By T S Vishwanath
The European Union’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation, introduced in June 2007, had a serious impact on India’s trade in chemicals with the EU. The regulation has now been complied with and companies have worked to meet the obligations. The last date for registration of chemicals under this regulation in the EU is May 2018. Even as companies have gotten used to REACH, and similar regulations in other countries, the EU will come up with another regulation that is likely to have an equal impact for exports into Europe.
Endocrine disruptors are chemicals that interfere with endocrine (hormone) systems at certain doses. These can cause cancerous tumours, birth defects and developmental disorders. Any system in the body controlled by hormones can be derailed by hormone disruptors.
Impact on India: The regulation on disruptors could impact exports of 1,500 million euros from India, according to some official calculations. This is because, of the 79 substances identified by the EU as endocrine disruptors, India has registered 29 for use locally. The products expected to be hit include coffee, tea, spices, vegetables, fruits, sugar, confectionery, animal feed, etc. While the EU is not bringing about this regulation all of a sudden and has been in discussions internally, the process will need to provide enough time for countries to adopt these changes. Besides India, countries including the US, China, Egypt, Brazil, Canada, Ecuador and Malaysia have taken up this issue with the EU at various platforms including at the WTO, pointing out to the disruptions to trade due to the regulation.
It is important to note that, for the EU, the decision to introduce the regulation in July 2017 was not easy. There was a lack of unanimity among member states when the European Commission was seeking to find consensus for adopting the scientific criteria for identifying these substances. The proposal to identify and ban endocrine disruptors was taken in 2013, but implementation got delayed due to differing positions among member states. Now, the EC seems to have built the required critical mass of support to turn this proposal into a law—expected to be in place in early 2018.
The differential stands adopted by member states may be attributed to dependence of some of them on pesticides or biocides for agricultural purposes that may now stare at a ban following their identification as endocrine disruptors. It has been reported that among the countries that supported the proposal there is a consumer movement backing organic farming. Among the dissenters, Denmark, Sweden and Czech Republic voted against the proposal, while Latvia, Hungary, Poland and the UK abstained from voting. The remaining 21 countries voted in favour of the proposed scientific criteria in the Standing Committee on Plants, Animals, Food and Feed of the EC.
Broadly, the impact of the proposed law may be put under three pillars:
Manufacturers and traders: Pesticide and biocide manufacturers and traders in domestic or export markets will be hit;
Users: Farmers and companies engaged in contract farming will need to adhere to the regulation if they plan to export to the EU;
Testing and regulatory agencies:
There will be need for increased adherence to the new norms that these agencies will have to ensure. Going forward, there will be need to build a strong database of users and manufacturers and traders of these products that the EU may identify as endocrine disruptors, to ensure that exports, especially of agricultural goods to begin with, do not face problems in the EU. Studies are needed to find out the time required to remove the traces of banned pesticides or biocides from the soil due to their extensive use over the years. In case of products like rice, exports are of the produce that would have been harvested in the previous season as rice is seasoned for a year before it is sold. Such challenges have to be studied and a strategy may be built based on the feedback collected from relevant stakeholders.
Equally important is to keep an eye on the developments in the EU to expand the scope of this proposed law to bring other products into its ambit.
India and the EU will hold a high-level meet in early October. This will provide a platform for both to discuss the issue and ensure that adequate time is provided to adhere to the regulations. India may seek technical help from the EU, as the EC must have put in place a system to help companies in the EU meet the obligations arising due to this development. What the REACH and now endocrine disruptors teach the industry is the need to remain vigilant of developments across the globe as these can displace and disrupt trade. Regular information gathering and analysis is needed to help companies, especially SMEs, meet the challenges of dynamic changes to regulations across the globe.