GHS & REACh from a Business Perspective

1. GHS & REACh from a Business Perspective V.M. (Jim) DeLisi Fanwood Chemical, Inc. P.O. Box 159 Fanwood, NJ 07023 908-322-8440 jdelisi@fanwoodchemical.com

2. Globally Harmonized System • Authors – United Nations and other “Expert” Groups • Interorganizational Programme for the Sound management of Chemicals (IOMC), • Coordinating Group for the Harmonization of Chemical Classifications (CG/HCCS) • International Labor Organization (ILO) • Organization for Economic Cooperation and Development (OECD) • United Nations Economic and Social Council’s Subcommittee of Experts on the Transportation of Dangerous Goods (UNSCETDG) These committees gathered experts from UN member countries to draft these new rules.

3. GHS • Purpose • Enhance the protection of human health & the environment • Facilitate international trade • Provide a framework for countries without an exiting system • Method • Harmonized criteria for the classification of substances and mixtures • Harmonized hazard communication system – including MSD sheets and labels • Scope • Covers all “hazardous chemicals”

4. Authority • In the USA it will be implemented by rule making by OSHA (MSD sheets and labels), DOT (Transport issues and labels), and EPA (only for pesticides). It is thought (?) that this can be accomplished without legislation. The Consumer Products Safety Commission (CPSC) will also likely play a roll. • It will be implemented by similar authorities on a country by country basis over the next 5 – 10 years. EU will implement as part of REACh • Items currently in commerce are expected to be allowed to be sold without label changes during a transition period.

5. Label Elements • Pictograms • Signal Words • Hazard Statements • Precautionary Statements with Pictograms • Product Identifiers • Supplier Details Many of these elements are “new” in the USA but have been used around the world for decades

6. GHS – MSD Sheets Format – the order of listings has been changed! • Identification 9. Properties • Hazard Identification 10. Stability & Reactivity • Composition 11. Toxicological Details • First – Aid Measures 12. Ecological Information • Fire-fighting Measures 13. Disposal Considerations • Accidental Release Measures 14. Transport Details • Handling & Storage 15. Regulatory Information • Exposure/Personal Protection 16. Other Information

7. GHS - Conclusion • It does not require any new testing – but “end point” changes might require additional hazards warning and statements. • New requirement in the USA for the use of symbols may increase concerns in consumers. • It does contain “suggested” testing protocols if new tests are to be performed. • More Information? - All of the details are on the Web! Google GHS also www.osha.gov/dsg/hazcom/ghs.html www.enece.org/trans/danger/publi/ghs/ghs_welcome_e.html

8. Warning: Its now final, but the implementing rules and regulations have not yet been publishedREACh • R – Registration • E – Evaluation • A – Authorization • Ch – Chemicals Foundation Precautionary Principle Substitution Principle

9. Macro Concerns • Can an “Agency” that does not currently exist scale-up in less than a year to handle this burden? • Time • Gathering information and submitting to the Agency • Dealing with consortia • Estimated time to prepare technical dossier per product = 1 week • Estimated time to prepare safety assessment per product = 1 week • Withdrawal of products • Confidential Business Information. • There will be public access to every substance a business offers, also the public has a right to ask for Chemical Safety Report that may contain CBI. • Many SME will disappear under this burden

10. Macro Concerns Continued • Costs • Testing costs (assumes no existing data, source NOTOX) • > 10 MT ~ $100,000 • < 10 MT but >100 MT ~ $300,000 • < 100 MT but > 1,000 MT ~ $1,500,000 • > 1,000 MT ~ $2,000,000 • Product substitution and reformulating costs. • Fees payable to the Agency – expected to vary from about $1,500 for >10 MT to about $31,000 for <1,000 MT per registrant. SME’s to receive a 25% discount. There are also expected to be discounts for consortium participants.

