Corporate Sustainability Reporting Directive (EU)

The EU Corporate Sustainability Reporting Directive (CSRD) will amend the 2014 EU non-financial reporting directive. It will introduce more detailed reporting requirements and ensure that large companies are required to report on sustainability issues such as environmental rights, social rights, human rights and governance factors.

The CSRD will also introduce a certification requirement for sustainability reporting as well as improved accessibility of information, by requiring its publication in a dedicated section of company management reports.

The European Financial Reporting Advisory Group (EFRAG) will be responsible for establishing European standards, following technical advice from a number of European agencies.

EU rules on non-financial information apply to all large companies and all companies listed on regulated markets. These companies are also responsible for assessing the information at the level of their subsidiaries.

The rules also apply to listed SMEs, taking into account their specific characteristics. An opt-out will be possible for SMEs during a transitional period, meaning that they will be exempted from the application of the CSRD until 2028.

For non-European companies, the requirement to provide a sustainability report applies to all companies generating a net turnover of €150 million in the EU and which have at least one subsidiary or branch in the EU. These companies must provide a report on their ESG impacts, namely on environmental, social and governance impacts, as defined in this directive.

Application will take place in three stages:

• 1 January 2024 for companies already subject to the non-financial reporting directive

• 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive

• 1 January 2026 for listed SMEs, small and non-complex credit institutions and captive insurance undertakings.

Further information is here, including the link to the CSRD itself.

Changes to EU Industrial Emissions Directive (EU)

The European Commission has announced today (5 April 2022) major changes (proposed) to the EU Industrial Emissions Directive (the IED).

Pollution prevention and control will continue to be based on the ‘Best Available Techniques’ (BAT) IED permitting process, but the framework will be enhanced by measures to boost effectiveness:

• Member State permitting authorities will be required to use tighter pollutant emission limit values when revising permits or setting new permit conditions. Currently, about 80% of permits stick to the lowest legally allowed values.

• Extending the IED’s coverage to additional livestock farming and industrial activities: new sectors with significant potential for high resource use or pollution will need to curb environmental damage at source by applying Best Available Techniques.

• Increased focus on energy, water and material resource efficiency and reuse, as well as promoting the use of safer and less toxic, or non-toxic chemicals in industrial processes.

The new sectors proposed for IED coverage include especially:

–   Extractive industry installations (mines), covering metals, rare earth metals and industrial minerals. Energy minerals, such as coal, and aggregate quarries are excluded.

–   ‘Giga-factories’ for electro-mobility batteries: a growth sector, relevant for the industrial transformation, and complementing the Batteries Regulation, for larger-scale plants.

The new rules will preserve the effective mechanism used to date to decide what Best Available Techniques are for the various industrial sectors, known as the Sevilla process. The Sevilla process is a participatory, transparent, science-based information exchange involving all industry, national and European Commission experts, and civil society to set mandatory emission limits of pollutants emitted by large agro-industrial installations. Environmental norms defined through the Sevilla process are published for each industrial sector in the Best Available Techniques Reference Documents – BREFs.

BREFs then become BATC documents, when agreed and published.

Details are here.

EU further detail re NI Protocol (Northern Ireland)

The EU issued (a few days ago) a set of non-papers that give further detail on its proposals for changes to its Single Market rules to ease movements between NI and GB under the Ireland/Northern Ireland Protocol (a schedule to the UK-EU Withdrawal Agreement).

The first set deals with sanitary and phytosanitary (SPS) – here.

(1) re guide dogs (assistance dogs) – European Commission’s services had clarified (some time ago) that assistance dogs accompanying their owner when entering the EU territory and Northern Ireland, may benefit from the flexibility offered by Article 32 of Regulation (EU) No 576/2013 on the non- commercial movement of pet animals.

The above was recalled in the technical meetings the EU held with the UK Cabinet Office and the British DEFRA ministry, especially those held on 27 April and 12 May 2021, where the UK side confirmed that the Northern Ireland ministry DAERA would propose an operating procedure for the practical implementation of Article 32.

DAERA updated its guidance on 2 June 2021 – here.

(2) re identification and re-identification of cattle, sheep and goats – the document points out that EU rules on traceability of terrestrial animals require that certain species (bovines, ovines, caprines, camelids and cervids) shall be individually identified on the establishment where they are born. The same requirement applies to animals of those species when they enter into the Union from a non-EU country; those animals have to be individually identified at the establishment of arrival.

Under the EU animal health legislation (Delegated Regulation (EU) 2019/2035), bovine, ovine and caprine animals need to be identified with an eartag bearing a code as laid down in Implementing Regulation (EU) 2021/520 so that the first element of the identification code is the country code of the Member State where the means of identification was first applied to. The country code can be either a two-letter code (mirroring ISO standard 3166-1 alpha-2) or a three-digit country code (ISO standard 3166-1 numeric).

