(27 June - 1 July 1994)

EXPERT GROUP ON CHEMICAL INDUSTRY ISSUES

FOURTH REPORT

1. Introduction

1.1 In accordance with the recommendation of Working Group B contained in Part I of the Annex to the Report of Working Group B (PC-VI/B/8), the Expert Group on Chemical Industry Issues, a continuation of the former Expert Group on Chemical Industry Facilities, met in The Hague from 25 - 28 April 1994 to continue discussions on issues related to the declaration and verification of chemical industry facilities. It also held, on 27 and 28 April 1994, its second joint meeting with representatives of the chemical industry. The report on this joint meeting is contained in Information Series B (Chemical Industry) No. 2, May 1994. The Group then had an informal meeting on 4 May 1994 to discuss the report on the joint meeting with the representatives of the chemical industry, and a further formal meeting on 25 May 1994 at which this Expert Group Report was adopted.

1.2 Mr. Adam Noble of the United Kingdom of Great Britain and Northern Ireland continued as the Chairman of the Expert Group.

2. The tasks assigned to the Expert Group

The Group was given the following tasks by Working Group B:

2.1 develop solutions to the issue of past production of Schedule 1 chemicals at facilities having a capacity above 1 tonne per year, for purposes not prohibited under the Convention;

2.2 develop clarifications in regard to "discrete organic chemicals including PSF chemicals";

2.3 resolve the issue of low concentrations of Schedule 2 and Schedule 3 chemicals, including products containing scheduled chemicals and the further processing of formulations containing Schedule 2 chemicals;

2.4 define the application of the definition of "production" in the context of Schedule 1 production facilities that acquire Schedule 1 chemicals by extraction or isolation of such chemicals, for example, from natural materials or from old chemical weapons;

2.5 agree on the method of reporting aggregate national data for Schedule 3 chemicals;

2.6 agree on the verification and declaration requirements for "mixed" plants;

2.7 develop solutions for the issue of castor bean processing plants;

2.8 finalise model facility agreements for Schedule 1 facilities, Schedule 2 facilities and Schedule 3 facilities covered under Article VI of the Convention;

2.9 agree on the declaration forms and handbooks drafted by the Secretariat;

2.10 conduct the meeting with the chemical industry;

2.11 agree on the illustrative elements of the preliminary findings and preliminary/final inspection report forms drafted by the Secretariat; and

2.12 resolve any other issues left over from informal consultations.

2.13 Given the rather short time available to the Group, it focused its deliberations on those issues on which it was possible to reach conclusions and to recommend decisions for the Commission to take. In doing so, the Group limited the number of outstanding issues to which it will have to return at another meeting.

3. Understandings proposed for adoption

The Group reached the following understandings which it recommended to the Commission for adoption:

3.1 Scope of the term "alkyl" in the Schedules of Chemicals

In relation to the groups of chemicals ("families") listed in the Schedules of Chemicals, the terms 'alkyl', 'cycloalkyl', 'alkylated' or 'Me' (methyl), 'Et' (ethyl), 'n-Pr' (n-propyl) or 'i-Pr' (isopropyl) are to be understood literally, i.e. as not including any substituted alkyl, methyl, ethyl, etc.

3.2 Sub-distribution and packaging

It was understood that the activities of sub-distribution and packaging are not to be considered as processing of scheduled chemicals and are therefore not subject to declaration.

3.3 Waste disposal

It was understood that a plant site containing a plant in which a Schedule 2 chemical is consumed in a waste management or disposal system in quantities above the threshold for that chemical will declare this consumption in accordance with Part VII, paragraph 8.

3.4 Changes to annual declarations

3.4.1 It was understood that any change to those parts of the annual declaration that would not normally be expected to change from year to year, such as the name, address and location, should be communicated to the Technical Secretariat on the next occasion upon which a declaration is due.

