How so? Mergers sometimes require approval when one company wants to acquire another, in order to avoid lessening of market competition.
As in the authorisation process for chemicals, a company that applies for merger approval provides information on the markets they operate in. And in both processes, companies have an incentive to present their cases in a way that best suits their interests, since their objective is to get the go-ahead from regulators.
But here the similarities end. Because when applicants in the authorisation process claim there are no safer alternatives for them to use, regulators take their word for it. Merger law, on the other hand, calls for a more thorough vetting of the applicant’s world view to make sure things are really as they claim.
This is done by active outreach, such as e-questionnaires and phone interviews, to the applicant’s competitors.
Whats the problem?
Under the EU’s chemicals legal framework REACH, the most hazardous chemicals are only allowed for use with a permit – a so-called authorisation. Authorisation should only happen when there are no safer alternatives and when the benefits of continued use outweigh the risks – or when the risks can be managed properly.
There have been cases where authorisation was given even though there are safer alternatives on the market. This leads to unnecessary use of some of the world’s most nasty chemicals and handicaps producers of safer alternatives, as well as competitors who have already invested in new, safer technology.
The authorisation process is more passive. Sure, ECHA arranges public consultations where third parties can submit information. The problem is that most alternative providers, as well as other third parties, either never hear about these consultations or are sometimes not keen to take part, since it could threaten their business or future business relations.
It has also been proven that their input doesn’t really make any difference. Every authorisation application so far has been given the thumbs-up, so why should they bother?
It is obvious to ChemSec that it’s not enough to just sit and wait, expecting to receive all the relevant information about alternatives by publishing a public consultation somewhere on ECHA’s website. No, you have to actively reach out and find these alternative providers. Often a relevant alternative is just a couple of phone calls away – something ChemSec knows since we have been doing the outreach that authorities should have been doing in the first place.
“It is obvious to ChemSec that it’s not enough to just sit and wait, expecting to receive all the relevant information about alternatives by publishing a public consultation somewhere on ECHA’s website”
Active outreach also solves the problem of companies being afraid to contribute because it might hurt relations, since it’s a whole other thing to be sought out and asked questions about your product, rather than coming forward on your own initiative.
Right now there’s an authorisation case from the company Ormezzano in the hands of the Commission. It is very similar in scope to a previously granted authorisation – from the company Gruppo Colle – where safer alternatives did in fact exist.
It’s already late in the process since ECHA has already given the application a greenlight, but the Commission must not necessarily follow ECHA’s advice. There is still time to apply the suggestions laid out by ChemSec and ClientEarth on to this case, including the aforementioned parts of the merger law.