On 22 September 2015 the CRM Alliance, of which the MMTA is an active member, came together in Brussels to participate in a luncheon event sponsored by CRM Alliance member, Etimine S.A., from Luxembourg. Etimine SA was established in 1984 and is a subsidiary of Eti Maden IGM, a Turkish state-owned company. It is the biggest borate producer in the world and also has the largest share of the world boron market.
The luncheon event focused on a highly sensitive issue for several critical raw materials – EU environmental legislation (REACH), with a particular focus on borates. Since the EU is highly dependent on the import of borates and other CRMs into the EU from third countries such as Turkey and the United States, the discussion generally centered on the impact REACH has on trade.
Concerning REACH, the CRM Alliance advocates having the socio-economic assessment undertaken at the beginning of the REACH process, rather than at the end. For critical materials this would mean that it could be concluded at an early stage that authorization, restriction or Candidate Listing cannot be realistic options, given their socio-economic importance. Other risk management options could then play a more important role, such as Occupational Exposure Limits for workers.
The CRM luncheon event was hosted by Member of the European Parliament Prof. Carlos Zorrinho. Speakers representing the European Parliament, European Commission and affected industry representatives presented their views to the audience. A lively Q & A session followed.
Speaker Bjorn Hansen, Head of Unit at DG Environment and in charge of REACH could be called one of the founding fathers of REACH. Although Mr. Hansen was of the opinion that REACH has so far proven to be a success, he was very interested to hear the opinion of industry concerning its REACH experiences and how industry and regulators might find solutions to current problems. He explained that while his REACH colleagues at DG GROW work on ensuring access to critical materials from the industry side, his task within REACH is to protect human health and the environment. The final goal of REACH is to ensure a level playing field, as well as to promote innovation and European industrial competitiveness. Although those tasks seem to be far apart, they also have commonalities.
Firstly, he explained, through its requirements and transparency, REACH establishes a level playing field. Not just for economic importers of substances but also between substances. REACH tries to include safety aspects into the actual marketing of the products, and internalises not just the cost but also the safety know-how of the products being sold.
Secondly, REACH establishes an obligation to use substances safely. This intentionally includes the pressure to substitute certain substances. Mr. Hansen believes this objective to have a positive effect on CRMs. By using a substance sensibly, the result is that a hazardous substance is not used if there is a less hazardous substance available. Since many CRMs are hazardous, REACH puts pressure on actors using those substances to look for substitutes and rewards those actors that use substitutes where possible. Moreover, it increases the efficiency of the use of all chemicals such as critical materials, as REACH helps to reduce the wastage of CRMs, and therefore ensures their availability for those applications critical for the EU economy for which there are no substitutes.
Concerning the recent European Court of Justice ruling on “once an article always an article”, Mr Hansen explained that this ruling effectively creates parity between importers of articles and EU manufacturers, whereas previously the latter had a perceived competitive disadvantage vis-a-vis competing importers. In his opinion there would be no scope for this ruling to be challenged at WTO level.
Given the very definition of a CRM as being of particular importance to the EU, Mr. Hansen stated that there is a specific role in REACH for CRMs. REACH is based on a sequence of decisions, starting with risks, ending with RMOAs. If the socio-economic importance can be demonstrated, it can influence decision-making, which means there is room within its current frame. However, he was also aware of the fact that authorization is very complex, while it was initially supposed to be much simpler. In practice this means that for substances such as the borates which are used in many applications, the process is not only very complex, but also very costly. A solution for this issue is yet to be found.
Successes of REACH are also clearly visible, Mr. Hansen stated. Using borates as an example, according to their chemical safety report, the borates industry is using borates safely. Many substances already registered have qualitatively high registration dossiers which has resulted in a significant improvement in risk management. Listing substances as Substances of Very High Concern provides an extra check to see if the risk is properly controlled by industry and whether the substance’s continued use is justified from a socio-economic perspective. To bring industry and regulators closer together, special meetings take place between the European Chemicals Agency, the European Commission and industry associations. Specific industry concerns should be raised through these channels. Studies indicate that the registration process was mainly very expensive due to a lack of transparency. Therefore, the substance exchange forum was set up to ensure that data holders transparently declare the costs of the data they hold. In Mr. Hansen’s view, once companies understand why they have to pay 10,000 EUR to register a substance, they generally pay.
