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published on 11 November 2020 | Reading time approx. 11 minutes
The EU Waste Framework Directive, as amended by Directive (EU) 2018/851 (WFD), provides for new information obligations for suppliers of articles containing more than 0.1 per cent of a Substances of Very High Concern (SVHC). These obligations will apply from 5 January 2021, provided the respective national implementation laws are enacted in time. In Germany, this requirement will be implemented in the Chemicals Act (ChemG), details are to be clarified in a supplementary legal regulation. The European Chemicals Agency (ECHA) has already set up a corresponding database (SCIP Database), to which the information on such substances must be submitted to comply with the legal obligation. Companies that market products containing substances of very high concern in the EU must in future inform not only their customers but also the ECHA. Especially in the case of international supply chains beyond the external borders of the EU, it must be clarified which company in the supply chain is legally subject to this information obligation and which company can best implement this obligation to the ECHA in practice. In addition, it is particularly important for companies in the Life Science sector to determine as to whether they are also affected by these new waste-related notification obligations towards ECHA, since certain areas regulated by special legislation are exempted from the already existing duty to inform customers about SVHC-containing products.
With the amendment of the Waste Framework Directive (WFD) in 2018, a new duty to provide information on so-called “Substances of Very High Concern” (SVHCs) within the meaning of Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH Regulation) was introduced in Art. 9 (1) lit. i WFD. The relevant information is collected in the newly established SCIP-database (Substances of Concern In Products), which is managed by the European Chemicals Agency (ECHA). The SCIP notification process is scheduled to start on 5 January 2021. Waste treatment facilities will have access to this database and, upon request, also consumers. This serves to ensure the provision of information on the presence of substances of very high concern throughout the life cycle of products, up to the waste stage. These are potentially hazardous substances which are, for example, carcinogenic, mutagenic or toxic for reproduction. Substances that have been identified as SVHC according to the procedure defined in the REACH regulation are placed on the so-called European candidate list for further evaluation. Although this does not yet result in an obligation to register the substance, it does impose extensive information obligations in the supply chain. Producers and importers shall already now notify to ECHA the substances listed on the Candidate list which are present in their articles in a concentration above 0.1 per cent and in quantities totalling over one tonne per year, unless the exposure of humans or the environment to the substance can be excluded or the substance in question has already been registered by another manufacturer or importer in the EU for the use in question (Article 7 (2) (3) REACH Regulation). The purpose of the duty of notification is to inform the ECHA of the use of SVHC in articles in order to lay the groundwork for the adoption, by the competent authorities, of potential risk management measures in accordance with the authorisation and restriction procedures put in place by the REACH Regulation (see also ECJ ruling of 10 September 2015, Case C-106/14) . In addition, suppliers are already obliged under European chemicals law to inform their commercial customers if their products contain at least one of the substances on the candidate list in a concentration of more than 0.1 per cent (see Art. 33 (1), 57, 59 REACH Regulation). This information duty aims at enabling all operators in the supply chain to take, at their stage, those risk management measures which follow from the presence of substances of very high concern in articles in order to guarantee their completely safe use (see also ECJ ruling of 10 September 2015, Case C-106/14) . Moreover, consumers also have their own right of information vis-à-vis their trading partners, the importer or the manufacturer regarding products containing SVHCs in order to make their purchasing decisions on an informed basis (Art. 33 (2) REACH Regulation).
