New Phase for ECHA Board of Appeal

« It is thought that the BoA’s caseload is likely to increase in volume and complexity over the coming years as more companies come within the remit of Echa’s decision making, both for REACH and the EU biocidal products Regulation.

But the BoA has had its internal challenges, which have at times made it seem vulnerable. Fundamental changes to its organisation, to be ushered in by a Commission Regulation, could help to address these.

EU legislators foresaw the need for an appeals mechanism, when they negotiated the EU REACH Regulation. The law cites that a three-member Board comprising a chairman and two other members, supported by alternates where needed, “should be set up within the agency to guarantee the processing of appeals for any natural or legal persons affected by decisions taken by the agency”. It gives the BoA the right “to exercise any power which lies within the competence of the agency or remit the case to the competent body of the agency for further action.”

In an interview during his candidacy for the executive director post of Echa in 2007, Geert Dancet foresaw the work of the BoA as a key test of the agency’s credibility, alongside its ability to deliver robust REACH guidance and IT infrastructure and to manage the pre-registration period and the first registration deadline in 2010.

Chairman of the BoA, Mercedes Ortuño, once described the institution as a “safety net” – not only for those affected by REACH but also for the agency – able to check, rectify or endorse decisions .

Check and balance role

Has this ‘check and balance’ role been borne out in practice? Chemical Watch asked a range of stakeholders for their views, receiving generally very positive responses concerning the impartiality; quality and usefulness of the BoA’s decisions.

The European Commission’s DG Grow comments that: “Thanks to the quality of its decisions, the Echa Board of Appeal has established a good reputation and is now perceived as a competent and independent party. Despite the expected increase in workload, the board should continue to be an easily accessible referee in appeal cases.”

Mr Dancet’s view is that in the context of implementing an evolving complex regulation, the board has “been helpful in determining the boundaries of our decision making and our administrative practices”. Its decisions for and against the agency in each appeal have satisfied him that “the processes we have set up have been set up in a solid and legally correct way but here and there we have had to give legal and scientific interpretations which were not in the legislation itself.” Decisions made by the European Court similarly help to mould the legislation and validate Echa’s approaches, he notes.

And Nina Cromnier, Chair of Echa’s Management Board, to which the BoA is directly accountable, comments that it “has given very high quality decisions that have fostered good trust in the whole system. It definitely has played an important role and the quality of the decisions is respected by all stakeholders … It really is a learning body, ensuring that issues that are not clear in the legislation are made clear”.

Indeed, from its start the BoA has had to delve into some of the darkest grey areas of REACH. On the controversial issue of animal testing to meet the data demands of the Regulation, the BoA has now adopted some key rulings, for example, in a case brought by Honeywell, it concluded that Echa had acted disproportionately in requesting the company to carry out an additional animal test.

In another example, it found that Echa had been too inflexible in a case brought by CINIC Chemicals Europe over its procedures for admission of information that could have prevented unnecessary animal testing. It shed clarity on Echa’s role in adjudicating data-sharing disputes, when it waded through the arguments in a case brought by the Vanadium Consortium, to conclude that the agency had fairly assessed whether each party in the dispute had made every effort to ensure that costs were determined in a fair, transparent and non-discriminatory way. It also ruled that Echa needed to change its procedures, regarding the verification of SME status of registrants and corresponding fees payable.

Over this last summer, the BoA has issued two further rulings on contentious compliance issues, which Echa and other stakeholders are still evaluating the implications of. One was its decision on the legal standing of the agency’s “statements of non-compliance”, or Soncs, in a case brought by Solutia Europe and the other, in September, was its first decision involving the substance evaluation process of REACH in a case brought by nine companies asked to provide more safety data on medium-chain chlorinated paraffins.

Neither the number nor the complexity of cases that the BoA deals with is expected to diminish, especially now that Echa has also been made responsible for the EU biocidal products Regulation, which, therefore, makes it an area of law on which appeals can be brought to its BoA.

Of the 43 cases brought to conclusion so far, nine have gone in Echa’s favour, seven have been upheld and 18 were withdrawn by appellants. In a further nine cases, the agency exercised the power afforded by REACH to rectify its decisions rather than going ahead with the case, after an initial examination of the grounds for appeal and a consultation with the BoA chairman on the admissibility of the case.

