1. Background
EU (REACH* introduced in 2007) and Japan (CSCL* revised in 2009) have implemented chemical management programs to protect the public from chemical substances and products containing hazardous chemical substances, and to enhance their industrial competitiveness.
* REACH: Registration, Evaluation, Authorization and Restriction of Chemicals
* CSCL: Chemical Substances Control Law
Following the EU-REACH, in order to strengthen its chemical management system for the protection of public health and the environment, Korean government has enacted the Act Concerning Registration, Evaluation, etc. of Chemical Substances (so-called K-REACH), which prescribes the process for evaluation and assessment of hazards and risks of chemical substances and products in addition to the existing Toxic Chemical Control Act (TCCA).
2. Related Issues
After two years of consultation among industries, the government, and related ministries, the government attempted to legislate the final bill but failed, after which lawmakers proposed the current K-REACH bill, which contains even stricter restrictions. Without any consideration of the original government bill and business’ position, this lawmaker-introduced bill was passed in just 16 days in the National Assembly.
Despite the original intent – protection of public health and the environment, K-REACH imposed regulations which were too strict for companies to comply with. In particular, under the current TCCA, quantities of less than 0.1 ton per year of chemical substances or new R&D chemicals are not subject to any hazard assessment. K-REACH however, does not allow such exemptions. Unlike the original government bill which requires companies to report their manufacturing or importing of new chemical substances at one ton or above, K-REACH which was passed in the National Assembly, strictly regulates all new chemical substances.
If all new chemical substances become subject to regulation regardless of the quantity either manufactured or imported, the number of chemicals to be reported to the Ministry of Environment (MOE) will dramatically surge. Given that the registration and evaluation of chemical substances is both a costly and time-consuming procedure, the new K-REACH would place a heavy burden on companies. For example, a company has to spend at least 70,000 USD as well as 9 months in time for the evaluation/assessment of each item. It is feared that with the fierce competition, such a costly registration process would seriously erode industrial competitiveness.
On the other hand, EU-REACH, which was the basis for K-REACH, exempts less than one ton of chemicals. The US does not regulate chemical substances under 10 tons. In comparison with other advanced countries, K-REACH, scheduled to come into effect starting January 1, 2015, is a very strict regulation.
In addition, companies are required to report to the MOE the amount of their chemical substance consumption, and manufacturers/importers of chemicals mandatorily provide information on chemical substances (usage, quantities of consumption/sales, etc.). This makes companies very concerned over the risk of sales information leakage.
3. The Way Forward
In response to K-REACH, the KEF will make a significant effort towards minimizing the negative impact on the industries. In particular, the KEF will set up the Chemical Safety Committee with business members from relevant industries and ensure that business opinions are reflected in the revised enforcement ordinance/regulations of the Act through a joint public-private consultative body.