Firms unprepared for REACH deadline |
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| Tuesday, 11 March 2008 | |
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Some companies have not taken adequate steps to comply with new chemicals legislation.
A survey released by PricewaterhouseCoopers, entitled Waking up to REACH, found that two in five companies have limited awareness of the Registration, Evaluation and Authorisation of Chemicals (REACH) regulation despite a 1 December 2008 deadline. No impact on operations Preparation for REACH outside Europe and the chemicals industry is particularly low. This could cause significant business disruption through supply chains. The pre-registration process for REACH starts on 1 June 2008, which provides manufacturers and exporters of chemicals to Europe six months to complete the process. In anticipation of this looming deadline, PricewaterhouseCoopers surveyed 241 senior executives across six industries in 29 countries to gauge readiness and reaction to REACH. The survey shows that one in four executives feels that REACH, which places greater responsibility on the industry to manage the risks that chemicals may pose to health and the environment, will have no impact on operations. Good practice and good governance Hans Schoolderman, director of sustainability & climate change services, PricewaterhouseCoopers Netherlands, explained that the pre-registration process is not very time-consuming and but is required if companies will secure access to the EU-market. He said that, if handled properly, the legislation can enhance the bottom line by increasing the customer confidence in product safety. “Consumers have little to no tolerance for chemicals that are a risk to human health and the environment. It is good practice and good governance for companies to be transparent to their customers regarding their products and the safe use of the products – and REACH will help get us there,” according to Schoolderman. The survey found that large companies have greater awareness of the legislation than smaller ones and that European companies are best prepared for REACH, as they are most aware of the legislation. Maintain supply chains REACH is not just a concern for chemical producers because the legislation affects downstream users of chemicals. Chemical companies lead the way on awareness, followed by pharmaceuticals, industrial manufacturing, forest, paper and packaging, retail and consumer and automotive. The European Chemicals Agency (ECHA) estimates between 10 per cent and 30 per cent of classified chemicals that are listed with the ECHA will disappear as a result of REACH. Early communication with downstream companies and suppliers, whose businesses may be adversely impacted by the disappearance of these substances, is essential to maintain supply chains. Most North American respondents to the survey had not discussed REACH with customers or suppliers, however, and only half of European companies said they have initiated contact with suppliers concerning REACH. Risk assessment PricewaterhouseCoopers warned that this apparent lack of action to contact suppliers and engage in discussions with downstream companies and customers may negatively affect business. Most organisations said they have not yet completed risk assessments on how REACH will impact their businesses. Only 10 per cent had completed a detailed assessment and 31 per cent had no risk assessment at all. Asia-Pacific and North American companies are the least prepared in terms of carrying out the necessary level of risk assessment to measure the impact of the REACH legislation. Failure to meet the terms of REACH could lead to a ban on exports to the EU so compliance is relevant to producers around the world, not just those in Europe. Those executives surveyed who are in the know about REACH said there would be risks to implementing the law. Over half cited the cost and time involved, followed closely by supplier risk (49 per cent). Compliance deadlines Only 14 per cent of executives surveyed feel REACH will have a positive impact on their businesses; the majority are withholding judgement until the legislation comes into effect. When asked what action companies were most likely to take as a result of the REACH legislation, an overwhelming 66 per cent said to ensure suppliers adhere to REACH compliance deadlines, otherwise known as supply chain assurance. Another 46 per cent said they would take action to help suppliers comply with REACH, and 45 per cent said the legislation would require them to renegotiate or modify their supplier contracts. Saverio Fato, global chemicals leader at PricewaterhouseCoopers, warned that only those companies that meet pre-registration deadlines for REACH will truly capitalise on the legislation. “This includes continuing to operate business as usual and qualifying for an extended timeline to register existing substances used in the European market. REACH-compliant businesses can potentially be seen as forward thinking, responsible and efficient,” he concluded. Related articles
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