Document Sample

    Background paper by the Netherlands

                 March 2005

                                                      Tjalling Dijkstra
                                                Policy Coherence Unit
                                                         Bert Vermaat
                         Sustainable Economic Development Department
                                            Ministry of Foreign Affairs
                                                       P.O. Box 20061
                                           2500 EB 's-GRAVENHAGE
                                                      The Netherlands

                                             Tel.: +31 70 348 4557/4168
                                                    Fax: +31 70 348 6188

In October 2003, the European Commission published draft legislation on the Registration,
Evaluation, Authorisation and Restriction of Chemicals (REACH).1 The potential
consequences of this and earlier proposals on the European chemical and related industries
have been studied quite extensively. In addition, an Extended Impact Assessment begun by
the European Commission in 2003 is expected to be finalised by the end of March 2005.
However, none of these studies and assessments deals with the consequences for developing
countries. The EC Treaty requires the EU to take account of the consequences for developing
countries of the policies it implements which are likely to affect those countries.2 Therefore,
in the present paper the Netherlands attempts to identify specific possible effects of REACH
on developing countries. It analyses trade flows from developing countries to the EU that may
be affected by REACH and it describes possible consequences for these countries of the
Commission’s proposal for REACH (draft of October 2003).

This paper is not a full-fledged impact assessment, but rather a preliminary study that can
serve as a basis for further debate in the Council. Section 8 presents preliminary conclusions
and recommendations. The Commission is invited to describe what consideration it has given
to the consequences of REACH for developing countries and to present its conclusions. It is
also invited to provide further clarification of the European Chemical Agency’s task of
actively participating in technical assistance and capacity building activities for sound
management of chemicals in developing countries.

REACH will cover all chemical substances traded on the EU market. The notification and
registration requirements for individual producers/importers will depend on the type of
substance and the quantities they handle per year. Developing countries are major suppliers of
chemical substances. In 2003, the EU-15 imported over €5.3 billion of chemical substances
from developing countries,3 or 17% of their imports by value from all third countries (see
Table 1).4 In comparison, in 2003 the EU-15 imported €8.0 billion of chemical substances
from the US, 2.4 billion from Japan and 0.2 billion from Canada.

Table 1: Imports of chemical substances by the EU-15 (cif value, 2003)
HS Code                           Imports of substances         Total imports of   Imports of substances from
                                   by EU-15 from DCs       substances by EU-15      DCs as % of total imports
                                              (EUR m)                  (EUR m)        of substances by EU-15

HS28 (inorganic)                                 1,320                    4,423                         29.8
HS29 (organic)                                   3,467                   23,965                         14.5
HS32 (tannins and dyes)                            539                    3,092                         17.4

Total                                            5,326                  31,480                         16.9
                                                                      Source: EU Expanding Exports Helpdesk
     DCs   = developing countries
     HSC28 = inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals
             and of radioactive elements or isotopes (the radioactive substances are not covered by
     HSC29 = all organic chemicals
     HSC32 = tanning or dyeing extracts; tannins and their derivatives; dyes, pigments, and other colouring
             matter; paints and varnishes; putty and other mastics; inks

The total value of organic chemicals imported from developing countries was much higher
than the value of inorganic chemicals and tannins, dyes and related substances (see Table 1).
However, in percentage terms, the EU depended most on developing countries for its supplies
of inorganic chemicals: developing countries supplied 30% of all imports by value of
inorganic chemicals into the EU-15, compared to 14% of all organic chemicals and 17% of
all tannins and dyes.

The imported inorganic chemicals had the lowest cif value per tonne: EUR 321, compared to
EUR 1,097 for organic chemicals and EUR 3,149 for tannins and dyes.5 With a lower value
per tonne, extra costs as a result of REACH may have a larger impact on profit margins, but
this also depends on the quantities handled by each importer.