3.4.2 It was also understood that, even where there is no change to the substance of a declaration compared to a previous one, the information required under that later declaration shall be provided in full.

3.4.3 In regard to the declaration of additional activities required in accordance with paragraphs 4 (c) of Parts VII and VIII, the following was understood in regard to which changes need to be declared:

(a) any change during the year that involves:

(i) an additional Schedule 2 plant or Schedule 3 plant;

(ii) an additional Schedule 2 chemical or Schedule 3 chemical;

(iii) an additional type of activity related to a Schedule 2 chemical (production, processing, consumption, direct export, or sale or transfer);

(iv) any other non-quantitative change in relation to the anticipatory declarations, except for those to which paragraph 9 of PC- V/B/WP.15 applies;

(b) any quantitative upward change that changes the status of a plant (crossing of the declaration or verification threshold);

(c) any Schedule 3 plant which increases production above the range given in the anticipatory declaration;

(d) any additional time period when a declarable activity in relation to a Schedule 2 chemical takes place;

(e) any increase in the declared anticipated annual production/processing/ consumption figure for a Schedule 2 chemical.

3.4.4 In regard to subparagraph 3.4.3 (d) above, it was understood that the declaration of time periods when declared activities are anticipated to occur should be as precise as possible, but should in any case be accurate to within a 3 month period. The declaration requirement in relation to these time periods does not necessarily mean that individual planned production (processing, consumption) campaigns need to be declared. Such an understanding, it was considered, might provide a flexible framework for industrial declarations and might reduce the frequency of declarations of additional activities in regard to time periods of production, and the processing or consumption of Schedule 2 chemicals.

3.4.5 It was further agreed that it may also be useful if States Parties, on a voluntary basis, would inform the Technical Secretariat of cases when plants or plant sites which have been declared to undertake activities in relation to Schedule 2 or Schedule 3 chemicals cease to do so.

3.5 Understandings in relation to Part IX of the Verification Annex

3.5.1 The term "unscheduled discrete organic chemical" referred to in paragraph 1(a) of Part IX of the Verification Annex and the term "PSF chemical" referred to in paragraph 1 (b) of the same Part do not cover:

(a) oligomers and polymers, whether or not containing phosphorus, sulfur or fluorine;

(b) chemicals only containing carbon and metal.

3.5.2 The term "oxides of carbon" in the definition of unscheduled discrete organic chemicals (DOCs) refers to carbon monoxide and carbon dioxide. The term "sulfides of carbon" in the same definition refers to carbon disulfide. Both terms refer to carbonyl sulfide.

3.5.3 In calculating the "approximate aggregate amount of production of unscheduled discrete organic chemicals" at the plant site pursuant to paragraph 1 (a) of Part IX of the Verification Annex, the production data should be aggregated in a way that includes:

(a) in the case of the production of two or more unscheduled DOCs at the same plant, the aggregate of all of these unscheduled DOCs;

(b) in the case of multistep processes, only the quantity of the final product if it is an unscheduled DOC, or the quantity of the last intermediate in the multistep synthesis that meets the definition of an unscheduled DOC;

(c) in the case of intermediates meeting the definition of an unscheduled DOC and being used by another plant at the site to produce an unscheduled DOC, the amount of the intermediate and of the product manufactured from it at that other plant.

3.5.4 The term "hydrocarbon", referring to production which is excluded from the coverage of Part IX, includes all hydrocarbons (i.e. chemicals containing only carbon and hydrogen), irrespective of the number of carbon atoms in the compound.

3.6 Mixed plants

3.6.1 "Mixed plants" are plants which are individually covered under more than one Part of the Verification Annex related to Article VI. The term covers, for example, a multipurpose plant that manufactures, in the same process line but at different points in time or parallel in several process lines, Schedule 2 and Schedule 3 chemicals (and/or DOCs). However, the term does not relate either to a case where a plant produces a Schedule 3 chemical in a multiple-step reaction involving the production of a DOC in the initial steps, or to a case when, during the production of a Schedule 3 chemical, a low concentration of a Schedule 2 chemical is simultaneously produced (this would be classified as either a Schedule 3 or a Schedule 2 plant depending on the applicable rules for low concentrations).

