REACH, Europe’s landmark chemical safety legislation, is living up to its name.
The recently passed law, officially called The Registration, Evaluation and Authorisation of Chemicals, replaces a hodgepodge of existing laws in the European Union and could have far-reaching implications for the beauty and consumer products industry. In addition to addressing the question of safety for an estimated 30,000 ingredients used in consumer products, the law could possibly impact product pricing and availability of some ingredients for the creative palette.
About 800 of those chemicals are used for fragrances and some 150 of them are naturals, according to Jean-Pierre Houri, director general of the International Fragrance Association, or IFRA, an industry group that is one of the many players involved in implementation of the new law. With some exceptions, the new law covers all substances, even those created before current testing standards were put in place.
One of the interesting characteristics of REACH is that it doesn’t just affect suppliers, or as Kenneth Schrankel, vice president of regulatory policy and industry issues at International Flavors & Fragrances, put it, “REACH affects everyone in the supply chain” — including cosmetics manufacturers and importers of beauty products into the EU. It also has inspired unusual collaborations between groups that have clashed in the past.
Environmentalist watchdog groups, such as Greenpeace and World Wildlife Fund lauded REACH as prompting a gradual shift in the industry as companies try to prepare for possible blacklisting of certain chemicals. Greenpeace said a number of firms, like The Body Shop and Unilever, named in its report “Perfume — An Investigation of Chemicals in 36 Eaux de Toilette and Eaux de Parfum” published in February 2005, have already reviewed their chemical usage policies and are taking steps to phase out phthalates and synthetic musks. Helen Perivier, international toxics campaigner for Greenpeace and specialist on REACH, said Greenpeace has been meeting with some of the cosmetics industry’s biggest names to continue the movement. “This legislation puts into force what some companies consider good business,” said Perivier.
Greenpeace argues that looking for replacements for risky substances would encourage, not hinder, innovation. “The substitution principle is not to only look at what can replace chemicals, but to drive companies and business to look more innovatively toward the substances in common use,” she explained. “For many, many products, it’s totally possible to have the same quality without toxic substances.”
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Some beauty executives question that assertion and at least one supplier pointed out that when substitutes are found, the reformulated product as a whole needs to be retested for not only safety but compatibility. But the industry, including manufacturers and suppliers, have embraced the concept of the law, while being wary of its complications and costs.
“The fundamental idea is excellent,” said Ken Marenus, vice president of regulatory affairs at the Estée Lauder Cos. Inc. He praised the idea of tracking and making inventory lists of “every chemical known to man and nature.” His chief concern is “making sure that suppliers are going to continue to support their products.”
Marenus, who said Lauder has been scrutinizing its ingredient lists for 18 months, said the problem of losing the use of substances goes beyond economics, particularly in fragrance. He noted that in a scent formula, where there are 200 to 400 ingredients, “If you have to change one or two, you may not be able to have the fragrance.” IFF’s Schrankel observed, “It’s obvious that it’s going to drive consolidation. If you’re a small chemical company, making a handful or a few ingredients, and you are right at the margin of having a reasonable profit, all of a sudden you’ve got to apply some additional costs for REACH compliance. You may say, ‘I’m cashing in. I’m going to the Riviera and I’m going to sell this to DSM [Group].'”
One of his IFF colleagues, Paul Pieschl, director of global product integrity and research perfumery, added that basic ingredient suppliers have started editing the list of substances they offer, simply because the anticipated cost of testing is not justified by the amount of volume done by the individual ingredients. “A number of suppliers that we deal with are already phasing out and minimizing their catalogues,” said Pieschl.
Schrankel agreed. “In the future, those chemicals that exist today where there is low margin of return, there’s a high cost to satisfy REACH criteria — those will get left behind.”
L’Oréal is more confident regarding the cost of REACH. “There may be financial savings linked to the reorganization of the portfolio of raw materials so that the financial impact overall is less than we think,” said Loic Armand, director of external relations at the French beauty behemoth. “The rationalization of the portfolio could, depending on each company, compensate for the costs involved,” he said. “From the beginning our industry declared itself in favor of REACH. We didn’t fight it, we prepared for it. We have all been quite involved in the preparation for REACH.”
In anticipation of REACH, L’Oréal started reevaluating all its ingredients five years ago, said Laurent Gilbert, global director of raw materials at L’Oréal.
Gilbert said that even though we have a comprehensive dossier on all the ingredients, around 50 percent of L’Oréal’s portfolio would have to have the dossier updated to meet the REACH requirements.
