UK Government warned that no-deal Brexit REACH plans are ‘vague and insufficient’

THE UK Government has published draft legislation for chemical registration in the event of a no-deal Brexit, but the proposed plans have come under criticism from the chemicals industry and from the House of Lords.

The main piece of EU legislation currently governing chemical registration is REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), which is implemented by the European Chemicals Agency (ECHA). The UK government has proposed to implement UK REACH in the event of a no-deal Brexit. The Department for Environment, Food and Rural Affairs (DEFRA) and the Health and Safety Executive (HSE) released guidance last year on how chemical regulation would be handled in the UK. The House of Lords EU Energy and Environment Sub-Committee expressed concern in November 2018 over the guidance and called on the government to clarify how UK REACH would work and put forward a more credible plan for collecting data on chemicals.

Inadequate government response

On 4 January, the government responded to the House of Lords report but still failed to clarify or address all of the concerns raised in the report. A letter from Lord Teverson, Chair of the Sub-Committee, to DEFRA Minster Thérèse Coffey on 16 January called for further clarification and criticised the government’s “vague and insufficient” statements on how the HSE and the Environmental Agency would regulate chemicals. The letter also queried if the government had assessed the impact that the cost of dual registrations under both EU and UK REACH will have on the range of chemicals available in the UK.

"Last year we were hugely concerned about the scale of work that needed to be done to maintain adequate chemical regulation in light of Brexit, and frankly the minister's response to our report has done little to alleviate our concerns,” said Lord Teverson. “It seems Brexit could leave us without a functioning and populated UK chemicals database, without an independent and transparent process for risk assessments, and without access to the thousands of chemicals produced by EU-led companies. I hope the minister can provide further assurances on the measures that are being put in place, otherwise we risk a severe impact on the UK chemical and manufacturing industries, and potentially on human and environmental health."

Draft regulation

On 9 January, the UK Government published a draft statutory instrument (SI), which would act as legislation for UK REACH if the UK leaves the EU without a deal. The legislation sets out further details for registrations, saying that while qualifying registrations held by UK companies will be automatically transferred to the new system, the registrants will still be required to resubmit data. The SI also said that any UK company currently buying chemicals from an EU27 country under EU REACH will become an importer after 29 March and must register those chemicals with UK REACH.

A Regulatory Policy Committee report found the government’s proposal fit for purpose, but highlighted the need for more accurate information on data transfer and costs.

A report by the House of Lords Secondary Legislation Scrutiny Committee released on 7 February raised concerns over the draft regulations, saying that the proposal has insufficient information on the expected impact and doesn’t provide financial analysis on the potential costs to the industry, particularly in relation to the cost of obtaining data needed to register a chemical with UK REACH. The committee also raised concerns on the ability of UK companies to maintain access to the EU market unless they move their registrations to an EU27 country.

On 8 February, the ECHA announced that it would open a Brexit “window” from 12–29 March to allow UK companies to transfer their registrations to an EU27 representative.

Industry concerns

According to The Guardian, more than 50 chemicals companies in the UK have already moved registrations to EU27 countries. The article also noted that managing UK REACH could be a burden for the HSE, which is already under pressure to make 19% spending cuts by 2019–20.

Marco Mensink, Director General at the European chemicals trade group Cefic, told ICIS that in the event of a no-deal Brexit: “The UK will not have access to databases, and will not have voting rights in ECHA either. Companies will have to register substances both in the UK and the EU. The challenge coming will be that you will have to have two registrations.”

A survey of 38 UK companies by the Chemical Business Association (CBA) has found that 75% of them don’t own the data that would be required for them to register chemicals under UK REACH. The companies currently hold a combined 351 registrations under EU REACH. Peter Newport, Chief Executive of the CBA said: “It is not a simple proposition, as the government assumes, for UK companies to access this testing data. It is a commercial decision for its owners – generally consortia of European companies – not by ECHA or by UK business. This fact renders the government’s current proposals unworkable.”

The survey found that 29% of companies are currently in discussions to obtain the data, but only 8% have agreed a fee. The companies surveyed will also have to register an additional 1,266 registrations as an importer.

“If a no-deal Brexit takes place on 29 March, all EU REACH registrations held by UK companies become invalid,” said Newport. “Yet the industry requires continued frictionless access to the EU market, the destination for 60% of the UK’s chemical exports. The only way for this to be achieved is through an ‘Associate Membership’ of ECHA or some arrangement guaranteeing regulatory compliance with the EU regime and allowing continued access to European markets – even in the case of a no-deal Brexit.”

Richard Carter, Managing Director of BASF UK and Ireland, told Ready for Brexit: “The thought of having to re-register with a UK REACH equivalent if there is no deal and if there is no recognition equivalence is a huge concern for BASF. We have one thousand substances where we are the holders of the registrations. Everybody can do the maths, we don’t know the cost for re-registering, but times that by one thousand times and it could be very significant.”

At a conference organised by the Consultative Commission for Industrial Change (CCMI) and the European Economic and Social Committee (EESC), Ian Cranshaw, Head of International Trade at the Chemical Industries Association (CIA) said that UK industries had already invested £6m (US$7.82m) to comply with EU REACH. He said that it did not make sense for UK companies to pay again to register with UK REACH. Cranshaw also said that a CIA survey of the companies it represented showed that not a single company said that Brexit would be of any benefit to them.

A joint statement by Mensink and Steve Elliott, the Chief Executive of the CIA, said: “What our industry and the whole economy needs is an agreed Brexit deal. Businesses are increasingly preparing for a no-deal outcome with all the implications that has, for not just the UK, but for Europe as a whole. The deadline is fast approaching. We hope the negotiators put the finishing touches to an agreement that commands support from within the UK and across Europe”