3.6.2 ''Mixed plants'' will be declared in accordance with all the appropriate Parts of the Verification Annex related to Article VI.

3.6.3 ''Mixed plants'' will be inspected according to the particular Part of the Verification Annex under which the inspection was mandated and will be limited to the provisions of that Part of the Verification Annex. In particular:

(a) notification of an inspection of the plant site where a mixed plant is located will have to be timed in accordance with the applicable provision of the Part under which the inspection is initiated;

(b) access within a "mixed plant" that is being inspected will be governed by the inspection provisions of the Part under which the inspection is initiated (Section E of Part VI, paragraphs 23 to 29 of Part VII, paragraphs 18 to 24 of Part VIII or paragraphs 15 to 20 of Part IX);

(c) inspections at a "mixed plant" are counted separately for the different Parts of the Verification Annex. Each inspection at a "mixed plant" is consequently counted under the Part under which it is initiated.

3.6.4 It was understood that if it were possible for different parts of a plant to be configured in such a way that they could be inspected separately under the different procedures without overlap, these parts would be considered as separate plants and would be declared as such. In such cases, the concept of "mixed plants" would therefore not apply.

3.7 Transfers of Schedule 1 chemicals

It was agreed that the provisions on transfers and receipts of Schedule 1 chemicals contained in Section B of Part VI of the Verification Annex apply to all such transfers and receipts.

3.8 In regard to paragraph 3.7 above, the Group agreed that there is a need to develop declaration forms for these transfers and recommended that the Secretariat develop such forms for inclusion into the Declaration Handbook section for Part VI of the Verification Annex.

4. Illustrative elements of preliminary findings and inspection reports

The Group finalised its discussions in relation to illustrative elements for the standardised format for preliminary findings and for inspection reports, which are held by the Secretariat and are available to Member States upon request. The Group recommended that these matters be taken up by the Expert Group that will address in a comprehensive manner the issue of the standardised format for preliminary findings and for inspection reports.

5. Tentative understanding on recycled Schedule 2 chemicals

The Group discussed a tentative understanding, not finally agreed upon, in relation to recycled Schedule 2 chemicals. The Group will finalise this issue at its next meeting. The tentative understanding is as follows:

5.1 A ''recycled chemical'' is a chemical that is partly converted or consumed in a process and then recovered and re-introduced into the process upstream for another cycle of conversion or consumption followed by recovery. Any loss of Schedule 2 chemical from the process cycle through incomplete recovery will be compensated for by make-up quantities (net loss).

5.2 It was understood that a plant site containing a plant in which a Schedule 2 chemical undergoes a cycle of consumption and regeneration will, in accordance with Part VII, paragraph 8, make a declaration if, in total, (X+Y) exceeds the declaration threshold where:

5.2.1 X, expressed in the same unit as the declaration threshold, equals:

(a) for batch processes, the total amount of the Schedule 2 chemical charged (then consumed, regenerated and subsequently recovered in a separate process step); or

(b) for continuous processes, the total amount present in the reaction vessels and process streams; and

5.2.2 Y, expressed in the same units as the declaration threshold, equals the aggregate annual compensation for the net loss of that chemical.

5.3 It was further understood that the regeneration process is not required to be declared as a production of a Schedule 2 chemical in the cycle.

6. Issues for further consideration

The Group identified the following issues that it will need further to consider:

6.1 Biochemical and biologically mediated processes for scheduled chemicals

It needs to be further considered whether the activities defined in Article II, paragraph 12, also apply to biochemical and biologically mediated processes.

