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Margot Wallström

Member of the European Commission, responsible for Environment

"Beyond REACH"

European Voice Conference

Brussels, 31 March and 1 April 2003

Dear Ladies and Gentlemen,

I would like to start by talking about ourselves, penguins and polar bears.

What do we have in common with these animals? The very uncomfortable reality is that each one of us here today carries several hundred synthetic substances in our bodies, chemicals that persist and bioaccumulate. They are found in breast milk and the placenta, thus affecting the foetus and new-born babies. They are also found in deep-sea living organisms and in animals living in the Arctic and Antarctic, where they were never used.

A significant number of industrial chemicals can act as endocrine disrupters, posing the risk of interference with the reproductive or immune system or causing cancer at very low concentrations. And we do not know enough about the mechanisms they work through. It is a fact, though, that various diseases are on the increase, such as testicular cancer and reproductive disorders, and a link to chemicals exposure seems likely.

It is of course also true that modern society depends on chemicals. They are used in the vitamin pill you took this morning, the microphone in front of me and the clothes that we are wearing. It is therefore not surprising that the production of chemicals has increased dramatically during the last decades. In that perspective, our insufficient knowledge about the chemicals in use and their impact on human health and environment is a cause of deep concern.

The new chemicals policy will radically change the way in which we deal with chemicals.

It will make a major contribution to the protection of human health and the environment.

For the first time ever, we will put in place a system to produce sufficient information on the chemicals we use in significant quantities. Chemicals that pose unmanageable and unacceptable risks will be phased out. Chemicals whose risks are manageable can be appropriately handled - and we will know that all the other ones don't pose problems.

The new policy introduces a radical paradigm shift, which breaks with the past: In the future; the chemicals industry will be responsible for generating and providing the necessary information about their own products in line with corporate responsibility. Not -- as it is today -- the public authorities having to prove that a chemical is hazardous.

This radical shift in dealing with chemicals is indispensable if we are serious about protecting human health and the environment.

The timing of this conference here is very appropriate. The Commission will shortly present its legislative proposal, which follows the White Paper that we published in early 2001.

The name of the conference is also well chosen. "Beyond REACH" implies that devising REACH and eventually getting it up and running is a process, not an end result.

This process can be compared to building a house a smart house that serves a vital overarching purpose and must satisfy many individual needs and requirements. Such a construction must of course be well prepared and thought through.

From the outset, everybody, all those who produce, handle and use chemicals have agreed that we need a new house - that the existing chemicals policy has too many shortcomings and needs to be radically reformed.

Participation in the discussions on what the new house should look like to serve its purpose has been impressive we have consulted with industry, NGOs, consumers, regulators and other stakeholders, including many of you here today. We have taken serious note of the Parliament's Resolution and Council's Conclusions on the White Paper. A vast majority of those consulted or who have raised their voices indeed supports the objectives of the reform.

First and foremost, REACH will close today's unacceptable knowledge gap!

At the same time, REACH will maintain and enhance the competitiveness of the very important chemicals industry, which is the third-largest manufacturing industry in the EU and directly employs 1.7 million people.

REACH will also be transparent and open so everybody who uses chemicals in one way or the other has access to important information.

REACH must also be compatible with the internal market, ongoing international efforts in the field of chemicals management, WTO rules and regulations.

Also, at the top of our minds has been the need to restrict animal testing to an absolute minimum. The Commission supports alternative test methods, for instance via our research programmes. But, we should not forget that at present, we are unwittingly testing chemicals on both living humans and animals. This is clearly unacceptable.

In all this, it has been crucial that REACH works in practice that the technical aspects of the system are neither too bureaucratic, nor too cumbersome, but able to deliver the desired results as efficiently as possible and over an acceptable period of time.

To reconcile all these requirements has been a formidable challenge. We have had to strike a very careful balance between all those factors.

But this is what sustainable development is about taking account of the economic, social and environmental consequences of the policies that we formulate.

And I am delighted to state today that the legislative proposal meets the objectives we set out in the White Paper - and has clarified it regarding some important issues.