The EU imported chemical substances from as many as 99 different developing countries.
China and India were by far the biggest suppliers; they were responsible for 39% and 17%,
respectively, of the total EU-15 imports from developing countries by value. The remaining
imports came from developing countries from all over the globe, including Indonesia,
Thailand and Vietnam in East Asia; South Africa, Guinea and Kenya in Sub-Saharan Africa;
Morocco, Algeria and Egypt in North Africa; Brazil, Jamaica and the Dominican Republic in
Latin America; and Kazakhstan, Georgia and Azerbaijan in Central Asia.

The EU’s import figures show the relative importance of developing countries as suppliers of
chemical substances to the EU. In a similar way, the export figures of developing countries
show the relative importance of exports of chemical substances to the EU for those countries.
In 2003, about one fifth of developing countries’ total exports of chemical substances by
value were destined for the EU. Both in absolute and relative terms the exports of organic
chemicals to the EU were the most important (see Table 2).

Table 2: Exports of chemical substances by developing countries (fob value) (2003)

 HS Code                        Exports of substances         Total exports of         Exports of substances to
                                   by DCs to EU-15          substances by DCs        EU-15 as % of total exports
                                            (USD m)                  (USD m)              of substances by DCs

 HS28 (inorganic)                               1,468                    8,669                          16.9
 HS29 (organic)                                 3,760                   17,770                          21.1
 HS32 (tannins and dyes)                          623                    3,605                          17.3
 Total                                          5,851                   30,044                          19.5
                                                                     Source: UNCTAD COMTRADE database
Note: The import figures in Table 1 and the export figures in Table 3 do not match because of differences in
currency, cif vs. fob pricing and failure to report to UNCTAD by some developing countries.

In conclusion, EU-15 import figures and developing countries’ export figures show that the
trade flows of chemical substances from developing countries to the EU are of major
importance both for the EU and the developing countries. In EU terminology, for purposes of
impact assessment, this means that developing countries as a group should be considered a
major interested party.

Starting eleven years and three months after REACH comes into force, substances in articles
will have to be notified or registered if they meet certain criteria listed in Article 6 of

REACH.6 The range of potentially affected articles is huge. One of the most affected articles
for developing countries will certainly be apparel. Apparel may contain substances such as
dyes that may unintentionally be released during wearing or washing. These dyes must be
notified if they meet certain criteria, and on the basis of this notification it may be decided
that they have to be registered.7

The value of EU imports of apparel from developing countries is more than six times as large
as that of chemical substances. In 2003, the EU imported over €33 billion worth of apparel
from developing countries, or almost three fourths of its total imports of apparel (see Table
3). The EU thus depends heavily on developing countries for its supplies of apparel, and their
market share will grow with the phase-out of export quotas under the WTO Agreement on
Textiles and Clothing (ATC) on 1 January 2005.

Table 3: Imports of apparel by the EU-15 (cif value, 2003)

HS Code                       Imports of apparel               Total imports of     Imports of apparel from DCs
                             by EU-15 from DCs                apparel by EU-15              as % of total imports
                                       (EUR m)                        (EUR m)               of apparel by EU-15

HS61+62                                      33,435                      46,300                           72.2
                                                                         Source: EU Expanding Exports Helpdesk
HS61 =     knit and crochet apparel
HS62 =     non-knit and non-crochet apparel

The EU-15 are a major export destination for apparel from developing countries. In 2003, 93
developing countries exported apparel to the EU-15. Almost 30% of their apparel exports by
value were destined for the EU-15 (see table 4). Major EU suppliers included China, Turkey,
Bangladesh, Tunisia, India, Morocco, Indonesia, Pakistan, Thailand, Mauritius, Vietnam,
Cambodia, Sri Lanka and the Philippines. This is expected to change, however, with the
expiration of the ATC and the lack of international competitiveness of some of the
preferential suppliers in a more competitive trading environment.

Table 4: Exports of apparel by developing countries (f.o.b., 2003)

 HS Code                Exports of apparel            Total exports of apparel by          Exports of apparel to
                         by DCs to EU-15                           DCs (USD m)        EU-15 as % of total exports
                                 (USD m)                                                      of apparel by DCs

HS61+62                            26,428                                89,108                     29.7
                                                                        Source: UNCTAD COMTRADE database

It can be concluded from the example of apparel that developing countries are also major
interested parties when it comes to the aspects of REACH that relate to substances in articles.

