Effect of company size on potential for REACH compliance and selection of safer chemicals

Highlights

• Many small and medium-sized enterprises and some larger firms are unaware of REACH.

• Large firms have a better grasp of REACH and its implications than smaller companies.

• Education of small companies is required for effective implementation of REACH.

• Many companies want help with tools to manage REACH requirements and communications.

• Companies want more information on chemical composition and related health impacts.

Abstract

REACH represents a global paradigm shift in chemical regulation, and it has introduced a new, complex regulatory process to which chemical producers and users throughout supply chains must adapt. This paper presents results of survey research to illustrate whether and how the business members of a large Scandinavian trade organization understand and comply with REACH. It also explores how these businesses obtain information about the chemicals they use in their products, and whether they feel that the information they have is sufficient to meet their needs. In addition, the paper describes how business size affects these issues. The survey results show that, at the time of this study, many small and medium-sized enterprises (SMEs) and a number of larger firms were unaware of REACH. Survey results consistently showed that the size of a company is an important factor in both understanding of and compliance with REACH, with respondents from large firms having a better grasp of REACH and its implications than smaller companies. An effective implementation of REACH will require, at the most basic level, more attention to educating EU companies, especially smaller ones, on how and why REACH applies to them. Survey respondents who were aware of REACH and its applicability to their firms also reported the types of support they needed in order to better understand and comply with the regulation, with nearly 40% of all respondents expressing a need for help with data systems or tools to manage REACH requirements and communicate REACH requirements to suppliers and customers. Many companies reported needing more information from their suppliers on chemical composition and related health impacts of materials and products. Ensuring that this information is readily available throughout supply chains is essential to reducing the negative impacts of chemicals and products on human health and the environment.

Introduction

Synthetic chemicals are essential to most industrial processes and formulated products, yet it continues to be difficult for product manufacturers to obtain useful information about chemical hazards and the risks associated with chemicals’ various applications. In addition, with today's complex and globally dispersed supply chains, the vast number of businesses and other actors that purchase components and finished products find it challenging – if not impossible – to know the identity of chemicals that make up those products. It is common for businesses not to know which chemicals compose finished products or the hazards and risks associated with those chemicals (Scruggs and Ortolano, 2011).

In 2006, the European Union passed sweeping new legislation to control the use of hazardous chemicals: the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH). The law applies to most chemicals (both new and existing) produced in or imported into the EU in quantities above 1 tonne/producer/year, as well as to chemical mixtures, and to finished products (known as “articles” in REACH). Full or partial exemptions exist for medicinal products, food additives, cosmetics, polymers, and radioactive substances, as well as for substances classified as waste, chemical intermediates, unaltered minerals, ores, oil, gas and coal, chemicals used exclusively for research, or those that are solely transported through the EU (REACH, 2006, UK REACH Competent Authority, 2012). The regulation became effective in 2007, with requirements phased in through 2018. In some respects, REACH has placed the burden of proof on chemical producers, who must provide basic information about their products to the European Chemicals Agency (ECHA) before placing them on the European market, a requirement dubbed “no data, no market”. The data gathering and information reporting requirements are unprecedented worldwide, and those requirements increase with production volume and for chemicals designated as of higher concern (based on their potential health or environmental effects) (REACH, 2006). Since REACH extends to European imports, it has effectively raised chemical reporting standards internationally, and several nations around the world are considering, or are in the process of, enacting similar legislation.

In many ways, REACH represents a global paradigm shift in chemical regulation, and it has introduced a new, complex regulatory process to which chemical producers and users throughout supply chains must adapt. The European Commission recently expressed concern that small and medium-sized enterprises (SMEs) are not keeping pace with REACH and may need additional accommodation in order to meet the regulation's requirements (European Commission, 2013a).

This paper presents results of survey research to illustrate whether and how the business members of a large Scandinavian trade organization understand and comply with REACH. It also explores how these businesses obtain information about the chemicals they use in their products, and whether they feel that the information they have is sufficient to meet their needs. In addition, the paper describes how business size affects these issues.