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Interaction with stakeholders, decision-making and legal remedies
First published in Specialities Chemicals Magazine, September 2011.
Summary
The present article reviews the role of ECHA in the REACH evaluation and authorization phases in as far as the involvement of stakeholders and possibilities to challenge the decisions taken during the processes are concerned. The Agency has been given a prominent role and corresponding responsibility under the REACH Regulation. We analyse whether and how decisions taken by ECHA can be challenged by interested parties, and what are the opportunities of stakeholders to comment on draft decisions before their final adoption.
General information on the role and functioning of ECHA
The European Chemicals Agency (ECHA) has been established to act as an independent body in the context of the implementation of the Regulation on the registration, evaluation, authorisation and restriction of chemicals (REACH) (Regulation 1907/2006/EC). It is a body of the European Union mainly sponsored by subsidies from the Union and fees paid by undertakings, and it is based in Helsinki, Finland.
The Agency is headed by an Executive Director and comprises a Management Board, a Committee for Risk Assessment and a Committee for Socio-economic Analysis, a Member State Committee, a Forum for Exchange of Information on Enforcement (Forum), a Secretariat and a Board of Appeal.
The tasks of the Agency are manifold and stretch from managing the registration process of chemicals under REACH and coordinating the authorisation and restriction processes to tasks under the CLP Regulation (Regulation 1272/2008/EC on classification, labeling and packaging of substances and mixtures). In the future, under the to-be-adopted Biocidal Product Regulation, the Agency will be assigned additional competences.
Of relevance to the present article, the role of ECHA may be divided in an advisory role, from a scientific and technical perspective, and a decision-making role. The legal remedies available to stakeholders are directly dependent on the Agency’s function, as no direct legal remedies are easily available when it acts as a scientific advisor and when it provides opinions or recommendations to the European Commission. By contrast, direct legal remedies are available when the Agency adopts decisions that produce legal effects.
Specifically, certain ECHA decisions, listed exhaustively, may be challenged before the Board of Appeal (BoA). This is the case for the rejection of a registration dossier as incomplete (Article 20 REACH), decisions taken in the context of data sharing (Articles 27(6), 30(2) and 30(3)), decisions under dossier and substance evaluation (Articles 51 and 51), and decisions regarding the exemption of substances used for product and process oriented research and development from the obligation to register (Article 9).
The appeal procedure before the BoA is open foremost to the addressees of ECHA decisions. A person can only file an appeal against a decision addressed to another person if the contested decision is of direct and individual concern for the former. Furthermore, the appeal before the BoA can be filed only after the adoption and publication of the contested ECHA decision. There is no challenge of draft decisions, for example, during dossier evaluation by ECHA or substance evaluation by the competent authorities of the Member States.
ECHA decisions not covered by the appeal procedure before the BoA, and decisions taken by the European Commission under REACH may only be challenged before the European General Court, pursuant to Article 94(1) REACH. The difference between the appeal procedure before the BoA and the one before the General Court is significant in terms of legal effects and timelines. While an appeal before the BoA has a suspensive effect, which means that the contested ECHA decision does not have any effect on the addressee until the BoA takes a decision, the application for annulment of a Commission regulation does not have an automatic suspensive effect. Therefore, the contested act continues to produce effects, unless an interim action requesting suspension of the measure is successful. There are no rules in REACH as to the time within which the BoA must take a decision, but it can be expected that this will be a significantly shorter procedure than an action before the General Court.
Relatively few cases have thus far been brought before the Board of Appeal. In the years 2009 and 2010 there was only one appeal per year, in 2011 four. Three of the appeals concerned the rejection of registration dossiers by ECHA due to incompleteness, two the registration fee and one data sharing. All appeals but two have been withdrawn by the appellants during the proceedings. One appeal (A-001/2009) resulted in the Agency’s Executive Director overturning the initial Agency decision (rejection of the registration dossier), in favour of the Appellant.
2. REACH evaluation
REACH requires companies to register their substances by submitting a technical dossier to ECHA. The amount and quality of information to be provided depends on the hazardous properties of the substance and on the quantity in which it is manufactured or imported.
While ECHA is not involved in the preparation of the registration dossier, which is the task of the registrants, it becomes involved at the evaluation stage. Specifically, once the registration of a substance is completed, the Agency must evaluate the dossier and coordinate the evaluation of substances by the Member States. The dossier evaluation and the substance evaluation are two different processes, with certain common steps.