The EU has now issued Implementing Regulation (EU) 2021/1064 to provide that ‘XI’ is the two-letter code to be used in United Kingdom in respect of Northern Ireland and the three-digit code assigned is ‘899’.

–  New-born animals in NI after 01/07/21 should bear the “XI or “899” code in their eartags;

–  Animals introduced from third countries (or GB) into NI after 01/07/21 and identified not in accordance with EU rules (e.g. bearing a UK code) should be re-identified with eartags bearing “XI” or “899” establishments of the first arrival;

–  Animals introduced from third countries (or GB) into NI already identified in accordance with EU rules (e.g. bearing a XI code) do not need to be re-identified.

It must be remembered that EU Animal Health Law already moved on since 31st Dec 2020.

(3) re re-entry of animals for exhibitions/events – the document points out that EU animal health legislation (Delegated Regulation (EU) 2020/692) stipulates ungulate animals (except racing horses) to be introduced into the EU have to fulfil all the requirements and respect a residency period of 6 months in an authorised third country of origin for such imports.

To enable the participation of EU animals in events, exhibitions or shows, the Commission has drafted an amendment to Delegated Regulation (EU) 2020/692 to set up for certain species of ungulates (bovine, ovine and caprine animals) :

* a derogation from certain general requirements, including from the 6 months residency in the “guest” country;

* minimum specific animal health requirements for the re-entry into the Union of those animals:

–  they are moved for a period not exceeding 15 days to participate in events, exhibitions;

–  the third country is listed for the entry into the EU of cattle, sheep, goats;

–  the establishment complies with the requirements for assembly operations of ungulates;

–  the transport is direct and in appropriate vehicles;

–  the animals do not have contact with animals of a lower health status during the stay in the third country.

In addition, the Commission has drafted a new legal text (amending Implementing Regulation (EU) 2021/403 as regards the new model certificate and amending Regulation (EU) 2021/404 as regards the list of third countries authorised) to lay down:

–  a specific model certificate for entry into the EU of those animals reflecting the requirements described above;

–  the list of third countries authorised for this special re-entry into the EU of animals which took part to such events.

(4) re animal products that originate in the Union and move to a third country and then move back again after unloading, storage and reloading in that third country

The document states that animal health policy for entry into the EU of products of animal origin does not allow third countries to certify for import into the EU products which have been imported in that third country, including products of EU origin.

Therefore, the EU’s Implementing Regulation (EU) 2020/2235, which establishes the model certificates for entry into the EU of products of animal origin, does not include any model certificate to cover the entry into the Union of products of animal origin which originate in the EU and which are moved to a third country or territory, and are then moved back to the Union from that third country or territory after unloading, storage and reloading.

The lack of such certificate model would prohibit EU products of animal origin to re-enter the EU after being stored in a third country.

The Commission has drafted a new Implementing Regulation amending Implementing Regulation (EU) 2020/2235 to add a model certificate for that purpose. This will allow re-entry into the EU of products of EU origin which are packaged and stored under the control of the competent authority of the third country.

The change will also amend Annex XXII to Implementing Regulation (EU) 2021/404 to establish a list of third countries that are authorised to use that certificate (including GB and the Crown Dependencies).

A separate non-paper addresses medicines – here.

This document points out that medicines placed on the market in Northern Ireland (NI) must be covered by a valid marketing authorisation issued by the Commission (EU-wide authorisations) or the UK for NI in applying the Union legislation for medicinal products listed in Section 20 of Annex 2 to the Ireland/Northern Ireland Protocol (UK national authorisations).

The Protocol provides for two possible UK national authorisation routes: purely UK national authorisations (“NI-only authorisations”), which concern medicines that are made available in NI only, and UK national authorisations granted via the Mutual Recognition or Decentralised Procedures (MRP/DCP), which is mandatory.

European Commission Notice of 25 January 20212 provides for a grace period of one year (until end-December 2021) for maintaining batch testing and manufacturing / logistics in Great Britain (GB) to ensure undisrupted supply of medicines to NI and those EU Member States (Cyprus, Ireland and Malta) that have been historically dependent on medicines supply from or through GB.

Bear in mind that medicines supply in Northern Ireland is the responsibility of the UK authorities, not the EU.

