Company Profile of Procter and Gamble
1 Introduction
Greenpeace is conducting a worldwide campaign against Persistent Organic Pollutants (POPs) and other
hazardous substances. These substances must be prevented from entering the environment by abolishing
their production and use and replacing them with non-hazardous alternatives. The elimination and
substitution debate was initiated in the 1990s in Europe and the first international formal policy proposals
were produced in the OSPAR Convention, in which 16 European governments (including the EU) agreed
to eliminate discharges of hazardous substances to the marine environment by 2020
1. On 29 October 2003the European Commission made a legislative proposal for a new European chemicals policy, known as
REACH, which is expected to enter into force by 2005
2.Persistent Organic Pollutants (POPs) are highly toxic substances that decompose very slowly in the
environment and accumulate in humans and animals, sometimes with hormone-disrupting effects. Many
of these pollutants are chlorinated substances. Well-known POPs, such as DDT and PCBs, have long
been banned in Europe, but other toxic substances are still being produced and used.
These toxic substances are transported by air and water to remote and vulnerable regions. For example,
polar bears, whales, seals and human inhabitants of the Polar regions are highly exposed to these
substances
3.Environmentally harmful POPs accumulate in the food chain. Even low concentrations of a toxic
substance in the environment can lead to high levels in animals at the top of the food chain. But the same
substances are also found closer to home, in rainwater
4 and household dust5 for example, and in ourbodies.
6Hazardous substances must be prevented from entering the environment. The most powerful instrument
for achieving this objective will be legislation banning the production and use of existing hazardous
substances and the prevent the production of new ones, which for instance is the basis for the global POPs
treaty,
7 which was adopted in 2001.The OSPAR Convention was the first regional treaty that agreed to eliminate discharges of hazardous
substances to the marine environment in one generation (by 2020).
8 It gives the greatest urgency tophasing out the chemicals on what is called the OSPAR priority list. On 29 October 2003 the European
Commission presented a new European chemicals policy. The European Parliament and the member
states will be further consulted before new legislation will be adopted and enter into force. The new
policy framework is called REACH (Registration, Evaluation and Authorization of Chemicals). These are
the key concepts in the new policy framework that intends to severely restrict and ban unauthorised use of
hazardous chemicals.
The European Commission has already received a lot of input from various stakeholders, including the
chemical industry, consumer goods manufacturers and retailers.
9 The chemical industry claims that theproposed legislation will undermine the competitiveness of the sector and is seeking to water down the
new regulations.
10 On the other hand, others like the UK retailer Marks and Spencer, fear the potentialcost of a consumer backlash over dangerous chemicals could far outweigh the impact of the additional
testing that the rules being proposed by the European Commission would require.
11The presence of toxic substances is not limited to the production area, but is directly evident in many of
the products around us, including everyday consumer products which pollute the environment while being
used or in the form of waste after disposal. Greenpeace is therefore calling on industry to:
1) halt production and use of hazardous substances;
2) adopt the precautionary principle: only produce and use chemical substances for which sufficient
evidence is available that the chemicals present no potential for hazards to ecosystems or human
health;
3) substitute hazardous substances with clean or less hazardous alternatives;
4) publish information about products, including the chemicals they contain.
Companies which manufacture and/or retail consumer goods play a major role in the worldwide use and
distribution of these chemicals of concern. Some have already adopted progressive policies to find
substitutes for hazardous substances, while others have failed to make progress and use their influence to
lobby against the pending new chemicals legislation.
Greenpeace is calling on companies that produce and/or use these substances to draw up an action plan
showing how they will meet these demands within one year. Companies should accept their social and
environmental responsibility and help to achieve a cleaner and safer future. But they can also benefit from
such a plan since they will need to adapt to changing consumer and legislative demands.
Greenpeace has sent letters to a large number of manufacturers of consumer articles enquiring about the
presence of and their policy on hazardous substances in their products and their position on the pending
EU legislation on hazardous chemicals. Some companies did reply while others did ignore the enquiries.