11. Macro Concerns Continued • 1 substance – 1 registration: May make it very difficult to differentiate your product from your competitors. May expose “niche” markets to your competitors. • Mixtures & Blends (Preparations) can not be registered. • Items not “pre-registered” will be treated as new entities once this process is closed – 12/01/2008 – no Grandfathering! • Importers of Articles, as well as “downstream users” many of whom don’t have a clue about “chemicals” will need to understand these regulations. • Unlike EINCS and TSCA, includes materials produced in the EU but not consumed in the EU.

12. IT HSES R & D Law Purchasing Manufacturing REACh Logistics Sales/Marketing Business Finance Internal Groups that need to be involved in REACh Implementation (courtesy Afton Chemical)

13. Phase in Schedule • Carcinogens – Mutagens – Reproductive Toxins subject to Authorization > 1 MT/year = 3.5 years – 12/1/2010 • >1,000 MT/year = 3.5 years - 12/1/2010 • 100 MT – 1,000 MT/year = 6 years – 6/1/2013 • 1 MT – 100 MT/year = 11 years – 6/1/2021 • Very toxic substances that may cause long term harm < 100 MT/year = 3.5 years – 12/1/2010 • Assessments begin 18 months prior to due date • Pre-registration 6/1/08 to 12/01/08 – it is expected that there will be no fee associated with pre-registration and the list of such substances should be published by 1/1/09. Anything not on this list will be considered a new substance.

14. RegistrationNo Data, No Market • Registrant means the manufacturer or the importer of a substance or the producer or importer of an article submitting a registration for a substance. • Manufacturer means any natural or legal person established within the Community who manufactures a substance within the Community. • Importer means any natural or legal person established within the community who is responsible for the import. THIS ENTITY WILL BE RESPONSIBLE FOR EVERYTHING THAT FOLLOWS!!!

15. Only Representative • A legal person within the EU that has been appointed by an establishment outside the EU to fulfill his obligations for this regulation. • This representative shall also comply with all other obligations of importers under this regulation and shall have sufficient background in the practical handling of the substance and keep available sales data, including a customer list, as well as up-to-date MSDS, etc. Thus implies that this “person” can not be a “shell”. • If an “only representative” is appointed, importers will then be considered down stream users.

16. Registration Categories • Less than 1 MT/year in commerce (exempt) • 1 MT to 10 MT/year in commerce • 10 MT to 100 MT/year in commerce • 100 MT to 1,000 MT/year in commerce • More than 1,000 MT/year in commerce • Intermediates – a substance that is manufactured for and consumed in chemical processing and is transformed into another substance. Non-isolated intermediates are not covered by this law. • Polymers are exempt but monomers are included • Articles are not covered – unless they are intended to release 1 MT/year or more of a substance. (Thought starter: A pen is an article that releases a substance.)

17. Key issues for Exporters to Europe • Selling into the EU will on a “CIF” basis will be impossible unless your customers are willing to be “Registrants”. • If you are not an EU “Person” then you will need an agent to be the Registrant. If you have an existing relationship, now is the time to be sure that you will be satisfied with this “Person” for the long term. • One Registrant is preferable to several since there will be fees associated with each registration – therefore if you have a “country by country” strategy, it may need to be re-evaluated. • Registrant will be responsible for notifying the agency about issues that are often confidential including locations, end uses and over all volumes. This is further complicated if you have multiple agents. • Registrant will also manage cost savings through consortium. • Enter the market now so that you can pre-register your products – entry after this rule comes into force will be much more difficult and costly.

18. Key Issues for Importers from Europe • Items produced in the EU solely for export, many of which are not currently ENICS registered, are included in REACh. Could cause product withdrawals. Will also “catch” materials such as agrochemicals, pharmaceuticals, food additives, etc. that would otherwise not be included if registered in the EU. • Competitiveness - REACh testing costs will not be included in chemicals sourced from other lands. • Product reformulations necessary to maintain EU market presence may affect your end uses and economics. • Many SME’s will be shrinking their product offerings – may affect their ability to supply.

19. Evaluation • Registrant required to submit data to the agency based on the production level. Agency to then decide if the data is adequate to issue a registration number – one product – one registration. It is expected that 30,000 substances will be registered! • If you choose not to undergo this process, Customers and the Agency must be so notified in advance. • Data requirement list, by category is available upon request.

