What U.S. Chemical Manufacturers Need to Know About Competing in Global Markets

Chemical manufacturers account for 12 percent of all U.S. exports, bringing in approximately $192 billion in 2013[i]. By 2018, this total will jump to over $279 billion annually, according to ICIS, a petrochemical market information provider. But companies that hope to take part in this growth will first have to live by the Globally Harmonized System (GHS) of classification and labeling of chemicals. This is more than a domestic obligation, but a critical link to competing in the international chemical market.

December 1, 2013 marked the first deadline in a series of transitional phases required for the United States to become part of a global system that communicates hazardous chemicals using a universally shared set of criteria, pictograms, colors and warnings. Without properly understanding how the GHS framework has been implemented in other countries, companies shipping internationally can run into costly delays. One key issue is recognizing the different roles regulatory agencies play in the execution of GHS in particular countries. For example, domestically, guidelines for GHS are communicated through a variety of government agencies including the Department of Transportation and Environmental Protection Agency. However, the main requirements detailing classification of chemicals (substances and mixtures), labeling and safety data sheets (SDS) are housed in Occupational Safety and Health Administration’s (OSHA) Hazard Communication Standard. The involvement of different agencies adds significant complexity, as does the fact that GHS guidelines are often augmented with pre-existing laws related to chemical products and hazardous substances.

Following is an overview of how some of the major countries importing chemicals from the U.S. have approached GHS. While some of these countries were early adopters of the system, many have distinctive transitional phases for implementation and in some cases, have already introduced legislative revisions to update the United Nations’ core GHS standards. For chemical manufacturers and distributors, having a roadmap of international resources, key deadlines and flexible tools to produce accurate labels and SDSs is critical to navigate the waters of international shipping.

European Union

The European Union (EU) is implementing GHS through Regulation CE 1272-2008, commonly known as the “Classification, Labeling and Packaging of Substances and Mixtures” (CLP). The official regulatory body managing GHS implementation is the European Chemicals Agency (ECHA)[ii]. The CLP regulation was put into effect in January 2009 with the first major deadline for chemical substances taking place on December 1, 2010. This date encompassed classification, labeling, SDS formatting and packaging. A secondary transition date for classification of mixtures is scheduled for June 1, 2015.

The CLP regulation is legally binding across all member states, but for companies exporting chemical products, it is equally important to verify how a specific country presents the regulation. Manufacturers should ensure labels and SDSs are written in an individual country’s official language(s). For example, it is required that chemical exporters shipping to Belgium provide labels and SDSs in Dutch, French and German. Multiple languages can be exhibited on GHS labels, provided that the same information is equally conveyed and languages are grouped together.

To accurately understand which criteria are needed to ship chemicals to a member nation, U.S. exporters should also reference the EU’s regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). While the CLP regulation is the primary vehicle for GHS implementation, REACH regulations are closely connected. Similarly, EU criteria for SDSs require the inclusion of a REACH registration number for substances and until 2015, classification criteria of chemical products under the EU’s previous law, the Dangerous Substances Directive.

Japan

As an early adopter, Japan began compliance efforts in 2000 and has since fully implemented GHS. In 2006, the country’s Industrial Safety and Health Law (ISHL) was revised to align with GHS. The primary regulatory body enforcing GHS is the Industrial Safety and Health Administration. More recently, the country released new standards to serve as implementation tools for GHS. Requirements for classification of chemical products (substances and mixtures) are outlined in Japanese Industrial Standard 7252:2009 (JIS). Japan’s standards for labeling and SDS formatting were previously housed under two separate standards but have since been consolidated into one, JIS Z 7253:2012[iii].

U.S. chemical companies should ensure that GHS compliance tools reflect additional requirements under Japan’s system. Japanese GHS labels are more complex than other countries, requiring additional items that comply with domestic regulations such as the country’s Poisonous and Deleterious Substances Control Law. Chemical suppliers should also reference Japan’s national register for chemicals, the ENCS Inventory, to ensure chemical products do not contain banned or prohibited ingredients. Manufacturers should inquire about which mandates can specifically result in delays. Japan’s GHS standards are considered voluntary, despite the fact that companies are “obligated to make an effort” at compliance.

