REACHLaw Introduction

1. INTERNATIONAL WORKSHOP ON REACH - THE NEW EUROPEAN COMMUNITY REGULATION ON CHEMICALSREACH – State of Play TodayMathias BernerPartner, Sales Director7th of April 2009, Brasilia

2. Agenda1. REACHLaw Introduction2. Basic REACH concepts & terminology3. The complexity of REACH4. Current Status of REACH5. SIEF and Consortia Strategy6. Cost Estime for REACH7. Authorization8. Conclusions

3. REACHLaw Introduction

4. Our mission REACHLaw Ltd exists exclusively to provide full set of REACH services and timely solutions to its clients by offering unique combination of expertise in REACH, legal, chemistry, environmental and business

5. OurExecutiveTeam & skills Mr Lasse Kurkilahti, Partner and Chairman of the Board, former CEO and President of Kemira Ltd, also former Chairman of Finnish Chemical Industry Association, MSc in Business Admistration Mr Lasse Musakka, Partner and CEO, MSc in Economics Mr Mathias Berner, Partner and Sales Director, D.Sc. (Tech) Mr Riku Rinta-Jouppi, Partner and Chief Legal Council, MA Law, MSc in BioinformationTechnology Mrs Ying Zhu, Partner and COO, PhD in Bio Chemistry, MBA Mr Jouni Honkavaara, Partner, CFO and CMO, MSc , MBA > 40 specialists in REACH/EU competition law, chemistry, toxicology and business Introductions: Key capabilities of REACHLaw: Chemical Industry, business and legal REACH knowledge, Chemistry, Close Co-operation with ECHA and Helsinki REACH Centre, Independence

6. Our Service Model Non-EU Countries EU M SIEF Non EU Industry Associations Consortium Consortium LR OR DH REACHLaw Ltd Brussels REACHLaw Ltd Helsinki, Finland Process development & Confidential Information Management Non–EU Manufacturers ECHA Own subsidiaries & Partners for on site support and additional competencies EU Manufacturers Importers (→ DU) EU Manufacturers Downstream Users (EU Market)

7. Some of Our Partners China Huateng www.hthitech.com CPCIA www.cpcia.org.cn India Dynamic Orbits www.dynamicorbits.com Russia Petrofinn www.petrofinn.com Thailand Pro-Application Servicewww.proapplication.com USA ChemRisk www.chemrisk.com Latin America CIQyP & MOURAO ENRIQUE ASSOCIADOS With the support of: ABIQUIM, ANIQ, ASIQUR, ASIQUIM, ASOQUIM. AUSTRALIA Pamir Consulting www.pamirconsulting.com

8. REACHLaw Ltd today : global, world class REACH service provider Partners Customers Ourcustomers: > 200 majormanufacturers in 25 countrieswitharound 2000 substances

9. Examples on our REACH service packages • Services for Manufacturers • Registration Service Package • Service/outsourcing/Thirdpartyagreementmodelfor EU manufacturers and subsidiaries of non-EUmanufacturers • OnlyRepresentativemodel for non-EUmanufacturers • Service Package for LateArrivals • Sourcing and SupplyChainStrategies: REACH RiskAnalysis • Services for Leadregistrants & Consortia • Pre-ConsortiumStudy for ConsortiaFormation • LeadRegistrantSupport Service Package • ConsortiumSupport Service Package • Services for Downstreamusers • DownstreamUserRegistrationPackage • ExposureScenarios

10. Basic REACH concepts & terminology

11. Comment to the Presentation The presentation is built on previous REACH knowledge and only a very concise summary and key terms will be repeated

12. What is REACH? • REACH is the new chemical legislation in EU affecting the sale and manufacture of all chemicals unless specifically exempted • REACH is in Force NOW! • No (pre)-registration – no Market

13. What to register? • All substances – on their own, in preparations or articles (if intended to be released) • manufactured or imported in quantities of 1 tonne or more per year • unless they are explicitly exempted from the scope of registration, notably Annex IV, V.

