Opinion of the Committee of the Regions on ‘The impact of EU chemicals policy on Europe's cities and regions’
Date: 2005-02-24
Institutions: European Committee of the Regions
Subjects: Community certification, EU office or agency, chemical industry, chemical product, data collection, economic consequence, environmental risk prevention, testing

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Official Journal of the European Union

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Opinion of the Committee of the Regions on ‘The impact of EU chemicals policy on Europe's
cities and regions’

(2005/C 164/10)

THE COMMITTEE OF THE REGIONS

Having regard to the decision taken by the CoR Bureau on 15 June 2004, under the fifth paragraph of
Article 265 of the Treaty establishing the European Community, to instruct the Commission for Economic
and Social Policy to draw up an own-initiative opinion on this subject;

Having regard to the proposal for a Regulation of the European Parliament and of the Council concerning
the registration, evaluation, authorisation and restriction of chemicals (REACH), establishing a European
Chemicals Agency and amending Directive 1999/45/EC and Regulation (EC) on persistent organic pollu-
tants, and to the proposal for a Directive of the European Parliament and of the Council amending Council
Directive 67/548/EEC in order to adapt it to Regulation (EC) of the European Parliament and of the
Council concerning the registration, evaluation, authorisation and restriction of chemicals (COM(2003)
644 final);

Having regard to the presidency conclusions of the Lisbon European Council of 23 and 24 March 2000;

Having regard to the European Commission's annual reports on better lawmaking pursuant to Article 9
of the Protocol on the application of the principles of subsidiarity and proportionality, the most recent of
which was the report ‘Better Lawmaking 2003’ of 12 December 2003 (COM(2003) 770 final);

Having regard to the European Commission's initiative on Simpler Legislation for the Internal Market
(SLIM), launched in May 1996;

Having regard to its opinion on the Communication from the European Commission on Productivity: the Key to
Competitiveness of European Economies and Enterprises (CdR 224/2002 fin) (1);

Having regard to its opinion of 9 October 2003 on the Communication from the European Commission on
Industrial Policy in an Enlarged Europe (CdR 150/2003 fin) (2);

Having regard to its opinion on the Report from the Commission on Better Lawmaking 2002 (CdR 62/
2003 fin) (3);

Having regard to its opinion on the 2003 Communication from the European Commission on the Internal
Market Strategy (CdR 341/2002 fin) (4);

Having regard to the draft opinion adopted by its Commission for Economic and Social Policy on
8 December 2004 (CdR 238/2004 rev. 1) (rapporteur: Mr Jochen Riebel, Minister for Federal and European
Affairs of the Land of Hesse and Land delegate to the Federation (DE-EPP));

Whereas:

1)

2)

3)

the March 2000 Lisbon European Council set the European Union the strategic goal of becoming
the most competitive and dynamic knowledge-based economy in the world;

after completion of the first four years, it has become apparent that significant additional efforts will
be necessary in order to achieve this objective. It is therefore particularly important that all propo-
sals for EU policy be reviewed with an eye to their impact on international competitiveness;

Point 6 of the Protocol to the Treaty of Amsterdam states that ‘the Community shall legislate only
to the extent necessary’. In addition, Point 9 states that the financial or administrative burden falling
upon local authorities and economic operators should ‘be minimised and proportionate to the objec-
tive to be achieved’;

(1) OJ C 128, 29.5.2003, p. 1
(2) OJ C 23, 27.1.2004, p. 16
(3) OJ C 73, 23.03.2004, p. 38
(4) OJ C 128, 29.5.2003, p. 48

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4)

5)

Article 2 of the EC Treaty states that the tasks of the Community should include promoting the
sustainable development of economic activities, a high level of employment, a high degree of
competitiveness, and a high level of protection and improvement of the quality of the environment;

Article 3 of the EC Treaty refers to the activities of the Community for the purposes set out in
Article 2, and the strengthening of the competitiveness of Community industry in particular;

adopted the following opinion at its 58th plenary session of 23-24 February 2005 (meeting of
24 February).

1. Views of the Committee of the Regions

THE COMMITTEE OF THE REGIONS

1.1
approves in principle of the Commission's attempt to
lay down uniform rules on handling chemicals through the
introduction of the REACH system;

1.2
feels that account should be taken both of the interests
of environmental and consumer protection, and of the need to
maintain and strengthen the competitiveness of European
industry;

notes that

1.3
the proposal would place a significant
burden not only on the chemicals industry but on the produc-
tion chain as a whole, and at
the same time points out
however that a balance needs to be struck between, on the one
hand, protecting the environment, health and worker safety
and, on the other, promoting the innovative capacity and
competitiveness of the industry concerned;

1.4
feels that the legislation in question is too complex, and
that the parties concerned will be unable to apply it without
external expertise;