To obtain a better picture of the presence of hazardous chemicals in consumer goods and about what
companies are doing to avoid them, Greenpeace compiled the results of existing tests on consumer
articles, most of them conducted by the German consumer group Oekotest. In addition, Greenpeace
commissioned the Dutch research group TNO in 2003 to test a further selection of consumer articles for
selected chemicals (organotins, phthalates, brominated flame retardants, musks, Bisphenol-A and alkyl
phenols and its ethoxylates)
12 and reviewed the social and environmental policies, particularly onhazardous chemicals and REACH, of a selected number of companies. These included companies
producing sports wear, cosmetics and body-care products and electronics. The following report is a
dossier on Procter and Gamble. A previous draft of this report has been discussed with Procter & Gamble
and we thank the company for providing comments and additional information.
History and background
In 1837, William Procter and James Gamble combined their skills as a candle maker and soap maker and
formed the partnership of Procter & Gamble. In 1879 they developed an inexpensive white soap named
Ivory, and in 1890 the company established its own research laboratory, the first of its kind in the US, and
a stream of innovative new products followed. In 1930, P&G purchased its first plant outside North
America, with the purchase of British soap manufacturer Thomas Hedley & Sons. Five years later the
company established a factory in the Philippines.
During 1920s and 1930s, the company pioneered sponsorship of radio dramas aimed at a female audience
that gave rise to the term "soap opera". The company still sponsors three daytime US TV shows,
including As the World Turns.
13Nowadays Procter & Gamble markets nearly 300 brands, including leading brands such us Pampers, Tide,
Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor, Iams, Crest,
Actonel, Olay, and Clairol. P&G has sales in more than 160 countries around the world and P&G’s
worldwide headquarters is located in Cincinnati, Ohio, USA. The company operates 115 plants in almost
80 countries worldwide and employs nearly 98,000 people.
14P&G is divided into five global business units: fabric and home care; beauty care; baby and family care;
health care; and snacks and beverages.
15 The firm also makes pet food and water filters and produces soapoperas.
16The biggest division in 2003 was Fabric & Home Care (sales of $12.6bn), followed by Beauty Care
($12.2bn), Baby & Family Care ($9.9bn), Health Care ($5.8bn) and Snacks & Beverages ($3.2bn). Fabric
& Home Care was also the most profitable division (with net earnings of $2.1bn, marginally ahead of
Beauty Care).
17In late 2003 the group announced a partnership with appliance manufacturer Applica Consumer Products
to begin marketing a major line of household consumer appliances, jointly branded as P&G and Black &
Decker, commencing in early 2004. No further details have been confirmed but among the first products
are expected to be a Folgers-Black & Decker coffeemaker.
After several years of strong development in the Nineties, several of its key brands lost their leadership of
the market to rivals, while many of its new product launches proved disappointing or downright failures.
After two years of further internal restructuring, P&G appeared to have found its way forward again by
early 2002. The group reported headline sales for the year ending 2003 of $43.4bn, up 8%. Around half of
total sales were generated in the United States.
Key Numbers
18Company type Public (NYSE PG)
Fiscal year end June
2003 sales (million) $43,377
2003 net income (Million) $ 5,186
2003 employees 98,000
Key People
19Alan (AG) Lafley is Chairman, CEO and President of P&G. Other key executives include Bruce Byrnes
(Vice Chairman and President, Global Beauty Care and Global Health Care), Kerry Clark (Vice Chairman
and President, Global Market Development & Business Operations.
Top Competitors
20Johnson & Johnson
Kimberley-Clark
Unilever
Procter and Gamble was the #2 beauty products company by revenues after L’Oreal in 2002
21 with topbrands such as Head & Shoulders shampoo (#5 sales in US in 2002), Cover Girl (#2 colour cosmetics in
US, 2002), Always and Tampax feminine hygiene (#1 and 2 world in 2001) and Secret Brands and Old
Spice deodorant (#1 and 5 in 2002).
22Rankings
23Procter and Gamble ranks number 31 on the Fortune 500 and number 21 on the Financial Times Global
Top 500 companies list. Procter & Gamble is included in the Dow Jones Sustainability Index (DJSI) and
has been rated as the market sector leader in the Consumer Goods sector for four consecutive years. It is
also in the FTSE4Good index. Procter and Gamble is listed on the Domini 400 Social Index of the
socially responsible investment firm Domini Social Investments.
