REACH etc. (Amendment etc.) (EU Exit) Regulations 2019 - Motion to Approve

– in the House of Lords at 3:51 pm on 26 March 2019.

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Moved by Lord Gardiner of Kimble

That the draft Regulations laid before the House on 5 February be approved.

Relevant documents: 15th and 17th Reports from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

My Lords, these regulations concern the registration, evaluation, authorisation and restriction of chemicals, otherwise known as REACH. These regulations apply to the whole of the UK, with the exception of paragraph 1 of Schedule 11, which makes technical amendments to the England and Wales regulations that transposed the EU directive on the disposal of polychlorinated biphenyls, or PCBs. We have worked with the devolved Administrations on this instrument and, where it relates to devolved matters, they have given their consent.

Our chemicals sector is world leading and one of the UK’s largest manufacturing exporters by value. We fully realise the sector’s economic importance and its importance to the way we all live our lives. At the same time, we also recognise the risks to human health and the environment if chemicals are not used properly. The UK is strongly committed to the effective and safe management of chemicals to protect both the public and the environment. That will not change when we leave. This is why we clearly set out our negotiating position in the White Paper published in July last year.

We want frictionless trade which maintains strong chemicals regulation through a common rulebook for sectors such as chemicals that would be supported by arrangements that cover all relevant compliance activity such as REACH, and continued active participation in the European Chemicals Agency, ECHA, so that UK businesses can continue to register chemical substances directly, rather than working through an EU-based representative.

However, we must also be ready should we leave without a withdrawal deal. The building blocks of REACH will all remain, and we are keeping the fundamental approach of REACH, with its aims of ensuring a high level of protection of human health and the environment, as well as enhancing innovation and competitiveness. This is why we seek a smooth transition and an outcome which minimises friction, disruption and delay at our borders and supports the continued chemical supply chains with the EU.

Delivering day one functionality has been a key priority since 2016. To achieve this, we have been working with both industry and the UK regulators. Since 2016, Defra, in partnership with BEIS and HSE, has run an extensive programme of stakeholder engagement with the chemicals industry with the aim of reaching as wide an audience as possible, particularly targeting SMEs and downstream users of chemicals. This programme included regular ministerial meetings with Ministers from Defra, BEIS and DExEU.

Last summer, we held a series of informal briefings for the chemicals sectors, NGOs and other stakeholders on the proposals contained in the instrument. We followed this up with detailed guidance. Since October, this effort has been even more intense. We have engaged directly with more than 1,700 stakeholders. Building on this, we launched the ongoing business readiness campaign in January to spread coverage to as many businesses as possible. We have used online adverts to promote stakeholder events and both social and traditional media outlets for increased stakeholder engagement. In the last week, my officials have also been in Frankfurt and Brussels to spread the message to EU business.

Concurrently, we have been building the UK REACH IT systems. We have tested this system with more than 100 industry users from UK and international chemicals manufacturers and distributors, the energy sector, aerospace, biotechnology and the automotive sector, agriculture and the cosmetics industry. The system stood up well and we received positive feedback, with industry generally finding it straightforward to use. The positive assessment and feedback from attendees during this exercise means that UK REACH IT will be ready to go live for exit day. It will have the critical functionality to enable industry to register new chemicals and for holders of existing REACH registrations to provide the UK agency with details to verify those registrations.

UK REACH provides for the functions of ECHA to be carried out by the Health and Safety Executive. The HSE will receive industry’s registrations of chemicals and make technical decisions, for example in dossier and substance evaluations, as well as scrutinising authorisation applications and making scientific recommendations on whether to introduce new restrictions. This builds on the HSE’s activities as the competent authority for REACH. The Environment Agency and the devolved environmental regulators will have the role of providing the advice that the HSE will need on environmental matters.

The HSE is ready to act. We are increasing the resources available to it with extra money and extra people. We have done the same for the Environment Agency and for Defra. We have also provided extra resources to both the HSE and the EA to prepare, and we will continue to scale up their resources to £13 million a year at full operation. Appeals against the HSE’s decisions will be heard by the First-tier Tribunal, which is fully independent of the HSE. The tribunal can bring in expert advice so that it can assess the merits of the case.

