Homestead mailing list

[tvoivozhd <tvoivozd AT infionline.net>]

At present chemical companies are free to dump lethal products on 
Americans and make millions of dollars as agents of sickness and death, 
depending on the fact that the FDA has insufficient funds, labs and 
employees to test them.

The faster the U.S copies the E.U. approach, the better off Americans 
will be.




Policy News –
January 5, 2005
U.S. companies get nervous about EU’s REACH

Since 1998, Europeans have been working on legislation that will require 
industry to prove that chemicals being sold and produced in the EU are 
safe to use or handle. The current system requires governments to prove 
that a chemical is dangerous. If passed, the legislation will send 
European chemical manufacturers scrambling for safety and health data on 
chemicals that have been marketed for years; many experts predict that 
it will change the industry worldwide. With billions of dollars in trade 
and investments at stake, U.S. companies are expressing concern.
figure
Researchers say that over 99% of the more than 30,000 chemicals 
currently on the market do not have sufficient safety data that are 
publicly available.

Clearly, the EU represents a huge swath of the chemical industry, and 
REACH will have global implications,” says Michael Walls, director of 
science policy with the American Chemistry Council, an industry trade group.

Called REACH—Regulation, Evaluation, and Authorisation of Chemicals—the 
policy will require registration of all substances that are produced or 
imported into the EU in quantities greater than 1 ton. The amount of 
information required for registration will be proportional to the 
chemical’s health risks and production volumes. Companies will also need 
to seek authorization to sell and produce problematic chemicals, such as 
carcinogens, mutagens, and teratogens. Toxic chemicals that persist in 
the environment or that bioaccumulate will also need authorization, 
which will be granted if risks can be adequately controlled or if there 
are no alternatives.

The European Parliament and the European Council will have hearings on 
REACH within the next couple of months. The policy is slated for 
enactment in 2006, but many familiar with REACH say they don’t expect 
anything to be passed until 2007.

U.S. companies have a lot at stake if REACH becomes law. According to 
Penelope Naas, director of the Office of EU and Regional Affairs for the 
U.S. Department of Commerce, EU and U.S. markets are intricately linked. 
U.S. chemical trade across the Atlantic is worth $600 billion every 
year, but more importantly, she says, U.S. companies have $2.5 trillion 
invested in Europe.
REACH defenders say it is good policy

“Once you go through the REACH process, you have chemicals that have a 
‘blessing’, and you create better markets,” argues Robert Donkers, the 
environmental counselor to the EU’s delegation to the United States and 
the person credited as the author of REACH. He predicts that the policy 
will increase the public’s confidence in consumer products that have 
suffered a series of scandals, including mad cow disease and the 
discovery of dioxin in chickens.

“Our industry is [also] heavily reliant on imports,” says Thomas 
Jostmann, a director with CEFIC, the European Chemical Industry Council. 
In fact, with a net surplus in chemical trade to the United States, the 
EU would seem to have more at stake.

The direct costs of REACH to EU companies are projected at about €3.5–4 
billion over 11 years, with most costs stemming from safety testing and 
registration. Annually, this comes to about €315 million, or 0.06% of 
annual chemical sales, according to a study by the European Council.

“This is not a crippling blow to industry,” says Frank Ackerman, an 
environmental economist at Tufts University, whose own study on the 
costs of REACH confirmed these numbers.

European officials said that REACH could both benefit and hamper smaller 
companies. Because REACH requires businesses to generate safety 
information for a specific market, the regulation could open up 
opportunities to smaller companies that find it profitable to furnish 
these niche customers with the safety information. And as chemicals are 
removed from the market for safety reasons, small businesses are more 
likely to respond with innovative products that are safer for users.

“At least in Europe, the innovation is coming from the small- to 
mid-size companies,” says Robert Foster, a senior science advisor to 
Notox, a company that tests chemicals for safety.

Lawyers representing multinational companies, some based in the United 
States, say that the EU’s plan may violate World Trade Organization 
(WTO) agreements. Law firms are now lobbying European officials to 
weaken REACH and may sue the EU before a WTO panel when the law is 
finally implemented.

Many of the U.S. concerns were given voice in December at a meeting in 
Cambridge, Mass., that was attended by top representatives from such 
major chemical-producing and -consuming companies as Estee Lauder, S.C. 
Johnson & Son, Dow Corning, Merck, Procter & Gamble, and Lyondell.

Walls says that the direct costs of testing will not be the only way 
companies will be impacted. One-third of the U.S. chemical industry is 
foreign-owned, and the United States is a net importer of chemicals from 
Europe. “If products are removed because of REACH, we will be affected,” 
he pointed out.

The new layers of bureaucracy that would be put in place also cause 
concern. All the information gathered under REACH will be stored in a 
central database that can be publicly accessed, and the whole initiative 
is likely to be handled by a soon-to-be-created EU government agency. 
Detractors say the process in all probability will be unwieldy and a 
barrier to trade.

