Article 57(f) REACH: the important precedent of the HHPA/MHHPA case decided by the EU Court of Justice
On 15 March 2017, the Court of Justice of the European Union ("CJEU") ruled on cases C-323/15 P (Polynt v ECHA) and C-324/15 P (Hitachi Chemical Europe and Polynt v ECHA) under Regulation (EC) No 1907/2006 (''REACH'').
The cases are appeals against judgments of the General Court (''GC'') in Case T-134/13 and Case T-135/13, concerning a decision of the European Chemicals Agency (''ECHA'') under Article 57(f) of REACH to list HHPA and MHHP as substances of very high concern (''SVHCs''). The Appellants in the proceedings were represented by the Fieldfisher REACH team led by partner Claudio Mereu and Counsel Maud Grunchard.
In a nutshell, according to the EU Court, SVHC listing on grounds of Article 57(f) REACH ("equivalence of concern") cannot be based only on hazards – other factors need to be considered, including human exposure reflecting the risk management measures in force.
HHPA and MHHPA are cyclic acid anhydrides listed as category 1 respiratory sensitizers in Table 3.1 of Part 3 of Annex VI to Regulation (EC) No 1272/2008 on classification, labelling and packaging of substances and mixtures (''CLP Regulation''). ECHA, upon referral by the Netherlands, identified both substances as meeting the criteria referred to in Article 57(f) of REACH and thus added them to the candidate list for the SVHCs by its Decision ED/169/2012 of 18 December 2012.
In essence, the Applicants raised two substantial arguments before the GC: (1) Article 57(f) of REACH does not apply to respiratory sensitizers; and (2) ECHA took the view, incorrectly, that the substances give rise to a level of concern equivalent to those of category 1 carcinogenic substances, mutagenic substances and substances toxic to reproduction ("CMR").
In support of their second argument, the Appellants claimed that the effects of respiratory sensitisation are not irreversible, and that consumers or workers were not exposed to MHHPA/HHPA. The GC dismissed both actions essentially concluding that Article 57(f) of REACH excludes any consideration of data other than those relating to the hazards arising from the intrinsic properties of the substances concerned, such as those relating to human exposure reflecting the risk management measures in force. The companies appealed those judgments before the CJEU.
At the outset, the CJEU distinguishes between SVHC inclusion for CMRs - which can be hazard based - and SVHC inclusion for "equivalence of concern" on grounds of Article 57(f) of REACH - which can be based also on other factors.
The Court stated that Article 57(f) of REACH provides for an independent mechanism of assessment (paragraph 25), and that a decision under this provision '' [...] requires a range of factors to be taken into consideration, wider than those relevant for the purposes of a simple technical exercise to categorise the effects or intrinsic properties of a substance'' (paragraph 36).
In this context, the CJEU found that ECHA and the Commission erred in law when examining the second condition laid down in Article 57(f) of REACH.
In particular, according to the Court "[...] taking data relating to human exposure reflecting the risk management measures in force into consideration, where they exist, does not result in rendering the identification of a substance as being of very high concern impossible, nor does it deprive Article 60(2) of that regulation of any meaning" (paragraph 41).
The Court justified its conclusion by two main points. The first one is that under section 2 of Annex XV of REACH is has been established that "[...] the available use and exposure information and information on alternative substances and techniques shall be provided" (paragraph 42). The second one is that in its ''Guidance for the preparation of an Annex XV dossier on the identification of substances of very high concern'', ECHA highlights in section 126.96.36.199 that "[...] Article 57(f) of the REACH Regulation does not prohibit the taking into consideration of data other than those relating to the hazards arising from the intrinsic properties of the substances concerned" (paragraph 43).
The most important conclusion of the Court is that overall "[...] the General Court erred in law in holding, in essence, that Article 57(f) of the REACH Regulation excludes, in principle, any consideration of data other than those relating to the hazards arising from the intrinsic properties of the substances concerned, such as those relating to human exposure reflecting the risk management measures in force" (paragraph 44).
According to the Court, therefore, exposure and other risk based consideration may be considered under Article 57(f), as opposed to Article 57(a) to (c) (CMRs). This is a very important conclusion for all substances being considered as SVHC for "equivalence of concern" on grounds of Article 57(f) of REACH.
Nevertheless, rather unexpectedly the CJEU concluded that such an error in law is not capable of resulting in the judgment under appeal being set aside. It took the view that, even though the GC misinterpreted Article 57(f) of REACH, it nevertheless examined the data relied on in that regard by the Appellants, finding that they were inconclusive. Therefore, it was for the GC alone to assess the value which should be attached to the evidence produced before it, since the CJEU can only rule on points of law, and not those of facts.
Hence, while the CJEU agreed with the Appellants' legal arguments in both cases, and took the view that the GC erred in law when it failed to consider further data other than hazards when deciding on SVHJC listing under Article 57(f), it ultimately rejected the appeal.
Since the CJEU agreed with claims raised by the Appellants, and in light of applicable precedents in chemicals cases (e.g. Acrylamide cases, C-626/11 P, and C-625/11 P), the Court should have set aside the judgements under appeal and refer the cases back to the GC. Instead, the Court simply took no action, which amounts to a denial of justice, since there is no further judicial remedy, nor further appeal options for the Appellant companies.
This ruling has two far-reaching consequences.
First of all, it serves as a warning to the Commission and ECHA that they have to consider more carefully all the data for purposes of SVHC inclusion on grounds of 57(f), including exposure data. Secondly, it confirms once again the continuing reluctance of the EU Courts to rule against EU Institutions and Agencies on matters involving chemicals. The reasons behind this approach are open to interpretation. These may derive from policy reasons, or more simply, from the inability (or unwillingness) of EU judges to consider technical arguments. In the context of national proceedings this would normally be solved with the assistance of external experts, something which EU judges have typically refused to do. This, in turn, re-opens the debate as to whether such type of cases shouldn't be better dealt with by a Board of Appeal with qualified technical experts and legal members, such as the ECHA Board of Appeal. This would ensure a more balanced and cohesive approach to technical cases.