24 Domini praised Procter & Gamble forits ‘notably generous’ level of charitable donations in countries outside the U.S., for its packaging waste
reduction program and for its US workplace policies, especially towards working mothers. However,
Domini voiced concerns about the company’s lay-offs in 2001 of 17,400 employees.
Subsidiaries/Affiliates
25The Iams Company
P&G-Clairol, Inc.
Reflect.com LLC
Wella AG
Stock information
26P&G is a publicly owned company. Its stock is listed and traded on the following exchanges: New York,
Cincinnati, Amsterdam, Paris, Basle, Geneva, Lausanne, Zurich, Frankfurt, Brussels, and Tokyo.
W
Netherlands
27Procter & Gamble Nederland B.V.
Watermanweg 100
3067 GG Rotterdam
Netherlands
Phone: 31-10-286-3100
Fax: 31-10-286-3131
Shareholders
28Country capital (%)
Bank of America Corp. United States of America 1.15
Barclays Plc United Kingdom 3.4
FMR Corp. (Fidelity Investments) United States of America 2.59
JP Morgan & Co. United States of America 1.38
Mellon Financial Corp. United States of America 1.3
State Street Corp. United States of America 2.3
Vanguard Group Inc. United States of America 1.5
Wellington Management Co. United States of America 1.3
3 Business Strategy
P&G is organized around five global business units that manufacture and market the product categories.
These units are responsible for spreading product innovations across the company’s product categories
and geographic markets. In addition to units formed along product lines, P&G also has Market
Development Organizations (MDOs), which are geographically organized.
Corporate Functions covers two main focus areas: 1) upstream research and development focussing on
new developments, and 2) corporate needs not covered by the other departments, such as corporate
human resources and corporate external relations, customer business development.
Global Business Services provides support services to P&G business units and to P&G employees.
29Most of the products are produced or assembled in P&G-owned facilities and 10% at third-party
manufacturers. This proportion has increased during the past few years.30
Employment
Approximately 21,600 people lost their jobs since 1999 when the company initiated a multi-year
restructuring program concurrent with the company’s reorganization into product-based global business
units. While all geographic regions and businesses were impacted, a higher number of U.S. employees
were affected because of the concentration of operations in the US.
31In 1999, concurrent with a reorganization of its operations into product-based Global Business Units, the
company initiated a multi-year restructuring program designed to accelerate growth and deliver cost
reductions by streamlining management decision-making, manufacturing, and other work processes, and
by discontinuing under-performing businesses and initiatives. The program was substantially complete at
the end of fiscal 2003.
Advertising
32Advertising Age/TNS Media Intelligence estimated total media expenditure in the US of $2.7bn in 2002,
including measured media expenditure of $2.0bn. Biggest spending brands were Olay (measured spend
$161m), Crest ($160m), Clairol ($154m), Cover Girl ($110m) and Pantene ($99m).
4 Social and Environmental Responsibility
“Sustainable development is about improving quality of life for everyone, now and for generations to
come.”
The company’s worldwide business conduct and its social responsibility is based on a set of principles,
values and statement of purpose,
3334 and the company’s supplier’s code of conduct is laid down in a set ofguidelines for its suppliers.
35 These guidelines include guidance on legal compliance, human rights,employment (including child labour and forced labour) and on health, safety and the environment. Procter
and Gamble’s commitment is to and it expects its suppliers to ‘operate within the spirit and letter of the
law and maintain high ethical standards’ wherever it conducts its business.
The guidelines also state that if ‘a pattern’ of violation of these principles becomes known and is not
corrected Procter and Gamble will discontinue the business relationship. P&G is also committed to
supporting economic growth, social justice, human rights, political justice, and equal opportunity
wherever it does business in the world.
In 2003 Procter and Gamble published its fifth Sustainability Report for P&G’s worldwide operations.
Data in this report cover the period from 1 July 2002, through 30 June 30 2003. According to the
company, its key sustainability focus areas are water and health and hygiene. Environmental Protection
focuses on water, use of resources and waste reduction. Social responsibility focuses on health, hygiene
and education.
