Interested in the lubricant industry in Asia?

Subscribe now to Lube Report Asia. This FREE weekly e-newsletter features breaking news and base oil price reports.

November 1, 2016

Volume 7 Issue 4

    View Printer Friendly Article Bookmark and Share

Asia’s Chemical Regulation Policies in Flux

Several countries in Asia are changing their approach to evaluating and restricting chemical substances, according to a global trade expert who recently summarized the situation for importers at an industry conference in the United States.

South Korea, Malaysia, Taiwan, Vietnam, China and Thailand each follow an independent chemical substance policy akin to the European Union’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) legislation, which aims to create a global database of hazardous chemicals and harmonious labeling and handling practices. Each of those country’s polices is undergoing change, according to James Eggenschwiler, director of global trade for The Redstone Group.

“Thailand is the new kid on the block with a new national inventory that’s being created as we speak,” said Eggenschwiler at the Independent Lubricant Manufacturers Association’s annual meeting in Scottsdale, Arizona, last month. The country operates under a hazard-driven inventory system. Companies that wish to import a substance included on the government’s list of hazardous materials – or fitting the profile on that list – must first obtain government approval.

Thai importers face an impending deadline, the lawyer explained. Chemicals imported through the end of the year can be nominated for the inventory, thus preempting the registration process. “After the 31st of December, all bets are off,” he confirmed. Products that do not appear in the inventory will have to be registered.

Unlike other countries that may require only a Chemical Abstracts Service number or chemical name for registration, Thailand requires specific information and some analytical data to identify the substance.

Vietnam’s chemical substance regulations are almost identical to those of Thailand, according to Eggenschwiler, but the country is about a year behind Thailand in changing over to a national inventory and registration system. He anticipates the change will come within the next year.

Taiwan is currently gathering data to update its policies, with the intent of reregistering existing substances based on a hazard profile.

The National Chemical Substance Register Office in Taiwan mandates that any importer bringing in 100 kilograms or more of a chemical must file a Phase 1 registration. Eggenschwiler likens this type of registration to that required in Europe, but with more detail and thus more confidentiality risk.

While Taiwan’s existing inventory is not very old, Eggenschwiler said, “They’re trying to find out what’s really coming in and at what volumes and to how many importers.” The NCSR Office will create hazard categories based on the updated inventory and select which substances must be reregistered under the “Taiwanese REACH,” he projected.

South Korea’s “K-REACH” legislation was passed in 2013 as a reaction to three chemical disasters in the country. “Since that time, there’s been a tug of war between the legislature and the regulatory agencies,” said Eggenschwiler. “And we still see that playing out today in the way that some things are handled when you get down into the granular dossier and data requirements.”

Only substances listed in the Korea Existing Chemicals Inventory, published on June 30, 2015, can be shipped into the country. Every three years, the government will publish a list of priority existing chemicals to be reregistered. The first set of 510 substances identified from the KECI list must be reregistered by June 2018, Eggenschwiler reminded delegates.

“They’re actually being treated as new chemicals for the purposes of the registration,” he continued. Importers must secure approval by the deadline “or the market is lost for that substance until it is approved.” This also applies to chemicals that are imported as components in another product.

Hazardous chemicals require an additional registration and approval process, and “most bets are off for confidentiality,” Eggenschwiler advised. Some data could be prevented from public disclosure, but “anything that’s driving the hazard is going to be public.”

Registration for each substance is specific to the importer, which must be named in the dossier. Importers are also responsible for filing an annual report on the previous year’s business, due June 30, if the volume of a particular chemical amounted to 1 ton or more. However, Eggenschwiler reported that regulatory agencies “haven’t quite implemented [this policy] yet; they’re in the process.”

Manufacturers that don’t comply with K-REACH regulations may face fines or penalties, and their supply stream will be cut off, warned Eggenschwiler. At that point, the importer is free to switch suppliers. “So if you have a competitor in Korea and you don’t take care of this issue right away, you’re setting your importer up to switch brands.”

Eggenschwiler also described Malaysia’s chemical evaluation system as being in a “state of flux.” While no dates or other specific information have been announced, Eggenschwiler reports that the country is shifting to a Korea- or Taiwan-type model with a comprehensive national inventory and supporting registration system.

Until now, the country has operated under a hazards-driven regulation system that follows the United Nation’s Globally Harmonized System of Classification and Labeling of Chemicals. A substance may be listed on either of two different lists, and importers should check both unless they know their substance to be non-hazardous, he advised.

Chemical imports into China are subject to a changing classification system as well. “China is in a significant state of flux…at the ministry level as to what to allow or not allow and what changes are being proposed that they should or shouldn’t make to their registration process,” Eggenschwiler observed.

In the past year, China made the change to allow foreign manufacturers to directly register their own imports with the Inventory of Existing Chemical Substance in China. A Chinese communication agent is still required, however, and the dossier must be filed in Mandarin Chinese.

A boon for foreign manufacturers is that they will own the dossier and registration for each product, allowing them to sell to any Chinese importer. Previously, the Chinese company owned the dossier and the rights to that substance within the country. In fact, Eggenschwiler elaborated, companies can specify in the dossier whether the importer must purchase from the company directly or has permission to purchase from a distributor.

“While China presents a big market and they are freeing up the possibilities of getting in,” he cautioned, “it’s not necessarily an easy one to navigate and maintain without some guidance.”

In all aforementioned countries, Eggenschwiler summarized, the obligation to register substances lies with the importer. However, because of trust levels and confidentiality considerations, manufacturers may not want to rely on importers to manage the registration process. “You’ll end up spending more money, on average, working through miscommunication situations than you would just handling it yourself,” he concluded. 

Photo: andresr / iStock

The policies for classifying and registering all chemicals imported into South Korea, Malaysia, Taiwan, Vietnam, China and Thailand are all changing and in some cases becoming more scrupulous.