especially if those products are not among their top sellers. This, actually, is
one of the goals of REACH. Over the long-term, it will force companies to with-
draw what regulators have termed “substances of very high concern” (SVHC).
By forcing changes in the market strategies, research and development, prod-
uct selection and substitutions of companies, REACH is sure to affect compa-
nies everywhere, even those that do not do business in Europe. In this sense,
the law presents much more than just a matter of product stewardship and
environmental concern.
As for the estimated costs of REACH, they are astronomical. According to the
European Commission, the chemical industry alone is set to fork out $3.1 bil-
lion in direct expenses. The indirect numbers that will result from laboratory
test work, managerial and administrative labor, new software implementation,
safety-data gathering, and legal fees — to say nothing of the costs associated
with merely using affected chemicals — are estimated to skyrocket as high as
$2.9 billion.
According to a survey of 62 multinational companies by the Dutch company
KPMG, 92 percent expect REACH to affect the availability or price of raw
materials and products. Nearly 30 percent expect REACH to affect more than
a quarter of all materials and products, and approximately 10 percent do not
think they’ll be able to manufacture certain products once REACH takes full
effect.
Given the supply-chain issues that will result from the enormous scale of
REACH, it is the small to mid-size companies that are likely to suffer the great-
est losses, along with companies that produce specialty chemicals. For exam-
ple, distributors will have to pass information up and down the supply chain,
in which case breaches of confidentiality are sure to result. After customers
learn who the major suppliers are, it is only a matter of time before the
middleman is cut from the chain.
The following list includes some steps suggested to help prepare for and miti-
gate REACH’s impact:
Ascertain which REACH requirements will affect your products, cus-
tomers, and suppliers
Implement structures to guarantee executive responsibility and
accountabilityCreate a fund to handle your compliance response
Decide which products you intend to pre-register well before the June
2008 deadlineDefine your research and development efforts to accord with REACH so
that you can transition to alternate substances should any products be
threatened by blacklisting