20. Key issues for Exporters to Europe • Who will be your registrant? • Data – availability and cost. • Confidential Information, including registration level, end uses and exposure data will be public. • Will all of the components your customer needs “survive” this process. • Substitution Principle – could effect operations in other parts of the world, as the “Greens” will be carefully monitoring any action taken by the agency. • Strict Liability – Producer Pays – including downstream liability. NO REGISTRATION - NO MARKET

21. Authorization • A manufacturer or importer or downstream user shall not place on the market a substance that is included in Annex XIV, without Authorization. • Materials included in Directive 67/548/EEC, categories 1 & 2 are all likely candidates for Annex XIV. This directive is almost 200 pages in length – with many listings, by CAS number, on each page. • Each authorization shall be accompanied by a test plan to substitute it for something safer. • Goal is the elimination of use in the EU of any substance requiring Authorization. • Authorizations will be end use specific, and will have termination dates • Estimated cost per authorization application: $75,000/use.

22. Key issues for Exporters to Europe • It will be difficult and expensive for EU consumers to use items subject to authorization. (Note: All four of the currently used base oils in news inks are class 2 carcinogens in 67/548/EEC) • Suppliers need to understand if other components consumed by the customer are potentially subject to Authorization since this might effect your sales. • May accelerate the movement out of Europe for finished chemical products as well as articles including printed matter, furniture, etc.

23. Information Sources • Trade Associations – SOCMA, CPMA, ACC, CEFIC, CIA & other EU based National Associations. • Agency is to have a help desk – though by then it is probably too late. • Consultants and Testing Companies • Customers, Competitors, Distributors • Internet – Everything is to be Published

24. Web Sites • http://europa.eu.int/comm/enterprise/reach/index_en.htm • http://europa.eu.int/comm/environment/dansub/home_en.htm • http://www.cefic.be/ • http://www.cia.org.uk/newsite/ • http://www.americanchemistry.com/s_acc/index.asp • http://www.socma.com/ • http://www.etad.com/ • http://www.etad.com/etadna/committee_us.php • http://www.reachready.co.uk

25. OPPORTUNITIES for Non-EU Economies • Support “article” producers in non-EU economies. • Someone else’s product withdrawal may become your opportunity. • Increased awareness of customer needs. • New partnerships. • Clearly – it will be quicker, easier and less costly to innovate outside the EU – do it in the USA!!!

26. “Opportunity” • Approach all of your EU customers that act as “importer of record” and offer to relieve them of this burden. • Use global offices to seek-out companies that ship materials into the EU and offer to provide “registration services”. • Consider producing “up-stream” products where continuing production in the EU will be problematic. • If EU based, Register and then become a supplier of your raw materials to other EU consumers.

27. Way Forward • If you have no sales or purchases from the EU – this will have no affect on your business – for now. • Purchases from the EU? • Survey suppliers to be sure that they intend to comply with this regulation, even if they do not have any EU customers. • Sales to the EU – either direct or through others? • Prepare to pre-register all of the ingredients in your formulations – may mean that your supplier needs to release CBI on any formulations you purchase – if he is not registering. • Survey all of your suppliers to find out if you can “piggy-back” on their registration. • Appoint an “only representative” to administer your needs • Seek out consortia to partner on specific ingredients and identify who will be the “lead registrant”.

28. Final Comment “We suspect that what we are seeing now is close to the end result and it is what we will have to live with. The mood in Brussels is to get on to something else. Until, that is, some of the real effects on jobs, innovation, and companies become clear and ‘drastic reappraisal's set in; too late.” A quote from a presentation made by Dr. Brain Murphy, Robinson Brothers Limited in London January 17, 2006

29. Thank You V.M. (Jim) DeLisi Fanwood Chemical, Inc. P.O. Box 159 Fanwood, NJ 07023 908-322-8440 jdelisi@fanwoodchemical.com