The Committee appreciates the continued positive inter-agency cooperation between the Environmental Protection Administration (EPA) and the Ministry of Labor (MOL) to develop a harmonized and transparent approach to the Chemical Substances Nomination and Notification (CSNN) process. We look forward to further initiatives by the EPA and MOL to share proposed new measures related to chemical management with the relevant industrial associations.
However, recent amendments to the MOL’s regulations governing the labeling and hazard communication of hazardous chemicals (MOL) and to the EPA’s regulations on new and existing Chemical Substances Registration (EPA) tend to be more stringent than the previous rules with regard to chemical substance disclosure. The impact on the protection of Confidential Business Information (CBI) could significantly undermine Taiwan’s leading position as the chemical innovation and R&D hub in the regional and global marketplace serving the needs of the electronics and chemical businesses.
Below, the Committee sets out some further suggestions on chemical substance registration. In addition, we sincerely hope that the EPA will release detailed guidelines as early as possible as to how charges will be imposed for the chemical substance management fund under the amendment of Toxic Chemical Substances Control Act, so that industry may better prepare.
Suggestion 1: Improve the protection of Confidential Business Information (CBI) with regard to chemical substance disclosure.
1.1 CBI Disclosures on Safety Data Sheets (SDS) – an MOL issue. Taiwan, China, Japan, and Korea are the fastest growing countries globally for the semiconductor industry. Compared with the other three countries, Taiwan requires the inclusion of much more toxicological data in its CBI applications to prove a substance does not fall into any of the nine hazard classifications. Further complicating the application requirements, Taiwan requires a summary along with the toxicology reports. Moreover, in March this year the MOL released a draft amendment to its Regulations for the Labeling and Hazard Communication of Hazardous Chemicals, stipulating that Chemical Abstract Service (CAS) numbers should be shown if the product belongs to a mixture, and that substances regulated by the six subsidiary regulations under the Occupational Safety and Health Act are not allowed to apply for withholding CBI. In the semiconductor industry, it is highly possible that competitors could analyze the product’s composition and formulation by reverse engineering based on the contents of SDS disclosures.
In addition, the proposed amendment may significantly impact the ability to import R&D samples. If the amendment is adopted, the stringent disclosure requirement may make foreign suppliers reluctant to ship samples to Taiwan because of CBI concerns. Over-disclosure on the SDS will not only jeopardize chemical suppliers’ product trade secrets and CBI, but also negatively impact future investment and R&D activity in Taiwan. As a result, Taiwan could lose its competitiveness in this rapidly developing industry and the critical position it has achieved in the Asia-Pacific supply chain.
In responding to the 2017 White Paper, the MOL said that “to protect workers and their right to know, MOL is referring to European Union (EU) practices and CLP regulations in excluding substances with high health hazards from SDS withholding applications.” The Committee urges MOL to consider Taiwan’s strategic significance in the Asia-Pacific region for the semiconductor industry, and the implications of that role on the applicability of adopting the EU’s CLP (Classification, Labelling, and Packaging) regulations. According to MOL’s response to the 2017 White Paper, “90% of industrial stakeholders support the existing CBI application scheme.” This statement does not accurately reflect chemical importers’ and manufacturers’ point of view. For chemical suppliers, product formulas are viewed as highly confidential trade secrets. As for the protection of labor and users’ right to know, the main concern should be the overall hazard identification and response measures for the product, rather than the exact chemical name or CAS number.
As employers, operators, and Environment, Health, and Safety (EHS) personnel are required to know the hazardous substances being used in the workplace in order to conduct risk assessments and workplace environmental monitoring under the scope of the Occupational Safety and Health Act, the Committee recommends that MOL adopt SDS disclosure practices such as being employed in Korea and Japan: publishing a list of hazardous substances and cut-off values, and stipulating that when both criteria are met, hazardous substances shall be disclosed and prohibited from CBI application.
On the other hand, for hazardous substances not covered by the Occupational Safety and Health Act, as long as the hazard identification and response measures are clearly communicated to downstream users, the Committee urges MOL to consider giving industry the flexibility of using the product’s generic name to protect the exact chemical name. If downstream users demand further recipe disclosure, the request can be treated as part of regular business activities, managed by a non-disclosure agreement (NDA) or other business solutions.