14. How to Register? Independent, professional Only Representative Own legal entity (subsidiary in the EU) as registrant (Importer in the EU as OR/registrant) (Test laboratories) (Multinational companies) (Non-EU Government affiliates)

15. When to Register? Dec 1 2008 Dec 1 2010 June1 2013 June 1 2018 • Milestones TODAY’S FOCUS • 1000 t/y, • CMR 1&2 • R50/53 • Evaluation, SDS & Down Stream User Data maintenance • Evaluation, SDS & Down Stream User… Pre-Registration (June 1 – December 1 2008) Pre-Registration preparations ongoing • 100 - 1000 t/y • 1 - 100 t/y • Evaluation… 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 In Force June 1, 2007

16. Terminology • SIEF = Substance Information Exchange Forum • All pre-registered substances are automatically part of the (pre)SIEF. • After sameness of the substances is agreed the SIEF officially starts • Purpose of SIEF: agree on CLP and data sharing • Consortia • “Voluntary” • Formalized co-operation between companies

17. The complexity of REACH

18. The context/concept/paradigma of REACH (Background:Scope of our risk analysis) EU - customers 7. Independent importers Your OR / subsidiiary New counterparts ECHA, SIEF, Consortia.... EU – supplier Substance A 4. 1c. 6. 5. EU Scope: topics to be covered 1a. Appointing Parties, substances, legal entities 1b. Appointment Process 1c. Appointed Party (OR) 2. Independent non-EU suppliers 3. Indirect export 4. Independent EU importers 5. Potential EU suppliers, re-import 6. New ”REACH counterparts/liabilities/risks” 7. New liabilities against your customers Non-EU 1b. 3. Independent Non - EU Manufacturer Your company (Group) Your company Group 1a. Non-EU suppliers Non-EU suppliers 2.

19. Comments to REACH risk analysis • Understand all REACH relationships very well • Especially Focus on • Supply chain issues • Pressure created by your customers in EU • Liabilities arising from REACH

20. HAZARD ASSESSMENT (HA) EXPOSURE ASSESSMENT (EA) Dangerous or PBT, vPvB FINAL EXPOSURE SCENARIO (ES) RISK CHARACTERISATION (RC) DOCUMENTATION IN CHEMICAL SAFETY REPORT (CSR) TECHNICAL WORK IN REACH ORGANIZING EXISTING DATA SHARING THE EXISTING DATA TESTING REQUIREMENTS EVALUATION OF THE DATA QUALITY IDENTIFICATION OF DATA GAPS PREPARATION OF TESTING PROPOSALS GENERATION OF NEW DATA CHEMICAL SAFETY ASSESSMENT CSA PREPARATION AND CHECK OF CSR Substance persistent, bioaccumulative and or toxic (PBT)

21. Starting point If substance is not hazardous, only data for physicochemical properties required (Annex III) • When there is an information gap which cannot be filled by any non-testing method, registrant has to take action - Annexes VII or VIII : generate new information - Annexes IX or X : prepare a testing proposal

22. Tests needed (1/4)

23. Tests Needed (2/4)

24. Tests Needed (3/4)

25. Tests Needed (4/4)

26. Conclusions on technical requirements • There is an incredible workload coming towards substance with the 2010 deadline • Numerous tests have either to be performed (Annex VII-VIII) or testing proposals submitted (Annex IX-X) • Requires completely new interactions between competitors (NOTE: Competition LAW!) How is the industry coping with this?

27. European Chemical Industry Council (CEFIC) Alert 4.3.2009 • A key warning to companies is that in practice, they should aim to submit lead registration dossiers by June 2010 - six months before the deadline - to be on the safe side. This is so that it can undergo a technical completeness check and secure registration - after the registration fee has been paid - in time so that all other members of the substance information exchange forum (SIEF) that are sharing data in that dossier can refer to it. • The timeline also indicates that already: SIEF formation facilitators should have been identified; codes reflecting the role companies will play within SIEFs should have been communicated; and agreement on the sameness of a substance represented by the SIEF should have been achieved. For many SIEFs this will not have happened--it is understood that only 10% of pre-SIEFs had a potential formation facilitator lined up via the pre-registration process.

