The REACH Data Dilemma: Part 1
By Michael Wurzman
The REACH Data Dilemma: Part 1
Unlike man, all data is not created equal. REACH compliance is dependent on receiving high quality data from your supply chain and being confident it is current. If the substance content data you receive is not complete and in a usable form - or outdated - you may not be able to satisfy your REACH compliance responsibilities. The massive amount of substance data contained in a product is overwhelming. Without an industry wide common data collection approach, it will become massively expensive for our supply chains and still be impossible to control the quality of the data received.
The first requirement is a methodology to allow tracing data from the originator and providing a systematic way to push or pull data through the supply chain to the OEM. The second requirement is a consistent structure of data so it can be easily analyzed, which we will address next month.
Many believe that the simple exchange of spreadsheets should be sufficient. Experience in automotive has shown that with a large, diverse and deep supply base, this becomes problematic. There are issues with collecting, verifying and rolling up the data, but also enormous difficulties in updating the data for changes. For complex products such as ours, using spreadsheets is virtually impossible in any cost effective manner. In Texas, they have a saying, “There is no learn’n in the second kick of the mule”, so let’s learn from automotive and not start down a failed path of spreadsheet data exchange.
When making a decision on how to exchange the data, and what system to use, we need to look beyond our current requirements of REACH and Conflict Minerals, but also to what is anticipated. Legislation is being written to expand conflict mineral reporting to the EU, as well as the legislation regarding human slavery, water consumption, greenhouse gasses and possibly the use of O.D.S. (ozone depleting substances) in our supply chains. With this in mind, we know the data will be expanding in scope and requiring frequent updates.
The only practical way to accomplish this is with a unified reporting system that can both push and pull data along a supply chain. This requires a system that can track and rollup data from the basic material supplier (and, in the future the source of raw ingredients) to the OEM. Each data element needs to be tracked and updated as new substances become reportable under REACH and other global legislation. Additionally, all approved multiple sources need to be tracked throughout the supply chain for true REACH compliance. The cost of doing this with redundant systems would be enormous, both in manpower time and support costs.
Compliance Data Exchange
AEM has reviewed many systems and determined that HP’s CDX (Compliance Data Exchange) will be able to meet our needs today and in the foreseeable future. It is a cross-industry solution that uses the proven IMDS platform, but at a lower cost with integrated conflict mineral reporting. Also, the training level of CDX users will be tracked, alongside the actual data to help address data quality issues. We will be able to integrate with all internal data systems, as we are in-house platform neutral. By agreeing to use it as an industry, we can guide its expansion to cover our emerging reporting needs.
The Importer-of- Record and REACH Obligations
REACH has all the transparency of a national tax code – even when it comes to import/export activities between two divisions of a multi-national company.
For example, imagine that Heavy Equipment, Inc., (HEI/US) ships a preparation - windshield washer – and a component article - hand grips - to its sister organization in France (HEI/FR). HEI/FR incorporates the windshield washer and hand grips into finished cranes.
Within this scenario, HEI/FR has obligations as an EU producer of finished-assembly cranes that it places on the EU market. But, in the limited space available for this discussion, let’s focus solely on HEI/FR’s three possible obligations as the importer-of-record for the preparations and component articles that it imports and incorporates within those cranes.
1. Registering Substances
In the scenario above, HEI/FR doesn’t import substances by themselves. But what about the imported substances in the windshield washer preparation? HEI/FR may have registration requirements for the substances in the windshield washer if two criteria are met: a) the substances in the windshield washer are intentionally released during the crane’s normal conditions of use, and b) the cumulative amount of the substances in the windshield washer – measured across all the mixtures that HEI/FR both manufactures for the EU market and also imports into the EU – exceeds one metric tonne per year.
2. Notifying the European Chemicals Agency
Let’s say that the component hand grips that HEI/FR imports from HEI/ US contain a known Substance of Very High Concern – DEHP. Does HEI/FR have to notify ECHA about the presence of DEHP in the grips?
The answer is “yes,” if a) the concentration of DEHP exceeds .1% w/w of the grips and b) the cumulative amount of DEHP that HEI/ FR places on the EU market from all sources of imported and manufactured articles exceeds one tonne per year.
3. Communicating to Customers and Downstream Users
If HEI/FR imports grips containing DEHP, it must inform its customers and other downstream users if the concentration of DEHP in the grips exceeds .1% w/w. What is critical to note here is that there is no tonnage threshold needed to trigger this obligation.
In the above scenario, HEI/US is a non-EU firm. Its primary REACH-related obligations are business obligations. For instance, HEI/FR and its other EU importers will likely insert REACH-compliance clauses into purchasing contracts. Plus, they’ll demand documentation about the presence of any SVHCs, as well as their concentrations, safe handling methods and so on for both ECHA and downstream users. Plus, EU authorities might demand similar documentation before allowing HEI/US’ shipments into the EU.
EU divisions of global equipment firms face importer-of-record obligations, even if the non-EU exporting firm is part of the same global company. Global corporations would do well to investigate the registration, notification and communication services of an EU-based Only Representative.