1. ©2008 Rolls-Royce plc The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc. This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies. Title - Arial 28pt Registration, Evaluation, Authorisation and Restriction of Chemicals Regulations REACH Cathy Phillips CEng IMechE CMIOSH AIEMA HSE Materials Manager, Corporate HSE

2. Rolls-Royce data – strictly private Filename 2 Rolls-Royce plc Power for air, sea and land Customers; 500+ airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces and more than 2,000 marine customers, including 50 navies. Energy customers in nearly 120 countries. Annual sales over $10 billion 35,000 employees; 21,000 in UK, 8,000 in North America and 5,000 in rest of Europe

3. Rolls-Royce data – strictly private Filename 3 REACH and YOU Overview of REACH Legal obligation 1 – pre-registration through to authorisation Pre-registration Registration Authorisation & restriction Legal obligation 2 - Declaration Business Risk Action Plan / Governance

4. Rolls-Royce data – strictly private Filename 4 Objective To identify the business and legal risks associated with REACH. To assess the overall scale of the task for each of your legal entities.

5. Rolls-Royce data – strictly private Filename 5 REACH Regulation (EC) No 1907/2006: Registration Evaluation Authorisation (and Restriction) of Chemicals Entered into force on 1 June 2007 Registration begins 1 June 2008

6. Rolls-Royce data – strictly private Filename 6 Business Costs & Benefits Inputs: Registration costs, inc. testing estimated EUR 2.8 – UR 5.2 billion Outputs: Health benefits. Savings of EUR 50 billion over 30 years. Prevention of occupational skin and respiratory diseases. Savings of EUR 90 billion over 30 years. Benefits to the environment. Savings of at least EUR 9 billion.

7. Rolls-Royce data – strictly private Filename 7 Business Risks and REACH REACH will have BENEFITS for human health, and the environment because some really hazardous chemicals in use on their sites will not be allowed in future. More information will be available about the hazards and how to manage them (on the MSDS) Most risk assessments will be easier to put together and to audit against – Users are required to follow the Risk Management Measures on the MSDS

8. Rolls-Royce data – strictly private Filename 8 Business Risks and REACH REACH could result in some of the substances used to make manufactured products being: Unavailable, if suppliers (manufacturers / importers) do not register the substances. Increasingly difficult to obtain in the long term, if they are hazardous. More costly to buy (because of the registration and authorisation costs).

9. Rolls-Royce data – strictly private Filename 9 Business Risks and REACH SO… It can – if not managed well – be a business continuity issue. It can be a compliance issue So REACH is NOT “just another HSE issue”. It is a purchasing, manufacturing, design and strategic issue that just happens to originate in the field of HSE.

10. Rolls-Royce data – strictly private Filename 10 Manufacture Placing on the market Use Importation REACH scope of substances On their own Trichlorethylene In preparations Paints, Sealants, Resins In articles Systems, Components, aircraft

11. Rolls-Royce data – strictly private Filename 11 REACH applies to…. All Chemicals All uses All stages of a chemical’s life cycle (unless specific equivalent legislation exists) Ignoring REACH could effectively put us out of business. We have to take action ! REACH has an effect on business continuity

12. Rolls-Royce data – strictly private Filename 12 REACH Key Words Substance: A basic chemical, like iron, nickel, trichloroethylene, lead oxide Preparation: A mixture of chemicals, like steel, adhesive, resin, paint, an etchant, an NDT fluid Article: An object where the shape is more important than its chemical composition: A billet, a rod, a diesel engine, a gasket, a spare part, a submarine, a valve, a second hand product

13. Rolls-Royce data – strictly private Filename 13 Who does REACH apply to? Any Company (LEGAL ENTITY) producing, importing, using or placing a substance, preparation or article on the EU market must comply with REACH. Covers EU manufacturers, including chemical suppliers, distributors and downstream users. Covers EU enterprises importing products to the European Community

14. Rolls-Royce data – strictly private Filename 14 Supply Chain and manufacturing use of Substances REACH – legal overview Pre-registration Import substances into EU >1tonne/year Registration Pre Registrants to submit Safety Assessment for each specific use of substance Evaluation By ECHA. For several substances this may already exist Authorisation to use in specific application Restriction Declaring Substances of Very High Concern in Articles to customers Substances of very High Concern (Candidate list) SupplierRolls-RoyceCustomer 0.1% of SVHCs In Articles 0.1% of SVHCs In Articles

