleted from the legally binding Withdrawal Agreement and moved into the Political Declaration.

Chemical Watch article on regulatory alignment
Chemical Watch article on BASF

(12 September 2019) On 1 November 2019, chemical registrations under REACH made by UK companies will become void. This means they will no longer hold licenses allowing them access to the EU market. Therefore, ECHA is again issuing a call on companies to transfer their business or registration to the EU if they want to maintain business links with the EU. Despite multiple previous calls and Brexit deadline extensions, a large share of substances which are only UK registered have not yet been transferred (estimated at around 40%), suggesting that major supply chain disruptions and enforcement issues should be expected in case of no-deal exit.

(20 June 2019) The UK government published a revised statutory instrument on the Pesticides Regulation which fixes the “drafting error” previously reported by the University of Sussex (Brexit Watch n°22). Three paragraphs establishing the ban on endocrine disrupting chemicals in the EU’s regulation from 2009, had been deleted from the text of the UK instrument. The relevant provisions will be reinstated by the new amendment.

Last week CHEM Trust threatened with legal action unless weakened protections were amended. Michael Warhurst from CHEM Trust finds it “hard to believe” in a drafting error, given the strong lobbying of the US against banning hormone disrupting chemicals.

Revised Statutory Instrument on the Pesticides Regulation
CHEM Trust article
Brexit Watch n°22

As time passes, more deficiencies are identified amongst the flood of statutory instruments, which were put forward by the UK government under the Withdrawal Act, which aims at copying across the EU’s acquis.

Easier said than done: the UK’s new legislation on pesticides would significantly change governance and objectives, going beyond a technical adaptation to the UK context, according to a study conducted at the UK Trade Policy Observatory, University of Sussex. It would give “more control to UK Ministers and less to independent scientific advisors”, which weakens the enforcement mechanisms and allow Ministers to consider the evidence at their own discretion.

Further to that, it appears that the EU’s legally binding restriction on active substances that have endocrine disrupting properties is missing from the UK’s copy across statutory instrument. Dr Lydgate, from the University of Sussex, postulated whether the changes in UK’s pesticides rules would make it easier for the UK to pivot to an US type of regulation.

CHEM Trust argues that this represents the “first concrete evidence of Brexit being used as a cover for deregulation”. CHEM Trust have sent a Pre-Action Protocol letter threatening legal action to Secretary of State Michael Gove unless weakened protections are amended. The letter also formally calls for a revision of the UK’s statutory instrument on REACH, which removes vital stakeholder engagement mechanisms, amongst other deficiencies. Responding in the HuffPost, the Ministry, Defra, said it was a “drafting error” which they are now addressing.

HuffPost article (June 2019)
Laboratory news article (May 2019)

The UK’s IT system for chemicals registration provides “basic functionality”, according to the UK Chemical Industries Association (CIA), which helped test it. However, some aspects need further work, including a functionality that would allow registrants of the same substance to contact each other, and clarification on process for companies importing or manufacturing a substance for the first time in the UK.

Should the UK leave the EU’s chemicals safety regulation REACH under a no deal scenario, it will have to duplicate chemical registrations. Earlier this month, Secretary of State for Environment, Food and Rural Affairs Michael Gove reassured a House of Lords subcommittee that Defra has the personnel and contingency plans ready for a no-deal Brexit, and has taken account of the concerns expressed by the chemicals industry association.
 
Chemical Watch article

According to the European Chemicals Agency (ECHA), over 4,800 of an estimated total of 12,000 UK registrations have been transferred to the EU27 or are in the process of being transferred. The transfers have been accelerating rapidly with last week seeing a record of 1,800 transfers.

Nevertheless, out of the 1,181 substances that hold a registration only in the UK, only 197 have so far been transferred to the EU27.If not transferred in time, i.e. before Brexit day, these substances are at risk of losing access to the internal market and to cause major supply chain disruptions
ECHA advises companies to proceed to the transfer through the IT tool before Brexit takes effect (currently 13 April 2019, 00:00).

ECHA’s communication

The European Chemicals Agency (ECHA) reported this week that they are working on transferring 3,000 REACH registrations to the EU27. These transfers are a necessary step for UK companies to maintain access to the EU’s internal market. According to UK’s Chemical Industries Association, transfers will still continue, as the number of substances registered by UK companies is higher than originally assessed.

ECHA announced that the transfer window will now stay open after 30 March, and will be “subject to further developments”. ECHA’s advice to chemical companies remains the same and will be adapted accordingly in the event of new developments.

ECHA’s communication
ECHA’s instructions for companies
Chemical Watch article