6.2 Extraction and isolation of Schedule 1 chemicals

It needs to be further considered whether:

6.2.1 the "acquisition" of Schedule 1 chemicals, as referred to in paragraphs 1 and 2 of Part VI of the Verification Annex, includes their extraction from natural sources;

6.2.2 for Schedule 1 chemicals that are normally not "produced" in the terms of the Convention but are isolated by processing (e.g. toxins), extraction and isolation above the declaration threshold shall be undertaken only in declared Schedule 1 facilities; and

6.2.3 any facility that acquires Schedule 1 chemicals through production (i.e. chemical synthesis) or extraction/isolation, irrespective of the method used for acquisition, will have to be declared and verified under Part VI of the Verification Annex.

6.3 Issues related to Part IX of the Verification Annex

6.3.1 In relation to the term "unscheduled discrete organic chemical", it needs to be further considered whether products that are complex mixtures manufactured by chemical modification of natural products (such as hydrogenated food oils) are covered or not. In this context, it also needs to be further clarified what a "complex mixture" is.

6.3.2 It needs to be further considered whether or not the term "production by synthesis" used in Part IX does include biochemical and biologically mediated processes, such as, inter alia, fermentation. Another possible approach could be to identify specific types of facilities the activities of which would be considered not to be covered under the term "production by synthesis".

6.3.3 In regard to the exemption from declarations of other chemical production facilities exclusively producing explosives (only explosives that meet the definition of unscheduled DOCs need to be considered), it needs further to be considered whether:

(a) there is a need for a definition of "explosives", and whether the definition used in the UN classification of dangerous goods contained in document ST/SG/AC.10/1/Rev.5 or another existing definition could be used, or another definition be developed;

(b) an illustrative list of explosives, either existing or specially developed for this purpose, may be useful as guidance for declarations by States Parties.

6.4 Issues in relation to BZ and the meaning of the term "a State Party" in paragraph 8(a)(i)(2) of Article II

This issue will need further consideration. The Group requested its Chairman to consult on the issue and to prepare a discussion paper on the matter for this Group to consider at its next meeting.

6.5 Further issues under consideration are: low concentrations; use of formulations; national aggregate data for Schedule 3 chemicals; past production of Schedule 1 chemicals for purposes not prohibited at facilities with a capacity above one tonne per year; and castor bean processing plants.

7. Declaration Handbook and declaration forms

The Group agreed that Member States should, as recommended by Working Group B, conduct tests of the Declaration Handbook as it stands and should communicate any suggestions for improvement directly to the Secretariat for incorporation into any necessary revisions. The Group also agreed that it should finalise its work in relation to all outstanding declaration requirements at its next meeting. It was understood that the Secretariat will revise the appropriate sections in the Declaration Handbook as results are achieved.

8. Model facility agreements

The Group received drafts of the sections on inspection procedures for the model facility agreements for single small-scale facilities, Schedule 1 facilities, and Schedule 2 and Schedule 3 facilities. It discussed in particular the section for Schedule 2 plant sites and suggestions for the improvement of the sections on inspection procedures were communicated to the Secretariat.

9. Recommendations

The Group recommended that:

9.1 Working Group B request the Commission to adopt the understandings contained in paragraph 3 of this Report;

9.2 the Secretariat develop the necessary declaration forms for transfers of Schedule 1 chemicals and include them into the revised section of the Declaration Handbook for Part VI of the Verification Annex before circulation to Member States;

9.3 Working Group B transfer the illustrative examples for preliminary findings and inspection reports developed by this Group to the appropriate Expert Group for consideration in developing the formats for standardised preliminary findings and inspection reports;

9.4 Working Group B, taking into account a proposal recorded during the joint meeting with representatives of the chemical industry, consider mandating an Expert Group to address the issue of how to record exports/imports of scheduled chemicals for declaration purposes, as required by the Convention; and

9.5 Working Group B call for another meeting of this Group in order to resolve the issues referred to in paragraphs 5,6 and 7 of this Report.

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