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REACH regs remain 'Elephant in the Room' for industry as fears grow over awareness - EEF survey

Britain's manufacturers are being urged to get to grips with the requirements of a European Directive on the restriction or banning of certain hazardous substances, or face the prospect of unlimited fines or even prison through a failure to comply.

The call was made by EEF, the manufacturers' organisation, following publication of a survey showing awareness of the implications for manufacturers, especially amongst smaller companies, remains worryingly low. It backs longstanding fears that companies have failed to recognise the full scope and significance of the REACH (Registration, Evaluation & Authorisation of Chemicals) regulations on their use of certain substances or, that they believed it was limited to chemical companies.

In contrast, the regulations are gradually restricting the use of hazardous chemicals in certain areas or, implementing widespread bans, including substances which have been commonly used in manufacturing processes for many years under controlled conditions. This has major implications for all companies from requirements for worker safety, to controls on how substances are used, through to the need to potentially modify processes and substitute other materials.

There are also major implications for companies in the supply chain that must be in a position to advise their customers if such substances are present in the products they sell.

Where there is a strong enough argument for continued use of a banned substance, companies can apply to the European Commission to continue to use it. The first such deadline is just a month away. Furthermore, companies have just six months to make themselves aware of the implications of the next major deadline for registration of chemicals in June 2013. This could see certain substances being withdrawn from the market.

Initial estimates suggest the cost of REACH is around €2billion, whilst the cost for large companies to apply for continued use of a substance is at least 50,000 euros. Anecdotal evidence suggests in some cases it can be as much as 200,000 euros. Failure to comply with the regulations is a criminal offence with the possibility of unlimited fines and, up to two years in prison.

In response, EEF is calling on government to do more to raise awareness of the implications of REACH on businesses. It is also calling for more user friendly guidance and a clearer understanding of when the Commission is likely to give permission for continued use of banned substances.

"REACH continues to be the 'Elephant in the Room' for many companies who are either unaware of the implications or, still believe it is a chemicals only issue," warns EEF Head of Climate & Environment Policy, Gareth Stace. "In contrast the regulations have serious requirements for all manufacturers who are facing either the restricted use or banning altogether of some substances.  

"For many companies there is the very real risk of lost business if they are unable to advise their suppliers whether their products contain certain materials and, where they are, how their use is being monitored. Furthermore, if companies don't plan for substance bans, it could prevent production entirely.

"When armed with the right information manufacturers are doing the right things - substituting substances that are of concern with safer alternatives. But we need to see government and European regulators and legislators to do all they can to raise awareness and make it easier for companies to understand the implications of it on their business."

The survey shows 20% of companies still believe REACH is not applicable to them while a further 30% say it isn't important to their business. The figures rise for the smallest companies with just under a third of companies with turnover below £2m per annum unaware of how they will be affected. More worryingly, even where smaller companies were aware of REACH, half were not monitoring developments.

This compares to 72% of large companies and 83% medium sized who are monitoring developments.

In contrast, the survey showed that where there was awareness there was action, especially amongst downstream users who are working with suppliers and customers, monitoring developments and, substituting substances of very high concern.

The survey also shows that REACH is perceived as costly and complex with the cost and time companies are spending on dealing with it creeping up. 60% of companies have seen moderate increases, whilst a fifth have described the increase as 'significant' in the last two years with around half of companies taking on dedicated staff to deal with the issue.

Other findings:

*         80% of large companies that are aware are considering substituting substances or have already done so.

 

*         Of those that were aware, half were changing work practices and redesigning processes, regardless of business size.

 

*         One in five companies said managing chemicals is a key business priority

To help companies, EEF offers a widespread advisory and consultancy service on the implications of the REACH regulations, as well as a programme of ongoing seminars and guidance. There is also a substance alert scheme that companies can sign up to which will help minimise the risks to their business.

REACH entered into force on 1st June 2007. However implementation is via staggered deadlines. To date REACH has mainly impacted only on the chemicals industry.

There are currently 21 substances set for bans under the Regulation. The first suite of bans takes place from February 2015. Applications to continue to use these substances must be submitted from February or August this year if companies want to avoid business continuity issues. In December the Commission announced a further suite of substances that will be banned, subject to clearance in the European Parliament. This includes several compounds of chromium and trichloroethylene.

More bans are expected. The European Chemicals Agency makes recommendations to the European Commission on which substances to prioritise for bans, drawing from the "Candidate List of Substances of Very High Concern". There are currently 153 substances on the list. Additional substances are added to the list twice a year. The full list is available from the ECHA website.

Once substances are added to the Candidate List, immediate disclosure obligations come into force. Any company using any of the substances in quantities greater than 0.1% w/w in the products they sell are required to notify their business customers to ensure its safe handling. If companies place that substance on the market in quantities greater than a tonne they are also obliged to notify the European Chemicals Agency.

On the 1st June 2013, companies that place substances on the market in quantities between 1,000 and 100 tonnes a year are required to register them. The registration dossiers assess the potential impacts of those substances on human health and the environment and sets out risk management measures to enable its safe use. Preparing this dossier can be expensive and in some cases companies may decide not to register a substance and withdraw it from the market. In a recent survey for the European Commission (CSES Survey 2012), 37% of firms said they had experienced a withdrawal of a substance as a result of registration. Around 30% were expecting it to happen again in future.

T: 0207 654 1576

W: www.eef.org.uk/REACH

17th January 2013




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