REACH – chemical compliance for retailers
13th March 2018
It only takes a quick glance at the product ranges of UK retailers to confirm just how many non-food products are likely to be impacted by EU chemicals related legislation. Clothing, footwear, candles and other home accessories, as well as furniture such as sofas and tables, cosmetics and household items such as cleaning products come immediately to mind. This article highlights some red flag issues involving REACH and biocides regulation.
REACH - articles
The obligation on retailers under REACH to supply safety information to customers within 45 calendar days of a request kicks in when an “article” under REACH, e.g. a shoe or a table, sold in the EEA (the EU plus Iceland, Lichtenstein & Norway) contains one or more Substances of Very High Concern (SVHCs) over a particular threshold. That threshold is 0.1% weight by weight, regardless of total tonnage imported or whether the product was sourced from outside or within the EEA.
In September 2015, the ECJ (the European Court of Justice) confirmed that this threshold applies to each component in a product, not the overall product. Take for example the welt on a shoe, the strip which runs along the outsole to attach the upper section to the bottom. It’s the welt, not the shoe, which is looked at when applying the SVHC threshold test. Any retailer which based its compliance on the assumption that the threshold applied at product (rather than component) level should have gone back to its supply chain for more information.
SVHCs are now on the enforcement radar for regulators in Member States. A pilot project to verify compliance with the communication and notification obligations regarding substances in articles began in October 2017 and will run until end of June 2018. This enforcement project is being run by the Forum for Exchange of Information on Enforcement of REACH, hosted by ECHA and composed of representatives of EEA national regulators. Member State regulators exchange information and coordinate enforcement and monitoring activities through the Forum. Specific substances which will be targeted include:
- brominated flame retardants
- phosphorous flame retardants
- short-chain chloroparaffins
- aprotic polar solvents
- perfluorinated substances
- phenolic benzotriazoles
An issue identified in one Member State may well infect others across the EEA. A report of the compliance project is expected by the end of November 2018.
Articles that are likely to contain SVHCs to which consumers may be exposed are a particular focus. Examples of consumer articles that may be inspected are electrical products, building materials and interior articles.
A smart approach to chemicals compliance includes communicating publicly your approach to SVHCs and using it as a PR tool. It’s a powerful message to say publicly that products contain no SVHCs, but careful thought needs to be given to how this sits with supplier contracts, and overall marketing strategy. The SVHC list is updated regularly. Retailers need to have relevant information on hand to respond to a consumer request. If information is not readily available, the risk increases that the 45 day deadline will be missed.
2018 REACH registration deadline
For products imported into the EEA, retailers and their suppliers are gearing up for the 2018 REACH registration deadline. In general, this requires each substance (on its own or in a mixture or in an article where it is intended to be released during use) imported in quantities of 1 tonne or more per year to be REACH registered. Chemicals related legislation relies on a specific meaning of “importer”. Generally where a retailer sources products from outside the EEA for the EEA market, often as a result of increasing price pressures, it is likely to be treated as the “importer”.
REACH registration can be onerous, in terms of time and cost. It needs an understanding of which company in the group is the “importer” and accurate tracking procedures must be in place to capture volumes. Sometimes it’s possible to rationalise multiple registrations of the same substance by different group companies through changes to the supply chain.
Additional challenges are presented by a non-EEA manufacturers’ appointment of an “Only Representative” in the EEA who is responsible for registration. Specific documentation is needed in order to pass responsibility from the “importer” to the “Only Representative”. If this is not in place or the Only Representative is not validly appointed, primary responsibility for registration remains with the “importer”, who may be the retailer. This is one to watch, and discussions with suppliers are needed to understand their registration strategy.
This also has supply chain considerations which retailers should be aware of (e.g where a supplier may be intending to cease supplying a product rather than register).
Retailers should also be aware of recent changes to data sharing obligations. REACH requires potential registrants to share data in certain circumstances. Data sharing agreements must now include detailed costs information on the data to be shared. The aim is to underpin the requirement under REACH that costs should be fair, transparent and non-discriminatory. This needs careful thought going forward as the changes apply to new and existing data sharing agreements (although parties to existing agreements can waive the requirements, so long as it’s unanimous).
Retailers also need to be aware of potential risks relating to an ECHA compliance decision requiring the submission of additional data. A retailer may find itself responsible for considerable additional costs. Where the retailer has not itself registered a substance it may find that an upstream supplier chooses to remove a product from the market rather than undertake further costly testing, or that supplier may request a contribution to additional testing costs.
With retailers under increasing scrutiny from consumers, compliance presents opportunities for positive brand messaging. But, be sure to understand your obligations and have access to the right information.
Compliance with the Biocidal Products Regulation (BPR) is just as important for retailers as REACH compliance. Increasing numbers of products are marketed as having biocidal properties e.g. “anti-bacterial”, including household cleaning products. Many products are treated with biocidal products, for example preservatives in paint or on wooden furniture.
The requirements under the BPR are complex and depend on whether the product is an article treated with or incorporating a biocidal product, or actually a biocidal product. This distinction is subtle. Retailers can be subject to very different obligations depending on which category a product falls within and whether any transitional measures are relevant. A retailer’s obligations also depend on whether it is “importing” or obtaining an item from within the EEA.
For example, a treated article could not be supplied in the EEA after 1 March 2017 unless all active substances in the biocidal product used to treat it were either approved already at EU level, or in the EU Review Program for the relevant Product Type. In addition, specific labelling requirements apply to treated articles under the BPR.
For biocidal products there is an additional layer of regulation. Generally any biocidal product must be authorised, as well as the active substances in it. This can mean authorisation in each individual Member State where the product is sold (and the costs vary across the EEA).
Whatever conclusions are reached, they should be documented, in case of future regulatory scrutiny. Similar to REACH, the BPR requires anyone holding an authorisation for a biocidal product to keep records for at least 10 years, and to make them available to a regulator on request.
EU chemical compliance legislation cannot merely be copied and pasted into UK specific legislation on Brexit. This is because certain aspects require the involvement of EU institutions notably ECHA (the European Chemicals Agency) in the case of REACH and the European Commission in the case of the BPR. It seems increasingly likely that a transition period will be agreed during which time the path between exit day and a future treaty-based relationship with the EU will develop. How exactly this will work remains unclear. What is clear however, is that retailers and other businesses have to comply with complexities of REACH and the BPR in the meantime. It is equally clear that the obligations under consumer protection legislation (including REACH SVHC obligations) are unlikely to be reduced following Brexit.
REACH and biocides regulations are complex. Brexit also represents its own challenges. Constant vigilance and up to date supply chain information are key to remaining compliant. With retailers under increasing scrutiny from consumers, compliance presents opportunities for positive brand messaging. But, be sure to understand your obligations and have access to the right information.
For further information please contact Elizabeth Shepherd or Catherine Manning.