CZECH REPUBLIC ON EU CHEMICALS POLICY (REACH):

UNCLAS PRAGUE 001561

SIPDIS

SENSITIVE

STATE FOR EUR/NCE. EUR/ERA, AND EB/TPP/BTA/EWH
COMMERCE FOR ITA/MAC/EUR MIKE ROGERS
STATE PLEASE PASS TO USTR LISA ERRION

E.O. 12958: N/A
TAGS: ETRD ECON SENV EZ EUN
SUBJECT: CZECH REPUBLIC ON EU CHEMICALS POLICY (REACH):
DON,T LET THE PERFECT BE THE ENEMY OF THE GOOD



1. (U) SUMMARY: Experts at the Czech Ministry of Industry and
Trade believe that despite the admitted flaws in the draft EU
REACH legislation, all EU member states are ready to press on
with the legislation in its current format 'to get the ball
rolling,' and necessary alterations to the agreement would be
added as amendments in the future. They described flaws in
the draft legislation as lacking proper internal definitions,
being overly complicated and expensive for entrepreneurs, and
potentially violating the trade secret rights of businesses.
They estimated that it would take at least 18 months from the
passage of the legislation to set up an operational REACH
implementation entity in Helsinki. END SUMMARY


2. (U) Econoff met with Ministry of Industry and Trade
Director of the Department of Light Industry, Blanka
Ksandrova, and Head of the Chemical and Pharmaceutical
Department Eva Vesela to survey current Czech views on the
draft EU REACH legislation, which would require health and
environmental assessments for more than 30,000 chemicals and
substances. Ksandrova and Vesela agreed that the draft
legislation in its current form is less than perfect, but
said that all EU member states are likely to pull the trigger
on a political decision to pass the legislation at the
Competitiveness Council meeting November 27-29 so that the
registration entity can start the long process of
establishing their headquarters in Helsinki and working out
the practicalities of running day-to-day operations.
Ksandrova estimated that this process would take at least 18
months. She said that changes to the 1,000 plus pages of
legislation are inevitable, but attempts to put together a
perfect package are fruitless and are merely delaying the
standing-up of the institution. However, Ksandrova and
Vesela both despaired over some of the more glaring problems
with the current legislation: registration requirements may
violate firms' rights to privacy and/or trade secrets; some
of the important terms relating to impact on public health
remain undefined (such as what constitutes an 'endocrine
disruptor').


3. (U) Ksandrova noted that Czech industries, labor unions,
and environmental NGOs are actively lobbying the government
on the pending EU REACH legislation. Key sectors in the
Czech Republic that could be adversely affected by the REACH
directive are the auto, paper, and mining industries - three
traditionally strong sectors in the economy, where producers
are worried about the cost of REACH implementation and
limitations it might impose on their operations. They are
pressing for exemptions from REACH, claiming that it will
cripple their worldwide competitiveness.


4. (SBU) The chemical industry is also concerned about the
REACH directive, but Ksandrova noted that there is a feeling
in the Czech Republic that chemical companies are "public
enemy number one" because of prior environmental disasters
and lingering feelings of resentment from the lack of concern
for public health that the industry showed during the
communist era. Therefore, the chemical companies have been
less strident in their public opposition to REACH. Ksandrova
opined that if companies were forced to abandon some
hazardous materials, they would find alternatives, but have
not done so previously because the existing regulatory regime
did little to encourage them to be creative.


5. (SBU) Ksandrova expressed great concern that the REACH
process will be prohibitively expensive for entrepreneurs who
may want to bring a new product to the market, and that the
regulations will be overwhelmingly complicated. She said
that the handbook to explain the registration process would
likely be over 1,000 pages. Although she had no specific
proposals to report, she said that there is a discussion to
have either the EU or the Czech government pay part of the
registration costs to minimize the impact on small and medium
enterprises, which begs the question: what about support to
non-EU suppliers?
CABANISS