New E.U., U.N. Chemicals Rules to Affect U.S.

Published July 1, 2006

The European Union (E.U.) announced on May 8 it is likely next spring to begin enforcing broad-ranging chemical regulations under its REACH (Registration, Authorization, and Evaluation of Chemicals) program.

The new approaches to chemicals management embodied in the REACH program and the United Nations Strategic Approach to Chemicals Management (SAICM, which was adopted on February 6, 2006 and is a voluntary rather than binding agreement) will affect American businesses in three critical ways.

First, the far-reaching jurisdiction of REACH and SAICM over the manufacture and import of chemicals and products containing chemicals could dramatically affect American businesses that manufacture or import to the E.U. Second, the philosophical approach behind these initiatives and the E.U.’s stated goal to export REACH worldwide could affect all exporting American businesses regardless of whether they export to the E.U. Finally, REACH and SAICM may also influence how the United States regulates chemicals domestically.

Theoretical Risks

REACH was designed to ensure chemicals do not harm human health or the environment. The premise behind REACH is that there is inadequate knowledge of the potential risks associated with many chemicals, even those that have been in circulation for decades. Unlike the United States, which regulates new chemicals using a risk-based analysis (giving weight to real-world exposure levels to a chemical), REACH focuses solely on the chemical’s abstract potential to create a hazard, regardless of whether there is any actual risk of it happening.

REACH would require the registration of approximately 30,000 chemicals currently used in hundreds of thousands of products. Registered chemicals considered high-risk according to their inherent toxicity will have to go through additional evaluation procedures prior to production or import within or into an E.U. country.

E.U. lawmakers are currently developing a final version of REACH, with the vote for final passage expected to occur in fall 2006.

SAICM Flexibility

SAICM aims to “achieve the sound management of chemicals throughout their life-cycle so that, by 2020, chemicals are used and produced in ways that lead to the minimization of significant adverse effects on human health and the environment.” SAICM is a voluntary document that, unlike a treaty, does not bind the countries involved to specific obligations. More than 100 countries, including the United States, agreed to SAICM in February 2006.

The next step for countries that have agreed to SAICM is to implement its principles by developing national action plans, which are expected to vary widely.

In contrast to REACH, SAICM is not mandatory, and there are no regulatory requirements or enforcement mechanisms. This arrangement provides flexibility to countries and organizations to further specific agendas.

For example, the E.U. successfully inserted a regulatory assistance fund into SAICM just prior to finalization. The “Quick Start Program” provides technical and financial assistance to developing countries to establish chemicals management rules. The E.U. created Quick Start to facilitate the spread of REACH-like regulations to developing countries.

European Red Tape

A group of developing nations, however, recently estimated REACH will cost them at least $10 billion to complete the registration process for the approximately 30,000 chemicals subject to the REACH requirements. Those 30,000 chemicals will be registered over an 11-year period beginning after enactment, which is expected to occur in 2007.

By contrast to these approaches, which assume all chemicals are equally likely to reach humans and the environment, risk-based chemicals management systems hold many benefits for developing countries, including the ability to develop and move to market chemicals and products that contribute to economic growth, and to deliver chemicals and products that improve quality of life.

The countries that make up the E.U. collectively moved only 2,700 chemicals to market over the 18-year period from the end of 1981 to 2000. By contrast, in only three years, 2002-2005, the United States approved nearly 3,000 chemicals for manufacture.

Despite the United States’ long, successful tradition of regulating chemicals using a risk-based approach, several U.S. policymakers and states, such as California, are considering adoption of a REACH-style system. Sen. Frank Lautenberg (D-NJ) has introduced S. 1391, the Kid Safe Chemicals Act, co-sponsored by Sen. James Jeffords (I-VT), ranking member of the Senate Environment and Public Works Committee, which would move the United States toward a hazard-based regulatory scheme similar to REACH.

U.S. Impacts

Increased costs, regulatory uncertainty, threats to confidential business information protections, and increased exposure to litigation in the United States are all possible impacts of REACH. As noted, SAICM could be used to spread these consequences beyond the E.U. through initiatives such as the Quick Start Program.

These concerns notwithstanding, REACH and SAICM are now part of the international regulatory landscape, and adaptations to these new policies are inevitable. Companies that manufacture or import chemicals and products to Europe will soon have to begin preparing to comply with REACH.

The next step for SAICM is the conducting of regional forums on implementation. The first such meeting will take place in Cairo, Egypt in fall 2006.

For the present, U.S. domestic adoption of REACH-like regulations appears ill-advised. The United States should not abandon its own successful program in favor of untested European efforts.

William L. Kovacs ([email protected]) is vice president of the U.S. Chamber of Commerce Environment, Technology, and Regulatory Affairs Division.

For more information …

More information on the upcoming SAICM forum in Cairo, Egypt is available at