For example, REACH now requires that specific uses of high-concern substances, such as PBTs persistent, bio-accumulative and toxic pollutants - and vPvBs - very persistent and very bio-accumulative substances will have to be authorised. Also, the use of endocrine disrupters and substances of an equivalent level of concern will be included under authorisation on a case-by-case basis.

All in all, by generating and making available information on chemicals, REACH will produce a win-win situation for everybody:

for citizens who are in contact with chemicals every day and demand to know more about them so they can deal with them responsibly and safely;

for workers who handle chemicals and want risks to be as low as possible

for the chemicals industry because its image as a high sustainability sector will improve, increasing its competitiveness; innovation will be enhanced

for policy makers who have a duty to protect human health and the ecosystem;

and for society as a whole because human health and the environment will suffer less harm. This will reduce the costs of treating chemicals-related diseases and dealing with the long-term damage done to the environment.

Now, the first question that comes to mind is: Why has the existing regulatory system not been able to deliver what we need?

Firstly, for those 140 substances put on the priority list for high production volume chemicals, only 11 assessments have been concluded over a ten-year time span. This is clearly unacceptable.

Secondly, the authorities have been responsible for risk assessment and development of risk management measures. In doing that, they have been obliged to follow cumbersome procedures. It is high time to place this responsibility where it belongs, with the industry, and the procedures must be smooth and efficient.

Thirdly, the current system does not encourage innovation and substitution. Today, it is much less hassle to continue to market an existing chemical (that we really do not know anything about) than to put a new, less hazardous and more efficient chemical on the market because this requires testing.

Fourthly, the current regulatory system is based on altogether some 60 individual pieces of legislation. We need one Regulation and one door through which all the information on chemicals will go in and come out again. REACH will be this one Regulation and create a one-stop shop.

So, how will REACH actually work?

As you know, REACH stands for R - Registration, E Evaluation, A Authorisation, of CH - Chemicals.

Registration means that chemicals produced or imported in volumes higher than one tonne per year and per manufacturer or importer will have to be registered in a central database.

Five types of information will be required: the properties, intended uses, likely exposure scenarios, the potential risks to human health and the environment, and how these risks are to be managed.

Chemicals produced or imported in high volumes (above 100 tonnes per year and per producer or importer) and those that give rise to concern will need to be evaluated. Before I elaborate evaluation, allow me to mention a few more aspects of registration.

There has been a lot of speculation whether intermediates, chemicals that are used to manufacture other chemicals, will have to be registered. The answer is: yes, they will. It would be irresponsible from the point of view of human health and the environment not to include them, and we need a comprehensive system to avoid that some potentially problematic substances could slip through any loopholes.

But at the same time we have been keen not to overburden the system and to keep it proportionate. Those intermediates that are never separated out from other substances (so-called non-isolated intermediates) will be exempted altogether. Requirements for other categories will depend on their degree of exposure. Intermediates that are handled just as any other substance on the market, must of course be subject to exactly the same requirements as these. Reduced registration requirements will also apply to polymers.

Also, it is important to mention that substances that are manufactured for process-oriented Research and Development will be exempted for five years with the possibility of renewal for a further maximum of five years from the registration requirement, irrespective of volume. This is to ensure that development of new products will not be too costly for EU producers compared to non-EU competitors. We have also included this provision to encourage innovation and substitution. We need the industry to strive continuously to produce safer, less hazardous substances, which can replace those that cause concern.

Evaluation: Evaluation will be compulsory for the high-tonnage group, and can be initiated by the public authorities in cases of concern, regardless of tonnage. On the basis of proposals from companies in the registration, the authorities will decide on testing strategies to focus information requirements and minimise the use of laboratory animals wherever possible.

Authorisation relates to substances of very high concern. Specific uses of such chemicals will have to be authorised by the Commission or, in cases of strictly local use, by Member States, based on comprehensive data and risk assessments that industry will deliver.

While it has been clear from the beginning that CMRs, that is carcinogenic, mutagenic or reprotoxic substances, would fall under this category, we have now, as I have already explained, also included PBTs and vPvBs. Endocrine disrupters and substances of an equivalent level of concern will also be included on a case-by-case basis.

This, I am deeply convinced, has been necessary to be able to control the risks of these substances.