The new notification obligation to the ECHA, which is now also stipulated in the waste legislation, is legally linked to this existing information obligation under REACH about SVHCs among actors in the supply chain and towards consumers. However, these information obligations along the supply chain under chemical law, originally provided for in Art. 33 REACH Regulation, expressly do not apply to areas which are subject to special regulations, including medicinal products, food and feed as well as cosmetics in the finished state, intended for the final user (see Art. 2 para. 6 lit. a, b, d REACH Regulation). Medical devices are included in the rules from the previous information requirements if they meet the definition of “article” (Art. 3 No. 3 REACH Regulation), what is usually the case, as the exemption in Art. 2 para. 6 lit. c REACH Regulation only applies to those medical devices that are marketed as mixtures (Art. 3 No. 2 REACH Regulation). The companies in the life science sector affected by the previous exemptions must now ask themselves whether SVHC substances in their specific product categories must instead be reported to the SCIP database under the new waste law information obligations. This is likely the case for most product types. This is because the new information obligation is anchored in European waste law (Art. 9 (1) lit. i WFD). It can therefore be assumed that, despite the reference to REACH, the exceptions to the scope of application foreseen in the WFD and not those of the REACH Regulation will apply. With a few exceptions (see Art. 2 WFD), the WFD is applicable to all products that become or may become waste. It is true that the German Waste Law (Kreislaufwirtschaftsgesetz - KrWG), which transposes these European requirements into national law, provides for exceptions to the scope of application, e.g. substances that have to be disposed of in accordance with the Food and Feed Code (LFGB) (§ 2 (2) KrWG). However, the new information obligation in Art. 9 (1) lit. i WFD will not be implemented in the German Waste Law (KrWG) as originally planned by the Federal Government (BT-Drs. 19/19373), but, at the suggestion of the Bundesrat and as requested also by the Federal Association of German Industry in the Chemicals Legislation (Chemikaliengesetz - ChemG ) (Resolution of the Bundestag of 17 September 2020 ). The fourth section of the Chemicals Act already contains various notification requirements. The new obligation required by EU waste law is to be implemented exactly in this fourth section by a newly created § 16f ChemG. This fourth section (i.e. in future also the new § 16f ChemG) is explicitly not applicable to food, feed materials, compound feed and feed additives (§ 2 (2) ChemG), although the ban on marketing of unsafe food and feed (Art. 14, 15 Regulation (EC) No 178/2002) should generally rule out the possibility that they contain substances of very high concern. In addition, § 2 (1) ChemG exempts certain products that are subject to special legal regulations, such as cosmetics, tobacco products, pharmaceuticals, medical devices and certain wastes, from individual notification obligations. However, it does not follow from the resolution of the German Bundestag of 17 September 2020 that § 2 (1) ChemG should be amended in such a way that the new notification obligation to ECHA for products containing SVHCs should not apply to these product categories either. Rather, it is planned that after § 16e ChemG a new § 16f ChemG will be inserted, which requires suppliers within the meaning of Art. 3 No. 33 REACH Regulation, placing on the market articles (with the exception of those for military use), to provide ECHA “from 5 January 2021, the information referred to in Article 33(1) of Regulation (EC) No 1907/2006 (...) in accordance with Article 9(2) of Directive 2008/98/EC”. The REACH Regulation is therefore only referred to in order to define the duty holders (“suppliers”) and the products for which the information obligation exists, but not to exempt certain product categories from this information obligation according to Article 2 REACH. The fact that specific product categories relevant to the life science industry are also covered by the new information obligations makes sense, even when one considers their objectives, which we take a look at in the following.
The declared goal of the EU and Member States is to reduce the content of hazardous substances in materials and products, including recycled materials, and to promote the development of non-toxic material cycles. The new information requirements thus pursue the general objective of reducing the content of SVHCs in products. In addition the SCIP database that has now been set up is intended to ensure that sufficient information on the presence of hazardous substances is available throughout the life cycle of products and materials and can be transferred to waste treatment facilities during the waste phase if necessary. Such information is important to reduce the risks posed by substances of very high concern during subsequent waste treatment and to check whether waste is unsuitable for certain recovery operations, such as recycling or the production of high-quality secondary raw materials, due to the presence of hazardous substances. The SCIP database will thus improve the safety of waste managers and their ability to process waste (e.g. removing hazardous substances from materials before waste treatment) by providing the necessary information on hazardous substances. The purpose of the law thus also clearly argues for including the provision of such information also for specific product categories, such as medical devices, pharmaceuticals, food, cosmetics, detergents and cleaning agents, animal feed, plant protection products and biocides. Of course, it will be necessary to wait for the legally binding implementation of the European legislation in German law (and in the laws of other member states) before a final statement can be made on whether the specific product categories relevant here are also included.
The information obligation applies to suppliers who place products on the EU market that contain SVHCs in a concentration of more than 0.1 mass percentage. However, only economic operators established in the EU (and EFTA) can be “suppliers” in the sense of Art. 9 (1) lit. i WFD and the newly introduced § 16 f ChemG; only these operators can therefore be subject to the information obligations towards ECHA (“duty holder”). Supplier of an article can be any producer, importer, distributor or other actor in the supply chain who places a product/ article on the EU market (see definitions in Art. 3 No. 33 REACH Regulation). Retailers and other actors in the supply chain who provide products directly to consumers are not covered by the new SCIP obligation, unless such a retailer also acts directly as an importer and/or producer in the supply chain.
