Do Regulatory Compliance Programs Require Strong Enforcement?

Do Regulatory Compliance Programs Require Strong Enforcement?

In the European Union (EU), chemical legislation such as the REACH Regulation and the CLP [Classification, Labeling and Packaging] Regulation is developed centrally in Brussels and, once adopted, is basically the same in each of the Member States. Large companies appreciate this approach because it facilitates launching products in a number of countries and reduces the resources required significantly.  Enforcement of the regulations is handled differently because, instead of being handled centrally, it remains the responsibility of each individual Member State and can result in differences in both the requirements that have to be fulfilled and approach taken. In practice, the REACH and the CLP Regulations mandate each EU Member State to ensure that there is an official system of controls in place and that they must also lay down national legislation specifying the penalties for non-compliance with the provisions of the regulations. As non-compliance could result in damage to human health or the environment, it was considered important that the penalties for non-compliance, set up in the various countries, were not only effective, but also proportionate and dissuasive. The European Chemicals Agency [ECHA] may not be responsible for enforcement but it does host the Forum for Exchange for Information on Enforcement which works towards coordinating and harmonizing the enforcement of the REACH and CLP Regulations in the EU Member States and because both the REACH and CLP Regulations have been adopted by the European Economic Area, Norway, Iceland and Liechtenstein are also involved in the deliberations. Non-compliance is treated as an administrative matter in some countries while others may treat it as a criminal offence and there are some where it is a combination of both. Fines and prison sentences are the main criminal sanctions in all countries where criminal law is applied. The fine can go up to 55 million Euros in Belgium, when it is imposed at the federal level, while in the United Kingdom the fine can be unlimited. The most serious breaches of the REACH regulation company officers can be punished with imprisonment in all the countries concerned. In Belgium, the most serious offences can lead to up to eight years of prison, while the maximum sentence is three months in Norway. The Forum for Exchange for Information on Enforcement has run three test programs, i.e., REACH-EN-FORCE 1, REACH-EN-FORCE 2 and REACH-EN-FORCE 3. The reports covering the first two programs indicated that a small number of companies were either fined or criminal complaints filed but nobody has ended up in prison yet! These sanctions may sound extreme and, in the majority of non-compliance cases, they won’t be used but it is still good to have them in reserve to ensure that the regulations are respected. In most cases, non-compliance occurs at the product level and complaints against consumer products are published in RAPEX, the EU rapid alert system that facilitates the rapid exchange of information between Member States and the European Commission. The measures taken to prevent or restrict the marketing or use of products posing a serious risk to the health and safety of consumers are published along with the trade name of the product, the reason for the non-compliance and the action taken. The Regulatory Authorities have a range of tools available to ensure that companies comply with the legislation but the range of penalties in place including everything from withdrawing the product through to either fining the company or sending the officers to prison, is enough to encourage companies to take all the necessary steps to ensure that their products comply with the legislation.

About the Author: Barry Podd: Spent 26 years in the Chemical Industry in various positions in Research and Development, Marketing, Sales and the Regulatory Affairs. Barry joined Kimberly Clark in 2005 and was Associate Director Global Regulatory Affairs responsible for Chemical and Food Contact Management issues around the world until he retired at the beginning of 2013. Active in a number of Trade Associations, e.g., EDANA, CEPI and the European Tissue Symposium [ETS] and, even though retired, still speaks regularly at conferences on biocides, chemical legislation and food contact.

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