Protecting Innovation in Chemical Manufacturing

On January 1, 2017, Taiwan implemented Phase 4 of the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). In accordance with Phase 4 of GHS, Taiwan will require chemical companies to make full disclosure of health hazards on a Safety Data Sheet (SDS). However, while many of Taiwan’s global counterparts require chemical companies to disclose health hazards on SDSs, the level of disclosure required by the Taiwan SDS will far exceed the requirements in any other country. In the American Chamber of Commerce’s recently published 2017 Taiwan White Paper, the Chemical Manufacturers Committee contends that this exceptionally high level of disclosure has the potential to hinder innovation and R&D activity in both the chemical and electronic industries in Taiwan.

“The purpose of the SDS is not chemical substance disclosure but to protect labor safety, and the health and safety statements in the SDS are sufficient to indicate the degree of hazard posed by a given product,” the committee states in its position paper. The high level of disclosure planned for the Taiwan SDS requires disclosing the amount of hazard for each individual chemical contained in a product, misrepresenting the danger posed by the product as a whole. The committee sees no public benefits in the disclosure of low-hazard ingredients and contends that such a high level of disclosure would both cause anxiety amongst consumers and damage the rights and interests of manufacturers.

Further, such disclosure threatens to undermine companies’ ability to protect their confidential business information (CBI), potentially hindering innovation in Taiwan and discouraging manufacturers from offering new products in Taiwan’s market. The committee warns that over-disclosure could deter companies from applying for CBI protection, a process that is already extremely onerous. Although the Environmental Protection Administration’s Toxic and Chemical Substances Bureau (TCSB) has implemented a simpler R&D reporting process, the process provides CBI protection only for new chemical substances and offers no protection for R&D work involving pre-existing chemical substances. The committee recommends revising the CBI application process and issuing a list of chemical substances disclosed under generic names. These two policies will help bolster Taiwan’s role as a leader in chemical innovation and R&D without bringing any added risks to the public.

To read the full Chemical Manufacturers position paper, click here.

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