There is a lack of reliable data on the size of enterprises in developing countries that produce
chemical substances for export to the EU. Resource persons8 concur, however, that the
majority are small and medium-sized enterprises (SMEs) with 10 to 300 employees.9 In
addition to these SMEs, a limited number of locally-owned large companies and local
subsidiaries of multinationals produce and export chemical substances to the EU.

The SMEs in developing countries are generally in no better position than SMEs in the EU
itself. ECORYS and OpdenKamp Adviesgroep reviewed 36 studies of the impact of REACH
on European society and business and arrived at the conclusion that small and medium-sized
manufacturers and importers are affected by REACH to a greater extent, since they have
smaller volumes over which to distribute the costs for registration and testing. SMEs produce
more substances in small quantities than do large companies, and the costs of registration for
substances are much higher per tonne if they produce between 1 and 10 tonnes than if they
produce 10 tonnes or more.10

REACH may have consequences for developing countries in four areas:11
• the registration of existing substances,12
• the testing requirements,
• the notification/registration of substances in articles,
• the national development impact.

5.1    The registration of existing substances
The very complexity of REACH can be a burden to chemical industries in developing
countries that want to continue exporting to the EU. To import their substances into the EU
under REACH, companies will have to build up knowledge, for example on supplying the
required registration data. The related costs could reduce their profit margins, which may
already be thin.

Like all manufacturers located outside the EU, companies from developing countries will
need their EU importer or their EU representative to submit a registration (REACH arts. 5, 6
and 6a). The importer may not always be eager to carry out the registration procedure,
especially when importing a large range of chemical substances from various sources. The
alternative – an EU representative – can be costly, especially in the case of minor trade flows
(in terms of value).

If the importer of the substance is a downstream user himself he may even decide to buy his
supplies from EU producers rather than import them because of the administrative burden of
acting as the registrant for importation.13

An EU importer of substances from developing countries is a potential registrant and
therefore needs to be involved in (1) cost-sharing in relation to compulsory sharing of
vertebrate animal testing data with other members of the Substance Information Exchange
Forum (SIEF)14 and (2) access to a voluntary consortium for sharing of non-animal testing
data. The second issue may be the most problematic. Voluntary consortia are not obliged to
take on new members and large European companies may use this as a means of excluding
non-European competitors. There is no incentive for them to allow importers to join ‘their’
consortium. As a consequence, companies importing from developing countries may have to
form their own consortia to generate the non-animal testing data. This could lead to additional
financial costs and possibly to unnecessary and duplicative testing.

SMEs from developing countries may encounter the biggest problems, because EU importers
will rely on them for the required registration data. They, however, may lack the human
resources to make a thorough assessment of REACH and the financial resources to pay for

external assistance. Importers will be inclined to act as registrants only for the larger
suppliers, and finding an EU representative will be difficult and uneconomical for SMEs
trading in smaller quantities. Voluntary consortia may not be interested in having them as
members, which means that they would have to generate the non-animal testing data
themselves. This would be costly. Consequently, these enterprises might be forced to leave
the EU market.

Finally, enterprises and governments in developing countries have put effort into
implementing the Globally Harmonised System (GHS) of classification and labelling of
chemicals developed by the UN. The current REACH proposal does not, however, work with
HS Codes. The Commission is still considering whether, when and how to incorporate GHS
into REACH.

5.2    The testing requirements
Animal and non-animal testing for REACH registration can be done in any laboratory,
anywhere in the world, as long as it meets the requirements laid down in REACH. Under
REACH, laboratories must follow the Good Laboratory Practice (GLP) Principles developed
by the OECD and incorporated into current EU legislation. This may be appropriate for
developed countries, but may not always be feasible for developing countries, which are not
members of the OECD. Many developing countries have no labs that can provide data
generated in accordance with GLP.