China

China is the eighth largest chemical importer in the world. The country’s massive industrial gains have outpaced domestic chemical production, providing U.S. chemical suppliers with a major growth opportunity[iv]. The country’s GHS standards have been fully implemented since 2011. Decree 591 (Regulations on Safe Management of Hazardous Chemicals in China) is the principle legislation of GHS in China. However, specific mandates for labeling, SDS formatting and classification are implemented through a series of additional measures. These core standards are outlined below:

GB 13690-2009: The primary standard pertaining to classification and hazard communication of chemicals

GB 15258-2009: The primary standard pertaining to preparation of precautionary labels for chemicals

GB/T 16483-2008: The primary standard pertaining to formatting and creation of SDSs for chemical products (Note: ‘GB/T’ denotes a recommended national standard)

GB 190-2009: 190-2009: The primary standard pertaining to packaging labels for dangerous goods.

While there are more than 10 different agencies involved in GHS implementation, the principle regulatory authorities in China are the Ministry of Industry and Information Technology (MIIT) and the State Administration of Work Safety (SAWS). The MIIT is the main coordinating authority while SAWS is primarily responsible for GHS implementation. 

Manufacturers looking to ship GHS-compliant labels to China should cross-reference classification requirements to make sure any additional hazard groups or classes are included. A key distinction in China’s GHS requirements is the inclusion of a 24/7 emergency phone line located within the territory of China. SAWS also requires companies to cross-reference their products with the National Registration Center for Chemicals to ensure products do not contain any restricted or prohibited chemicals. For chemical substances that are not identified in this database, U.S. suppliers may need to appoint a local agent for assistance.

Canada

While Canada has not yet implemented GHS, it is currently revising various laws and regulations to reflect GHS standards. The regulatory agency spearheading GHS implementation is Health Canada. GHS criteria for hazard classification and communication elements would be enforced under a new series of proposed regulations known as Hazardous Products Regulations which would replace the current mandate (Controlled Products Regulations)[v]. Deadlines for these legislative changes are scheduled for the spring of 2014. While the target implementation deadline is June 2015, an anticipated transitional phase will be set up through June 2016 to allow provincial and territorial updates to be made.

In accordance with Canada’s Official Languages Act, U.S. chemical suppliers must produce GHS labels and SDSs in English and French. While there are differences between Canada’s proposed GHS standards and the U.S.’s, manufacturers exporting to Canada may find certain flexibility regarding GHS compliance. In February 2011, both countries established a regulatory cooperation council to align Canadian and American regulatory approaches in various sectors. This agreement, which includes GHS implementation, is designed specifically to reduce systematic barriers and delays. There are however, a few notable distinctions where Canadian standards require additional information such as the inclusion of biohazardous infectious materials (not regulated under OSHA’s HCS) on GHS labels and SDSs. As GHS changes have not been fully integrated into Canadian legislation, exporters should check with Canada’s Workplace Hazardous Materials Information System (WHMIS) to verify what label and SDS requirements are needed. For example, while GHS formatted SDSs are accepted in Canada, GHS labels do not fully comply with WHMIS requirements.

Shipping Chemicals Internationally

For chemical companies focused on exporting products, solving the GHS puzzle is not a simple process. Every country has a different approach to adopting the GHS framework, what agencies will spearhead implementation and what pre-existing national initiatives will intersect with and possibly supplement the GHS guidelines.

Shipping GHS compliant products internationally is a double-edged sword of achieving cost-effective compliance and shipping product on time. That can come down to fine details like using labeling technologies that enable efficient changeovers for multiple product runs going to different international markets.  For international shippers managing a high mix of chemical exports, product variability can lead to label complexity. To efficiently address these challenges across an international spectrum of GHS adoption, manufacturers can benefit from on-demand color printing to produce labels formatted to various languages, sizes and color requirements.

International GHS requirements extend beyond the U.S.’s specific interpretation of compliance. The UN’s guiding document outlines the core criteria for chemical classification, labeling and SDSs but exporters should still refer to individual government agencies and their documented regulations. This comprehensive approach will help identify which requirements truly are “universal” such as the requirement for colored pictograms, and which are more likely to see individual interpretation.

Andy Scherz is senior product manager at Epson America, makers of on-demand color labeling systems.