28. EU Response on REACH and costs

29. Current status of REACH

30. Some statistics: pre-SIEF’s Low cost? High cost? If > 1000 ton and no existing consortia -> major difficulty in registering on time

31. Which substances will be affected 2009-2010 (=deadlines for registration) 30.000

32. Current status:Types of SIEF’s (according to our experiences from 2000 Pre-SIEFs)

33. CEFIC tried to help

34. Why so slow progress – major reason ? • Big ones not taking the lead, especially non-EU manufacturers • Pre-registration, basic challenges • Major tasks • Substance identification (chemistry) • Knowledge about & interpretation of REACH regulation (legal) • Volume calculation • REACH-IT • Registration, completely new challenges • Pre-SIEF , SIEF and consortia formation: Who should take the leading position, what it means, how to cooperate in SIEF / Consortia, cost sharing etc (legal & business) • Later: Evaluation of data, new research (toxicological & eco-toxicological tasks)

35. Current status: Pre-SIEFs have started, but… • We (= ourcustomers) have made pre-registrations for around 2.000 substances • Less than 200 Pre-SIEFs are running… • Reason to beworried ??

36. SIEF and Consortia Strategy

37. Immediate Actions needed • Products in over 1000 t category or CMR’s are in very real danger of missing the 2010 deadline if no one is taking the lead • What is the pre(SIEF) status? • Data availability? • SIEF distribution? But first, let’s understand the individual role...

38. Our Categorization - first understand the status

39. Next Step: (pre)SIEF status • What is the status of the pre-SIEF? • Is it progressing • Based on the pre-SIEF lisiting are there other major manufacturers • Who is the SIEF Formation Facilitator? • ECHA will not assist in this process! IF THE MAJOR MANUFACTURERS WILL NOT TAKE THE LEAD, REGISTRATION DEADLINE WILL BE MISSED

40. Pre-consortia Study or Lead registrant Pre-SIEF status Others in similar position alone LEAD REGISTRANT Pre-Consortium Study If successful Consortium

41. Authorisation Service – Providing Evidence of Adequate Control to ECHA

42. Authorization process

43. Substances Prioritised by ECHA for Authorisation • 5-tert-butyl-2,4,6-trinitro-m-xylene (musk xylene) • Alkanes,C10-13,chloro (short chain chlorinated paraffins; SCCPs) • Hexabromocyclododecane (HBCDD) and all major diastereoisomers identified • 4,4’-Diamino diphenyl methane (MDA) • Bis (2-ethylhexyl) phthalate (DEHP) • Benzyl butyl phthalate (BBP) and • Dibutyl phthalate (DBP)

44. ECHA Authorisation Process • ECHA consultation now open until 14 April 2009 for evidence from industry that certain uses for these substances should still be exempted from authorisation • The criteria used are: • Intrinsic properties (CRM, PBT, vPvB) • Volumes applied • Nature of Uses

45. ECHA Fees For Authorisation

46. Cost estimtion for REACH

47. Cost components of Registration phase 1-2% 10% 5% 70-80% 10% Pre-registration service Registration service SIEF Data Big variation ECHA Consulting Oil industry: Total average cost estimate 100.000 to 200.000 euro/substance

48. Principal model for cost estimate (simplified) Somemajorcostfactors • The exportedvolume (= data requirement) • Yourindividual data gap (= yourmissing data) • The total data gap (cost for new research) • Number of potentialregistrantssharing the cost • Costsharingmechanism • Consortiacosts • Echafees • Externalservicefees

49. ECHA Fees 30 000 Substance * 23 250 €/substance = 697 500 000 euro

50. Conclusions