The SI contains a range of transitional provisions to provide legal certainty to business and to protect supply chains. There will be automatic transfer of existing UK registrations into the UK REACH system. This means that industry needs to do nothing on exit day to be reassured that its registrations will be valid in UK law and there will be no break in its access to the UK market.

Companies will need to provide HSE with the information supporting their registrations in two phases: initial information within 120 days and the full information within two years. No fee will be attached to these requirements. As I have said, industry has tested the IT systems and given them its support.

To give a sense of scale, we will grandfather more than 12,000 registrations into UK REACH—35% of them from 2018—representing 5,700 chemicals. Looking forward, we would expect 50 to 100 new chemicals to be registered each year. REACH places a registration duty on importers of chemicals. This will be new for companies that import from the EU/EEA as they are currently covered by their supplier’s registration. We are therefore giving them a two-year grace period, which will give them time to adapt and will protect supply chains. In the meantime, they must send information to the agency within 180 days in what is described as a light-touch notification procedure to provide assurance that they know how to manage the chemicals safely. We expect downstream user notifications to be over 10,000. I should emphasise that we will keep both two-year deadlines—for grandfathering and for downstream user registrations—under review.

Although we are providing two years for industry to adapt, there have been questions about why we need these data at all. The “no data, no market” principle is key to REACH, and will remain key to the safe use of chemicals in the UK as well. Surely it would be irresponsible to set up a UK regulatory system without data on the chemicals being used in the United Kingdom. That would leave the UK regulator with no data through which to regulate industry and assure the safe use of chemicals in the UK.

The UK Chemical Industries Association and Cefic, the EU chemicals trade body, have published their joint recommendation that the data used to register under EU REACH should be made available for UK REACH at no extra charge. We have heard similar messages from other EU trade bodies. Some chemical consortia have amended their contracts to enable this to happen. That is welcome news and I endorse the industry’s efforts.

We are determined that there should be no need for any additional animal testing for a chemical that has already been registered, unless it is subject to further evaluation showing that the registration dossier is inadequate or there are still concerns over the hazards and risks of the chemical. That is why this instrument continues the core aim in EU REACH of avoiding duplicate animal testing.

Both the legislation and the systems we are putting in place are fully operable. The building blocks of REACH will remain: industry’s primary duty to understand the hazards and risks of chemicals and ensure safe use, tied to the principle of “no data, no market”; registration by the industry of the chemicals it produces and places on the market—registration is not a regulator-led approval scheme; dossier evaluation by the regulator of at least 5% of registration dossiers to check compliance and quality; substance evaluation, namely investigation by the regulator of outstanding concerns about a chemical, often leading to a requirement on industry to fill the knowledge gaps; the authorisation process, which forces industry to apply for and justify continued use of “substances of high concern”; and restriction of the most dangerous chemicals where unacceptable risks remain.

The SI changes, in Schedule 1—in Article 3—the definitions of the various industry duty holders so that they refer to the UK rather than the EU. This is a simple but essential change. Without it, UK industry would no longer have any duties, including to ensure the safe use of the chemicals it produces and uses.

Just as HSE inherits the role and functions of ECHA, the responsibilities of the European Commission pass to the Secretary of State. For example, the Secretary of State will make decisions to authorise the use of a substance of very high concern or to restrict chemicals on the basis of an opinion from HSE. The Secretary of State would need to bring a statutory instrument to Parliament to make new restrictions or add to the list of chemicals where industry needs an authorisation.

As REACH covers environmental protection, which is devolved, the Secretary of State must act with the consent of the devolved Administrations where a decision relates to an area of devolved competence. A safeguard clause allows the Secretary of State and devolved Administrations to take urgent action where it is needed to protect human health or the environment. This must be followed up with the normal restriction process to see if there should be a UK-wide control.

We will continue to ensure the highest levels of protection for human health and the environment, based on robust evidence and strong scientific analysis. At the same time, we are taking steps to provide industry with the legal certainty it needs to operate and to preserve the supply chains for the chemicals we depend on. For these reasons, I beg to move.