K-Reach Enacted – The Game Now Shifts to Advocacy to Ensure Sound and Practical Implementing Regulations
On May 1, 2013, the Korean National Assembly passed the "Act on the Registration and Evaluation of Chemicals," a Korean version of REACH, the so-called "K-REACH." Although touted in the trade press as a "compromise" legislation, we cannot envision how the Act could have been promulgated in a more exacting form. With the small exception of a change in the registration threshold from 0.5 tonnes to 1.0 tonnes per annum, none of the hard fought improvements made by industry over the draft version floated by the Ministry of Environment (MOE) in 2011, ultimately were adopted by the National Assembly.
As enacted, K-Reach adopts many of the elements of the European Union's REACH regulation with some important differences. Specifically,
1. Priority existing chemicals will be subject to registration if manufacture or import exceeds 1 metric tonne per year. There will be a transition period for the registration of priority existing chemicals similar to REACH. A Presidential Decree to implement the Act will be issued setting forth the specific timeframes;
2. Priority existing chemicals will be selected by the Ministry of Environment (MOE) on the basis of hazard, tonnage, and use information obtained from annual reports to be filed by manufacturers and importers;
3. The threshold for annual reporting of existing chemicals is 1 metric tonne per year and applies not only to substances and mixtures but also to substances released from articles during use;
4. The threshold for annual reporting of new chemicals is not clearly specified in the Act. A Presidential Decree to implement the Act will be issued, which will clarify the annual reporting threshold for new chemicals;
5. The Act does not specify the data requirements, which will be set forth in the implementing Presidential or Ministerial Decrees. Discussions surrounding the bill indicated that data requirements will be similar to, but not as extensive as, that of REACH;
6. There is a Korean-only representative provision similar to REACH;
7. Communication on safe use down the supply chain is required. If the substance is classified under the Industrial Safety and Health Act, this must be described in an extended Safety Data Sheet (SDS) like that required under REACH, and such SDS must be transferred to the customer;
8. The MOE will conduct hazard assessments for all registered substances and risk assessments for substances that are of concern based on hazard or manufacture/import volumes exceeding 10 metric tonnes per year. An Addendum to the Act specifies the following risk assessment schedule based on tonnage:
a. ≥ 100 tonnes/year – Jan. 1, 2015
b. ≥ 70 tonnes/year – Jan. 1, 2017
c. ≥ 50 tonnes/year – Jan. 1, 2018
d. ≥ 20 tonnes/year – Jan. 1, 2019
e. ≥ 10 tonnes/year – Jan. 1, 2020
9. Substances of very high concern will be subject to Authorization in a process that parallels REACH authorization;
10. Highly dangerous chemicals will be subject to restrictions in a process that parallels REACH restrictions;
11. Registrants will be forced to share existing animal data;
12. Registration fees will be prescribed by Ministerial Decree; and
13. Onerous administrative fines and penal sanctions apply for failure to comply.
As noted, many of the details as to how the legislation will work in practice are to be defined in Presidential or Ministerial Decrees yet to be promulgated. Because the law goes into effect on January 1, 2015, it can be anticipated that the MOE will be working hard on developing the implementing regulations and guidance over the next year or so. These implementing regulations will flesh out critical aspects of the legislation, such as the criteria for deciding whether existing substances are of priority for registration, whether certain substances will be exempted, the treatment of polymers, surface-treated particles and alloys, the specific data requirements associated with each tonnage band, the use of read-across and alternative testing strategies, the precise mechanism for data sharing and data compensation, the procedure securing confidentiality of data, the format for sharing information down the supply chain, and many other details.
By working through Korean counterparts, the U.S. Trade Representative Office, or other resources on the ground, industry needs to engage in a dialogue with MOE in order to influence the development of the regulations, or at least obtain advanced warning as to the content of the proposed regulations. The time provided for formal public comment on Presidential and Ministerial Decrees is typically very short. Industry needs to be prepared and establish a process for rapid translation of the draft regulations because experience has shown that it typically takes several weeks before an English language version of the drafts becomes available.
Keller and Heckman LLP is organizing a coalition of interested companies to work on advocacy in the regulation development process. If you are interested in learning more about this effort, contact Herb Estreicher at estreicher@khlaw.com.