Denehurst Chemical Safety Ltd
Compliance audits and internal systems for regulatory monitoring
Compliance Audits and Systems
As well as REACH and CLP compliance for registration, classification, SDS etc, the regulatory framework in Europe includes many other aspects such as off-shore chemical use, biocidal products, consumer legislation, food contact etc. and those manufacturing or trading in chemical products need to ensure compliance.
Much of this is customer driven with awkward questions from those using the products wanting assurance that their uses are covered.
It is important to have a 'system' in place to monitor chemical substances and blended products and to ensure that those in your organisation know their respective roles.
Compliance checks by Denehurst
Work is typically performed on-site, but will generally involve preparation activities before a visit and reporting after on-site assessments. To get the most out of the checks, various members of senior management need to be involved, including technical, purchasing, sales and production.
A typical audit would normally involve a total of two days work (one day on-site and several hours for preparation and writing-up). For on-site visits outside the UK, some extra travel time may need to be factored in (typically a half day for most of Europe, but more for the US or Asia).
Costs are typically £900 / €1100 per day plus expenses.
Having a system
Every organisation will have a different way of working and the systems used may be dictated to by multi-site (or even multi-national) management procedures that govern procurement, development of SDS, marketing, legal and so one. However, irrespective of how the organisation is set-out, there needs to be a clear procedure to identify responsible individuals and sites that are involved in certain activities.
Some companies have complex software and IT systems to manage the multi-departmental procedures, but others may use paper systems or simple spread sheets. How it is done is not important, as long as nothing falls between the cracks. It is also important to have a system to prevent a blame-game or passing the buck; trying to avoid responsibility is a skill many of us have, but is not conducive to an efficient and compliant work place.
Examples for responsibility
• Senior management – resources, decisions, strategy
• Procurement – communication with suppliers and gather information on
• Regulatory – fulfil legal & technical & compliance requirements
• Legal – contracts, SIEF agreements, non-disclosure
• Health and safety – ensure risk management is implemented
• Sales – communicate RMMs, identify uses, inform about uses advised against
• Marketing – new business opportunities, new regulatory frameworks
• Finance – establishing a suitable budget
Who handles the receipt of SDS ?
Who ensures updated SDS are passed to those writing new ones or those implementing health and safety ?
Which site is the official ‘importer’ for CLP notification and REACH ?
Who has reminded the R&D laboratory that CLP applies to imported samples ?
Who check labels of products from the US site before being passed on to EU customers ?
There are many issues and responsibility must be shared with senior management support; it is all goes wrong, it is the senior management who are held to account by the regulatory agencies.
Actors in the supply chain –
Roles and responsibilities under REACH and CLP
An important issue for all ‘actors’ in the supply chain is designation of their roles and responsibilities. Communication of hazard and recommended risk management measures is legally required to allow safety to workers, consumers and the environment; all actors in the supply line carry responsibility and failure to communicate could lead to penalties by national Competent Authorities. Note that actors may have more than one role, depending on their activities.
The REACH Regulation (EC) No 1907/2006 and CLP Regulation (EC) No 1272/2008 share many common definitions, but the absence of references to Only Representatives (OR) under CLP has caused some confusion. The need for Only Representatives to ensure ‘..information on the supply of the latest update of the safety data sheet..’ is difficult to interpret from a strictly legal perspective, but it is clear that the OR must ensure that the content of the SDS is communicated.
REACH activities include registration and provision of a Safety Data Sheet (SDS) and CLP requires notification of classification and labelling and correct labelling for supply. The requirement for Transport classification and labelling is not directly affected by either regulation, but data generated during the REACH registration process and improved understanding of hazards may influence Transport issues.
The key point is that all parties in the supply chain know their roles and responsibilities and have ensured that the chemical substance or mixture is compliant with the necessary regulations and that effective and compliant communication has taken place.