Chemical companies in developing countries and elsewhere may have existing data which
they want to use to register substances under REACH. The proposal allows for the use of
existing non-GLP data under certain conditions, specified in Annex IX, section 1.1. However,
this Annex states those conditions in very general terms, e.g. ‘adequacy for the purpose of
classification and labelling and risk assessment’, ‘valid method for observing an effect’, etc.
The adequacy and validity will be assessed at the evaluation stage of the REACH procedure
by Member States’ competent authorities. This case-by-case approach increases uncertainty
about the outcome of the REACH procedure for registrants that supply existing non-GLP

REACH requires that all new testing take place under GLP conditions. If there are no local
GLP laboratories, companies in developing countries may use laboratories in the EU, but
such labs are usually more expensive than labs in developing countries. Laboratories in
developing countries may adopt the international standard ISO/IEC Guide 17025 (‘General
requirements for the competence of testing and calibration laboratories’) and be certified as
compliant with that standard. However, the ISO/IEC standard was developed for another type
of research than the GLP standard and can therefore not replace GLP. There is no equivalent
ISO standard to GLP.

Developing countries may become observers to the OECD Working Group on GLP and
members of the OECD Test Guidelines Programme. Laboratories in such countries may then
request inspection by the monitoring authority of an OECD country in order to receive GLP
status. India, for instance, has taken this approach. However, many developing countries lack
the institutional strength to follow its example. Some of them could become GLP-compliant
if they received external technical assistance. The OECD secretariat and national monitoring
authorities of OECD countries have very limited funds for technical GLP assistance to

developing countries. The EU might therefore consider contributing to this effort as part of its
REACH-related technical assistance and capacity building program (see also section 6).

5.3     The notification/registration of substances in articles
Substances in articles have to be registered or notified if they meet certain criteria.15 In the
case of registration, developing countries may face the same problems mentioned above with
regard to existing substances, but with a different timeframe (starting 11 years and three
months after REACH comes into force). If the substances only have to be notified (article 6
(2)), the procedure will be less complicated and costly. The obligation to notify certain
substances in imported articles will rest upon the importer. The importer will, however, rely
on the producer for the required information, which can be an additional hurdle, especially for
SMEs in developing countries. Moreover, the volumes of trade in potentially affected
products are much bigger, as illustrated by the example of apparel.

Article 6 (2) may cause problems for producers of articles from developing countries (and
other third countries) because the EU importer of these articles needs to notify all substances
classified as dangerous that are present in the article type in quantities of 1 tonne or more per
year and ‘known to be released during normal and reasonably foreseeable conditions of use
even though this is not an intended function of the article in quantities that may adversely
affect human health or the environment’. The importer will have to obtain all this information
from the producer, which may not always be able to provide it. The third condition, relating
to unintentional release, is especially vague and may cause confusion.

Importers that want to play it safe may tend to notify any dangerous substance in an article,
even if they do not know whether there will be any release during normal use and whether
this release would be large enough to affect human health or the environment. This risk-
averse approach would overload the notification system and increase costs to the importer,
who would pass on those costs to the producer.

Importers may also take the opposite approach and decide, without consulting the producer,
not to notify a substance because they are not aware of any release. This may be advantageous
in the short run but will backfire if a health or environmental problem arises.

EU producers of identical articles will not face such notification-related problems because
their suppliers will normally register the substances they supply.16 This advantage will,
however, have a price, because suppliers will pass on the registration costs to the downstream
user. EU producers of articles will have only registered substances at their disposal, while
non-EU producers of articles will also have the option of using non-registered substances,
notably those not known to be released. This might be an incentive to shift production to
locations outside the EU, including developing countries.

5.4     The national development impact
If chemical companies from developing countries are not able to comply with REACH, the
EU market could be lost to them. As mentioned earlier, the expected impact is largest for
SMEs. For the countries concerned this may result in unemployment and loss of income and
foreign exchange. This potential effect could at least partly be mitigated by technical
assistance and capacity building in the developing countries concerned (see Section 6).