The EU is now proposing that regulatory compliance functions may exceptionally be located in UK (GB) in respect of medicines covered by any national authorisations issued by the UK authorities in respect of NI, provided that the following conditions are met:

a. the UK fully applies the relevant Union legislation on medicines: on quality, safety, efficacy, pharmacovigilance and batch testing and release when issuing national marketing authorisations in respect to NI;

b. the marketing authorisation contains a legal prohibition of sale (resale) outside its geographical scope: medicines with an authorisation for UK(NI) cannot be legally sold anywhere else in the EU and the specific authorisation code for NI is stamped on each pack;

c. the safety features required under applicable Union law are placed on each pack ensuring that medicines can only be sold in conformity with a valid marketing authorisation in NI;

d. the UK ensures and demonstrates the correct implementation/application of the Falsified Medicines Directive in respect of NI. The EU end-to-end verification system must generate an alert if a medicine specifically authorised for NI is scanned elsewhere in the EU Internal Market;

e. enforcement and supervision by the UK competent authorities on economic operators and regulatory compliance activities located in GB are carried out in accordance with applicable Union law.

The document sets out additional requirements.

Information on the EU’s controls on medicines for human use is – here.

Bear in mind that the UK has signed up to the separate (non-EU) Project ORBIS and the MHRA has issued its first authorisation here. I wrote a blog post about this at the time.

Bear in mind that the BGMA has issued a press release about withdrawal of medicines a few days ago – reported by the BBC – here. The BGMA press release is – here.

Equal Pay Proposal (EU)

On 4th March, the European Commission presented a proposal on pay transparency – here.

The legislative proposal focuses on two core elements of equal pay:

(1) measures to ensure pay transparency for workers and employers, and

(2) better access to justice for victims of pay discrimination.

Further information is here.

NB: this Blog does not focus on Employment Law issues.

Medical Devices Regulation (EU)

The new EU Medical Devices Regulation 2017/745 (MDR) applies from (yesterday) 26 May, after a year’s postponement. The MDR is here.

The MDR tightens controls on high-risk devices such as implants and requires the consultation of a pool of EU level experts before placing medical devices on the market. Clinical evaluations, investigations and the notified bodies that approve the certification of medical devices will be subject to tighter controls.

The new European database of medical devices (EUDAMED) will contain information about each medical device on the market, including economic operators and certificates issued by notified bodies. Each device will have a unique device identifier so that it can be found in EUDAMED. Labelling will be more detailed and electronic manuals will increase user-friendliness. Implant patients will receive an implant card with all the essential information.

Once devices are available on the market, manufacturers will have to collect data about the devices’ performance. EU countries will closely coordinate their vigilance and market surveillance.

The MDR is complemented by the Regulation on in vitro diagnostic medical devices (2017/746/EU) which applies a year later on 26 May 2022.

Q&A about the MDR is here.

European Climate Law (EU)

I blog posted before (in December) about the EU’s proposal for a European Climate Law. On 21 April, the EU’s co-legislators reached provisional agreement on the matter.

The European Climate Law will contain the EU’s commitment to reaching climate neutrality by 2050 and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

Once this provisional agreement is formally approved by Parliament and Council, the European Climate Law will be published in the Official Journal of the Union and will enter into force.

Further information is here.

SPS Export Health Certificates from April 21 (EU)

I posted before about the new EU Animal Health Law (Regulation (EU) 2016/429) that comes into force on April 21. This document is here.

The new EU Animal Health Law (AHR) is a large and complex Regulation designed to consolidate, update and replace a number of existing Regulations.

The main change is the new model export health certificates (EHCs) in use from April 21. EHCs are required for third country import into the EU.

AT THE SAME TIME, April 21 is the date for new rules for entry into the EU of composite products.

Including those for composites, a total of five new EHCs are needed from 21 April. These include three new products of animal origin (POAO) EHCs, two new composite EHCs and a private attestation document for composites exempt from certification. In the UK, private attestations do not need to be signed by an Official Veterinarian (OV) or Food Competent Certifying Officer (FCCO).

The three new POAO EHCs include meat of certain wild game and farmed large game and mechanically separated pork meat.

The two new composite product EHCs are –

a. Entry into the EU (or Northern Ireland) of not shelf-stable composite products and shelf stable composite products, containing any quantity of meat products (except gelatine, collagen and highly refined products) and intended for human consumption; and,

b. Transit through the EU to a third country either by immediate transit or after storage in the Union of not shelf-stable composite products and shelf-stable composite products containing any quantity of meat products and intended for human consumption.

Article 12 of Commission Delegated Regulation (EU) No 2019/625 (delegated rules to a DIFFERENT Regulation (EU) No 2017/625, the Official Controls Regulation) establishes three categories of composite products (applicable from April 21):

(1) non shelf-stable composite products,

(2) shelf-stable composite products that contain any quantity of meat products, except gelatine, collagen and highly refined products, and

(3) shelf-stable composite products that do not contain meat products, except gelatine, collagen and highly refined products.

Note: the EU Official Controls Regulation itself has applied since 14 December 2019.

With a view to smoothen the transition, Article 35 of Commission Implementing Regulation (EU) No 2020/2235 introduces a period of six months (to 20 October 2021) for the imports of composite products during which the old certificate will be accepted to enter the Union. Where no certificate was required prior to 21 April 2021, then the new relevant certificate or private attestation must be provided.

