Date: Mar 17, 2009
The Advocate General to the European Court of Justice (ECJ) has rendered an Advisory Opinion proposing that the ECJ reject the claims made by four companies that the REACH requirement for registration of monomers in polymers is ambiguous and/or invalid on the grounds that it is irrational, discriminatory or disproportionate.
The four companies - C.H.Erbsloh, Lake Chemicals and Minerals, SPCM and Hercules – brought suit in the U.K. High Court of Justice (Queen's Bench Division) Administrative Court, in 2007, challenging a number of REACH provisions. The U.K. High Court rejected claims relating to the validity of Articles 5 and 6(1) of REACH in connection with imported preparations but, on the question of Article 6(3) of REACH, the judge agreed that "there is a serious issue concerning the validity of Article 6(3) and that this is a matter which should be referred to the European Court of Justice". A hearing was held before the ECJ earlier this year during which submissions were made by the companies, the European Commission, the European Parliament and the Council of Ministers as well as the Polish government.
Specifically, the U.K. High Court asked the ECJ to make a preliminary ruling on the following questions:
1. In light of the fact that the registration requirements in Title II
of the REACH Regulation do not apply to polymers by virtue of Article 2 (9) of the Regulation, does the reference to "monomer substances" in Article 6 (3) mean:
(a) reacted monomers, that is monomers which have reacted together such that they are indissociable from the polymer of which they form part;
(b) unreacted monomers, that is monomers that are residual to the polymerisation process and which retain their own chemical identities and properties separate from the polymer after that process is complete; or
(c) both reacted and unreacted monomers?
2. If the answer to question 1 is either (a) or (c), is the application of Article 6 (3) to manufacturers or importers of polymers unlawful by reason that the requirements are irrational, discriminatory or disproportionate?
With respect to the first question the Advocate General noted that the plain language of Article 6(3) of REACH makes clear that the term "monomer substances" means reacted monomers that are part of the polymer. This is a straight forward reading of Article 6(3)(a) which speaks in terms of the situation where the polymer "consists" of 2% weight by weight (w/w) or more of such monomer substance(s) and further that the monomer substance(s) are "in the form of monomeric units," which is defined in Article 3(5) "as the reacted form of a monomer substance in a polymer." The Advocate General also found that the legislative history of the term "monomer substances" was consistent with its plain meaning.
With respect to the second question the Advocate General opined that Article 6(3) of REACH is not irrational in that it does not undermine the more general exemption of polymers from registration, is not discriminatory in that promotes fair competition between Community manufacturers and importers of polymers, and is not disproportionate in light of the overall goal of the legislation to protect health and the environment.
Although the Advocate General's Advisory Opinion is only persuasive and not binding on the Court, it is becoming clear that polymer producers should not expect relief from the ECJ and should organize their affairs accordingly. In that regard, there is one section of the Advocate General's opinion that is quite useful, as she makes clear that a polymer importer can rely on the registration of the monomers by the only representative of the foreign monomer producer because the only representative is indeed an actor up the supply chain within the meaning of Article 6(3). As the Advocate General notes:
123. Erbslöh fears an additional complication on the basis of doubts as to whether the registration of monomers by external producers in fact releases the importer from the obligation of registration, but these doubts are not convincing.
124. The institutions state that suppliers of polymers outside the Community can, under Article 8 of the REACH Regulation, appoint an only representative who registers monomers instead of the importer. Erbslöh doubts that such registration would be done by an actor up the supply chain within the meaning of Article 6(3), as the only representative is not a previous actor and the actor outside the Community is not obliged to register.
125. The appointment of an only representative presupposes, however, that a registration by him frees the downstream members of the supply chain from registration obligations. Otherwise it would make no sense. Accordingly, Article 8 of the REACH Regulation expressly lays down that the only representative fulfils the importer's obligations. A registration by him must consequently also have the effect of releasing the importer from his obligations under Article 6(3) of the REACH Regulation.
Accordingly, polymer importers (or non-EU polymer manufacturers wishing to secure their supply chain) should confirm that the non-EU monomer producer indeed will register through an only representative in order to avoid the default obligation to register the monomers in their polymers. This option would not apply in the case of a polymer produced from non-registered monomers as in that case the polymer importer will need to register the monomers. This is only proper because there must be a registration of the monomer somewhere in the supply chain in order to effectuate the purposes of REACH.