15. Rolls-Royce data – strictly private Filename 15 REACH Initial requirements Pre-registration for phase-in: Pre-registration starts 1 June 2008 and ends 1 December 2008 Minimum data (substance name, EC or CAS Number) When uncertain pre-register Registration: Starts 1 June 2008 A central inventory will be created of all substances produced or sold in the EU >1 tonne per annum Substance-specific, Use-specific Applies to substances in products, articles and preparations

16. Rolls-Royce data – strictly private Filename 16 Time-line Timeline 0 1 2 3 4 5 6 7 8 9 10 11 12 >1000 tpa 2 700 CMR >1 tpa 900* phase-in substances June 2007 100 -1000 tpa 2 600 10 -100 tpa 5 000 1 -10 tpa 18 000 R50/R53 >100 tpa 130 (?) Registration DU duties & obligations Articles notification begins non phase-in substances Pre-Registration Authorisation procedures begin Restrictions procedure Classification & Labeling

17. Rolls-Royce data – strictly private Filename 17 REACH Legislation Legislative text organised into fifteen ‘Titles’ 1 st eight refer to registration, evaluation, authorisation and restriction processes Remaining seven detail administration elements of REACH Help to businesses for implementation of REACH technical guidance notes are being written - RIPs

18. Rolls-Royce data – strictly private Filename 18 Supply chain communication

19. Rolls-Royce data – strictly private Filename 19 Supply Chain and manufacturing use of Substances REACH – legal overview Pre-registration Import substances into EU >1tonne/year Registration Pre Registrants to submit Safety Assessment for each specific use of substance Evaluation By ECHA. For several substances this may already exist Authorisation to use in specific application Restriction

20. Rolls-Royce data – strictly private Filename 20 Pre-Registration in REACH Manufacturers and IMPORTERS (M/I) of substances have to register them. This will MAINLY be chemical manufacturers and suppliers. Many substances can benefit from an 11 year phase in of registration, if they are Pre- registered BETWEEN JUNE AND END NOV.

21. Rolls-Royce data – strictly private Filename 21 Continuity of supply: Will your suppliers (particularly distributors and stockists who are importers) meet their legal obligations? Continued legal use: Will the manufacturer or importer (who could be several tiers up), include your use in their registration? Implications of Registration on Downstream Users…

22. Rolls-Royce data – strictly private Filename 22 Safety Data Sheets inversion of Sections 2&3 + email contact Persistent, Bioaccumulative and Toxic substances (PBT) and very persistent / very bioaccumulative substances (VPVB) will NOT be shown (initially) Will require an “extended SDS” following registration (e- SDS) which will MANDATE the way in which the substance / preparation is used. Title IV - Information in the Supply Chain

23. Rolls-Royce data – strictly private Filename 23 DUs need to: communicate use upstream (min 12 months prior to phase-in registration deadline) distributors have responsibility to pass information up and down between DUs and manufacturers / importers DU Chemical Safety Assessment for uses outside an Exposure Scenario (or use & exposure category) DU exceptions (e.g. <1 tonne per year) General compliance (max 12 months) Reporting of information (max 6 months) Title V - Downstream Users

24. Rolls-Royce data – strictly private Filename 24 The Evaluation in REACH Once pre-registered, manufacturers and importers of substances have to prepare DOSSIERS that will be EVALUATED by the REACH Agency in Helsinki. This will decide whether registered substances are ‘nasties’(substances of very high concern). If they are, then the European Commission could require them to go through Authorisation or Restriction.

25. Rolls-Royce data – strictly private Filename 25 Supply Chain and manufacturing use of Substances REACH – legal overview Pre-registration Import substances into EU >1tonne/year Registration Pre Registrants to submit Safety Assessment for each specific use of substance Evaluation By ECHA. For several substances this may already exist Authorisation to use in specific application Restriction Substances of very High Concern (Candidate list)

26. Rolls-Royce data – strictly private Filename 26 “Substances of Very High Concern” Carcinogens, mutagens and reproductive toxins (CMRs) Persistent, Biocumulative and Toxic (PBT) Very persistent and very bioaccumulative (vPvB) Substances of equivalent concern (endocrine disruptors)

27. Rolls-Royce data – strictly private Filename 27 This list is intended to: Help companies make product and process decisions, whilst complying with regulatory and customer requirements. Enable the business risk from these substances to be managed throughout a supply chain It is intended primarily for the aerospace defence sector http://www.asd-stan.org TR 9535 and TR 9536 The Declarable Substances list

28. Rolls-Royce data – strictly private Filename 28 Substances in our Products and Processes Declarable Substances SAE standard All substances Candidate List AnnexeXIV Relevant to YOUR business

