Brexit and REACH - What does it mean for UK companies?
Brexit and REACH - What does it mean for UK companies?
by Emma Mundy at 15:56 in Content, Environmental
What will happen to REACH legislation in the UK once we leave the EU? There has been much speculation over the past few months as to which regulatory direction UK REACH will head in once we leave the EU. This blog aims to give you the latest developments for chemical legislation in the UK in light of Brexit.
The EU regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulates all chemicals manufactured and imported into the EU and has been in force since 2007. It is an EU Regulation and not a Directive which means that it is directly applicable in each Member State. The only part of the Regulation which has been implemented into national legislation is regarding enforcement and penalties.
REACH Regulation has been implemented to improve the environment and human health from the risks posed by chemicals and to ensure that the substances are freely circulated on the internal market whilst safeguarding the competitiveness of the EU chemical industry. REACH addresses the manufacture and use of chemical substances.
The regulation applies to substances that are manufactured or imported in amounts of one tonne or more per year per manufacturer or importer. REACH regulation has been implemented in phases with the highest tonnage chemicals required to register first. The regulation affects a multitude of companies from many different sectors who must comply with REACH.
Your registration obligations under REACH will depend on your role in the supply chain. Registration in simple terms is submitting documentation called a registration dossier to ECHA to show that the substances you deal with are handled safely in the supply chain and to ensure that substances of very high concern are eventually phased out and replaced with suitable safer alternatives. Registration is made through the European Chemicals Agency or ECHA.
What's the problem?
The UK, as a stand alone country, would find it incredibly difficult to match the extensive work done by ECHA over the past 10 years, with the sheer amount of information they have gathered it is one of the most extensive chemicals databases in the world. The question for the UK is whether an alternative regulatory scheme will need to be created and how the Government will go about this.
Prime Minister Theresa May has stated that upon leaving the EU the UK will need to convert the body of EU law into British law, referred to as the Great Repeal Bill. However, REACH regulation cannot be simply converted into UK law because EU law regulating the chemicals sector involves EU organisations such as the European Chemicals Agency (ECHA). ECHA is the body responsible for the administration of the legislation and work with regulatory authorities in implementing EU chemical legislation along with addressing chemicals of high concern. Once we leave the EU this may not be available to the UK and the UK may need to implement a body in place of ECHA. This means that the UK would need to develop their own replacement agency to perform the role of ECHA or negotiate access to ECHA.
An additional concern is that without EU regulations on chemicals the UK will be worse off environmentally, however the government have pledged to leave the country in a better environmental state than they inherited.
How might UK companies be affected once we leave the EU?
Registration for phase in substances deadline is May 31st 2018, this will occur before the UK will officially leave the European Union. This means that UK companies obligated to register will have no choice but to register with ECHA before knowing how leaving the EU will affect their registration. We don't currently know what's going to happen so it is hard to prepare for the outcome.
We could choose to do what other European EEA countries like Norway have done and opt to still be in REACH. The alternative is that we leave the EU REACH system and have an agreement like Switzerland, something the UK government are said to be investigating.
According to ECHA REACH registration statistics there are 6258 registrations from UK companies, the second highest in the EU behind Germany. It remains to be seen what will happen to these registrations once we leave the EU. There is concern that UK registrations could cease to exist and that the EU importer would need to take on the obligation adding to a company's financial outgoings and making it more expensive for companies to trade in goods affected by REACH regulation.
If a UK company is the lead registrant for a substance then this could also present problems. A new lead registrant would need to be chosen and chemical studies and scientific data may no longer be available. The concern is that UK companies wouldn't be given access to the data they need.
Many UK companies will already be registered with ECHA for their REACH obligations. According to the law only companies established in the EU can register, this leads to the question of what will happen to the UK registrations once we leave the EU, will they become void? Authorised representatives based in the UK may also find that they are no longer able to act for their non-EU manufacturers. Commercial agreements may also be affected and would need to be updated to reflect any changes once we leave the EU.
REACH registration is a huge cost and time burden on companies, if their registrations are no longer valid this will be a huge blow and could mean that they encounter more costs along the way. A further option would be to set up a UK chemical agency, however this could be very costly.
Consideration should be given to companies who already import into the EU. The burden of reporting for REACH is already high and if the UK takes its own path, with its own reporting criteria and authorisation, this could only give companies a bigger workload when importing their products.
What is being done?
REACH is an extremely long and complex regulation and the environmental audit committee have urged the government to look into this as a matter of urgency. They have also invited public responses on a number of issues relating to REACH regulation in the UK from challenges to scope, with a deadline of January 2017 for responses.
A report was published in April titled the Future of Chemicals Regulation after the EU Referendum, you can access it here. It is a summary of the findings of the environmental audit committees' inquiry into the future of chemicals legislation in the UK and REACH was used as a case study. The report states that government is considering different scenarios for implementing chemical legislation in the UK and that the government has ruled out remaining fully involved in REACH.
The Environmental Audit Committee want to negotiate to remain a participant in the system. They believe that, as a minimum, the UK should negotiate to remain a participant in this system, including paying for access if necessary. This would allow UK companies to place products onto both the UK and the EU markets without the need to generate additional testing data or incurring additional costs.
Last month UK Environment Minister Thérèse Coffey stated that she wants a REACH mutual recognition accord secured before the UK leaves the European Union. At the UK Chemicals Stakeholder Forum she said that this is an important priority for government and they are currently looking at the different options with the intention of achieving regulatory equivalence with EU REACH. Exactly how and when this will happen remains to be seen but the positive news is that the Government see UK REACH as an important priority and realise it is in the UK's best interest to ensure that UK companies do not have to go through the complex registration process once again.
How can we help?
At Lorax Compliance, we are constantly monitoring the EU REACH regulations, global chemical legislation and the impact of Brexit on REACH in the UK. If you need any further help understanding chemical regulation and how it might impact your business please contact us here.