Gilbert said between 80 and 85 percent of the ingredients in L’Oréal products were introduced before 1981, when chemical testing became compulsory under law. Some ingredients, such as minerals, will be exempted under REACH but around 50 percent of L’Oréal’s portfolio will have to have dossiers updated to include the pre-1981 substances. The whole procedure is expected to concern between 1,000 and 1,500 substances, according to Gilbert, who added that L’Oréal is considered a downstream user, or end user of the compounds. So L’Oréal will not be obliged to carry out safety evaluations itself. “Most of our ingredients will have to be reassessed by our suppliers, with whom we are working very closely. It will be rare that L’Oréal will have to carry out the tests,” Gilbert explained. “We are preparing ourselves to give information from L’Oréal about how ingredients are being used.”
L’Oréal is not expecting to lose any ingredients. “We anticipated REACH and we are working to make our substances REACH-compliant,” Gilbert said.
Manufacturers that produce or import consumer products into the EU must register safety dossiers for every substance they use in excess of 1 ton a year. If a supplier produces a product for a manufacturer inside the EU, then the supplier has to prepare a test dossier and register any ingredients that fit the target criteria. The manufacturer, or the supplier’s customer, then is designated as “a downstream user,” and must furnish the supplier with information about how the subject material is handled and in what volume. The law includes imported preparations, or fragrance compounds, and articles such as candles.
The compiled information will go into a database maintained by the EU’s Chemical Agency, which is being established in Helsinki, Finland. Disputes, such as a ruling on whether a substance can be used under certain circumstances, will be decided by the European Commission, based on information from the Chemicals Agency.
Despite a sizable list of exceptions, the law embraces a broad swath of substances, both synthetic and natural, and the requirements will be phased in over a series of three-year windows. First comes a period of preregistration from June 8, 2008; then, from 2008 to 2010, each company that does business in the EU has to register chemicals fitting the criteria that the firm used in excess of 1,000 tons a year or have been classified as being of “high concern,” according to an outline compiled by IFF’s Schrankel. Materials with an annual volume of 100 tons a year per company must be tested and registered between 2008 and 2013. Substances with a usage of more than a ton are due between 2008 and 2018. Data requirements are not as rigorous for substances falling into the 1- to 10-ton range, unless they are classified as hazardous or are intended for consumer use, Schrankel added. Then a full battery of tests will be required.
Gregory Adamson, vice president of product safety and regulatory affairs at Quest International, underscored the benefit that is widely perceived in the law. For instance, he sees the legislation inspiring manufacturers and their suppliers to work more harmoniously together on providing good stewardship in use of materials and standards of safety. In addition, “it’s good for the industry because it will provide a reassurance to the consumer that the products are safe for use.” He added, “The drawbacks are clearly the costs. This is a very onerous process demanding substantial additional resources.”
Estimates on the total price tag of testing over the entire registration period vary wildly, registering in the tens of millions of euros, because, as IFRA’s Houri pointed out, data can be shared and applied to groups of like compounds, and companies that are interested in the same materials can form consortiums to share information and costs.
Swiss-based supplier Firmenich has bitten the bullet and pledged that it will participate in the registration of over 200 materials, which would cost at least $5 million, just for outside testing fees, according to William R. Troy, vice president and general manager of product safety and regulatory affairs. Troy said he expects that some of the financial burden will be passed through the supply chain and it may be too great in some situations. “Clearly, the legislation at best will result in a loss of materials and maybe put some small mom and pop companies out of business.” He urged companies to take advantage of the preregistration option. Troy pointed out that the material becomes “known to authorities,” rather than being seen as “a new material” later in the registration period, and the testing requirements, therefore, become stiffer.
But what seems restrictive to the industry may seem in need of tightening to the watchdog groups. Greenpeace and the WWF say the adopted legislation doesn’t go far enough and their issue is with the clause that the legislation will allow certain substances to continue being used, even if they are identified as high risk to human health. “The EU decided to provide loopholes that would allow certain chemicals, which cause birth defects, for example, to remain on the market even when safer alternatives can be used,” said Greenpeace’s Perivier. “If a company can argue [such substances] can be adequately controlled [such as through low dosages], then the company can continue to use those substances. We feel that’s a very dangerous game to play.” She named another disappointment as the lack of decision regarding endocrine disrupters, the term used for substances that interfere with hormones and cause cancers. Those types of risks will be considered under REACH in six years’ time.
For both sides, REACH is a work in progress. The original law runs over 600 pages, and guidance directives for implementation filling hundreds more are being churned out. IFRA held a meeting at the recent annual gathering of the Cosmetic, Toiletry and Fragrance Association at Boca Raton, Fla., and CTFA has been closely following the proceedings to advise its members. “So much of what we do has to be seen in a global environment,” said Francine Lamoriello, executive vice president of global strategies at CTFA. “Regulators aren’t working in isolation any more. Our industry is one of the most global. It is really impressive.”