REACH may also lead to redistribution of scarce financial and human resources within
companies that export chemical substances to the EU. As a result, fewer resources will be
available for these companies for other purposes, such as local waste treatment or dealing
with pollution and other environmental problems. REACH may thus negatively affect local
environmental priorities in developing countries.

REACH may have a positive impact on developing countries if production of articles is
moved from the EU to those countries (see section 5.3). That production might, however,
instead bypass them and move to other OECD countries. Whether developing countries
would be chosen as a place of business depends on their labour costs, international transport
costs, national business climate, skilled human resources, etc.

All in all, the national development impact of REACH on the economies of developing
countries is still unclear and may need further study.

Given the complexity of REACH, assistance to developing countries will be of major
importance. The European Commission will create a new European Chemicals Agency to
manage the technical, scientific and administrative aspects of the REACH system. One of the
tasks of the Agency’s Secretariat will be ‘at the Commission’s request, providing technical
and scientific support for steps to improve cooperation between the Community, its Member
States, international organisations and third countries on scientific and technical issues
relating to the safety of substances, as well as active participation in technical assistance and
capacity building activities on sound management of chemicals in developing countries’ (art.
73 (2) (i) of REACH). The Agency will also include a Committee for Risk Assessment, a
Committee for Socio-economic Analysis and a Member State Committee that will perform a
number of tasks, including, at the Commission’s request, ‘active participation in technical
assistance and capacity building activities on sound management of chemicals in developing
countries’ (art. 73 (3) (e) of REACH). No separate Committee is planned for technical
assistance and capacity building in developing countries.

Neither the main text nor the annexes of REACH explain how assistance to developing
countries will be put into practice. There is no description of the envisaged technical
assistance and capacity building by the Agency, no plan for institutional embedding of this
task in the Agency, no budget allocation process for the task, no monitoring mechanism, no
proposed division of labour between the Agency and relevant DGs within the Commission
(e.g. DGDEV, RELEX and AIDCO) and no specification of the required development
expertise. The Agency is supposed to carry out a considerable number of tasks and it will be a
challenge for it to give adequate attention to each of them, including assistance to developing
countries. REACH does not provide any safeguards to ensure that it will do so.

For the moment, timely delivery of assistance is another concern. It is hampered by the fact
that the Agency will not become operational until REACH has come into force. In the
meantime, various DGs bear responsibility for informing and training chemical exporters and
authorities from developing countries, but without sufficient budgets.

The United Kingdom and Hungary have proposed the concept of One Substance, One
Registration (OSOR) instead of the present Commission approach requiring each EU

manufacturer or importer to register the substances it produces, imports or places on the
market. OSOR is expected to increase transparency by allowing simpler administrative
procedures. It would reduce conformity assessment costs to industry, because it would do
away with the need for negotiating access to consortia for mandatory sharing of non-animal
testing data and the related costs. These arguments apply to the chemical industry both within
and outside the EU. It can therefore be concluded that OSOR would be beneficial to chemical
exporters in developing countries.

One of the reasons that the UK Government proposed OSOR was to reduce the potential
negative impact on UK-based SMEs of obstacles to accessing data. The UK anticipates that
the number of companies producing certain substances will be rationalised and that large
companies will see a strategic advantage in not cooperating with smaller firms.17 As a
consequence, smaller firms are more likely to withdraw from the market than larger ones.
With OSOR, the difference between the impact on small firms and on larger ones would be
considerably reduced, if not eliminated.18

This observation holds not only for European SMEs but also for SMEs from developing
countries. As stated above, the majority of the chemical exporting companies in developing
countries are SMEs. It can therefore be concluded that OSOR could be more beneficial to
them than the Commission’s proposal on REACH.

The EU is the largest chemical market in the world. Data on the trade flows of chemical
substances in this paper show that developing countries are a major supplier to the EU market
and that the EU is an important outlet for the countries concerned. In EU impact assessment
terminology, developing countries as a group are a ‘major interested party’.