Roles in the supply chain
Definitions found in the CLP and REACH legal texts are described below. The key point to note is that although the actual definitions in CLP and REACH effectively the same, their meanings and roles can have different implications.
The key point here is that both legal definitions make it very clear that the manufacturer is a European legal entity. Therefore, any organisation producing or extracting etc outside Europe is not legally defined as a ‘manufacturer’ under the scope of CLP or REACH.
Under both REACH and CLP, the manufacturer is fully responsible for the identification of the substance, assessments of hazards and communication of risk management measures. The manufacturer is legally responsible for correct classification and labelling and the provision of an SDS if classified as hazardous, contains certain substances above specified limits or otherwise required.
The manufacturer must also ensure REACH registration and/or CLP notification. Registration is required if manufacturing over 1 t per annum (or pre-registered until transitional tonnage threshold deadlines). CLP notification is required within one month of first placing the manufactured substance on the market if it is classified as hazardous or if it is manufactured over 1 t per annum and is not yet REACH registered (irrespective of classification).
The role as manufacturer is therefore clear and will include toll-manufacturers who produce substances under contract. Note that blending / mixing chemicals is not a manufacturing process.
These definitions remain the same for each legal text and import is considered ‘physical introduction’ of the material into Europe. This term itself has led to considerable confusion as ‘introducing’ is not clearly defined. It is argued that those transporting within Europe are not introducing the material and the term needs to be clarified with the term ‘placing on the market’.
Placing on the market
The key point to note is that ‘import’ is placing on the market. This makes it essential that the importer appreciates that they are the placing on ‘the market’, even if they do not supply onwards, and ensures that all obligations for placement on the market are met. Irrespective of designations being made in the supply chain, consistency within the legal text and consistency between REACH and CLP is essential.
Note that goods used by the importer (ie considered placed on the market) need to be labelled for handling and use to meet worker protection regulations. National regulations on safe handling mean that it is necessary to ensure imported goods are suitably labelled in the correct language and with correct warning pictograms and statements to provide adequate communication to the workers. Many importers re-label on receipt of hazardous chemical products or request that the non-EEA exporter correctly labels. This is expected to take place prior to receipt of goods by the importer or ‘without delay’ after arrival on site; if any doubt, it is recommended that importers seek advice from their national inspecting agency
The term downstream user covers any user (except final use by the general public – the ‘consumer’) that is not the importer or manufacturer for any particular substance. In REACH, this clearly means that it is someone who is not responsible for registration activities and an importer that does not need to register because the registration is being covered by the Only Representative of the non-EU producer is also designated a ‘downstream user’. In CLP there is no provision of Only Representatives to take on the responsibility of the importer, so importers remain as such under CLP, even if they are considered to be downstream users for REACH.
Distributor / Trader
REACH and CLP are consistent on this term, but the terms ‘trader’ and ‘distributor’ are used in industry without full regard to their meaning. Distributors are those who facilitate movement of goods between supplier and recipient and the term ‘trader’ is used in this guide as an organisation that buys and sells goods, but does not necessarily change the packaging. However, the regulations do not describe those clearing Customs or handling/storage facilities explicitly; guidance would suggest that any EU legal entity that handles goods on behalf of importers without changing the goods in any way can consider themselves a ‘distributor’ in this context.
If acting as a distributor or trader of imported goods, it is important that the EEA customer knows that the material has originated outside the EEA and the EEA recipient must be made aware that they are the official importer and have REACH / CLP obligations. If the non-EEA supplier has appointed an Only Representative, the importer may be excused REACH registration duties, but the importer must have the agreement of the Only Representative. Traders who take ownership of the goods will generally be considered as the importer and would need to liaise with the OR. If the goods are simply being distributed, the recipient will typically be considered the importer. It is insufficient for only the distributor to have permission from the OR, unless taking on the role as importer themselves. The designated importer needs to confirm registration with the OR.
