Overview
It’s been a challenging first year for UK REACH, with stakeholders from all sides unhappy with the compromises that have been made, but often for different reasons. The first year ended with a promise from the UK government to look at further reform in 2022, and the new Environment Act 2021 gives UK government powers to press ahead with legislative change. In this article, we consider the progress that has been made to date and the challenges to come.
Transition
UK REACH came into force at 11 p.m. UK-time on December 31, 2020, creating a parallel regulatory framework for the management of chemicals in Great Britain and duplicating many of the obligations (and costs) for compliance. The duplication is because a key feature of REACH is the principle of 'no data, no market' – the concept that businesses must provide robust data about a substance’s hazard properties to the regulator in the form of a registration dossier before that substance can be placed on the market. Since no agreement was reached between the UK and the EU on sharing the existing EU database, companies must now submit such data to the UK regulator (the Health and Safety Executive) separately to populate a new registration database.
To lessen the immediate impact of this new regulatory burden on UK industry, UK REACH provided two ‘transitional arrangements.’ Firstly, existing EU REACH registrations held by GB-based businesses were carried across directly into UK REACH, legally ‘grandfathering’ the registrations into the new regime. Secondly, businesses that relied on a REACH registration held by an EU or EEA-based company before January 1, 2021, could continue importing substances for supply or use, under the ‘Downstream User Import Notification’ or ‘DUIN’ process. Both the ‘grandfathering’ and ‘DUIN’ mechanisms required an initial (relatively light-touch) notification to be made to the HSE during the course of 2021. However, in each case, there remains a ‘full registration’ obligation. Under the law, as it currently stands (but see further below), then depending on the tonnage band and hazard profile of the substance, those relying on transitional provisions would need to be compliant with all applicable registration requirements within either 2, 4 or 6 years from October 28, 2021.
To manage the process, the UK created its ‘Comply with UK REACH’ IT system, largely replicating the functionality of the existing EU ‘REACH-IT’ platform. General consensus among those using the platform is that while the functionality is a little clunky, the database has functioned well with relatively few teething problems.
Consultation on a ‘New Model’
Industry has estimated that the replication of the EU REACH registration model for the GB market will come at a cost to industry of around one billion British pounds. It is therefore unsurprising that it took just six weeks into the implementation of the new regime (February 2021) for 25 industry associations and downstream user groups to formally propose a lighter touch system where only chemicals of greater concern would need a full registration, in an effort to ease this significant cost of ‘replication’.
While the UK government could no doubt see the advantage of avoiding costs to industry, environmental NGOs were quick to challenge the proposals to move away from full data sets for all chemicals on grounds that the UK would be lowering environmental protections, undermining legal commitments to a ‘level-playing field’ under the EU-UK Trade and Cooperation Agreement.
Presumably due to these tensions, as well as other pressures on the department, the Secretary of State for the Environment, Food and Rural Affairs was not quick in coming back with a response. It was only in December 2021 that Secretary of State George Eustice published an open letter to the Chemical Industries Association confirming that he recognised “industry concerns around accessing data packages to support UK REACH transition”, and the associated cost to businesses. As a result, DEFRA, along with the HSE and Environment Agency, has been tasked with exploring “a new model for transitional registrations”, with the stated objective of “placing a greater emphasis on improving our understanding of the uses and exposures of chemicals in the GB context”. Despite the lack of detail at this stage, the willingness to explore alternative solutions is a significant development. Pending the outcome, registrants will be reconsidering the progress of work on new data sharing arrangements for the GB market. This will, in turn, raise concerns for those not able to enjoy transitional arrangements (such as, for example, new entrants to the market), who may find themselves in limbo while they wait for regulatory obligations to fall on their competitors and future co-registrants.
Focus on Data Sharing
Data sharing does, however, remain the most pressing issue facing participants in UK REACH, and we recommend using this time to ensure data rights are understood and data gaps identified, in preparation for the forthcoming data sharing discussions.
In December 2021 we invited Judge Moira Macmillan of the First Tier Tribunal, General Regulatory Chamber (GRC) (the body that will step into the shoes of ECHA’s Board of Appeal under UK REACH) to join a Steptoe panel on data-sharing for Chemical Watch, and heard first-hand how the GRC is gearing up to deal with disputes arising out of the new registration and data-sharing obligations. Judge Macmillan explained to our webinar audience that the GRC also hears information rights and data protection matters from other regimes, and so already has some background in resolving disputes around information and data. The wider regulatory perspective of the GRC contrasts with the narrow chemicals-only focus of ECHA’s Board of Appeal and this may well be an important difference in the way that cases are handled and resolved. Our experience in both the UK tribunal system and before the ECHA Board of Appeal informs us that there are likely to be other significant differences in approach, resulting in a divergence of decision-making.
UK Chemicals Strategy: Keeping Pace with the EU?
With its Green Deal and chemicals strategy for sustainability (CSS), the EU has set an ambitious agenda and laid out plans for substantive changes to existing EU chemicals regulation. This will likely include an attempt to combine and integrate requirements for chemicals, manufactured products and waste streams, with the aim of achieving circularity. That ambition, in itself, may trigger significant changes to (EU) REACH, as well as product regulations and waste requirements. New concepts are being created: the notions of ‘sustainable products’ and of ‘essential uses’.
It is expected that EU REACH will be amended to allow a streamlined procedure for restrictions for groups of chemicals with newly identified hazard classifications. It is also possible that the EU REACH authorisation process will be amended or even removed altogether, and the restrictions process extended and reinforced. These changes each represent a significant departure from the existing model.