P&G made total global philanthropic contributions (by the P&G fund and through corporate
contributions) of $84.5 million in 2003 and $77.7 million in 2002
“P&G commits to providing a clean, safe and incident-free work environment. We expect vendors to
provide a safe work environment, to prevent accidents and injury, and to minimize exposure to health
risks.” Procter and Gamble Guidelines for Vendor Relations, p. 6
P&G commits to improve the environmental quality of its operations and products and to do business
with vendors who share the company’s concerns for and commitment to preserving the environment. It
expects vendors, as a minimum, to meet all current, applicable environmental rules, regulations and laws
in their countries.
36Procter and Gamble has released a summary of data for the company’s resource consumption and waste
production for its global business, specified by its five product groups.
37 The company has more detailedpolicies in place on climate change, forests, health and safety.
38“…it is P&G’s policy to: Ensure our products, packaging and operations are safe for our employees,
consumers and the environment. …“ Procter and Gamble 2003 sustainability report.
39According to the company’s environmental policy, it is committed to reducing or preventing the
environmental impact of its products and packaging in their design, manufacture, distribution, use and
disposal whenever possible. It also says it supports the sustainable use of resources and actively
encourages reuse, recycling and composting. The policy also states that the company meets or exceeds the
requirements of all environmental laws and regulations and uses environmentally sound practices, even in
the absence of governmental standards.
P&G follows uniform corporate safety standards around the world and has operating policies, programs
and resources in place to implement its environmental policy globally.
40 A global Health, Safety &Environment (HS&E) team is responsible for ensuring that the approximately 130 manufacturing
facilities worldwide are operated safely and legally; that process hazards are minimized or eliminated;
that health risks are identified, managed, or eliminated; and that waste from sites is reduced as much as
possible.
41,42Product Safety & Regulatory Affairs (PS&RA) is responsible for ensuring that products are safe for
consumers, safe for the environment and in compliance with laws and regulations where they are sold.
PS&RA is also responsible for the development, validation and adoption of alternatives to animal testing
and ensures that any claims the company makes about the safety or environmental profile of its products
are scientifically sound.
43The safety of the company’s products and ingredients is based on risk assessments of chemical hazard and
exposure information. According to P&G, selection and formulation of product ingredients and mixtures
is based on acceptable risk profiles, as well as ‘satisfying other important business and consumer needs’.
44The company is also applying a risk assessment process to assess the safety of its processes at its own
manufacturing operations as well as at contractor manufacturing operations.
45A key part of PS&RA is the Central Product Safety (CPS) organization, whose primary role is to conduct
scientific evaluations of the human and environmental safety and impact of the company’s products.
46Coffee workers’ exploitation
In 2003, Procter and Gamble was targeted as one of the world's four biggest coffee sellers by Oxfam and
other pressure groups for exploiting coffee producers. Oxfam released a report pointing out that it costs
farmers more to grow and pick coffee than they receive when selling it, a situation that imperils the
livelihood of farmers according to Oxfam. The price that coffee farmers receive for their harvest has
fallen by almost 50 percent to a 30-year low. A shareholders’ coalition led by Domini Social Investment
Fund filed a shareholder resolution in April 2003 to address the coffee crisis.
47.According to Oxfam, the “Big Four” coffee roasters--Sara Lee , Procter & Gamble, Nestle, and Kraft,
owned by Philip-Morris --risk alienating consumers, who are gaining awareness of the social and
environmental costs of coffee production. According to the NGO, these four companies buy nearly half of
the world's coffee crop and thus dominate the $60 billion global coffee industry and their healthy profit
margins range between an estimated 17 and 26 percent.
Procter and Gamble responded in its 2003 sustainability report that it recognizes the social problems
many coffee-growing families face but that this is the result of the current situation of global
overproduction and low prices and that it pays prices based on the marketplace and must do so in order to
secure the coffee it needs and to maintain competitive prices for its consumers. It further stated that P&G
is committed to helping to address the underlying social and economic issues which contribute to this
situation, and working with reputable organizations that can help provide long-term systemic solutions.