With each of its rulings, the BoA has taken pains to explain the legal background, the circumstances and provide wider context and lessons for its decisions. It has always urged stakeholders to read its rulings carefully to ensure they grasp their context and broader messages. This, it says, means that it is offering far greater value to stakeholders and it has resulted in widespread acceptance of its judgements, evidenced, for instance, by the lack of any cases of companies further seeking to challenge BoA decisions at the European Court of Justice. However, Ms Ortuno says even if BoA decisions were challenged further, she would welcome this as an opportunity to validate its judgements.

The breadth of its rulings can pose considerable challenges to the agency, Mr Dancet says. He notes the BoA’s decisions on data-sharing cases, which brought “important clarifications which are useful”. He also points to the recent “famous Sonc case”. “We want to understand what it means because it was not a standard case.”

The case concerned a substance notified as a new substance for the EU market, under the previous EU ‘NONS’ legislation, and which was automatically transferred to the REACH system rather than being registered afresh. “It is not entirely clear whether [the BoA judgement] is limited to that kind of case or has further impact.” The agency always re-examines its procedures in light of the BoA’s rulings whether or not they are in its favour, he says, “but the wider the conclusions are written in those decisions we are not winning, the more analysis in terms of consequences we have to consider”. He also points out that with substance evaluation cases now being brought to appeal, another lesson being learned is that Echa is a more complex decision-making body than first appears. For instance, discussions in the Member State Committee cannot just be overturned by the agency.

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Given that Echa is a party to every appeal, interpretation of REACH recital 106 and Article 76, mandating that the BoA should be a part of the agency, is a key issue.

Until now, this has meant that Echa supplies HR services to the BoA and provides its ‘registry’, scientific and legal support, using Echa staff who are dually accountable to the agency and the BoA. While members of the BoA are not permitted to also work for the agency, the registry staff can, and they do.

In the absence of any other direct instructions in the REACH Regulation itself, the agency and BoA agreed between them in June 2009 “administrative arrangements for safeguarding the independence of the Board of Appeal”. This document explains how Echa runs the BoA registry as an “independent administrative unit” within its walls. Mr Dancet says the arrangement has worked “extremely well in my perception” and has allowed the flexibility to deploy resources to the BoA when needed but to otherwise use them in the agency.

The executive director also sets the budget for the BoA and controls decisions on how much secretarial support it can have. He is accountable on this to the Management Board, which also has the role to ensure that the BoA has adequate resources to work independently and effectively.

However, the REACH Regulation stipulates that while the Management Board should directly appoint the chairman of the BoA and other members and alternates, it may appoint additional members, based on a recommendation by the executive director on the capacity needed to ensure that appeals can be processed at a satisfactory rate.

Given this intricate arrangement, it is perhaps not surprising that there have been issues in the relationship between Echa and the BoA, something the Management Board examined at its last meeting.

Last year, the Management Board’s BoA working group assessed whether more could be done to ensure the independence of the registry. It sought legal advice from the European Commission and, this summer, a letter summarising this advice was published as an annex to a working group report on its recommendation that the BoA should, for the second time, be confirmed as a permanent institution rather than an ad-hoc body convened only when necessary. The report was published as part of the Management Board meeting proceedings.

The letter, dated 16 December 2014 from Antti Peltomäki, deputy director general of DG Grow, concludes that “despite the fact that Echa’s executive director is doing its utmost to ensure the independence of the Board of Appeal, the Commission considers that additional measures must be taken in order to avoid the perception that the independence of the Board of Appeal could be at risk.” It adds: “Following an in-depth legal assessment, the Commission considers that currently these issues deserve special attention in order to guarantee the independence and impartiality of the members of the Board of Appeal of Echa.”

It says that “there is no need to re-open REACH to address the issue” as it falls into “the discretion of the Commission implementing powers”. And it concludes: “Consequently, the Commission intends to amend the Commission Regulation (EC) No. 771/2008 on the rules of procedure of the Board of Appeal and its organisation … in the sense that the Registrar of the Board of Appeal and its staff are appointed by the chairman of the Board of Appeal directly”.

The precise scope of the Commission’s intended amendment of the Rules of Procedure Regulation is not yet known. The Commission told Chemical Watch in September that it “intends to make a formal proposal to amend the existing rules of procedures before year end. The planned changes include measures to further reinforce the independence of the Board of Appeal, that was not initially foreseen to be a permanent structure. The practical details and technicalities are still being discussed.”

Another point made in Mr Peltomäki’s letter is that an additional action that the executive director could take directly would be to delegate powers to the chairman of the BoA on the yearly performance evaluation of its registrar and registry staff. This is a “matter for the executive director to decide and would require only a modification of the current administrative arrangements”.