The distributor can in theory handle over 1 t of any substance without registration, letting the importers determine if individual tonnages are sufficient for registration. Obviously, the distributor cannot realistically consider themselves importer for CLP and make a notification while stating that their customers are importers under REACH – consistency in the supply line is essential. For any substance, the trader or distributor needs to make it clear whether they are the importer or not; if they are the ‘importer’, it should be consistent between REACH and CLP so that they register and fulfil CLP notification obligations as necessary.
Re-packing or re-labelling material is a ‘process’ and organisations doing this cannot claim to be a ‘distributor’. Likewise, selling under their own trade name with EEA contact details is not within the intended term of distributor.
The REACH Article 8 is the only reference to a role that can be played by a non-EEA organisation (‘non-community manufacturer or formulator’) and it does not appear in the CLP Regulation. The Only Representative (OR) effectively takes on the role that an importer would have as a registrant and carries full legal obligations. One exception to this is that the OR pays fees relative to the size of the appointing non-EEA producer and not relating to the size of the legal entity acting as OR. The non-EEA producer needs to make a formal letter of appointment to the OR.
Note that any contractual conditions when appointing an OR are secondary to their legal responsibility; contracts providing an OR with disclaimers may not be valid. An OR carries full responsibility for all parts of REACH, including passing on hazard information and correct Exposure Scenarios and other risk management details.
Note that paragraphs 2 and 3 include apparent contradictions; paragraph 2 states that the OR takes on all obligations of importers under this regulation even though according to Article 2, paragraph 11, they are not necessarily or actually an importer. Therefore, this does not make the OR an ‘importer’ under the terms of the CLP regulation and is why the OR is not responsible for CLP notification or labelling. Under CLP, the ‘importer’ is for those introducing onto the market and the OR does not have an obligation to notify (unless they themselves import a quantity of the substance).
Paragraph 3 then states that the OR must inform the [real] importers on what is going on in relation to REACH duties and this then regards those physically introducing to the market (Article 3, paragraph 10) not importers after all, but actually downstream users. This is only in relation to REACH duties, inclusive of REACH Annex XVII Restriction issues, and does not impact CLP.
Therefore, the EU legal entity that places an order to a non-EU exporter, and receives a specific chemical substance registered by that supplier’s Only Representative is an ‘importer’ under CLP but regarded as a ‘downstream user’ of this substance within the scope of REACH. The implications for labelling and SDS provision are discussed below.
Activities for each actor in the supply chain
Key activities that are the responsibility of different actors in the supply chain are outlined below. The ‘distributor’ can optionally do any of these steps, but by doing so, it will make them an ‘importer’ and then all responsibility of an importer will apply. For example, by making a CLP notification, they will then be an importer and find that REACH registration will apply (unless OR involved), that they will need to label for onward supply and provide an SDS.
Note that non-EEA legal entities have no legal part to play in this, other than appointing an OR and likewise, organisations considered as downstream users only have obligations to ensure correct labelling and a suitable SDS is provided by them to their own customers.
The need to register is clearly set out in the REACH legal text and official guidance; it is performed by EEA manufacturers (including toll or contract manufacturers), importers or Only Representatives of non-EEA producers. If an OR has given an importer authority under REACH to import directly or indirectly from their sponsoring non-EEA producer, then the importer assumes the REACH designated role of ‘downstream user’.
If a distributor decides to register, they are then an importer and other duties of importers will apply.
Manufacturers and importers need to notify, unless they have REACH registered. As CLP does not recognise the role of OR, importers covered by a REACH OR will still need to notify. However, once fully registered (pre-registered does not count), the importer does not have to notify as it has been already registered in the supply line. This last point is not explicit in the legal text.
Labelling for supply – CLP
Rules for ensuring correct labelling for placing on the market have not changed in the transition from the Dangerous Substances Directive 67/548/EEC to CLP. Onus rests entirely on manufacturers and importers.
The non-EEA suppliers have no legal role to play and there is no obligation for exporters to Europe to label containers correctly; however, correct labelling will provide a valuable customer service.