48Procter & Gamble recently agreed to begin marketing Fair Trade-certified coffee products within its
Millstone specialty coffee products division in the US, where it is the market leader. Apparently P&G
estimates that it will purchase approximately 2-3 million pounds of Fair Trade-certified coffee annually
under the new plan. Coffee beans that are produced under the Fair Trade certification guarantees farmers
a minimum of $1.26 a pound for coffee compared to non-fair trade coffee which pays farmers
approximately $0.52 per pound.
49, 50 P&G has also introduced Rain Forest Certified Millstone coffeewhich uses beans grown to environmental standards, and Cup of Excellence Millstone coffee, which
promotes quality among coffee growers, helping them to get a better price for their crop.
P&G has entered into a 10-year alliance with the NGO Technoserve, to help coffee farmers join together
to improve efficiency through pooling of resources, and to help diversification into other crops where
coffee farming is not economically viable.
51Animal rights
The animal rights pressure group People for the Ethical Treatment of Animals (PETA) campaigns against
animal tests and lists Procter & Gamble as one of the many companies that conduct animal tests for
personal care and household products, and that is not required by law.
52 The P&G products that are listedby PETA to be tested on animals include Clairol, Cover Girl, Crest, Giorgio, Iams, Max Factor, Physique
and Tide.
According to P&G, the company does not use animals to evaluate the safety of non-food and non-drug
consumer products, except where required by law.
53 According to P&G, animal research may still benecessary to evaluate the safety of novel ingredients and new product types for which no validated nonanimal
tests are currently available.
Procter & Gamble has made a commitment to eliminate all animal testing and stopped testing in 80% of
their product portfolio. Eighty-five percent of the animals used for human safety testing are rats and mice.
The remainder are mostly guinea pigs, rabbits, hamsters and ferrets and, according to the company, it
does not use cats or dogs in research or testing for non-food, non-drug products
54 The company hasvoluntarily spent approximate $170 million over the past 10-15 years to support the development of
animal alternatives.
55However, PETA is still running an international campaign against Iams pet-food company, a subsidiary of
P&G. The pressure group accuses Iams of contracting with dozens of laboratories that use cats and dogs
to conduct ‘cruel and unnecessary nutritional tests’.
56And in a recent P&G campaign update (March 15, 2004), Peta stated that Procter & Gamble has still not
ended the animal testing by continuing animal tests on new ingredients, even when those tests are not
required by law. And according to PETA the company's policy does not cover existing products in the
oral care product area -- toothpastes and mouthwashes such as Crest and Scope. It further stated that
although it welcomed P&G's step in the right directionit will continue to push the company away from
animal experiments permanently, including by keeping P&G on its "do test" list and by continuing to
encourage consumers to boycott all of its products.
57According to PETA, more than 550 companies, including large corporations like Gillette and Avon,
ensure their customers' safety by using more accurate non-animal tests but that P&G has refused to stop
animal tests even for products that are not required to be tested on animals by law, such as cosmetics and
household goods, which make up the majority of P&G's products.
5. Chemicals of concern in Procter and Gamble products
5.1 Chemicals of concern in Procter & Gamble products
Consumer organizations have tested several cosmetics and body care products for (potentially) hazardous
substances, including in P&G products, and identified several phthalates and musks in some of these
products
Artificial Musks
Nitro musks and polycyclic musks are a series of structurally similar aromatic compounds used as
substitutes for natural musks. Artificial musks are cheap, easy to produce fragrances that are added to
personal care and household products such as laundry detergents, shower gels, soaps, hand lotions and
perfumes. Some musks are also used as additives in food, room fragrances, chewing tobacco, fish baits,
Indian joss sticks, and in technical products such as herbicide formulations and explosives. The nitro
musks include musk xylene, musk ketone, musk ambrette, musk tibetene and musk moskene. The major
polycyclic musks are tonalide and galaxolide, also respectively known as AHTN and HHCB.
Artificial musks are persistent and bioaccumulative chemicals. Most health studies focus on musk xylene
(MX) and musk ketone (MK). Although MX and MK are structurally similar and possess almost identical
physico-chemical properties, they differ significantly in their biological properties. Both musks display
estrogenic activity in vitro, with MK showing an affinity for the oestrogen receptor three times greater
than MX.