Finally, we will also provide for restriction of certain substances in order to have a safety net in the system. This will give the possibility to introduce restrictions at EU level on any substance, or on the manufacture, marketing or particular uses of substances that pose unacceptable risks.

The system itself will efficiently promote substitution. Equal treatment on information for all chemicals and that this information is made public will lead to a higher demand for safer alternatives.

Now, who will do what under REACH in order to make it work?

The industry - manufacturers, importers as well as downstream users of chemicals - will provide the necessary information, including risk assessments related to the chemicals they manufacture or use. This information will be fed into the central database and be available to the public. Industry will also be required to pass important information down the supply chain, so downstream users know what they are dealing with.

The competent authorities in the EU Member States will be in charge of following-up on the registration dossiers and of performing evaluations. The authorities will also be able to propose restriction measures at EU level.

The new European Agency will receive registration dossiers, manage the central database and provide the public with information. It will also co-ordinate the work of the Member States authorities under the evaluation procedures and support the decision-making process related to authorisations and restrictions.

The European Commission will take decisions both on authorisations and restrictions at the EU level. With regards to authorisations, it will prioritise which substances have to undergo authorisations first.

Finally, the citizens will at last have information about chemicals through the central database. This will enable them to make informed choices, demand alternatives and know how to handle chemicals.

As you can see, REACH is quite an elaborate system. However, an important question is: How much will all this cost?

There will of course be costs involved in obtaining information and doing testing. The independent Business Impact Assessment study we presented last year estimates the direct registration and testing costs for industry at between 1.4 - 7 billion Euro over as long as eleven years, with 3.6 billion Euro as the most likely estimate. This is less than 0.1% per year of the annual turnover of the chemicals industry.

Costs must of course be compared with benefits. Even though they are difficult to estimate precisely in monetary terms, the impacts will be substantial with regards to lower risks to human health and improved environmental quality. As an example, the likely occupational health benefits from the new regulatory system should be estimated at between 18 and 54 billion Euro over a 30-year period, which corresponds to an ultimate yearly reduction of some 2200 to 4300 cancer cases over the same period

The increased trust among consumers, employees and not least investors will lead to a more positive business climate. Just as an example, I have met chemical industry top executives who are concerned that their sector suffers from a negative image. They complain that ever fewer students today consider a career in chemicals and that the industry has difficulties in recruiting talented engineers. I am convinced that the industry's image will be enhanced by a much larger degree of responsibility it will assume.

Another advantage for the industry is that a more predictable regulatory system will aid future long-term planning.

We should not forget the fact that the EU is the world's leading producer of chemicals. With the new strategy for chemicals, we have a unique opportunity to influence not only the business and marketing conditions in the European Union but also in the rest of the world.

I would like to state that REACH in many ways is a textbook example of innovation-friendly regulation, since it does not tell business which chemicals to produce or use. Instead, it sets strict harmonised requirements for all substances, with an eleven-year phase-in period and places the responsibility for the solutions on industry.

So where do we go from here?

We are currently finalising the legislative proposal, which will be the subject of an Internet consultation on the workability of the proposed system, starting in May.

The purpose of this consultation is to ensure that REACH will successfully function under real operational conditions. Stakeholders will be invited to comment on the workability of the proposed system, including technical requirements, correct use of definitions etc. However, it must be clear that the approach that REACH represents will not be up for debate again we are already committed to this -- only its workability.

We look forward to receiving these comments, so we can take them into account as we finalise the legislative proposal.

The Commission will then adopt the proposed Regulation before the summer break.

The journey from the White Paper to a formal Commission proposal is almost over, which is an important step in constructing and eventually start using the house that will protect us from the hazards of chemicals.

Finding the right balance between the need to ensure a high level of protection of human health and the environment and the competitiveness of an important part of EU industry has been a remarkable challenge.

But I believe that we have lived up to it. REACH will allow us to achieve what we set out to achieve: to gain more knowledge about chemicals so that we can take advantage of their benefits without exposing ourselves and our environment (including the penguins and polar bears) to unnecessary risks.

A sustainable chemicals policy, which puts the protection of people's health and our environment first, will enable a sustainable EU chemicals industry to prosper.

Thank you for your attention.

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