Importers who use the imported goods themselves and do not sell are expected to re-label imported goods for use on site; this is especially to meet national, worker safety legislation (outside REACH and CLP) demand that there is sufficient communication to allow workers handling chemical containers to understand the hazards of substances within them. Therefore, re-labelling to CLP standards is part of national inspection schemes, correct labelling it the correct language is expected. If in doubt, check with national inspecting agencies.
Recital 18 uses the term ‘suppliers’ and ‘before placing on the market’. Supplier is defined in REACH and CLP, but as noted, non-EEA exporters have no legal role as ‘supplier’ under CLP or REACH.
The act of import is ‘placement on the market’, but the importer may not necessarily be supplying. The OR is not a supplier and as already indicated, is not mentioned by the CLP regulation.
The distributor also gets a mention; the recital effectively states that they do not have to re-label if merely distributing goods, but that the responsibility rests with others in the supply line. In practice, it is essential that distributors are aware that correct hazard communication is taking place before they arrange shipment and delivery and checks that the suppliers and recipients are aware of their roles and responsibilities.
To conclude, the non-EEA exporter does not have to label according to CLP (transport labels sufficient for shipment) and the receiving importer can re-label on receipt. The recipient should ensure suitable labelling for workers and would be advised to work closely with suppliers (and OR if applicable).
Free samples, products made by toll manufacturers and formulators, contract packaging activities etc are all part of ‘supply’ and correct labelling is needed. There is no lower quantity limit (although some derogations for small packs < 125 ml).
The OR role is to ensure that the information needed for correct labelling is made available before receipt of goods and the SDS is the ideal vehicle for this. A specimen label would be ideal.
Supply of SDS
As with CLP, a supplier is an actor in the supply chain within the EEA and it will not be a non-EEA exporter. The term ‘placing on the market’ is not used here, so importers using the hazardous chemical products themselves will not need to generate an SDS. Supply can include transfer from one site to another within an organisation (depending on legal entity status) and supply to third parties and will include provision of samples and goods produced under contract.
An OR is not necessarily a physical supplier, making the legal role of the Only Representative for provision of the SDS confusing in view of the different parts of the legal text. Article 8, paragraph 2 (cited earlier in this guide) suggests ‘...information on the supply of the latest update of the safety data sheet...’ and not explicitly providing an SDS. However, their duty to ensure effective communication is clear.
They must effectively oversee the provision of a correct SDS and ensure communication of the content of an SDS that is in compliant with REACH. The non-EEA producer may take on this role, using their expertise on the substance, but the OR remains legally responsible that the information is received by the recipient of the substance when imported.
However, Annex II of REACH (revised in Regulation (EU) No 453/2010, does suggest that the OR needs identifying in Section 1 of the SDS as ‘supplier’ (para 1.3) and where the OR is noted as ‘supplier’, the ‘non-community manufacturer or formulator’ may be identified (i.e. optionally). This strengthens the argument that the OR should assume responsibility for the provision of a REACH compliant SDS for all hazardous substances that they have registered on behalf of non-EEA manufacturers and ensure that this are provided to the recipients of the substance (physical importers) before or at the time of supply.
The OR is legally responsible for ensuring that the contents of the SDS and all hazard data, risk management recommendations, exposure estimates etc are communicated to the importers (designated ‘downstream users’ under REACH) and providing a REACH compliant SDS in the name of the OR is the most efficient way of doing this.
Throughout this guide, the term ‘non-EEA producer’ has been used to describe manufacture of a substance or formulation of a mixture outside the Community; both roles can allow the non-EEA legal entity to appoint an OR. If exporting a mixture to Europe, the components in the mixture imported each at over 1 tonne per annum need registering (e.g. 2% in a mixture supplied at 100 t will result in a registration for 2 t) and CLP notification is needed for hazardous components irrespective of tonnage, as well as those subject to REACH registration.