Companies based outside the EU can thus not be “Duty Holders” in the legal sense with regard to the new information obligations under the WFD. However, especially in international supply chains, manufacturers are often located outside the EU, but at the same time have the best knowledge of the product and the substances it contains and would therefore be most suitable to fulfil the information duties. For this reason, the concept of the so-called “Foreign User” was introduced at EU level. This term is misleading in so far as third companies established in the EU but not subject to information obligations can legally act as “Foreign User” in the sense of “Third Party User” on behalf of the party actually obliged. In this constellation, the “Duty Holder” seated within the EU, makes use of a third “Non-Duty Holder” (within or outside the EU) (e.g. with the help of a contractual agreement) in order to fulfill its information obligations. This enables the duty holder to use his SCIP account with ECHA to assign the most suitable company to carry out the actual SCIP notifications. Nevertheless, the person responsible in external relations (i.e. towards ECHA and the supervisory authorities) remains the “EU duty holder”.
The “Foreign User” concept is not defined in the WFD or in REACH itself, but was developed (see “ECHA Accounts Manual”) to enable efficient working with the various ECHA databases (REACH-IT, R4BP 3, ePIC and in future also SCIP). Granting access to a “Foreign User” may disclose confidential information and data such as business and trade secrets or intellectual property such as patents held by the “Duty Holder”. It is therefore important that both parties agree (contractually) in advance on the scope of access (user role) and the handling of confidential information.
Of course, there are still many open questions concerning the new information and notification obligation regarding SVHC-containing products to the ECHA. Does this obligation exist, for example, in the case of an article consisting of several components, only if the concentration of the substance of very high concern exceeds the limit value of 0.1 per cent in the entire article or do the single components have to be checked for exceeding the limit value in an isolated manner ? With regard to this question, it is possible to refer on the ECJ’s previous case law on the obligation to notify along the supply chain according to Art. 33 of the REACH Regulation (ruling of 10 September 2015, Case C-106/14). In order to ensure the effectiveness, the ECJ has clarified that it is for the supplier of a product in which one or more articles of which it is composed contain a substance appearing on the candidate list in a concentration higher than 0,1 per cent, to inform the recipient and, on request, the consumer, of the presence of that substance. The threshold applies thus to all products contained in the finished product. In order to achieve the objectives of the newly introduced waste notification obligation in the best possible way, it is likewise necessary that the information has to be passed on by specifying the individual products/components in which a candidate substance is contained to more than 0.1 per cent.
Other questions arise with regard to the modalities of the information obligation, when one considers that there may be more than one “Duty Holder” along a supply chain when products are placed on the EU market. The EU Commission is trying to find a pragmatic approach for these multiple duty holders related to one product in order to avoid double reporting and thus unnecessary administrative burden for both duty holders and authorities (e.g. a simple reference to information already supplied to the SCIP database by the pre-supplier). Moreover, in Germany, the details of how information is to be communicated are to be determined by the legislator. In this respect, however, it can be assumed that the German government will not deviate from the ECHA specifications. It is also interesting that concrete sanction provisions for the violation of the new reporting obligation to ECHA have not yet been provided for in the German implementation project. It remains to be seen whether this gap will be closed. In particular, it is recommended that EU-wide and internationally operating companies also monitor closely the implementation of Art. 9 (1) lit. i WFD in the other Member States. As is often the case with the transposition of directives, differences in the enforcement and concrete application of this obligation in national law may arise, not least with regard to the sanction mechanism.
Companies must clarify whether they place products containing an SVHC substance on the candidate list in a concentration of more than 0.1 mass per cent (w/w) on the EU market. If this is the case, they have to comply with the already existing information obligations of the REACH regulation in the supply chain (although, as mentioned above, this does not apply to some product categories, such as medicinal products, food and feed as well as cosmetics in the finished state, intended for the final user) and, from 5 January 2021, additionally with the waste notification obligations to the ECHA, which will probably also cover these specific product categories, except for food and feed. It is therefore advisable to take precautions now in order to be able to adequately fulfill this obligation after the respective national regulations have come into force. For many companies, the obligation to report to the SCIP database leads to a considerable amount of work, which is why cooperation with a “Foreign User” should be considered.
Dr. Barbara Klaus
Partner
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Ulrich Klaus
Senior Associate