Others are worried about the amount of information that will have to 
pass up and down the supply chain. Companies formulating chemicals will 
have to ensure that end users have sufficient safety information. For 
instance, because they will be exposed to greater quantities, industrial 
chemical workers will have different exposure scenarios than those only 
using the compound for household applications. But even different 
industrial users might have varying exposures. For example, workers 
spraying a cleaning agent in an auto factory would encounter the 
chemical as a fine mist and might inhale it, while people using the same 
chemical in the textile industry would probably encounter the chemical 
in its liquid state. The scenarios would require different safety 
information.

This problem became apparent during a government–industry simulation of 
REACH in four different supply chains, says Andreas Ahrens, a co-founder 
of the German consulting company Ökopol, the Institute for Environmental 
Strategies. The simulation showed that for product formulators to 
prepare proper risk assessment documents, a great need exists to 
determine how consumers use a product and what terms and language they 
can understand. “Users will buy based upon the information available,” 
says Ahrens. “And companies will have markets based upon whether they 
choose to develop that information to service certain markets.”

Ahrens worries that some companies may become overburdened by the 
necessary paperwork, especially small- to medium-size firms with fewer 
than 250 workers. A representative from the Synthetic Organic Chemical 
Manufacturers Association (SOCMA), a U.S. industry trade group 
representing smaller chemical companies, agreed and said that the high 
costs of REACH may keep new products from ever getting to market.

“It could have a detrimental impact not only on exports but [also] on 
investments,” added Naas.

In an interview with ES&T, European government officials charged that 
U.S. government agencies have worked closely with business to weaken the 
impact of REACH, but they did not wish to state this publicly for fear 
of alienating U.S. officials. Naas dismissed those criticisms at the 
conference: “The press likes to publicize this as the U.S. attacking the 
EU.”

However, documents gathered by the environmental group Environmental 
Health Fund under the Freedom of Information Act and released by U.S. 
Rep. Henry Waxman (D-CA) last spring paint a very different picture. 
These documents indicate that various agencies within the U.S. 
government have conspired with chemical companies and chemical trade 
organizations to derail the scope of REACH. According to the documents, 
U.S. government lobbying on behalf of industry included a cable in April 
2003 from then Secretary of State Colin Powell to diplomatic posts in 
the EU that provided “talking points” for U.S. government officials to 
use when speaking with their European counterparts. The arguments were 
notably similar in language to themes developed by industry at the 
request of a U.S. trade official, charges Waxman.

For instance, one of the themes developed by industry reads: “REACH will 
work to stifle innovation and the introduction of new, safer chemicals.” 
In his cable to U.S. diplomats, Powell wrote, “These compliance costs 
may negatively impact innovation and EU development of new, more 
effective, and safer chemicals and downstream products.”

“The United States has not conducted studies on the health and 
environmental impacts of REACH,” Waxman tells ES&T. “It [simply] began 
to lobby against REACH on behalf of U.S. industry interests without a 
full understanding of these impacts.” The EU’s own analysis of REACH 
projected a possible savings of €50 billion in health-care costs, he 
says. “My primary concern is that the Bush Administration has allowed 
special interests to dictate government policy.” Industry experts 
contacted by ES&T declined to respond to Waxman’s report.

The most interesting wrinkle in the debate over REACH is now occurring 
in California. In early 2004, State Assembly member John Laird (D), 
chair of the assembly environment committee, and former State Sen. Byron 
Sher (D), chair of the senate environment committee, tasked the 
University of California, Berkeley, with developing a modern chemical 
policy for the state. When interviewed by ES&T in November, Michael 
Wilson, an assistant research scientist in the Center for Occupational 
and Environmental Health at Berkeley, said the report’s recommendations 
will have many elements in common with REACH. He expected the report to 
be released sometime in March and said that chemical industry 
representatives were already talking to state lawmakers about the topic. 
By December, Wilson said that he was unable to talk further with the 
media until the report was released.

A senior science advisor to the California State Legislature said that 
certain legislators are exploring changes to state chemical policy 
because federal regulations are broken. In the past decade, California 
has been hit with a number of costly chemical scandals, including the 
discovery of perchlorate in foods and the gasoline additive 
methyl-tert-butyl ether (MTBE) in drinking water.

“California needs to go beyond this inadequate federal oversight,” said 
the science advisor, asking to remain anonymous. The advisor added that 
chemical trade groups are “nervous about what we’re up to” but that many 
companies would like to see better chemical policy along the lines of 
REACH, so that they can quickly remove harmful chemicals from the market 
and protect themselves from lawsuits.

Geert Dancet, the European Commission official in charge of REACH 
legislation, was more direct in his assessment: “Companies in America 
are probably worried because if Americans see that Europe has these 
protections, they might want them as well.—PAUL D. THACKER