Resource persons agree that the introduction of REACH, as formulated in the Commission
proposal of October 2003, may have a particularly strong impact on developing countries.
This is due to several factors: the complexity of REACH; the voluntary nature of sharing of
non-animal testing data; the EU requirements for testing laboratories; the
notification/registration requirements for substances in articles; and the diversion of scarce
resources in the countries concerned. The majority of the producers of chemicals for export in
developing countries are small and medium-sized enterprises (SMEs). They are expected to
face the biggest problems, and may, in practical terms, lose their access to the EU market as a

REACH may, however, also create some market opportunities for developing countries,
especially for articles with substances that are not registered in the EU and are not known to
be released (these substances do not need to be notified or registered) or imported in
quantities of less than 1 tonne per importer per year.

The European Commission’s present REACH proposal requires each EU manufacturer or
importer to register each substance he produces, imports or places on the EU market. The
alternative approach of One Substance, One Registration (OSOR) could be more beneficial to
developing countries because it would increase the accessibility of non-animal testing data,
allow for simpler procedures and reduce conformity assessment costs as a result of enhanced
cooperation between registrants/consortia. Last but not least, it would reduce the
administrative burden REACH places on companies in general and SMEs in particular.

Under REACH, the European Chemicals Agency will have to actively participate in technical
assistance and capacity building activities for the sound management of chemicals in
developing countries. It is recommended that this task be sufficiently embedded in the
Agency’s institutional framework and adequately safeguarded through financial resources and
expertise. It might be beneficial to establish an additional technical committee as part of the
Agency, dedicated to technical assistance and capacity building in developing countries. Such
a committee could promote transparent procedures and efficient, effective and well-
coordinated technical assistance and capacity building by the Agency, the Commission and
the Member States.

Until the European Chemical Agency has been established, it is recommended that sufficient
financial means be allocated to the Commission services to initiate, provide and coordinate
technical assistance and capacity building. Training institutes of Member States could also
play a role in information dissemination and training. Even though REACH negotiations have
not yet been concluded, capacity building could begin now, e.g. upgrading testing laboratories
in developing countries to GLP status. It is also recommended that the European
Commission proactively inform chemical industry associations in relevant developing
countries about the details of REACH. In addition, there is an urgent need for user-friendly
manuals in various languages.

The Commission is invited to describe in substantive terms how and to what extent it has
considered the consequences of REACH for developing countries. If major knowledge gaps
still appear to exist, the Commission is invited to explain how and when it will address these
gaps. This invitation is in line with article 178 of the EC Treaty and with the EU’s
comprehensive framework for better lawmaking. Article 178 of the EC Treaty states that the
Community shall take account of the objectives of its development policy in the policies it
implements which are likely to affect developing countries. The EU’s framework for better
lawmaking includes a Communication on impact assessment, which states that the EU has to
assess the impact of major legislative initiatives on all ‘major interested parties’.19 As has
been shown, developing countries as a group are a major interested party and the REACH
proposal may affect them significantly.

With regard to the European Chemicals Agency and its role vis-à-vis developing countries,
the Commission is invited to provide further clarification and information as to:
• how the task of technical assistance and capacity building will be institutionally
    embedded in the Agency.
• how exactly it envisages the scope and content of this task.
• what expertise and financial means will be devoted to carrying out this task.
• how it plans to ensure timely delivery of cooperation with and assistance to developing
    countries, to prepare them for the entry into force of REACH. It should be noted that the
    Agency will not be operational until REACH has entered into force.
• how Commission DGs and Member States are expected to be involved in this task.

The Netherlands would appreciate being informed of the Commission’s views on both the
impact of REACH on developing countries and the ‘development’ task of the European
Chemical Agency and looks forward to a constructive dialogue.