However, when MK is reduced to its metabolite it loses its activity, whereas when MX is converted to pamino-
musk xylene, its estrogenic potency increases
58. Exposure of humans to MK might increase theirsusceptibility to the hazards of other cancer-causing chemicals. For example, MK acts as a cogenotoxicant
by amplifying the harmful effects of the polycyclic aromatic hydrocarbon benzo(a)pyrene
on DNA in human cells at relatively low doses
59. One human study has shown a significant associationbetween MX and MK levels in blood and hormonal and gynaecological problems in women, suggesting
that these musks cause reproductive toxicity and endocrine effects in humans.
60The polycyclic musks AHTN and HHCB induce both estrogenic and anti-estrogenic activity depending
on the cell type and the receptor subtype targeted. Weak estrogenic effects are observed at relatively high
concentrations while anti-estrogenic effects are seen at lower concentrations
61. However, a recent studyon fish found that these musks could be significant endocrine disruptors.
62Phthalates
Phthalates are a group of non-halogenated ester derivatives of phthalic acid which are widely used in a
range of industrial and consumer applications. Some phthalates, including DBP and DEP, are commonly
found in cosmetic and personal-care products, especially in nail polish, perfumes, hair sprays, household
cleaners and deodorizers, but the main use of phthalate is as plasticizers in soft plastics, especially in soft
PVC.
As of October 2000, the US Patent and Trademark office had 309 patents registered for the use of DBP in
cosmetics. And in 1995 DEP was reported to be in 67 formulations as a solvent and as a vehicle for
fragrance and cosmetic ingredients
63. Phthalate congeners with more than two and fewer than eightcarbon atoms are reproductive and developmental toxicants of varying potencies.
64 DBP and DEHP havebeen characterized as endocrine disruptors acting through complex pathways that generally do not involve
the androgen and oestrogen receptors. Recent research suggests possible effects on human sperm
development for a breakdown product of DEP, diethyl phthalate
65, widely used in cosmetics and perfumesand, until now, considered to be of relatively little toxicological significance.
Women of reproductive age (20-40 years of age) have been found to be more exposed to DBP than other
groups, possibly due to the volatilization and inhalation of phthalates from a variety of commonly used
cosmetics and household products
66. Adibi et al. recently studied a group of 30 pregnant women in NewYork and a group of a similar size in Crakow, Poland, and found that DEP and DBP were present in both
the personal air and the urine samples of the New York group in the highest concentrations. This and the
high correlation between personal air and urine samples led the researchers to conclude that inhalation
appears to be a significant route of exposure
67.In a more recent study among 2540 US citizens, children were found to have significantly higher levels of
the mono-ethyl metabolites of DBP, DBzP and DEHP than adults, whereas females were found to
significantly higher concentrations of the mono-ethyl metabolites of DEP and DBzP than males. Adult
females were found to have the highest MEP levels. The fact that women had higher concentrations of
MEP than did men was according to the researchers most likely attributable to women’s increased use of
personal care products, such as hair care products, cosmetics, and perfumes.
68The presence of phthalates and musks in their products is an indication for companies producing
personal-care products that there is at least a suspicion that their customers can be exposed to the
chemicals and their potential toxic impacts by using their products. This should be a reason for serious
concern, especially since the target group of many of those products is often women and men at their
reproductive age.
5.2 Procter & Gamble’s Chemicals Policy
In response to a Greenpeace, Procter & Gamble stated that it is important to share information with all
key stakeholders, and engage in dialogue about the safety of its products, including its ingredients.
69 Thecompany furthermore stated that all ingredients in Procter & Gamble’s products are evaluated to ensure
they are safe. This includes chemicals that are broadly recognized as priority substances by the
international scientific community and government authorities based on their persistence, ability to
bioaccumulate, and toxicity (including chemicals that are known in humans as carcinogens or mutagens).
According to the company, it avoids using such substances as ingredients in its products, unless it is sure
it can conduct a sufficiently thorough risk assessment to ensure that their use is safe for humans and the
environment.