Commenting on these pending changes, Ms Cromnier says “there is no doubt about the general direction … it is now very likely that the registry will be part of the Board of Appeal [or] Echa” but she cautioned that until the Commission presents its amended regulation, the details of the changes will not be clear. On the nature of the relationship between the Echa secretariat and the BoA, she only alludes to these, saying: “They are different roles and, of course, the dynamic between these roles is quite expected. As in all working life relationships, it is always important for good smooth cooperation to put yourself in the shoes of the other and use a professional and respectful attitude. That’s what I believe in and what I expect of the relationship in this case.” Asked if the Commission’s decision might make the relationship easier, she says: “I can’t really tell. It would clarify who is responsible for what and if things are clear then, in that respect, I would hope that it would but I would have to see it in practice to give an opinion.”

Similarly, Mr Dancet comments: “We have to still wait and see how the decision is phrased and how it is practically implemented to see what consequences it may have.” He notes that greater autonomy will bring significant additional administrative tasks that the BoA will also have to manage.

Ms Ortuño feels the difference in responsibility for the registry to the BoA, will not be so much about the impact it makes to its daily life – she praises the registry for its “vital” hard work in the past six years and its dedication to supporting appellants to ensure that the appeals process runs smoothly. But it will make a big difference in terms of the principle she says: “Our supportive body will be dependent on the Board of Appeal and not on the agency’s executive director. That, to me, was a really serious factor influencing the independence of the Board of Appeal. When your support depends on one of the parties to an appeal … that is a huge problem to me.”


Will the BoA have the resources it needs, in future, to tackle an unpredictable but likely increasing caseload? In common with other parts of Echa, the board has suffered cuts to its legal and scientific support. This, together with “other factors outside the board’s control” that have not been publicly stated but are thought to be staffing-related, has led to a backlog of cases, which the BoA now needs to plough through.

In her annual statement to the Management Board in June, Ms Ortuño made a strong plea for no further cuts in legal and scientific support or other interventions and for a period of stability to enable the BoA to get on with its work. “Trust us and leave us in peace with what we have to do” is its message. Speaking at the same meeting, Mr Dancet gave an assurance that he did not plan any further cuts to the BoA budget and staff, over the coming years. He told Chemical Watch he stands by this but he adds: “Of course, given the volume of work increasing, they will have to become more efficient. I cannot turn the clock back and say you can now have double the resources if the rest of the house is making cuts. While the workload is increasing … one can only follow the Commission mantra that we all have to find ways to do more with less.”

Ms Ortuño’s view is that the BoA is already operating very efficiently for such a small body and is ready to do more where possible. She notes measures, such as allowing appellants to join like cases into one appeal to cut down on time and costs; taking steps to pare down appeal cases to the key legal decisions so as not to be distracted by other issues; publishing clear and detailed decisions that enable others to learn from them and may prevent further unnecessary appeals; and publishing clear procedures, as well as offering support from the time an enquiry is made, to help potential appellants. One testament to the clarity of the process, she says, is that companies do not always feel that they need to use lawyers in order to bring appeals.

On the down side, greater clarity of the rules can lead to fewer potential appellants resulting in less fees income for the BoA – for example, the number of appeals regarding SME status has dropped considerably. She also observes that the BoA has many of the same responsibilities and procedures as a legal court – it examines all pleas made by appellants, it listens to arguments from other interested parties and allows rights of response. This is different to boards of appeal under other jurisdictions, she says, where the process is more like mediation. And in comparison, while court cases take four years on average, the BoA’s average turnaround time is one and a half years. The backlog in cases has not gone unnoticed among the stakeholders Chemical Watch interviewed. But Ms Ortuño says that in the feedback the BoA has received, there have not been any complaints about the length of the appeals process.

Commenting on the Management Board’s role in safeguarding the BoA’s finances, Ms Cromnier, while observing that financial constraints affect all parts of Echa’s work, concludes that: “It is an important issue and things do change and the workload of the Board of Appeal is not something that is totally predictable. We will have to work off the best estimates but that changes with time and we have to follow that very closely.

“I definitely wish to see a continued strong Board of Appeal that makes strong decisions in an effective time and the board has proved very good at these things and I wish them to do so also in the future.”

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Article of Mamta Patel

Cet article n’engage que son auteur/ This article is the sole responsibility of the author