International Herald Tribune  [Printer-friendly version]
October 11, 2006


[Rachel's introduction: The REACH legislation has become the most
dramatic example of Europe's "precautionary principle" of regulation.
In contrast to the U.S. approach, it requires businesses to show that
the substances they put on the market are safe, rather than requiring
regulators to prove why they should be banned.]

By Dan Bilefsky, International Herald Tribune

The European Parliament's powerful environmental committee approved
tough new rules Tuesday regulating the bloc's €400 billion chemical
industry, presaging a tense showdown between the European Union and
the world's biggest chemical companies, which argue that the
regulations risk damaging business and hurting global trade.

At issue is EU legislation, known as Reach, for the registration,
evaluation and authorization of chemicals, which would shift the
burden of proof from regulators to businesses when it comes to the
safety of up to 30,000 commonly used industrial chemicals.

The legislation has become the most dramatic example of Europe's
"precautionary principle" of regulation. In contrast to the U.S.
approach, it requires businesses to show that the substances they put
on the market are safe, rather than requiring regulators to prove why
they should be banned.

The U.S. government initially feared that $150 billion of its exports
could be affected. The U.S. chemical industry has estimated that the
proposal could cost U.S. companies alone some $8 billion during the
next decade. But EU lawmakers counter that all chemical companies will
need to either conform to the EU's more stringent standards, or risk
missing out on a European market of 470 million consumers, which is
now larger than the United States.

Products ranging from certain plastics to some materials used by
pharmaceutical companies could be affected, as well as industrial
solvents like ethyl benzene and heavy metals like cadmium used in some
paints. A number of low-risk substances like the polymers used in food
packaging and shopping bags are likely to be totally or partly
exempted from registration requirements.

The legislation has caused such concern in the United States that, in
April 2004, the secretary of state then, Colin Powell, sent out a
seven-page cable to U.S. embassies in all of the EU's 25 member states
questioning the legislation's overly cautious approach and warning
that it "could present obstacles to trade and innovation." Some
European governments, including Germany, Britain and France, have also
expressed fears that it could dampen the bloc's competitiveness.

Some nongovernmental organizations like Greenpeace charge that German
industry, led by the chemical and pharmaceutical giant Bayer, used its
sway to try and water down the legislation that was first discussed by
ministers in 1998. Margot Wallstrom, deputy president of the European
Commission and the former environment commissioner, described the
lobbying as the most intense that she had experienced.

In the draft rules adopted by the Parliament's environmental
committee, which still must be approved by the Parliament as a whole
and by EU member governments, EU lawmakers have backed regulations
forcing chemical companies to substitute dangerous chemicals with
safer alternatives if such alternatives exist. The rules are designed
to protect consumers from the potentially hazardous effects of
chemicals found in everyday products.

Guido Sacconi, an Italian lawmaker from the Socialist Group who is
steering the package through Parliament, said, for example, that toxic
chemicals found used in a ballpoint pen would potentially need to be
substituted if a safer alternative were available, even if the pen had
been on the market for years and the substitute was more expensive to

"There are possibly toxic substances in this pen," he said, waiving
his pen in the air at a press conference. "If a safer alternative is
available, then it should be substituted." He added that the
additional cost to the chemical industry of using a safer and more
expensive substance would be more than offset by the alternative of
being forced to close factories producing a chemical deemed to be
unsafe. He noted, however, that a hazardous substance could be allowed
if the benefits outweighed the risks.

But industry fears that the strict criteria and inherent cautiousness
of EU regulators could lead to the banning even of substances that
have clear benefits for public health. The registration process could
prove onerous, they charge, and could compromise trade secrets.

Franco Bisegna, head of government affairs at the European Chemical
Industry Council, said the substitution rule was an unfair burden on
business. Citing a hypothetical example, he said that if a flame
retardant used in the upholstery of an airplane passenger seat was
deemed to be risky by the EU, a company could be forced to stop using
it or to substitute it, at potentially enormous cost.

"What if the flame retardant was banned and there was no substitute?"
he said. "It's better to have an airline seat with antiflame retardant
than one that would be vulnerable in case of fire -- we need to look
the social benefits as well as the risks." The chemicals industry is
also concerned about proposals by the Parliament forcing chemical
companies to review permits for the most hazardous substances every
five years. Under the rules, manufacturers would also have to register
the properties of chemicals in an EU database.

But EU lawmakers counter that the tougher standards will prevent as
many as 4,500 deaths a year. They say that the safety benefits for
consumers more than outweigh the added costs to business. EU
regulators said the tougher standards would cost as much as €5.2
billion, or $6.5 billion, to producers and users over 15 years, when
they introduced the legislation in 2003.

Bisegna said that the regulations would affect all multinational
chemical companies doing business in Europe and that U.S. fears about
the legislation were exaggerated.

"If Reach is supposedly going to make European chemical producers less
competitive, then shouldn't the U.S. be happy?" he asked. "If industry
can't solve its competitiveness problems, I don't think it will be
Reach that will have given it its kiss of death."

Reach would require the chemicals industry to test the safety of the
30,000 or so chemicals that have been on the market across the world
without any significant testing of their toxicity on human health and
the environment. These substances would require registration with an
EU agency.

Only about a third of 140 potentially high-risk substances on the
market before 1981 underwent full assessments, according to the

The European Parliament is planning a final vote on the directive in
November or December; if approved, the directive then must be cleared
by EU member governments. That still leaves time for the lobbying
process to continue.

Copyright 2006 the International Herald Tribune