29. Rolls-Royce data – strictly private Filename 29 The Declarable Substances list A compilation of all the substances that have been identified as being… CMRs category 1& 2 (annex 1 of directive 67-548 as amended) Substances defined as vPvB or PBT (OSPAR listed substances) Ozone Depleting Substances as defined by Montreal Protocol Persistent Organic Pollutants as defined by the Stockholm Convention, etc. Substances listed within Annex XVII (restricted substances)

30. Rolls-Royce data – strictly private Filename 30 Substances in our Products and Processes Declarable Substances SAE standard All substances Candidate List AnnexeXIV Marine relevant High Risk Declaration from supply chain by no later than end 2010? Declaration from supply chain asap

31. Rolls-Royce data – strictly private Filename 31 Supply Chain and manufacturing use of Substances REACH – legal overview Pre-registration Import substances into EU >1tonne/year Registration Pre Registrants to submit Safety Assessment for each specific use of substance Evaluation By ECHA. For several substances this may already exist Authorisation to use in specific application Restriction Declaring Substances of Very High Concern in Articles to customers Substances of very High Concern (Candidate list) SupplierRolls-RoyceCustomer 0.1% of SVHCs In Articles 0.1% of SVHCs In Articles

32. Rolls-Royce data – strictly private Filename 32 Articles Registration = if intended release Notification = if ‘Candidate List’ & >0.1% w/w & cannot excluded exposure unless already registered for that use

33. Rolls-Royce data – strictly private Filename 33 Requirement to Inform Customers and the Consumer You have a legal obligation to INFORM Customers about SVHCs contained within YOUR product (Article 33(1)) > 0.1% w/w “sufficient information, available to the supplier, to allow safe use of the article including, as a minimum, the name of that substance”. Same information to be available free of charge to consumers on request (within 45 days) Your suppliers also have this obligation if they are located in the EU.

34. Rolls-Royce data – strictly private Filename 34 Requirement to Notify of SVHCs You have a legal obligation to NOTIFY the REACH Agency (ECHA) AND Customers about SVHCs contained within YOUR product (REACH Article 7(2)) if the following apply: >0.1% w/w AND > 1 tonne sold (of SVHC per year) AND Cannot show that the substance will not be released at any point in the life cycle (including disposal) This is a subset of the information needed for the customer

35. Rolls-Royce data – strictly private Filename 35 REACH and business risk…

36. Rolls-Royce data – strictly private Filename 36 Issues within the Supply Chain Supply chain…Issue… Changing formulations Quality concerns. In our sector, it could invalidate aircraft safety certification (European Aircraft Safety Agency) Withdrawal of formulation Need to find and prove alternatives to satisfy Quality (& Certification) requirements

37. Rolls-Royce data – strictly private Filename 37 Issues within the Supply Chain Supply chain…Issue… Failure to register / Failure to check that the substance is being registered for their use Substance could be lost Too specific or too general information on uses in the Chemical Safety Report Checking that substances are being used legally will be a laborious exercise

38. Rolls-Royce data – strictly private Filename 38 Issues within the Supply Chain Supply chain…Issue… Lack of information about substances in formulations Unable to check that formulation is being used legally Lack of information about substances in articles Unable to meet legal obligations to provide information on SVHCs to customers

39. Rolls-Royce data – strictly private Filename 39 ACTIONS: Hold your own internal workshops: 1.Dealing with the Registration process: 1.Manufacturer, importer or downstream user? 2.What do you buy from where? 3.What action is needed prepare for preregistration/registration? 4.What are the SVHCs used in your factories? 2.Dealing with the “Declaration” part of REACH: 1.What are the declarable substances (as a surrogate for SVHCs) in your products? 3.What are the risks from REACH to you? 1.Continuity of supply? 2.Ability to adapt to the loss of substances?

40. Rolls-Royce data – strictly private Filename 40 Step 1: What are YOUR responsibilities in REACH? 1.What substances / preparations do you use? 2.Which of these are imported? –Find out if what you are buying is imported by YOUR company or someone else. –If it is YOU, ask the non-EU supplier if they intend to have an ‘only representative’. YOU have a legal obligation to pre-register if you import! YOU NEED TO ACT NOW!

41. Rolls-Royce data – strictly private Filename 41 Step 2: Engagement with Suppliers If you want to maintain access to chemicals & raw materials, it is vital that the supplier understands their responsibilities. DEFRA estimates that more than 60% of businesses have not even heard of REACH. What should you do about it? 1.Most of your supply chain is probably unaware about REACH. So TELL THEM. 2.Are they organised for REACH?: Check! lEXAMPLE LETTERS ARE AVAILABLE 3.Will your supplier take care of you?: ASK!

