Environment & Regulations

REACH - Don’t be caught out

Dr Chris Eacott of Stewardship Solutions looks at four mistakes SMEs commonly mistake about REACH compliance and how to correct them

REACH has been in force for several years, but still most companies are confused about how to comply with it. It certainly does not help that some of the legal text and official guidance is unclear on some key issues.

Small and medium-size enterprises (SMEs) are especially vulnerable, since they do not usually have in-house regulatory specialists able to grapple with the many volumes of REACH-related information that exist and which continue to grow in number and size. Consequently, SMEs are more likely to make mistakes than large companies when attempting to comply with REACH. In some cases, these may have catastrophic effects on their businesses.

Stewardship Solutions, a service provider to  chemical-producing and consuming companies throughout the world of all sizes ,is one of the expert participants in the REACH 2013 Support Bundle for SMEs. This is an initiative that also includes ChemSIX, Chemical Watch, ReachCentrum and REACH Delivery that is offering a single bundle of products and services to enable SMEs to meet thir REACH obligations at low cost. This is available only until 15 February.  

In our experience, SMEs generally make four important mistakes with regard to REACH. Here are our thoughts on these and how to avoid them.

1. Ignore REACH (and hope it will go away)

Even now, many SMEs appear to believe that they can avoid REACH by 'keeping their heads down', hoping they will go unnoticed because they are too small for the enforcement authorities to bother about. Alternatively, some SMEs are so anxious or resentful about REACH that they simply refuse to engage with the legislation at all or expect their suppliers or customers to sort things out for them.

Clearly, this is hardly a sound REACH compliance strategy, and sooner or later these companies risk being caught out by becoming non-compliant with REACH - if not by the REACH enforcement authorities, then by their customers, who will not accept the risks to them of non-compliance in their supply chains, or perhaps by 'whistleblower' competitors who will seize the opportunity to gain business advantage.

Ignoring REACH will not make it go away

What should SMEs do? Stop prevaricating! Face up to the fact that REACH is not going away, and is already having a major impact on almost every industry sector in the EU, as well as global supply chains.

Start by accessing and reading some basic literature, talk to your trade association about how they can help you, and make enquiries to your Competent Authority (CA) REACH helpdesk, or other commercial help desks. Take time to evaluate the information you gather, but do ensure that you take decisive action to move forward on your REACH compliance journey.

2. The 'Just Say Yes' approach

An alternative to ignoring REACH is to adopt the 'Just Say Yes approach'. SMEs understandably feel overwhelmed by the amount of legislative compliance obligations they face nowadays. In their frustration, some can be tempted to provide the bare minimum of compliance information to their customers. They may not even bother to check if the information is accurate or potentially misleading to their customers.

Whilst this approach may work in the short-term, concerned customers will inevitably gain experience in differentiating between suppliers who make genuine attempts to provide accurate information - and comply with REACH - and those that do not. Watch out also for the rise of specialist REACH compliance audits and auditing services that will increasingly be commissioned by concerned customers and other downstream users in relevant supply chains.

SMEs should first of all take REACH seriously. Make every effort to understand how REACH applies to your business, and what your specific obligations are. If necessary, communicate with supply chain partners and clarify each other's obligations. This is an important step. Registration failures are known to have occurred because one party thought the other was responsible for registration.

At a basic level, ensure you have a complete understanding of the substances contained in your products, what their concentrations are and the volumes of each substance that are placed on the EU market at the exporter/EU importer interface. Then, implement systems to maintain ongoing, accurate records, since these could be required at any time by your customers as evidence of REACH compliance.

It is important to do your utmost to provide accurate REACH information

3. Consider REACH compliance a one-time effort

SMEs often believe that the main point of REACH is to achieve a registration of relevant substances by relevant 'actors' in relevant supply chains. Registration is indeed a critical aspect of REACH, but it is often forgotten that the main objective of the legislation is the enhanced communication of chemical product safety information all the way from chemical manufacturers to the point of sale to consumers.

As this information changes in the light of new evidence, there is a continual need to keep registration dossiers updated and ensure that any modified safety guidance is communicated effectively and in a timely manner through the aforementioned supply chains. This is absolutely central to REACH.

Thus, REACH must be addressed appropriately and planned for on an ongoing basis. Until at least 2018, the end of the phase-in period by which all relevant pre-registered substances must have been registered, there is a massive amount of work to do with respect to undertaking registrations, authorisations, implementing restrictions, and communicating the results of Chemical Safety Assessments (CSAs) via Chemical Safety Reports (CSRs) and Exposure Scenarios (ES).

Therefore, someone in the organisation needs to own a well-constructed REACH compliance plan, preferably one which is sanctioned and reviewed by the senior business team regularly - no less than once per year, preferably two to three times. External help may be needed to construct the initial plan, which must be tailored to the precise needs and REACH obligations of the business.

For some SMEs, the plan might be quite complex. It will probably have to cover many facets of REACH compliance, especially if the business has many products and responsibilities for aspects including registration, authorisation, reporting of Substances of Very High Concern, and so forth.

For a Downstream User, the plan would probably be much simpler. Without some sort of structured REACH 'lowest-cost' compliance plan, there is a distinct risk of falling into non-compliance, or unnecessarily exiting the EU market altogether, as REACH evolves and key elements are implemented.

SMEs making toxic chemicals will face particularly heavy registration burdens

4. Overlook the competitive impact of REACH

SMEs often overlook the possibility that competitive business advantage can be gained (or lost!) through REACH. At the same time, large companies are very much aware that REACH offers them potential business opportunities. There is anecdotal evidence that many have adapted their business strategies accordingly.

Large-company tactics range from 'whistleblowing' on non-compliant competitors to the REACH CAs, with the consequence that their competitors' products may be quickly forced off the EU market, to changing their product portfolios in favour of those substances and products that are perceived to have better chemical safety profiles, and a more profitable future.

SMEs should take time to think about their long-term business and product strategy, overlaying it with key future REACH milestones, such as registration and authorisation deadlines. Perhaps the costs of maintaining a marginally profitable substance are outweighed by REACH registration or authorisation costs, in which case the substance should possibly be abandoned by a given date.

Alternatively, a higher-priced substance which has been struggling to make headway in the EU market, will be given a significant boost by the likely withdrawal of a cheaper, but relatively much more toxic, competitor substance. Only by taking a broad and long-term view of the likely consequences of REACH on the EU marketplace, will SME businesses know if there are potential business gains to be had as a consequence of REACH implementation.

Conclusion

Clearly there is an enormous quantity of REACH legal text and guidance that needs to be sifted through, interpreted, and then applied to individual business situations. Then, there are the all-important technical tasks of registration, authorisation, preparing CSAs, CSRs, ESs, etc. that may also fall to SMEs.

When relevant in-house regulatory or technical specialists are lacking, it is virtually impossible to expect an SME business to properly comply with all aspects of REACH without having access to at least some form of external expertise. SMEs may resent needing external assistance with REACH, but in the long run, sound professional advice should actually save them time and money compared with trying to do it all themselves. At some point in time, each SME should therefore investigate its support options carefully.

 

 

From Online Issue: February 2012