The final speaker was Bayram Ankarali – General Manager of Etimine S.A. who provided the audience with a clear overview of the pressing situation in which the borates industry currently finds itself.
Dr Paul Rübig – Member of the European Parliament’s center-right party and member of the MEP Interest Group on Critical Raw Materials, stressed that given the current situation the EU finds itself in regarding global competition, ‘if we suffer from unemployment with many new migrants looking for new jobs, we need to look to stay competitive’. ‘How do we keep our employment in the important area of critical raw materials?’
One of the major issues he mentioned, is how to bring back industry, since industry is leaving the EU. The EU has gone from a figure of 15% to 14% reindustrialisation, while the target is to achieve a level of 20% by 2020. REACH is pushing hazardous substances off the market, whether necessary or not. Therefore the European Commission has to initiate legislation to better protect critical raw materials. It is then up to the co-legislators to make it official legislation. Dr Rübig underlined the importance the MEP Interest Group on CRMs plays in this regard, since it is essential that some MEPs look more closely into the different issues at stake, such as sustainable environment, resources, jobs and growth.
Terence Civic – Health, Safety and Regulatory Affairs Director at Materion Corporation, mentioned that the ECJ ruling on “once an article always an article” places an extreme burden on borates or beryllium. It is not only importers and manufacturers which have to address who uses those substances that are added to the Candidate List. Now a burden is placed on upstream suppliers that may not even be subject to REACH. Mr. Civic wondered whether importers are now having to go to third countries and if this would be a WTO violation.
The EU Commission responded to Maria’s question with information on two approaches they are taking. The first is to ensure transparency from Consortia on how they calculate the costs which they recoup from the later registrants. This reassures the company that what they are paying to register a substance reflects the cost of putting the information together. The second action is discussions at the Directors’ Contact Group, where the Commission meet with trade association to talk about practical solutions for problems facing registrants. One such action is allowing a company to register on time but to submit their statistics at a later date, which lessens the pressure on a small business.
Chris Dagger – Chairman Europe of the International Magnesium Association, questioned the validity of the data used in the reports by the UK and the NL finding that only 1-2% of the administrative burden is imposed by EU environmental legislation, as mentioned by Mr. Hansen. He also wondered how individual REACH consortia should price the contribution of newcomers of having done the initial research to be REACH compliant.
Sean O’Sullivan – Regulatory Affairs Manager at Glencore, was of the opinion that whilst REACH as a framework is certainly recognized to be solid and sound in what it wants to achieve, nonetheless there is an assumption of guilt before innocence. He underlined the problems industry is experiencing with Candidate Listing. He mentioned that in reality, candidate listing is a stigmatization of an issue. Once a substance is put on this Candidate List, downstream users will stop using those substances, regardless of whether they can be replaced or not. According to Mr. O’Sullivan this is an unintended consequence of REACH and the authorization process. Policy-makers should be aware that industry wants to play a sensible and responsible role in this process, but if the European Commission and other regulatory authorities are not willing to engage meaningfully with industry and accept independent reports then industry has some very serious questions which have to be addressed. According to Mr. O’Sullivan, it would have been easier if authorization was not driven by the ethos of substitution.
Ines Vanlierde – Secretary General of EuroAlliages, stated that nearly 5 years after the first REACH registration deadline there is nothing in practice that has been put into place at customs to determine whether imports are REACH compliant or not. This means that importers who have made the effort and costs to be compliant, are now disadvantaged. She wondered therefore where the level playing field is, as well as what the sanctions are for not complying. “Where is the control at the border to ensure that everybody is obeying the rules?”
This was a point which found general agreement amongst attendees and speakers alike, but for which there did not seem to be a ready solution. Mr. Hansen, too, agreed that although the function of his department does not extend to import control, enforcement was a key area to be addressed.
Following this successful meeting, the CRM Alliance would like to thank all participants for their interest in the subject and their active contributions made during the meetings. We hope to see you again in 2016.
Summary of CRM Alliance event, produced with permission.