US embassy cable - 05PRAGUE1561

UNCLAS PRAGUE 001561 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/NCE. EUR/ERA, AND EB/TPP/BTA/EWH 
COMMERCE FOR ITA/MAC/EUR MIKE ROGERS 
STATE PLEASE PASS TO USTR LISA ERRION 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, SENV, EZ, EUN 
SUBJECT: CZECH REPUBLIC ON EU CHEMICALS POLICY (REACH): 
DON,T LET THE PERFECT BE THE ENEMY OF THE GOOD 
 
 
1. (U) SUMMARY: Experts at the Czech Ministry of Industry and 
Trade believe that despite the admitted flaws in the draft EU 
REACH legislation, all EU member states are ready to press on 
with the legislation in its current format 'to get the ball 
rolling,' and necessary alterations to the agreement would be 
added as amendments in the future.  They described flaws in 
the draft legislation as lacking proper internal definitions, 
being overly complicated and expensive for entrepreneurs, and 
potentially violating the trade secret rights of businesses. 
They estimated that it would take at least 18 months from the 
passage of the legislation to set up an operational REACH 
implementation entity in Helsinki. END SUMMARY 
 
2. (U) Econoff met with Ministry of Industry and Trade 
Director of the Department of Light Industry, Blanka 
Ksandrova, and Head of the Chemical and Pharmaceutical 
Department Eva Vesela to survey current Czech views on the 
draft EU REACH legislation, which would require health and 
environmental assessments for more than 30,000 chemicals and 
substances.  Ksandrova and Vesela agreed that the draft 
legislation in its current form is less than perfect, but 
said that all EU member states are likely to pull the trigger 
on a political decision to pass the legislation at the 
Competitiveness Council meeting November 27-29 so that the 
registration entity can start the long process of 
establishing their headquarters in Helsinki and working out 
the practicalities of running day-to-day operations. 
Ksandrova estimated that this process would take at least 18 
months.  She said that changes to the 1,000 plus pages of 
legislation are inevitable, but attempts to put together a 
perfect package are fruitless and are merely delaying the 
standing-up of the institution.  However, Ksandrova and 
Vesela both despaired over some of the more glaring problems 
with the current legislation: registration requirements may 
violate firms' rights to privacy and/or trade secrets; some 
of the important terms relating to impact on public health 
remain undefined (such as what constitutes an 'endocrine 
disruptor'). 
 
3. (U) Ksandrova noted that Czech industries, labor unions, 
and environmental NGOs are actively lobbying the government 
on the pending EU REACH legislation.  Key sectors in the 
Czech Republic that could be adversely affected by the REACH 
directive are the auto, paper, and mining industries - three 
traditionally strong sectors in the economy, where producers 
are worried about the cost of REACH implementation and 
limitations it might impose on their operations.  They are 
pressing for exemptions from REACH, claiming that it will 
cripple their worldwide competitiveness. 
 
4. (SBU) The chemical industry is also concerned about the 
REACH directive, but Ksandrova noted that there is a feeling 
in the Czech Republic that chemical companies are "public 
enemy number one" because of prior environmental disasters 
and lingering feelings of resentment from the lack of concern 
for public health that the industry showed during the 
communist era.  Therefore, the chemical companies have been 
less strident in their public opposition to REACH.  Ksandrova 
opined that if companies were forced to abandon some 
hazardous materials, they would find alternatives, but have 
not done so previously because the existing regulatory regime 
did little to encourage them to be creative. 
 
5. (SBU) Ksandrova expressed great concern that the REACH 
process will be prohibitively expensive for entrepreneurs who 
may want to bring a new product to the market, and that the 
regulations will be overwhelmingly complicated.  She said 
that the handbook to explain the registration process would 
likely be over 1,000 pages.  Although she had no specific 
proposals to report, she said that there is a discussion to 
have either the EU or the Czech government pay part of the 
registration costs to minimize the impact on small and medium 
enterprises, which begs the question: what about support to 
non-EU suppliers? 
CABANISS