Reach to have great impact on Asia paint and coatings industry.
REACH was approved by EU ministers at the end of 2006 and will begin to apply in June this year. Thereafter, over a period of 11 years, some 30,000 chemicals in use today will have to be registered in a way that the European Commission says will "fill information gaps on the hazards of substances and ... identify appropriate risk management measures to ensure their safe use." It will be the responsibility of industry to provide the necessary data and identify the measures needed to manage the risks. In addition, stressed a Brussels official, REACH will establish an authorisation system for the use of substances of very high concern (such as those causing cancer, infertility in men and women, genetic mutations or birth defects). This authorisation system "will strongly encourage companies to switch to safer alternatives," said the Commission official. Some EU chemical and paint trade associations have already warned that the policy could lead to a number of products being withdrawn from the market while others may become scarce and costly.
All the same, the temptation here is to assume that this is merely a matter for the 27 European Union countries--and those who buy and sell to them--to worry over. After all, REACH has "no legal force outside Europe" says Ton van Lierop, the Commission spokesman on industrial policy. Asia Pacific paint and coatings companies do not, in general, buy much by way of chemicals from Europe nor do they export their products to it on any scale. Why should they be bothered by an internal policy agreed by a bloc of countries on the other side of the world whose direct effects are confined to those same 27 countries? Mr Erler says this view misses the point about the inter-connectedness of manufacture in today's world.
"Europe is the largest chemical producing region in the world and the REACH legislation will have a global impact in many ways," said Mr Erler. "Let's say that I'm a paint manufacturer in the Asia Pacific region and none of my supplies, and none of my supplier's supplies, get stuff from Europe. I can't just say that therefore the product is made in Australia or wherever. The product itself may be made in Australia but the processing chemicals, the chemical solvents involved in its manufacture may not be. The supply chain involves processing, refining, distribution, re-formulation, processing and further refinement. It's not a straightforward line," he said.
"REACH is really a very rigorous regime and it's going to cost, and that's going to have a ripple effect throughout the manufacturing supply chain," he said. "Not only that, if they are going to be generating all this data on 30,000 or more substances, and 40% of substances are either identified or confirmed as dangerous, what implications does that have for other country chemical regimes? If REACH triggers a warning, you may have to change your hazard label."
Giving a basic example of how this exposure to REACH extends through the manufacturing/distribution chain, Mr Erler said that paint used on a car exported to Europe had to be REACH-compliant. It might be easier for the paint companies in that position to register substances in Europe "because the product might go through five or six different people before it gets to Europe, but you will be able to say that the final products are already REACH-compliant." However some companies will have a very hard time dealing with this, Mr Erler commented.
Some countries already grasp where REACH is heading and see the possible risks for themselves. "Several third countries, including China, have carefully followed the discussions in the EU over the last few years and have shown a keen interest in learning from REACH," said Mr van Lierop. A number of ASEAN states had commented on REACH as it went through the legislative process "and this has been valuable, particularly in ensuring that the regulation respects the Community's WTO commitments," he said. Brussels believes that REACH is compliant with these commitments but it clearly helps the Commission's case if other countries and regions are seen to be moving in the same direction.
This may be true at government level but the Journal's sampling of opinion in industry suggests to us that while Asia and Pacific paint and coating manufacturers are aware of REACH and believe that it will affect their operations in some way in the future, few feel any need to take immediate action in response to it. We asked Asian Paints, for instance, India's largest paint company with manufacturing facilities throughout the Asia Pacific region, for its views on REACH. "We haven't received any official notification of this legislation. So we don't really know what it's about," said Andrew Williams who handles the company's advertising and media relations. "Currently, as far as the sourcing of chemicals goes, we're not sourcing out of Europe for any of our products and as far as exporting to the EU or any European countries, we're not exporting at the moment to any of them. So in the present situation I don't think we are being affected at all by this legislation," he said.
Mr Williams said Asian Paints had had no communication from the Indian government to suggest that a similar system to REACH was being considered for India though he admitted that "if something is being done in Europe for environmental reasons we might have it eventually because our environmental laws have actually been borrowed from the EU. If it happens in Europe then I would expect that within two to three years it will happen in India," he said.
Australia too is somewhat out of the frame when trade in paint with Europe is concerned: some 60% of all paint imports last year came from Asia Pacific countries. Nevertheless Australian paint companies "are conscious of the REACH legislation which will definitely impact on the paint industry," said Michael Hambrook, director of the Australian Paint Manufacturers Association. "The trouble is that at the moment we are still a few steps away from coming to grips with it. What we're doing at present is working with the government on the development of our own registration system following the GHS (the UN's Globally Harmonised System for chemicals). The EU has now developed its own special version in REACH. We're trying to go for the international system and hoping that the Europeans don't stray too far from the GHS," he said.
In Tokyo, the Japan Paint Manufacturers Association said that Japanese chemical and paint industries "are aware of the European REACH regulation and its time frame." The government and the industries concerned "have just started a study of how it may influence the market and what may be necessary in Japan," said an association spokesman. However "certain paint manufacturers who are operating in global markets have already started to review the necessary actions, especially in the European market. They realise that some cost increases cannot be avoided in that market," he said. The spokesman said the Japanese industries were concerned about the global trend "and whether REACH could influence other countries' regulations."
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|Publication:||International News Services.com|
|Date:||Mar 1, 2007|
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