1.5
supports any changes in the regulation that can help
simplify procedures and cut costs. This will require more
specific measures in particular for SMEs, which may incur
disproportionate costs as a result of implementing the REACH
system;

feels that data should not only be based on annual
1.6
product volumes, but that other approaches which have been
mentioned in the discussion on simplifying registration proce-
dures should also be taken into account,
i.e. exposure cate-
gories, the ‘one substance — one registration’ principle, or
priority lists. This could facilitate better overall organisation of
REACH system operations;

1.7
considers that, to ensure that the system is practicable
and, for SMEs especially, financially viable only the data which
is relevant for safe usage should be required. Compliance with
data
slow down production,
marketing or application processes so that enterprises remain
in a position to react innovatively and quickly to new market
demands (time to market);

requirements

should not

1.8
suggests making use of all the data already accessible to
manufacturers, users and public authorities as another means
of applying the regulation more flexibly. In the case of the
establishment of consortia, however, (especially between down-
stream users and between SMEs) the protection of intellectual
and industrial property rights must be safeguarded or, alterna-

tively, compensation should be paid. The main features of the
division of costs must be laid down in the regulation;

1.9
notes that implementation of registration procedures
will involve additional responsibilities for the relevant authori-
ties in Member States. A considerable amount of work will be
needed, particularly in cases where the criteria used are left
very much open to interpretation, making it unclear whether
certain requirements apply or not. Registration procedures
should therefore be kept as far separate as possible from regula-
tory activities. Derogations and distinctions must be simplified
and formulated with greater precision.
If necessary, down-
stream legislation must be put in place to provide clear pointers
to assist in interpretation. Access by regulators to information
on the procedures used by the agency must be kept as straight-
forward and free of red tape as possible;

1.10
basically approves the idea of setting up an agency
insofar as it would facilitate a uniform approach within the EU,
but insists that the jurisdiction and competences of the agency
should be more clearly marked out, especially in terms of its
relations with other Community, national, regional or local
institutions with responsibilities for registering chemicals;

1.11
considers it desirable that authorities in the Member
States, in close cooperation with the agency, should be in a
to registration
position to provide entrepreneurs
requirements with on-the-spot assistance in complying with
application procedures,
thereby securing the administrative
implementation of REACH in the Member States;

subject

1.12
views the agency as an independent institution and
important service provider, which organises the registration
and evaluation of substances under the mantle of confidenti-
ality; in doing this, the agency should seek to be very much
open to scientists and experts from the industry;

feels that the agency should ensure that specifications
1.13
and guidelines for the evaluation procedure are in place so as
to enable rapid and uniform action by authorities in the
Member States. For this to happen, there must be a clear divi-
sion of tasks between the agency and the Member States, with
no overlapping of administrative responsibilities;
in addition,
the extremely complex voting rules should be substantially
simplified and streamlined to cope with the expected high case-
load, while avoiding detailed, bureaucratic rules for communi-
cation between the Member States and the agency, and simpli-
fying the rules for dividing substance evaluation tasks among
the Member States, without thereby making them a quasi sub-
structure of the agency;

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1.14
notes that there are significant loopholes concerning
animal protection. The draft regulation stipulates that, in cases
such as parallel registration of a substance, manufacturers are
obliged to make use of existing data on animal testing, in order
to avoid unnecessary duplication of tests. However, Article 23
only refers to the avoidance of unnecessary animal testing as
an abstract objective and cannot therefore replace a specific
provision on this point;

1.15
argues that animal testing needed to achieve the objec-
tives of the regulation, including a high level of protection for
human health and the environment, should be kept to an abso-
lute minimum, and that all existing data should be made avail-
able. Animal testing should be prohibited if there are alternative
options for testing which have been approved by the authori-
ties;

1.16 welcomes the introduction of an obligation for down-
stream users to register usage of substances, so that applica-
tions which have not been registered by manufacturers or
importers can be identified, and potential risks can be avoided
through appropriate precautions;

is however aware of the disadvantages that would
1.17
arise, especially for SMEs, from any requirement to disclose
details of usage and consequently of technical expertise to
substance suppliers or to conduct costly studies of their own;

1.18
feels that it is necessary to lay down exact conditions
for data sharing, so that SMEs are not penalised by rules on the
sharing of costs (not only the costs of animal testing) and
protection of know-how.

2. Evaluation of the impact

2.1
Implementation of the draft regulation will primarily
concern producers and importers of substances and prepara-
tions, who will be subject to requirements for registration and
the related obligations to disclose information. The main
burden will fall on the chemicals industry. However, all sectors
which make use of chemicals, i.e. virtually all processing indus-
tries and service providers, will be affected as ‘downstream
users’. Under the new rules there is a danger that chemicals will
disappear from the European market and that price levels will
rise. This in turn would undermine the position of European
processing
from outside
Europe. Moreover, adjusting to the new system would also
entail costs. Production and employment could therefore be
adversely affected by the introduction of the REACH system,
not only in the chemicals industry, but also in many other
sectors.

competitors

industries

vis-à-vis

the production chain will potentially be under threat, even
though the companies in question are the backbone of many
European industrial regions.