70P&G does not publicize details of its policy on chemicals on its website or its environmental reports. But
in rtesponse to Greenpeace inquiries, it provided the following information. According to Procter and
Gamble, the company does not use natural musks that originate from animal sources, often farmed for this
purpose or alternatively from animals taken from the wild. For this reason P&G has had a very strict
policy not to use natural musks and this has been in force for as long as the company has been in the fine
fragrance business (since the mid 90’s).
In the 90’s P&G decided to stop using the synthetic nitro-musks because of environmental concerns
raised by some NGOs and government authorities. It also pointed out that recently the most commonly
used types of both nitro-musks and polycyclic musks have been reviewed for safety and accepted for use
in cosmetics by the EU Scientific Committee on Cosmetics (SCCNFP). According to P&G, it has
eliminated all musks (nitro and polycyclic) from its cleaning products since the 90-ties, but depends for
it’s fine fragrances on the continued use of polycyclic musks.
71According to P&G, phthalates are typically sub-components of some ingredients (such as perfumes) and
are not directly added as ingredients. Thus phthalates may be present in trace amounts in the finished
products. A number of phthalates are banned in the EU for use in consumer products (primarily soft,
chewable toys for small children) and P&G says it does not use those phthalates in any form in products
marketed in the EU. According to Procter & Gamble, Di-Ethyl-Phthalate (DEP) has been confirmed as
safe for use in cosmetics by the EU’s Scientific Advisory Panel convened and only DEP and other
approved phthalates may be present in trace amounts in some of its product.
72Furthermore, P&G has confirmed that it will publicize the company’s policy on these and other chemicals
of concern on the company’s website.
736 Procter and Gamble and REACH
In a letter to Greenpeace,
74 the company said that it welcomes the political objectives of the White Paperissued by the European Commission. The company also stated that in situations where there is reasonable
scientific evidence that the use of an ingredient would be unsafe, or where the company believes there is
significant scientific uncertainty about its safety, it does not proceed with that use. Instead it uses a viable
alternative, or it takes actions to reduce exposures to safe levels or does additional work to reduce
uncertainty until the company is confident that the product is safe.
But it also stressed the company’s commitment to the risk assessment approach, which is further outlined
in the company's 2003 Sustainability Report, where the company explains why it relies on risk
assessment. According to Procter and Gamble, this is because the precautionary approach could cause
'chemicals that are being safely used to be unjustifiably removed from the market, potentially depriving
society of innovative and beneficial technologies.'
75In response to a previous draft of this report, Procter & Gamble stated that it does not support approaches
that would broadly restrict the use of chemicals based on concern about their potential hazards alone, and
mandate the substitution of chemicals with less hazardous properties across all possible applications.
According to P&G, it is important to consider whether or not exposure is possible.
Risk-based chemical legislation has proved incapable of addressing the scale and severity of the problem.
Moreover, such an approach suffers from a number of inherent and fundamental limitations which fatally
compromise its utility. Assessing their risks and formulate and implement legal action takes to long and
as a result, a large number of chemicals are being used world-wide without proper knowledge about their
risk. The EU concluded in its White Paper that the risk assessment process is slow and resource-intensive
and does not allow the system to work efficiently and effectively.
76 The EU realized that the current riskbasedregulations will never be capable of ensuring an adequate level of protection of the environment
and human health from exposure to, and the effects of, hazardous chemicals. The current risk assessmentbased
chemicals policy system is failing by design.
The need for a revision of EU chemicals legislation was already highlighted at the informal Environment
Council in April 1998 in Chester, England. This became all the more relevant when the Environment
Ministers adopted the generational goal at the OSPAR Ministerial Conference in July 1998 in Sintra,
Portugal, where they made a commitment to progressively work towards the cessation of discharges,
emissions and losses of hazardous substances by the year 2020. A complete structural overhaul of EU
chemicals legislation will be essential to achieve the OSPAR objectives, particularly the effective
implementation of the generational goal, which needs to be fully transposed into EU legislation. This was
the basis for the EU’s currently proposed REACH system, which was first outlined in the European
Commission’s White Paper, the Strategy for a Future Chemicals Policy, in 2001
77:“EU chemicals policy must ensure a high level of protection of human health and the environment as
enshrined in the Treaty both for the present generation and future generations while also ensuring the
efficient functioning of the internal market and the competitiveness of the chemical industry.
