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 If the substance content data you re­ceive is not complete and in a us­able form – or outdated – you may not be able to satisfy your REACH compliance responsibilities.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.

Spreadsheet Maze

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.

Harvey Stone

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.

HEI/US

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.

Key Points

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.