42. Rolls-Royce data – strictly private Filename 42 ACTION: Have the suppliers you deal with heard of REACH? 1.Compile a list of your suppliers, and where they are. Include addresses. 2.Write to all your suppliers telling them about REACH. 3.Ask each supplier who their REACH FOCAL POINT is. 4.Keep a record on who has replied, and the names / email addresses of the focal points. ANSWERS WILL BE: “Don’t worry, we will pre-register/register”. - You are OK!  “We will not be registering” - You need to change supplier / product!  “Silence”: we don’t know what you are talking about - You need to educate your supplier! Step 2: Engagement with Suppliers

43. Rolls-Royce data – strictly private Filename 43  Dealing with “silence”! 1.Recommend that your suppliers go on a training day on REACH. 2.Most sectors offer training on REACH – they should go on one relevant to them. EEF, HSE, British Coatings Federation, Institute of Metal Finishing etc. Step 2: Engagement with Suppliers

44. Rolls-Royce data – strictly private Filename 44 Step 3: Estimate the risk EU stockists / distributors / agents… – Most distributors and stockists who are importers ARE UNAWARE OF THEIR OBLIGATIONS (according to UK HSE & DEFRA). – Many smaller stockists intend to stop supplying, because of the costs!! – Will this be the case for your supply chain? – What is the threat to your continuity of supply?

45. Rolls-Royce data – strictly private Filename 45 Step 3: Estimate the risk EU manufacturers of substances, formulators of preparations… – If the substance is a small sales stream for them, it may not be cost effective for them to keep making it. – Does this affect any substances, or constituents in preparations, that you need? – Will formulators change the ingredients in the preparations they sell you (do you care?) – What is the threat to your continuity of supply?

46. Rolls-Royce data – strictly private Filename 46 Step 4: Record what you learn For substances & preparations, make a spreadsheet of… The tradenames / specs of the chemicals you buy Where and who you buy them from (import?) How much you buy Whether the supplier knows about REACH Who their focal point is Their contact details Whether we are the importer If there is an only representative To prove ‘due diligence’ to regulators To help senior managers make decisions!

47. Rolls-Royce data – strictly private Filename 47 Step 5: Up to date COSHH inventories CHECK that all substances / preparations you buy are supplied with a MSDS, and check that it goes to your HSE people. Are there people outside purchasing that have delegated authority to purchase substances and preparations? How do you ensure these people get the MSDS to the HSE team? Tighten up these processes!

48. Rolls-Royce data – strictly private Filename 48 Step 6: SVHCs Your company needs to be able to tell customers and ECHA about all SVHCs within the products you make. To do this, you need the information for all products you BUY, where they are… – PREPARATIONS that we incorporate into the product – ARTICLES that we incorporate into the product In the absence of any other list, you can use the ‘declarable substances list’ from the SAE standard. – Watch for the issue of the first ‘candidate list’!

49. Rolls-Royce data – strictly private Filename 49 Step 7: Authorisation From next year, your company will need an ‘authorisation’ for continued use of SVHCs put onto the candidate list and transferred onto ANNEX XIV of REACH. – 50,000 Euros per authorisation per use – Paperwork (Like COMAH) for the application process The need for this will be stated on the MSDS. For these substances, substitution plans are mandatory. Start planning for these changes

50. Rolls-Royce data – strictly private Filename 50 Other sources of guidance and advice http://www.reachready.co.uk General Manufacturing Industry: http://www.orgalime.org/publications/guides/reach.htm Aviation/Automotive Industry: http://www.asd-europe.org/Content/Default.asp?PageID=41 http://www.sbac.co.uk/community/cms/content/preview/news _item_view.asp?i=17018&t=0 http://www.sbac.co.uk/community/cms/content/preview/news _item_view.asp?i=17018&t=0 Chemicals Industry: http://www.reachcentrum.org/ Coatings Industry: http://www.coatings.org.ukhttp://www.coatings.org.uk and search on OutREACH

51. Rolls-Royce data – strictly private Filename 51 Official sources of guidance and advice ECHA WEBSITE: http://ec.europa.eu/echa/home_en.html European Commission: http://ecb.jrc.it/reach/ DEFRA: http://www.defra.gov.uk/corporate/consult/reach- enforce/index.htm http://www.defra.gov.uk/corporate/consult/reach- enforce/index.htm HSE: THE UK ‘Competent Authority’: 0845 408 9575 UKREACHCA@hse.gsi.gov.uk