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K-REACH Regulations Dwindle Production of Domestic Firms
Stifling Bureaucracy
K-REACH Regulations Dwindle Production of Domestic Firms
  • By Jung Min-hee
  • August 28, 2015, 01:00
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According to a recent survey, the regulation of Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), which strictly controls the registration and management of chemical substances, was found to significantly constrict production activities of domestic firms. About 90 percent of respondents said that they are having difficulties in business operations since the act on REACH was put into effect. Therefore, there is an urgent need to reform the system.

The Korea Chamber of Commerce & Industry Business Institute for Sustainable Development (KCCI BISD) announced on Aug. 27 that it recently conducted a survey of 302 companies that were affected by the REACH regulations to find bottleneck problems after the imposition of the law. The REACH Act, which became effective from Jan. 1 this year, requires companies to report all new chemicals that they use to the Ministry of Environment (ME). Since it covers more tha 1 ton annually of existing chemicals that are produced, imported and sold, petrochemical companies have complained, citing “a thorn under fingernails,” even before the enforcement.

In fact, 91.4 percent of respondents said that the REACH regulations had greatly adverse effects on their production activities in the survey. Specifically, 50.7 percent of them said that they had difficulties in importing chemical feed stock. Also, 25.7 percent of respondents said that they had to delay the release of new products, while 23.6 percent of them said that they had to postpone research and development.

An official from the KCCI said, “Domestic companies importing chemicals need to get information about ingredients from overseas manufacturers. If they cannot, they will fail to comply with the obligations of reporting chemicals, which leads to punishment. So, when companies cannot receive ingredients information, they have to discontinue imports of chemical feed stocks, to change traders, or to develop alternative materials.”

Respondents have said that the greatest pressure from the requirements of the REACH regulations is registration. According to the survey, 53.3 percent of respondents said that they felt the greatest burden due to the registration of chemicals that they have used, while 46 percent of them cited, “registration of new chemicals.” 

Also, 50.7 percent of respondents said that paperwork was the biggest problem, which shows an urgent need to ease an administrative burden. After the implementation of the law, it takes two weeks on average for companies to fill out the papers for a single chemical substance, according to the survey.

This is why industry watchers say that different regulations are needed, and small amounts of chemicals imported for research and development should be exempt from registration, rather than reducing the number of papers.

After the survey, the KCCI submitted a recommendation to improve the REACH regulations to the ME on Aug. 20. It includes suggestions to reduce the number of chemicals required to report, ease burdens from registration fees and period, and eliminate paperwork on a small amount of R&D chemicals.

The KCCI said, “Europe’s system to manage new chemicals does not require to report and Japan’s system excludes chemicals, which is contained by less than 10 percent in a mixture, from obligations to report. We need to come up with realistic standards that reduce the target extent required to report, just like major countries, or check with overseas manufactures only whether chemicals contain subjects to regulation if they are impossible to report.”