The True Cost of the SCIP Database for Small Businesses
As of January 5th, 2021, companies that import, supply or manufacture products containing materials listed on REACH’s substances of concern will have to submit a dossier to the ECHA SCIP database. The intended purpose of the database is to increase access to pertinent information so waste operators can improve their processes and implement handling and disposal procedures that are safer for human health and the environment.
The EU has designed this comprehensive scheme as part of the Circular Economy Action Plan, putting sustainable growth front and center of its legislative agenda.
While the database is still under construction, ECHA has launched a preliminary version to allow organizations some time to get familiar with the interface and requirements to build the submission dossier. In April, however, an update of the required steps to build the data has thrown a wrench in the plan many companies had been putting together. What was a sensible proactive move to get ready for the 2021 compliance deadline may prove to be obsolete with each published update, raising growing concerns over the legitimacy of SCIP and the cost it represents for small and medium enterprises.
The Challenges Brought Forth by Data Collection
The original process of preparing the data for SCIP was focusing mostly on building an ID card for articles as such and complex products. This latest update requires the simple articles (what was formerly known as articles as such) to be the central information upon which to build the data sets.
Simple articles are defined as articles that cannot be reasonably disassembled, i.e. the smaller part of the product. Requiring that articles be grouped by identical components characteristics (name, tariff code, material code, etc.) means collecting data from suppliers will not be enough. Extra work will be necessary to unify and validate data likely to be disparate from supplier to supplier, then proceed to grouping. The challenge will be even more daunting for companies that regularly change suppliers or have a dynamic portfolio.
With barely 6 months left to get ready and the expectation of more changes to come, the SCIP Database regulation is creating both a sense of confusion and urgency. Even though businesses have been busy with the program for months, displaying the flexibility to adjust quickly (or in some cases, wipe and repeat) will freeze important resources, at a cost deemed too high by some associations, particularly for small businesses.
The True Cost of SCIP Compliance
According to SMEunited – a European association of crafts and SMEs – in a letter to the Directors General of DG Grow and DG Environment, “SCIP notification will clearly be a burdensome and costly task for an average SME.”
They estimate the SCIP database reporting cost will range between €48bn and €67bn a year and outline the disproportion between such an expense and the benefits of the database. The estimation was reached by running calculation scenarios based on:
- The average number of notifications per year (existing products, new products, products sourced from different suppliers, bill of materials changes, etc.)
- The time necessary to build/update the dataset and submit the notification
- The cost of a worked hour
- The investment in IT support and employee training
While handling SCIP submissions in-house may seem like a time consuming and costly task for SMEs, there are other options that can drive these cost estimations down dramatically. By outsourcing some or part of the SCIP submission process, businesses can leverage the technology and flexibility of third party specialists while focusing in-house efforts on core business functions. Often, outsourcing is a fraction of the cost of training personnel and redirecting their efforts to SCIP.
Minimizing SCIP Database Costs and Maximizing Efficiency
Beyond the debate about whether the database will fulfill its purpose, there is no arguing it is a complex process that adds to the already numerous and stringent European chemical regulations. At Source Intelligence, we have been busy designing a software solution specific to SCIP reporting and even busier keeping up to date on continuous changes. Our experience in global compliance programs gives us a significant advantage in terms of:
- Flexibility and ability of quick turnaround according to updates
- Robust AI-powered data collection tools and processes
- Performance in reporting tools
- Efficient procedures and automated data collection/aggregation
- Ongoing support and expert assistance
- Cost-effective solutions for SMEs
Whether you need part or all of the process to be lifted from your plate, Source Intelligence is the partner of choice to take you to full compliance with ECHA. Don’t risk betting on the deadline being pushed to 2022. Get prepared by requesting a demo today!