socma: history & mission

US Industries Experiences with REAChAPEC ConferenceAPEC Conference

Cuzco, PeruCuzco, PeruAugust 11, 2008August 11, 2008

V.M. (Jim) DeLisi, ChairmanV.M. (Jim) DeLisi, ChairmanSOCMA’s International Trade CommitteeSOCMA’s International Trade Committee

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SOCMA: History & MissionSynthetic Organic Chemical Manufacturers

Association was founded in 1921. Since then, SOCMA has:•Spoken for and served batch, custom and small

chemical companies. •Promoted innovative, safe and environmentally

responsible operations.• Is a recognized and respected voice in

Washington, D.C.

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SOCMA: History & MissionApprox. 300 members

Specialty, Batch & Contract chemical manufacturersGlobal membershipSuppliers to the industry80% small businesses

• < $50 million in annual sales• < 200 employees

Staff of 35 located in Washington, DC

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SOCMA Members: Markets Served

Pharmaceutical Fine ChemicalsCosmetics and ToiletriesPersonal CareSoaps and DetergentsIndustrial ProductsConstruction ProductsTextiles

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Household ProductsAgricultural ProductsElectronics/computersFoodPerformance ChemicalsPlasticsPetrochemicals

REACh Concerns & Experiences

of our Members

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•The implementing rules are still in transition. It is not a completed regulation.•Can ECHA, a brand new agency, effectively administer this complicated regulation?

• The fact that IUCLID 5 has had a rocky start is not a good sign!

• US EPA has been skeptical that this rule can be effectively administered 6

Macro Concerns

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•ECHA registration fees•“OR” & SIEF Participation fees•Testing Costs•Strict Liability•“IT “ upgrades to assure compliance•Document Preparation

• Safety Assessment• Technical Dossier

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COSTS

Only Representative• Cost• Availability• Accountability• Independence• One “OR” per foreign Manufacturer

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Intellectual Property Rights• Non Biocidal uses of Biocides• Additives

• Non-hazardous additives below 1% are not listed on our MSD sheets – may have to be disclosed under REACh.

• Confidential Formula may have to be disclosed.• Unique “Identifiers” – how will they be used?• SIEF participation

• One substance – one registration

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Anti-Trust

REACh compliance, if not done very carefully, could

potentially involve a breach of U.S. Antitrust Laws!

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Polymers•Polymers can not be registered

•IPR•“Hazardous Monomers”•Very complex for Paints, Coatings, etc

that can contain multiple polymers

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US Based Trading Companies

• Non EU based traders can not register without the permission of the manufacturer:

• A non-EU based trader must partner with the manufacturer of materials destine for the EU – can be both an IP and contracting problem since a non-EU manufacturer can only work through one “OR”.

• Those with EU platform may change the way they invoice customers to allow their EU company to invoice – reducing US income – and the taxes it generates.

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Pharmaceuticals• Definition of the word “IN”for

Intermediates• Confusion: Do sole pharmaceutical use

intermediates need to be registered? If so, the lack of EINECS or ELINCS numbers for many will cause disruptions

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CosmeticsLack of EINECS and/or ELINCS numbers has

already caused disruptions

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Product Substitution and Withdrawals

• Will impact US Production•Domestic sales•Export sales

• Will have consequences for worldwide demand.

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Intra-company Transfers• Much of US/EU trade in Chemicals is Inter-

Company transfers.• Products manufactured in the EU but not consumed

in the EU are covered by REACh. This was not the case with EINECS or ELINCS (or TSCA).

• May encourage big companies to alter their invoicing patterns resulting in reduced US sales.

• IT challenge is enormous!

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Candidates List•Creates a “banned” list of substances without the need for sound science.•May take decades to review.•May “force” substitution with untested materials.

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Domestic Dilemma #1I’ve got $1 M in sales in

the EU and I need to register 50

compounds.

Domestic Dilemma #2I’d abandon my sales in the EU but the plant across the street

will no longer be able to purchase my chemicals if I

don’t continue to supply their EU facilities.

Domestic Dilemma #3

I don’t have any exports to the EU but my most important

customer is telling me if I don’t comply with REACh he can no

longer buy my products.

SOCMA’s Role• Support our membership with seminars and advice.

• INFORMEX 2009 in January• Webinars• Expert Advice• Consortium formation

• Recommended Partners• Work to avoid the spread of REACh like regulations, especially

into the USA.

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Thank youV.M. (Jim) DeLisi

Jdelisi@fanwoodchemical.com

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