03/30/09

Reference: SPEECH/04/203
Date: 27/04/2004

SPEECH/04/203

Margot Wallström

European Commissioner responsible for the Environment

REACH

2nd US-EU Chemicals Conference, Charlottesville

26 April 2004

Good morning ladies and gentlemen,

Let me begin by bringing greetings from Europe. Our continent is going through historic changes. These are very exciting times for Europeans.

We are only five days away from the enlargement of the European Union. On Saturday we will welcome ten new member states into our community of currently 15 countries.

The Czechs, Cypriots, Estonians, Hungarians, Latvians, Lithuanians, Maltese, Poles, Slovaks and Slovenes have restructured their economies and societies over the last 15 years. Eight of them had to overcome the legacy of Communism. They all now stand on the threshold of the Union.

The enlargement of our Union is one of the clearest signs of the changing world after the fall of the iron curtain.

But Saturday's ceremonies handshakes, signatures, national anthems, flags and celebrations of the enlarged union will not change the economic and social realities overnight. The new member states still have a long way to go before they reach the levels of prosperity of the present members.

Enlargement is a sharp reminder of why the principle of sustainable development is so important. It gives equal importance to the economic, social and environmental dimensions of human development. Only if economic growth goes hand in hand with social justice and environmental care can we achieve lasting human welfare.

Just to mention one figure by living up to the commitment to improve the air quality to EU norms, the number of persons affected by bronchitis will be substantially reduced in the new Member States and 34.000 premature deaths can be avoided annually.

Today I want to speak about one example of how we seek to pursue sustainable development in practice our proposed new EU chemicals policy, which goes by the name of REACH.

Several factors place the chemicals industry at the core of the EU's strategy for sustainable development.

The chemicals industry is one of our key industrial sectors. It has an annual output of more than 500 billion Euros, or 600 billion US dollars. It directly employs 1.7 million people. It has a very important impact on the job market, trade and economic growth.

In the last century, our society quietly underwent a chemicals revolution. This is reflected in global production rising from 1 million tonnes in 1930 to 400 million tonnes today.

That revolution brought man-made substances into all strands of life and into most consumer articles. In fact chemicals are now everywhere!

But the "success" of chemicals could also be the Achilles heel of our society. We have developed a very high dependence on chemicals. Yet this is not matched by sufficient knowledge about their potential risks and long-term effects, for which we are paying a high price.

This is not just an issue for European countries. Chemical safety is a global concern. Countries all over the world are paying a high price for failures to address chemical safety.

For example, asbestos was once seen as a valuable, versatile material and was used extensively in buildings. Every year people are now dying from exposure to asbestos. It is estimated that, in developed countries alone, 100,000 more people will die. The costs of removing asbestos from buildings and contaminated sites have been enormous.

Man-made chemicals accumulate in our bodies. Many workers are exposed to chemicals that can cause allergies, respiratory diseases, cancers and problems with reproduction. In Europe, occupational skin diseases result in the loss of 3 million working days each year. These eczemas and other skin problems can often be directly related to chemicals.

They occur in most industries, forcing many affected workers to change jobs. The cost of 3 million working days lost has been estimated at 600 million Euro per year.

Scientists have also spotted a worrying decline in sperm counts among men in Europe and the US, which may be caused by chemicals.

In the sea, chemicals used in antifouling paint lead to sex changes in molluscs, which has exterminated certain species and seriously affected the productivity of aquacultures.

The hole in the ozone layer is directly related to chemicals.

The list of health and environmental problems linked to chemicals could be a lot longer ...

In the light of all this, it is no coincidence that chemicals were high on the agenda of the World Summit on Sustainable Development in Johannesburg in 2002.

In South Africa our heads of state and governments undertook to minimise all adverse effects of chemicals within one generation, by the year 2020. By proposing REACH, the European Commission has moved from words to deeds in meeting the Johannesburg goal.

REACH has been designed to provide the information and safety we need in Europe. But we do so in a way that is integrated with international efforts. To facilitate transfer of information, we will be implementing the Globally Harmonised System, which is the UN system for classification and labelling of dangerous substances.

Other speakers today will enter into more detail on REACH. I want to use my address to leave you with three messages three "MUSTs" if you prefer:

First, that we MUST close the knowledge gap.

Second, that we MUST reverse the burden of proof.

Third, that we MUST get more information to consumers and downstream users.

Starting with the first of these messages then, we must close the knowledge gap.

The current European system for chemical safety is similar to the American one. In Europe there is a requirement to routinely test new substances and report the results to the authorities. But this does not apply to chemicals already on the market.

When these chemicals "on the market" were recorded more than 20 years ago, there were 100,000 of them. So, the vast majority of chemicals that we use today are "existing" chemicals. We have very little information about them.

Among the high production volume substances, there is sufficient information about only five percent. Yet, these high production volume chemicals are the best known chemicals! We have even less knowledge about chemicals produced in smaller volumes.

The situation in the US is very similar. There are more than 80,000 chemicals registered for use in the US, out of which 1,400 are high production volume chemicals. However, data on human exposure exists for only 6 percent of these high production volume substances.

In Europe, our lack of knowledge is due to an administrative "catch 22". Public authorities are expected to assess the risks of existing substances on the basis of information submitted by industry. We know that this information is inadequate. But authorities can only request test data if they can prove that there is a risk.

This system might work if there was an incentive for industry to show that its substances are safe. But there are far too few incentives for chemical manufacturers in the EU to find out the environmental and health effects of their existing substances.

The liability regime is currently weaker in the EU than in the US. Thus there are even fewer incentives to inform clients and users of risks of chemicals, beyond the basic minimum. In a business environment where competitors can get away with keeping quiet about potential risks, honesty is not always rewarded!