The dossier evaluation encompasses the examination of testing proposals and the compliance check of the entire dossier.
The Agency has an obligation, pursuant to Article 40 REACH, to examine all proposals for Annex IX and X tests submitted as part of registrations or downstream user reports, and to draft a decision in relation to the proposal. The evaluation ensures firstly that the test proposals comply with the standard testing requirements, resulting in reliable and adequate data, and secondly that there are valid reasons for proposing additional testing for endpoints beyond the standard testing requirements, thus preventing unnecessary animal testing.
Within the realm of the compliance check, the Agency is required to examine only at least 5% of the submitted dossiers per tonnage band. The selection of dossiers is determined mainly by certain criteria specified in Article 41(5) REACH, but the Agency will also select dossiers randomly. If the dossier is found incomplete, ECHA issues a draft decision requiring the registrant to submit further information. The compliance check is hence a tool to control the quality of the registration dossiers.
Any party has an opportunity to comment on the draft proposals for tests on vertebrate animals – these are published on the ECHA website, with the objective to minimize duplication of animal tests. Thereafter, the registrant who proposed the testing can comment on the draft decision of ECHA modifying or rejecting the testing proposal (Articles 40(3), 50(1) REACH). Registrants also have an opportunity to comment on the draft Agency decision taken as a result of the compliance check.
The final decision on testing proposals or on compliance checks is adopted by the Agency if there is unanimity in the Agency’s Member States Committee, or by the European Commission in cases where there is no unanimity.
The substance evaluation involves both the Agency and competent authorities of Member States: the Agency will include substances that are suspected of posing a risk to human health or the environment in a list called the Community rolling action plan (CoRAP), based on harmonised prioritisation criteria developed by the Agency in collaboration with the Member States. Stakeholders are not involved during the set-up of prioritisation criteria, or during the process of inclusion of substances in the CoRAP. The substances listed in the CoRAP are subsequently evaluated by the Member State competent authorities to determine whether further information is required from the registrants. If the competent authority considers that this is the case, it prepares a draft decision, stating reasons and requiring registrants to provide further information.
The registrant is entitled to comment on the information request under Articles 46, 50(1) REACH. Further, the competent authority circulates its draft decision together with any comments from the registrant to the Agency and to the competent authorities of the other Member States, pursuant to Article 52(1). It follows the same procedure to adopt a decision on the request for further information, as described above for the adoption of decisions under dossier evaluation under Article 51 REACH, which means that either the Agency will adopt a decision, or the Commission.
In terms of legal remedies, registrants may introduce an appeal against the ECHA decisions adopted in the context of the dossier or substance evaluation, before the BoA, within three months of the notification of the decision. The appeal will be automatically suspensive, which means that the registrants will not have to proceed with performing the required tests, or completing the registration dossier, until the BoA rules on the appeal. This opportunity is of particular interest, since the registrants will be able to present both legal and scientific arguments against the ECHA decision.
If the decision resulting from the evaluation process is adopted by the European Commission, registrants may challenge this before the European General Court. However, differently from the appeal before the BoA, such an action does not have automatic suspensive effect, and the time period imposed by the decision will continue to lapse.
3. REACH authorisation
The REACH Regulation lays down criteria to identify chemical substances which are considered to be of very high concern (SVHC)1 and provides for their subsequent inclusion in the Candidate List for eventual inclusion in Annex XIV. Once included in Annex XIV, substances can no longer be used unless their use is specifically authorized by the European Commission.
Thus far, six substances have been included in Annex XIV, with sunset dates ranging from 2012 to 2014, and there are currently approximately fifty (50) SVHCs on the Candidate List.
Obviously, the inclusion of a substance in Annex XIV has a strong impact on its marketability. But even the inclusion in the Candidate List can potentially cause commercial damage to the manufacturer and other actors in the supply chain. Anticipating an authorisation requirement and negative reactions of customers to the inclusion on this blacklist, downstream users may eliminate substances of the Candidate List from their shopping list.
ECHA’s role in these processes is twofold: it takes final formal decisions in so far as the identification of SVHCs is concerned, but it only has an advisory role in so far as listing in Annex XIV and authorization decisions are concerned. The stakeholders’ right to comment and the legal remedies available to them are, accordingly, different for the two sets of procedures.