The producer of a mixture (formulator) may appoint an OR themselves or come to an arrangement with the manufacturer of the substance(s) to share their OR facilities. If appointing their own OR, the OR is in a good position to ensure that the imported mixture is accompanied by a compliant SDS. The arguments used above that show how the OR carries responsibility to the physical importers, (now designated ‘downstream users’ under REACH) also apply also to mixtures. The terms ‘suppliers’, ‘downstream users’, ‘placing on the market’ etc. apply equally to mixtures and substances.
The importer of any mixture must have sufficient details regarding the composition of the mixture to ensure REACH and CLP compliance; this will include the identity of any component that they import at over 1 t to allow registration (or to confirm it is registered by an OR appointed by the exporter or up-stream manufacturer) and the importer must be aware of any hazardous component, even if under 1 tonne. As this is a legal requirement for importers, they need to be confident that this part of compliance has been met before receiving the chemical product. The OR appointed by a formulator must make sure that the recipient has full hazard and risk management details of all components of the mixture that have been registered by the OR.
However, if the formulator is relying on their supplier’s ORs, mixtures can be imported with two or more different Only Representatives, each responsible for different component substances. This scenario is not explained in the legal text and although each OR must ensure that the importer of the mixture receives the necessary hazard and risk information and SDS for the substance that they have registered, the importer is left with the task of determining the appropriate hazards, risk management and classification of the mixture supplied. The non-EEA supplier of the mixture has a duty of care to help the recipient, but importers of mixtures need to be aware that ultimately, they have full legal responsibility to determine the hazards of the mixture, to ensure correct classification, correct labelling is required and to ensure suitable risk management.
The key point is that all parties in the supply chain know their position and have ensured that the imported chemical substance or mixture is compliant with the necessary regulations and that suitable hazard communication and risk management has taken place.
• Manufacturers in EEA have no choice in that all responsibility fall on them, even if contract manufacturing.
• Non- EEA exporters have no legal role to play regarding REACH or CLP, with the exception that Only Representatives can only be appointed by non-EEA producers.
• Importers must ensure that substances on their own or in mixtures are compliant with REACH and CLP. The role of importer is defined as the EEA legal entity that places material on the European market, but the term ‘placing on the market’ is less clear, despite definitions being provided in the legal text.
• Importers are regarded as downstream user under the scope of REACH, if registration is being covered by their supplier’s OR
• Importers covered by a supplier’s OR for REACH are still ‘importers’ under the scope of CLP.
• SDS provision (REACH) and Labelling (CLP) are needed for supply of hazardous substances, or mixtures containing hazardous substances above concentrations of concern or if EU exposure limits have been designated.
• The Only Representative carries full responsibility for ensuring full information is available on all hazard data and the details of the CSR and Exposure Scenarios developed within the CSR (where applicable). If the OR is a joint registrant, they must have access to the full lead dossier to fulfil this obligation. The CSR and Exposure Scenarios must be applicable to the importers and the uses by the importers.
• The OR should assume responsibility for the provision of a REACH compliant SDS for all hazardous substances that they have registered on behalf of non-EEA manufacturers and ensure that this is provided to the recipients of the substance (physical importers) before or at the time of supply.
• Non-EEA producers have no official role in SDS provision or labelling, but need to take a responsible role in cases not directly covered by the legal text, such as supplying mixtures where different ORs are covering different components.
• Importers of mixtures do have a legal obligation under worker safety and environmental regulations to not ‘place on the market’ (i.e. import) without access to adequate information to allow hazard and risk assessment.
Communication of hazards and risk management recommendations is legally required to allow safety to workers, consumers and the environment; all actors in the supply line carry this responsibility and failure to communicate may lead to penalties.
This guide has been put together using information currently available and following consultation with certain EU Member State Competent Authorities; not all opinions are shared and national variation in interpretation of certain points is likely. It is strongly recommended to check with your national CA if any doubt.
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