Although the public authorities in the EU have concentrated their efforts since 1993 on 140 potentially problematic substances that have been identified as requiring attention first, even this limited number has been difficult to manage. So far risk management measures have been adopted for only 17 of them.

Predictably, one perverse effect of today's regulatory system is that it penalises development of new and safer substances in the EU, because it is easier and cheaper to find new uses for untested and potentially dangerous existing substance than to place a new substance on the market. This clearly hampers innovation.

Turning now to my second message, we MUST reverse the burden of proof.

It is clear that the regulatory system has to stop penalising responsible businesses - by requiring responsible action from all producers.

We need to shift the responsibility for chemical safety to the chemicals industry itself. Taking responsibility for your own products is standard practice everywhere, why should the chemicals industry be treated in a different way?

The chemical industry is best placed to assess its own products and to design protective measures that are suitable for the different uses of their substances.

Finally then, we must get more information to consumers and downstream users.

There is a major problem of perception and trust when it comes to chemicals. Citizens receive conflicting information about chemicals all the time.

One day there is an alarming report about a substance used in everyday articles, for example the plasticizers used in toys that our babies put in their mouths. Next day, the findings are refuted by some scientists and supported by others. It is not surprising then that the outcome is a mixture of frustration and consumer boycotts.

Chemicals have at best - an ambiguous image; there seems to be a demand for miracle solutions (anti-bacterial sports shoes, long-lasting fragrances, stain-repellent textiles) coupled with a general distrust of everything that is considered as "artificial".

While we will still need chemicals in the future, we demand to know the risks that are associated with them. We also want to promote substitution, getting rid of the most dangerous ones and replacing them with safer alternatives.

Before concluding, let me now turn briefly to some of the most common criticisms that REACH faces that there was insufficient consultation in its preparation, that it represents a trade barrier, that it is burdensome or that it is costly.

Consultation

There has been intense consultation on our proposed reform for around 6 years now. The number of stakeholder meetings, working groups and written consultations has been unprecedented.

This culminated in the Internet consultation last summer during which we received 6000 reactions, including from the US government.

This open and transparent approach allowed us to take on board constructive proposals for changes to make REACH more workable and less costly, while maintaining a high level of protection of human health and the environment.

Trade Concerns

From the outset, REACH has been designed to be compatible with trade rules and we ourselves notified the proposal to the WTO.

WTO rules of course allow members to set in place measures for the protection of public health that they deem appropriate, as long as these protective measures are non-discriminatory towards other members and proportionate to the objectives pursued.

Our system is proportionate. In addition, it does NOT differentiate between chemicals produced within the EU and those imported to Europe. It allows for use of data from all parts of the worlds.

WTO compatibility is important. But "fear" of the WTO must never chill us into setting lower standards of health and environmental protection.

Burdensome

No one is interested in a system that is too burdensome or too complicated. We definitely do not want to replace an inefficient system with one that collapses under its own weight!

The main purpose of our numerous consultations and particularly the internet invitation to comment on the draft of the legal text was to test the workability. We have incorporated a number of suggestions on how to simplify procedures and requirements, without lowering the environment and health objectives.

We should also bear in mind that REACH has a tiered approach for registration. Substances carrying high risks and/or produced in high volumes will have to be registered first.

Costs

The extended impact assessment that was carried out last year shows that the benefits of REACH will clearly outweigh the costs. The direct costs of the proposal are estimated at 2.3 billion Euro over the 11 years that it will take to register all chemicals.

These are the costs that the chemicals industry will incur for testing and registration, and they represent less than 0.1 % of the turnover of the EU chemicals industry. Most of these costs are directly related to testing, which indicates how massive the lack of knowledge about chemicals is today.

The total costs of the proposal including the costs for the chemicals industry as well as those for its downstream users are estimated at between 2.8 billion and 5.2 billion Euro over 11 years. The uncertainty that is implicit in this estimate relates to the potential changes in the supply chains and the number of substances that may be withdrawn because future production would not be profitable.

But the health benefits far outweigh the costs. The benefits are estimated at 50 billion Euro over 30 years. And these are very conservative estimates based on the assumption that due to REACH there would be only a 0.1 % reduction in chemicals-related diseases.

In closing my address, I would like to share with you the results of a personal test that I carried out last year. Among all the talk of costs, trade barriers, bureaucracy etc. the results of the test underline the urgency of cleaning out the chemicals stable.

A couple of years ago, a British doctor told me that each of us have roughly 300-400 synthetic substances in our bodies, and that these were not present in our grandparents' generation. This got me curious. So I decided to find out what the situation is for myself.

Last summer I participated in a limited screening involving three groups of man-made substances brominated flame retardants, PCBs and organo chlorine pesticides. Of the 77 looked for in this screening, I had 28 in my body, including PCB and DDT, which have been banned in Europe for several decades.

I was told that my result was below the average of the group tested. The result certainly made me concerned, particularly since I also was told that some of the chemical burden in my body was transferred to my children when I was breast feeding them. And, synthetic chemicals are certainly not something that I want to leave as a legacy with them!

This blood screening result is something that people have sat up and taken notice of in Europe. I have received a large number of letters and e-mails from all over Europe about the chemical build up in our bodies. Still today, four months after going public with the results, I get questions about this blood screening from people I meet in the street.

That is also why I am convinced that REACH is the way of the future.

Is it likely that consumers will demand less information about their products in the future than they do today? The answer is clearly NO.

Is it likely that consumers will care less about their health? Again the answer is clearly NO.

REACH has been designed to meet the needs of citizens, consumers, workers and industry. I am convinced it will live up to this challenge.

Thank you for your attention.