REACH Exceeds Industry’s Grasp?

The new European Union law, Registration, Evaluation, and Authorization of Chemicals (REACH), has been in effect since June 1, 2007. It is part of a larger EU strategy to drive industry toward more sustainable use of resources and greater control of environmental impacts. The complex piece of legislation, 278 pages in length with over 1,000 more pages of still-incomplete guidance, took nearly a decade to pass and is considered one of the most critical in the last 20 years. The strict regulation places the burden on business to show that the chemicals it uses are safe. It prods industry to replace dangerous chemicals with safer ones and to research and develop new products.

REACH now requires that all chemicals that are manufactured in or imported into the EU in quantities of one metric ton or more per producer or importer per year must be tested for health and safety and registered with the European Chemicals Agency, a newly formed central authority located in Helsinki, Finland. Businesses will be required to stop using substances of very high concern (SVHC) unless they receive authorization from the European Chemicals Agency, an authorization that might be granted under specific circumstances and must be regularly renewed. SVHCs could in the future be restricted or banned completely. It is estimated that 30,000 chemicals will be registered over REACH’s eleven-year phase-in period.

For many OEMs, the title of the regulation seems to imply that they are not at risk. “They immediately turn off,” says Michael Kirschner, president of Design Chain Associates, LLC in San Francisco, California. “They think ‘That’s not us. We don’t have to worry about it. We don’t produce or sell chemicals.’ ” It is true that most article manufacturers may find that their finished products do not have to be registered. The scope of REACH includes all individual chemicals on their own or in preparations, but in articles only if the substance is intended to be released during normal and reasonably foreseeable use of the product. The risk, Kirschner points out, is in the disruption of the supply chain. Shell-shocked from the hammering it took during the run-up to ROHS and other similar directives, many in industry are frustrated. “They’re turning off,” says Kirschner. “They’re saying, ‘This is ridiculous. No more.’ ” But he cautions that a proactive stance is imperative to their survival. Though he believes that most businesses viewed recent regulatory upheavals operationally, what’s needed is a forward-looking and far-reaching strategic shift.

“In almost all manufacturing industries,” says Kirschner, “we focus and take great care and are proactive in dealing with the technical properties of the materials and parts we’re using to build products. We are fairly good at understanding the business properties such as financial liquidity, how a supplier operates, what their technology roadmap is, what their capabilities are. But where most companies really fall down is in taking into account the environmental properties of the materials, components, and parts in their products.” In part, the problem persists because standards are not available or those who need them are not aware of them, says Kirschner. “We’re unaware of standards for how to identify and measure those environmental properties,” he says. The required data is lacking, and “a lot of companies don’t have the expertise in house to be able to understand and incorporate those parameters and properties into their supplier- and component-selection processes.”

The solution, in Kirschner’s view, is in a cross-industry spirit of collaboration to develop new ways to be more fleet-footed and flexible. “We’re going to be reactive with REACH for the next year and a half [the period of preregistration],” he adds. “We’re going to try to smooth that road out as much as possible, but it’s becoming very clear that we have to take a proactive approach that requires some really innovative thinking and action and a lot of sweat.” He hopes that industries can join together and work with standards organizations and governments, he says, “doing the precompetitive cooperation that I think is necessary to produce a basic set of properties and information that is crucial to making decisions.” He cites the formal ANSI REACH conference in Baltimore in August 2007 and the NIST summit the year before as examples of that cooperation. Once that initial work is done, he believes, “then we can go ahead and compete on those environmental metrics, just as we do on all of the technical and business parameters. Eventually, it’s just going to become part of how companies do business.”

Michael Kirschner is president of Design Chain Associates, LLC, a consulting firm that advises electronics OEMs on robustness of the supply network and risk mitigation.

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