In 2022 we anticipate the arrival of the UK’s own chemicals strategy, first promised in the 25 Year Environment Plan back in January 2018. While the details of the strategy remain to be seen (and perhaps determined), with the EU already in the implementation phase of its chemicals strategy, it seems likely that the publication of the UK’s chemicals strategy could mark a significant point of strategic divergence between the two markets in 2022.
HSE’s Work Programme and Resourcing
As required under the UK REACH legislation, the HSE published its first ‘Work Programme’ (2021/2022) in June 2021. The publication of the programme highlighted the challenges faced by the HSE to implement, manage and regulate the new regime – with UK bodies now required to fulfil the full range of roles, tasks and responsibilities currently shared between ECHA, the Commission and 27 EU member states. By way of an example of the scale of the task, the HSE predicted that 26% of its overall capacity for 2021/2022 would be required simply for training and “understanding the legislation and associated guidance; learning processes and procedures; developing knowledge of regulatory science, especially in the area of toxicology.”
With limited resources, it is not a surprise that the HSE is taking a risk-based prioritisation approach to its work programme. In 2021/2022, key delivery objectives included work on restriction dossiers for tattoo inks and lead ammunition. Going forward, it has been confirmed that the HSE will assess all EU REACH restriction proposals where the Annex XV dossier has been published, but may also identify priorities from other sources, providing the example of the Regulatory Management Options Analysis on PFAS that the HSE is currently working on with the Environment Agency. It will be fascinating to see how the HSE chooses to deploy its limited capacity in its forthcoming work programme for 2022/2023, due later this year.
Substances of Very High Concern
On December 9, 2021, DEFRA published a policy paper titled “Approach to including substances of very high concern on the UK REACH candidate list”, which received an immediate reaction from NGOs who claimed the UK was not upholding the terms of the EU-UK Trade and Cooperation Agreement on ensuring a ‘level playing field’, and urging the EU to step in.
The candidate list is a list of substances of very high concern (SVHC) that may be prioritised for inclusion on the ‘authorisation list’, the REACH mechanism used for phasing out the use of harmful chemicals. When UK REACH came into force, all substances that were on the EU REACH candidate list were automatically carried over onto the UK REACH candidate list.
The UK REACH work programme for 2021/22 committed to assessing those substances added to the EU REACH candidate list since UK REACH came into force, to consider if it was appropriate to add them to the UK REACH candidate list. To make that assessment, as well as to determine which other substances the UK may wish to add to its candidate list, DEFRA and the Welsh and Scottish Governments have agreed “interim principles of assessment”, confirming that “a substance should not be proposed for inclusion on the [UK REACH] candidate list unless it is a good candidate for the authorisation list”; and that“Regulatory Management Options Analysis (…) should be used to determine if inclusion on the candidate list is the correct route.”
This UK-specific approach to inclusion on the candidate list differs from the process in the EU. Procedurally, this is somewhat inevitable since, under EU REACH, either a Member State or ECHA (at the request of the Commission) can propose a substance to be identified as an SVHC, followed by input from interested parties and the Member State Committee. UK REACH needs its own process, and the UK system allows the Secretary of State, Welsh ministers, Scottish ministers or HSE to put a substance forward for inclusion on the candidate list, and can only do so if they consider it fulfils one or more of the technical, hazard-based criteria to be considered an SVHC. However, following the latest policy guidance, it appears that consideration must now also be given to whether the substance is a “good candidate” for phase out, taking into account other available risk management options. NGOs believe that this will mean that the UK candidate list will be much smaller than the EU's. The NGOs point out that inclusion on the candidate list has legal consequences (such as notification of the presence in SVHC in articles) and encourages substitution – whether or not the substance is a “good” candidate for subsequent addition to the authorisation list.
The NGOs have also highlighted that the relevant UK bodies will (presumably) be making any such recommendations (at least in the short to medium term) without much of the hazard data that would be available to their EU counterparts. It has also not gone unnoticed that HSE has only identified four substance groups as priorities (from a significantly longer EU list). The HSE has however committed to publishing its reasons for these decisions shortly. This will make interesting reading. Those substances that were not prioritised for further assessment in this round will be kept “under review”.
Impact of the Environment Act 2021
In November 2021, more than 1,000 days after the UK Parliament was first presented with a draft Bill, it has finally passed its first 'Environment Act' in a generation, laying the framework for a significant shift in environmental standards and regulation.
Those grappling with UK REACH should note that the secretary of state has been given powers to further amend UK REACH, to change the 'how' of REACH and adapt it for the GB market. However, as a safeguard, the secretary of state must ensure that any such changes remain consistent with the aim and scope of REACH as set out in Article 1 of the REACH Regulation, and must obtain consent from Scottish and Welsh ministers. Although not unlimited power, the scope for change under these provisions is significant, and should be monitored closely. We have already seen how authorities responsible for chemicals may take different approaches to their EU counterparts – even when applying the same black letter law. Modifications to the GB decision making process are likely to accelerate that trend.
Further, the chemicals sector should keep a close eye on the list of substances that the UK nations will monitor when considering the chemical status of its water bodies: wide powers are provided in the Environment Act 2021 to amend the criteria for assessing chemical status including the substances to be monitored. The inclusion of new substances will inevitably increase regulatory scrutiny of the use of chemicals and the supply to the GB market.
Concluding Thoughts
REACH was highlighted as being one of the legal regimes that would be most impacted by the UK’s exit from the EU, and in 2021 we have seen many predictions of challenges and difficulties coming true. In 2022, we will find out how the UK government responds to these issues, and we will see for the first time the UK’s vision for the chemicals sector when the chemicals strategy is published.