1.2 CBI Protection for Existing Chemical Substance Registration – issue for the EPA’s Toxic and Chemical Substances Bureau (TCSB). Regarding the publication of information on existing chemical substances’ phase-I pre-registration on the open-data platform, we urge the competent authority to give the matter further consideration, balancing the desirability of disclosing pre-registration information to the public and the need to properly protect industry’s confidential business information to ensure that competitors are not able to access proprietary information by tracing back data on chemical identity, usage, volume of import and production, etc.
The Committee urges EPA to refer to the European Chemical Agency (ECHA) countermeasures for publishing registration information – such as the roles of the registrants, registration types, etc. – as overall statistics to the public, while at the same time protecting industrial CBI by avoiding the disclosure of specific stakeholders and chemical identities. The Committee recommends that Article 20 of the amendments to the Regulations of New and Existing Chemical Substances Registration could be revised to read: “The content pursuant to the previous Paragraph shall be publicly disclosed in statistics through the internet by the authority.”
1.3 CBI Protection for New Chemical Substance Registration – issue for the TCSB/EPA.
Since 2016, the Committee has recommended through the White Paper that the fee for extending the CBI application for new chemical substance registration should be lower than the fee for new applications. Although the National Development Council (NDC) has given a positive response that there is room for adjustment in the fee, and requested the EPA to speed up the revision process, we have received no further update on this matter. The Committee urges the EPA to act expeditiously to adjust the fee schedule.
Suggestion 2: Revise the proposed amendments regulating chemical substance registration and phase-II standard registration.
2.1 According to the latest draft amendment released in March 2018, the phase-II standard registration for existing chemical substances should start from the beginning of 2019. However, industry so far has no clue as to either the standard registration guideline or the mechanism for joint registration. The Committee urges the EPA to release the details and guidelines for standard registration and joint registration as early as possible to give industry sufficient time to communicate with suppliers along the supply chain and make its preparations. In addition, as industry is not involved in either the guideline drafting or the joint registration platform trial-run stage, the Committee urges the EPA to provide a consultation period for industry before the amendments are officially announced.
2.2 Currently a “2% rule” applies to polymers already listed on the inventory of existing chemical substances, as well as to new chemical substances. Under the rule, if a chemical substances makes up less than 2% of the content of the polymer, it does not have to undergo separate registration. The rationale for this practice is the recognized principle that the overall physical, chemical, and toxicological characteristics of a given polymer will not be significantly altered by adding a chemical substance accounting for less than 2% of its total volume. However, Article 4.1.(10) of the amendment, while retaining the 2% rule for listed existing chemical substances, deletes its applicability to new chemical substances. This change, which would burden industry with extra registrations, represents a clear deviation from international practice on polymer registration. It is also impractical and could cause confusion by easily leading to duplicate registrations.
In the interest of practicality and adherence to international norms, the Committee urges the EPA to continue to apply the 2% rule to both existing and new chemical substances.
2.3 According to appendix 7 of the amendment, standard registration for existing chemical substances – information items and hazard and exposure assessment – is required to be submitted for chemical substances that meet the definition of the carcinogenic, mutagenic, or toxic-to-reproduction (CMR) category 1 and are annually manufactured or imported in a volume of 10 tonnes or more. We were informed by officials that the tonnage band was revised downward from 1,000 to 10 tonnes due to harmonization between EPA and OSHA requirements. However, as the principle is applied only for OSHA on new chemical substance registration, the committee urges EPA to consider the potential risk and the operational difference between new and existing chemical substances, and maintain the tonnage band at 1,000 tonnes annually for existing chemical substance registration.
2.4 According to Article 17 and Appendix 6 of the amendment, officials plan to start implementing phase II of existing chemical substance standard registration from January 1, 2019, and industry is required to complete registration before a designated date. However, the standard for toxicological and ecotoxicological information acceptance has not yet been officially announced. Whether weight of evidence (WoE) – i.e. in-vitro testing, system review, QSAR, and read-across – is considered acceptable test data will have a great impact on OECD GLP (Good Laboratory Practice) laboratories. The availability of test data will also have a significant impact on whether standard registration can be completed on time. The Committee urges EPA to set the deadline for standard registration only after the criteria for test data collection have been finalized with industry.
Suggestion 3: Inform industry how it will be charged for the proposed Chemical Substance Management Fund.
According to the draft amendment to the Toxic Chemical Substance Control Act released by the EPA in 2017, the EPA will establish a Chemical Substance Management Fund as a user-charged financial fund for chemical management administration and emergency response purposes. However, industry so far has not been informed as to how it would be charged. The Committee urges the EPA to release details and guidelines for the operation of the proposed fund so that industry can better prepare for the amendment at an early stage.