What is not a composite product?

The addition of a product of plant origin during the processing defined in Article 2(1)(m) of Regulation (EC) No 852/2004 of an animal product does not automatically mean that the resulting food falls within the definition of composite products. If such addition does not modify the main characteristics of the final product, the latter is not a composite product. It can be to add special characteristics or necessary for the manufacture of the product of animal origin (Article 2(1)(o) of Regulation (EC) No 852/2004).

For instance, a cheese to which herbs are added or a yogurt to which fruit is added remain dairy products. Similarly, canned tuna to which vegetable oil is added remains a fishery product. These foodstuffs must be produced in approved establishments in accordance with Regulation (EC) No 853/2004.

What percentage of a processed product of animal origin makes a food subject to the rules applicable to composite products?

What makes foodstuff subject to the rules applicable to the composite products is the fact that it is made by both products of vegetable origin and processed products of animal origin. The percentage of processed product of animal origin included in the composite product is irrelevant.

The above is taken from the EU Q&A on composite products – here.

These changes create a high impact on food trade between the UK and the EU.

From April 21, any composite product containing meat products (except gelatine, collagen and highly refined products) is subject to EU Border Control Post (BCP) (or Points of Entry (PoE) for Northern Ireland) checks and requires an EHC.

Chilled/frozen composite products containing processed dairy/egg/fish require EU BCP/PoE checks and an EHC.

Shelf stable composite products containing processed dairy/egg/fish (where the dairy or egg components meet certain heat treatment requirements) require a private attestation and EU BCP/PoE checks unless they are on the EU’s list of lower risk products.

The UK has updated its composites products guidance – here.

APHA (a DEFRA agency) has produced guidance on the April 21 changes – here.

It will be noted that guidance in the EU and the UK is not yet updated in all areas.

The EU is yet to publish the final EHCs for live animals and germinal products that will be used under the AHR. All EU EHCs and Notes for Guidance are being updated to reflect the new rules by August 2021. Only those needed for use by traders from 21 April will be available from April on EHC Online (EHCO), with the remainder uploaded and available by August 2021.

5th List of Occupational Exposure Limits (EU)

Directive 2019/1831 (amending Directive 2000/39/EC) establishes a fifth list of indicative occupational exposure limits (IOELVs) for chemical agents.

For any chemical agent for which an IOELV has been set at European Union level, Member States are required to establish a national occupational exposure limit value. They also are required to take into account the Union limit value determining the nature of the national limit value in accordance with national legislation and practice.

Member States must bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 20th May 2021 at the latest.

The Directive establishes limit values for the following chemical agents:

Aniline

Chloromethane

Trimethylamine

2-Phenylpropane (Cumene)

sec-Butyl acetate

4-aminotoluene

Isobutyl acetateIsobutyl acetate

Isoamyl alcohol

n-Butyl acetate

Cardinal Environment EHS Legislation Registers & Checklists will be updated shortly.

EU Drinking Water Directive (EU)

The current Drinking Water Directive 98/83/EC last amended in 2015, is replaced by a new Drinking Water Directive (EU) 2020/2184 in force 12th January 2021. Member states have two years to bring in national legislation. We will add this Directive to Cardinal EHS Legislation Registers &a Checklists shortly.

The new EU Drinking Water Directive is here.

Key features of the revised Directive are:

• Reinforced water quality standards which are more stringent than WHO recommendations.

• Tackling emerging pollutants, such as endocrine disruptors and PFA’s, as well as microplastics – for which harmonised analytical methods will be developed in 2021.

• A preventive approach favouring actions to reduce pollution at source by introducing the “risk based approach”. This is based on an in-depth analysis of the whole water cycle, from source to distribution.

• Measures to ensure better access to water, particularly for vulnerable and marginalised groups.

• Measures to promote tap water, including in public spaces and restaurants, to reduce (plastic) bottle consumption.

• Harmonisation of the quality standards for materials and products in contact with water, including a reinforcement of the limit values for lead. This will be regulated at EU level with the support of the European Chemicals Agency (ECHA).

• Measures to reduce water leakages and to increase transparency of the sector.

Changes to Energy Labels and Ecodesign (EU)

1 March 2021 was the date for repeal and replacement of some of the pre-existing EU Regulations on both Energy Labels and Ecodesign.

15 product groups require an energy label, and 31 product groups are subject to ecodesign requirements – here.

Industry sectors may also sign voluntary agreements to reduce the energy consumption of their products. The European Commission formally recognises such agreements and monitors their implementation. 

The new Energy labels set out a different energy efficiency scale.

The new Ecodesign stipulations include requirements for repairability and availability of spare parts.