In the context of identifying substances as SVHCs, and their subsequent inclusion in the Candidate List, comments can be submitted by stakeholders after the Agency publishes a notice on its website that an Annex XV dossier was prepared for the respective substance2 (Article 59 REACH).
The substance can be included in the Candidate List by decision by ECHA, or by a Commission Regulation if there is no unanimous agreement in the Member States Committee (Article 59 (9) REACH).
In both cases, the only legal remedy available against the inclusion of a substance in the Candidate List is to introduce an annulment action before the European General Court in Luxembourg. Several cases introduced against ECHA decisions to include substances in the Candidate List are currently pending before the General Court (in relation to the listing of acrylamide, boric acid, and several coal tar chemicals). There is no possibility to challenge the ECHA decision on the identification of a substance as a SVHC before the Board of Appeal.
Differently from its decision-making role in the context of the Candidate List, ECHA has a purely advisory role in the process leading to Annex XIV listing and subsequent authorisation requests.
ECHA recommends priority substances for inclusion in Annex XIV, and, while stakeholders have a possibility to comment on the proposed priority substances, interested parties cannot easily challenge the final Agency recommendation for priority substances, through an appeal before the BoA or through an action before the European courts. However, actions for damages caused by the Agency’s recommendation for priority substances may be considered (this procedural opportunity has not been used as of yet).
The final Commission Regulation including a substance in Annex XIV is a challengeable act and an action for its annulment can be introduced before the European General Court. The action does not have immediate suspensive effect, hence the period leading to the sunset date will continue to run, unless the applicants are successful in obtaining interim relief and suspending the effects of the challenged act.
Once a substance is on Annex XIV, the European Commission is responsible for granting authorizations for specific uses to applicant companies. ECHA is also involved in the process in its role as a scientific adviser (rather than decision-maker). Applications for authorization are submitted to ECHA, and the Agency’s Committees for Risk Assessment and Socio-economic Analysis adopt opinions, which, after being sent to the applicant for comments, are sent to the European Commission. The European Commission adopts the final decision allowing or rejecting the application for authorization (Article 60 REACH).
The addressees of the Commission decisions (the initial applicants for authorization) can challenge the decisions by introducing an action for annulment before the European General Court. No annulment actions are readily available against the Agency’s opinions, since these have advisory value only and do not produce direct legal effects. However, also in this case actions for damages caused by the Agency’s opinions may be considered (again, this procedural opportunity has not been used as of yet).
To conclude, there are multiple opportunities for comments during the processes leading to final decisions in the context of evaluation and authorization under REACH. There are no downsides in stakeholders availing themselves of these opportunities and in fact they should be encouraged to participate since their participation may only increase their standing in an eventual legal challenge introduced against the final decision.
There are also legal remedies available against Agency and Commission measures, either before the Board of Appeal or before the General Court. The Agency decisions adopted in the context of evaluation are challengeable before the Board of Appeal, and the procedure presents the substantial advantage of the effects of the decision being suspended while the appeal is being treated. In the context of authorizations, the Agency does not take final decisions, hence the availability of legal remedies against ECHA is less apparent unless one considers the possibility of actions for damages caused by the Agency’s recommendations. However, the Agency’s decisions on the identification of substances as SVHCs may be challenged before the General Court. Last but not least, the Commission decisions to include substances in Annex XIV, or to reject authorizations, can be challenged before the General Court.
REACH is a new piece of EU legislation, and so far not all possibilities for legal remedies have been used by stakeholders. However, as the process advances and the knowledge and involvement of both stakeholders and authorities become more sophisticated, it is expected that legal challenges will occupy a more prominent role and bring much-needed clarification and legal certainty.
Footnotes
1 Substances of very high concern include substances which are: Carcinogenic, Mutagenic or toxic to Reproduction (CMR) classified in category 1 or 2; and/or Persistent, Bioaccumulative and Toxic (PBT) or very Persistent and very Bioaccumulative (vPvB) according to the criteria in Annex XIII of the REACH Regulation; and/or identified, on a case-by-case basis, from scientific evidence as causing probable serious effects to humans or the environment of an equivalent level of concern as those above, e.g. endocrine disrupters .
2 Annex XV dossiers are submitted by Member States or by ECHA, when requested by the European Commission.