Fundamental to achieving these objectives is the Precautionary Principle. Whenever reliable scientific
evidence is available that a substance may have an adverse impact on human health and the
environment but there is still scientific uncertainty about the precise nature or the magnitude of the
potential damage, decision-making must be based on precaution in order to prevent damage to human
health and the environment. Another important objective is to encourage the substitution of dangerous
by less dangerous substances where suitable alternatives are available. It is also essential to ensure the
efficient functioning of the internal market and the competitiveness of the chemical industry.”
78European Commission White Paper - Strategy for a future chemicals policy 2001.
The draft legislation, which will replace over 40 existing directives and regulations, will implement the
proposals set out in the Commission's February 2001 White Paper on the Strategy for a Future Chemicals
Policy.
79 At its core is REACH: a single, integrated system for the Registration, Evaluation, andAuthorisation of CHemicals. REACH will place a duty on companies that produce, import and use
chemicals to assess the risks arising from their use - requiring new test data to be generated in justified
cases - and to take the necessary measures to manage any risks they identify.
Moreover, all substances of very high concern will be subject to authorisation. Authorisations apply to
particular uses of the substance in question. Authorisation will be granted only if the producer or importer
can show that risks from the use in question can be adequately controlled, or that the socio-economic
benefits of the use of the substance outweigh the risks. In the latter case, the possibility of substitution
should be considered. Substances will be subject to authorisation based on their intrinsic properties (rather
than risk assessments) and the current proposal includes substances that are carcinogenic, mutagenic or
toxic to reproduction (CMRs category 1 and 2), chemicals that are persistent, bio-accumulative and toxic
(PBTs) and chemicals that are very persistent and very bio-accumulative (vPvBs). It also includes
substances identified as having serious and irreversible effects to humans and the environment equivalent
to the other three categories, for example certain endocrine disrupting substances (substances disturbing
the body's hormone system). This means that under the current proposal chemicals will be severely
restricted and replaced by safer alternatives based on their hazard properties rather than risk profiles. This
will shift the burden of proof from public authorities to industry for putting safe chemicals on the market.
“As an example, the likely occupational health benefits from the new regulatory system should be
estimated at between 18 and 54 billion Euro over a 30-year period, which corresponds to an ultimate
yearly reduction of some 2200 to 4300 cancer cases over the same period”. 2003.
80Despite the inability of risk assessments to protect human health and the environment, some industries,
e.g. the European chemical industry (CEFIC), reject the EU’s proposed authorization and registration
procedure (REACH) and its underlying principle of precautionary action.
81Procter and Gamble commented directly on the REACH consultation papers and through a variety of
industry associations to which Procter & Gamble is a member, and has been promoting risk assessment
and rejecting the proposed EU process to ban chemicals of very high concern based on a hazard
assessment. According to Procter & Gamble, a risk assessment, and if necessary a socio-economic
analysis, must be carried out ahead of any decision on restriction for chemical uses, including consumer
uses.
82The company participates in a voluntary industry project on human and environmental risk assessment
called HERA, which supports the comments of its sponsor the European chemicals industry council
CEFIC (and also AISA, see below). HERA, like P&G, rejects the REACH hazard assessment and
authorisation approach and promotes risk assessment, including socio-economic analysis.
83Procter and Gamble's food and beverages activities are represented in Europe’s Confederation of EU
Food & Drink Industry (CIAA).
84 CIAA, together with 16 other food and feed organizations, reject theREACH draft proposal and also endorse the comments of the European chemicals industry council
(CEFIC).
85Procter and Gamble is also member of AISE, the International Association of the Soap, Detergent and
Cleaning Products Industry. AISE supports the risk assessment approach as promoted by HERA and
rejects the REACH hazard approach.
86 AISE is in turn a member of the Downstream Users ChemicalsCo-ordination Group (DUCC) that likewise rejected the hazard approach of REACH and promotes risk
assessment.
87According to the EU Commission, companies will be able to ensure better protection of their workers and
their products will be safer for consumers and the environment and most chemicals will already be
registered when they are utilized by downstream users (companies that buy chemicals and use them as
ingredients in their own products).
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