   ‘Proposal for a Regulation of the European Parliament and of the Council concerning the Registration,
Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency
and amending Directive 1999/45/EC and Regulation (EC) [on Persistent Organic Pollutants]’ (COM(2003) 644
final of 29 October 2003).
  Article 178 of the EC Treaty.
  For the purpose of this paper, developing countries are defined as non-EU countries whose per capita GNI is
lower than the threshold for World Bank loan eligibility (IDA eligibility and 17-year and 15-year IBRD Terms).
This threshold is USD 5,295 for the financial year 2003. The definition is in line with World Bank and
OECD/DAC definitions.
  For the purpose of this paper, chemical substances include HS28, 29 and 32. HS38 (‘miscellaneous chemical
products’) is not included because this group comprises primarily vegetable oils and fatty acids that will be
exempted from registration under REACH.
   The import volumes in 2003 were: HS28, 4,117,969 tonnes; HS29, 3,160,809 tonnes; HS32, 171,148 tonnes
(Source: EU Expanding Exports Helpdesk).
  Substances in an article must be registered if (a) the substance is present in over 1 tonne per year per producer
or importer, each article being considered separately; and (b) the substance meets the criteria for classification as
dangerous in accordance with Directive 67/548/EEC; and (c) the substance is intended to be released under
normal and reasonably foreseeable conditions of use. Substances in articles must be notified if (a) the substance
is present in those articles in quantities totalling over 1 tonne per producer or importer per year; and (b) the
substance meets the criteria for classification as dangerous in accordance with Directive 67/548/EEC; and (c) the
producer or importer knows, or it is made known to the producer or importer, that the substance is likely to be
released under normal and reasonably foreseeable conditions of use, even though this release is not an intended
function of the article; and (d) the quantity of the substance released may adversely affect human health or the
  See note 6.
   Resource persons: (1) international chemical experts, including those from the Centre for the Promotion of
Imports from Developing Countries (CBI) Rotterdam, (2) representatives of developing countries in the TBT
Committee of the WTO, (3) representatives of the chemical industries of China, India, Thailand, Brazil and the
Philippines participating in the Stakeholder Discussion on REACH and Developing Countries organised by
FIELD (London, on behalf of UNCTAD (, Brussels, 28-29 October 2004.
  Microenterprises (with less than 10 employees) do not normally produce chemical substances for export. The
ceiling for SMEs differs from one country to another (e.g. the EU uses 250 and the World Bank 300 employees).
    Source: ECORYS (Rotterdam) and OpdenKamp Adviesgroep (The Hague), ‘The impact of REACH:
overview of 36 studies on the impact of the new EU chemicals policy (REACH) on society and business’. Report
prepared for the workshop ‘REACH Impact Assessment’, organised by the Dutch government, in anticipation of
the EU, in The Hague, 25-27 October 2004. The quotes are from page 14.
   Resource persons: see note 8.
    Registration of new substances is a less important area for developing countries, as their chemical industries
are usually involved in manufacturing products that were developed in Europe, the US or Japan and have been
on the market for some time.
    This argument is also mentioned in: ‘AmCham EU-CEFIC-FECC Discussion Paper on the Trade Impact of
REACH’, the American Chamber of Commerce to the EU, the European Chemical Industry Council and the
European Association of Chemical Distributors, 30 November 2004.
   All European manufacturers, importers and representatives of non-EU manufacturers of an existing substance
will need to pre-register their substance. All those who pre-register an existing substance will automatically
become members of the Substance Information Exchange Forum (SIEF) for that substance.
   See note 6.
   According to the REACH explanatory memorandum, ‘Introduction to the proposal’, section 1.2 (Registration),
‘manufacturers and importers shall address the risks of any use identified to them by their downstream users. A
downstream user has the right not to identify a use, in which case he would have responsibility for performing a
chemical safety assessment. Conversely, the manufacturer is not obliged to supply a substance for a use that he
feels he cannot support.’
   ‘New European Chemicals Strategy – UK Partial Regulatory Impact Assessment – Final Report, March 2004,
Ref 0002449’, published by the UK Department for the Environment, Food, and Rural Affairs (DEFRA), page
   Ibid., p. 70.

  ‘Communication from the Commission on Impact Assessment’, COM(2002) 276 final, Brussels, 5 June 2002,
p. 7.