"REACH is too week and requires further data quality assurance"

A coherent and effective regulation of chemicals relies on the availability of information about relevant properties, such as toxicity and persistence. Lack of information is, however, a serious obstacle to the assessment and management of chemical risks. At the 2002 World Summit on Sustainable Development in Johannesburg, countries identified “lack of sufficient scientific information for the assessment of risks entailed by the use of a great number of chemicals” as a major problem. Yet, due to the large amount of chemical substances in use, compilation of sufficient information on the properties of chemicals is an ambitious undertaking.

Since the companies that manufacture and import industrial chemicals are more readily able than government officials to generate information to assess chemical risks, it is more efficient to place the burden of information generation on industry than on government. The question is then how to gather such information and ensure that it is truthfully reported and, given the large number of chemicals to be tested with limited time and resources, how to decide which ones should be prioritized.

REACH—the regulation on the registration, evaluation, authorization, and restriction of chemicals in the European Union—is intended to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of the thousands of chemicals commonly used in the EU. REACH was adopted in December 2006 and it entered into force on June, 2007, with a phased implementation of over a decade. When fully in force in June 2018, it will compel all companies manufacturing or importing chemical substances into the EU in quantities of one metric ton or more per year to supply the European Chemicals Agency, ECHA, a minimum safety-related dataset for a large number of existing and new chemicals.

Nevertheless, ten years after its implementation, it is evident that a fundamental problem of REACH is that as a regulatory instrument, it is too weak to achieve a reduction of the use of hazardous chemicals to safeguard against adverse health effects and damages to the environment. Indeed, the underlying assumption of the registration and evaluation programs is that with greater information on the hazardous properties of chemicals, companies will improve risk management voluntarily, as a matter of good business practice. However, even though REACH had led to the production of more information, the case for regulation has remained largely unchanged.

Moreover, the incentive structure of REACH is inversed in the sense that if producers signal concern by disclosing or overstating the hazardousness of the chemicals, public authorities or the wider public will intervene via mandatory regulations or bad publicity. In other words, producers have an incentive to underestimate risks in order to avoid mandatory regulations and preserving self-regulation. It can be doubted that such mechanisms create sufficient incentives in absence of sufficient data quality assurance into the registration process to counterbalance such pervasive incentives.

Unfortunately, such a system of quality assurance is not in place, as evidenced by the significantly large proportion of registration dossiers that have left a lot to be desired. In 2016, for instance, ECHA published a REACH Progress Report on the results of dossier assessments. Critical data was missing in about 90 percent of the 184 examined registration dossiers, and the non-compliant companies were therefore asked to provide the missing information. Companies also failed to update their data regularly, even though REACH instructs them to do so. Ensuring that the knowledge gap is closed by refusing or withdrawing registration if dossiers are not complete or of appropriate quality is thus an urgent area for improvement.

An additional area for improvement concerns the fate of information once generated. We should make sure that the information generated to date under REACH leads to fewer risks to human health and the environment. The use of economic instruments and disclosure mechanisms can help bringing the environmental costs caused by the use of hazardous inputs into the prices of goods produced in the economy, furthering the incentives for substitution and reduced toxicity of chemicals. The experience with risk-based pesticide taxation in countries like Denmark where pesticide taxation is based on a risk indicator that accounts for environmental toxicity load, human health load, and environmental fate and behavior load, tells us that risk-based taxation is feasible and that it can be implemented based on the same type of information as that provided in the REACH registration dossiers.

Moreover, the Swedish experience with taxes on chemical substances used in electronic tells us that the use of complementary measures to speed up the EU transition towards safer products is viable. Tax revenues can be used to support innovation and cover administrative costs, and in particular, providing funding to increase the stringency of the quality assurance activities performed under REACH. Finally, the effects of economic instruments can be increased further by the use of disclosure mechanisms such as the Toxic Release Inventory or the Candidate List under REACH since reputation has shown to be a key element in improving the performance of chemical regulation.