2.3
The Commission's estimates for the direct and indirect
costs of using the system over the next few years have been
criticised by various parties as being too low. The Committee
therefore welcomes the Commission's decision to conduct a
new impact assessment to study indirect costs, effects on down-
stream users and the implications for new Member States. It
would be best to wait for the results of this impact assessment
before any further decisions are taken by the European Council
and Parliament.

2.4
It is thought that the new system will encourage innova-
tion, and it is certainly true that some of the measures will
make it easier to identify and market more new substances.
However, there is also a negative impact on the innovative
capacity of enterprises, particularly in the initial implementa-
tion phase. As a result of REACH, the time to market of new
products will be increased. Enterprises will be more exposed to
risk as a result of additional costs at the research stage, and
researchers will spend a great deal of time on testing existing
chemicals rather
than developing new products. However,
innovation is the key to the future economic success of Europe,
and the chemicals industry is by far the largest source of inno-
vative intermediate products. A lack of innovation in this field
would therefore also have a strongly negative impact on the
innovative potential of other sectors. In general, the Committee
considers that the mechanisms (which are mostly automatic)
designed to encourage innovation are still too general and,
given the scale of the expected impact, insufficient to the job at
hand.

2.5
On the one hand, costs are likely to be incurred by
economic players, by the regions in which jobs will be threa-
tened, and by end users as a result of higher prices of final
products. As for the benefits, they are expected to arise in the
fields of health, environmental and consumer protection, safety
at work, and also from simplified legislation and the pressure
on enterprises to innovate and compete; however, this view
does not take into account the fact that benefits will be phased
over a considerably longer period than the costs, and will thus
be felt in other sectors or society as a whole.

3. The Committee of the Regions' recommendations

THE COMMITTEE OF THE REGIONS

3.1
urges the European Commission to check the REACH
proposals for compliance with the subsidiarity and proportion-
ality principles;

2.2
Small and medium-sized enterprises are particularly
affected. Substance registration alone is likely to exceed the
financial and human resources of many companies, if informa-
tion is to be provided in as much detail as currently required
by REACH. Given that, in many cases, it will not be possible to
pass on costs to customers, the production of certain chemicals
will be brought to a halt and the viability of companies along

3.2
calls on the Commission to take account of the public
and consumers by providing for the uniform labelling of
chemicals in an area that is today marked by considerable
disparity, and endorses the Commission's proposal to secure
uniform rules for chemical products registered before or after
1981;

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calls in particular for a review of

3.3
the proposals to
consider whether the administrative outlay to businesses and
the related costs involved in achieving the objectives of these
legal provisions are in fact necessary;

feels that

3.4
could also be achieved by less complex legal provisions;

the objectives envisaged by the proposals

urges the European Commission to consider alternative
simplifying the

3.5
proposals currently under discussion for
REACH system;

calls for measures to help and support SMEs in the
3.6
strengthen
registration process
economic performance and employment in European regions
which are dependent on industry;

to safeguard or

in order

3.7
recommends using a more strongly risk-orientated,
exposure-based, priority-led concept instead of a quantity-based
approach to production and import volumes;

in tandem with that

3.8
recommends other moves
designed to make the legal provisions considerably simpler and
more readily understandable for users of
the registration,
evaluation and authorisation procedure;

3.9
urges the European Commission to consider whether
substance evaluation cannot make use of information systems
and data which already exist in Member States;

3.10
legislation into line with legislation in other policy areas;

urges the European Commission to bring chemicals

3.11
calls especially for the introduction of a specific risk-
based information system to avoid duplication of data procure-
ment at different stages of the production chain;

Brussels, 24 February 2005

recommends,

3.12
the sake of European business
competitiveness, entering into negotiations with the WTO,
with a view to international harmonisation of these rules;

for

3.13
in particular urges the European Commission to cast a
critical eye over its proposals to check for compatibility with
its own initiatives for simpler legislation for the internal market
(SLIM) and for better lawmaking;

3.14
calls upon the Commission to ensure that the basic
principle that responsibility shall lie with the manufacturer of
the chemical product or the party marketing the product
(‘polluter pays’ principle and principle of the reversal of the
burden of proof) shall continue to be upheld at all stages of the
marketing of the product in question, the aim being to help to
safeguard the protection of workers, consumers and the envir-
onment.

urges the European Commission, in its overall consid-
3.15
eration of Community objectives, to examine the impact of its
proposals on regional economic structures and thus their
compatibility with the EU objective of economic and social
cohesion; with this in mind, sectoral pilot studies could be
carried out in the various European regions that have a chemi-
cals industry, in order to secure an accurate assessment of the
impact of future legislation on a case-by-case basis;

3.16
urges the European Commission to act on the findings
of the expanded impact assessment, which is expected for the
end of March 2005;

3.17
urges the European Commission to clearly mark out
the powers of any European Chemicals Agency and to ensure a
viable and business-friendly implementation of chemicals
policy by closely involving local players.

The President

of the Committee of the Regions

Peter STRAUB