Eighth Session

(26 - 30 September 1994)

EXPERT GROUP ON CHEMICAL INDUSTRY ISSUES

SIXTH REPORT

1. Introduction

1.1 In accordance with the Plan of Activities for Expert Groups under Working Group B approved by the Commission at its Seventh Session and contained in the Annex to the Report of the Commission (PC-VII/8), the Expert Group on Chemical Industry Issues met on 14 September 1994.

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

1.3 The Group considered a revised version of the Chairman's paper developed during its fifth meeting. It also received a report from the Friend of the Chair, Mr. Ian Marrs of Canada, on a draft task list for a Task Force on recording exports and imports of scheduled chemicals. The results of the Group's deliberations are contained in this Report.

2. Understandings

Recycled Schedule 2 chemicals

2.1 A ''recycled Schedule 2 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).

2.2 It is 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:

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

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

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

The meaning of "production" in the context of Schedule 1 production facilities covered under Article VI

2.3 It is understood that:

(a) 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;

(b) 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 of Schedule 1 chemicals above the declaration threshold shall be undertaken only in declared Schedule 1 facilities; and

(c) any facility that produces Schedule 1 chemicals above the declaration threshold through chemical synthesis or extraction/isolation will have to be declared and verified under Part VI of the Verification Annex.

Past production of Schedule 1 chemicals at facilities having a capacity above 1 tonne per year, for purposes not prohibited under the Convention

2.4 The Group noted that all (past or present) facilities that after 1 January 1946 met the definition of a chemical weapons production facility (CWPF) as contained in paragraph 8 of Article II need to be declared as CWPFs irrespective of their purpose, and that all relevant provisions of the Convention will apply irrespective of the status of the facility.

3. Tentative understandings

3.1 The Group reached the following tentative understandings which it will come back to at its next meeting:

Discrete organic chemicals including PSF chemicals

3.2 In relation to the term "unscheduled discrete organic chemical", it was understood that, while industrial products have a purity that is less than 100 per cent, industrial chemicals produced by synthesis can for all practical purposes be considered as discrete organic chemicals only if they are characterised by one chemical structure, a chemical name and a CAS number (if assigned).

"Production" as defined in paragraph 12 (a) of Article II and biochemical and biologically mediated processes in relation to scheduled chemicals

3.3 The term "production" as defined in paragraph 12 (a) of Article II should be understood to include production of a scheduled chemical by a biochemical or biologically mediated chemical reaction.

4. Additional remarks in relation to the above understandings

Discrete organic chemicals

4.1 In relation to the tentative understanding recorded in paragraph 3.1 above, some delegations considered that Chapter 29 (Organic Chemicals) of the "Harmonised Commodity Description and Coding System" (Harmonised Systems) may be useful as guidance in identifying facilities that produce discrete organic chemicals.

4.2 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 existing or specially developed illustrative list of explosives may be useful as guidance for declarations by States Parties. A possible list was in the Annex to PC-VI/B/WP.2.

Recycled Schedule 2 chemicals

4.3 The Group, in agreeing to the understanding recorded in paragraphs 2.1 and 2.2 above, considered it necessary for the Secretariat further to elaborate, in consultation with interested Member States, the calculation methods to be applied for different process types. These calculation methods should eventually be incorporated in the section of the Declaration Handbook dealing with industrial declarations.

Castor oil processing plants

4.4 In relation to the understanding recorded in paragraph 2.3 above a view was expressed that, in the context of castor oil processing plants, this approach should not prejudice the Convention's provisions regarding the declaration of chemical weapons production facilities including any facilities that have produced, as an unavoidable by-product, Schedule 1 toxins. Others held the view that, in the light of the understanding recorded in paragraph 2.3, this issue has been satisfactorily resolved.

Past production of Schedule 1 chemicals at facilities having a capacity above 1 tonne per year, for purposes not prohibited under the Convention

4.5 The Group did not reach complete agreement on the application of the understanding in paragraph 2.4 above.

5. Issues for further consideration

"Production by synthesis" of discrete organic chemicals including PSF chemicals

5.1 In relation to discrete organic chemicals, the Convention, in paragraph 1 of Part IX of the Verification Annex, specifies the coverage of that Part by reference to production "by synthesis". The Convention does not define this term, thus implying that the common-use meaning of the term was intended, i.e. formation of a compound by combination of its elements or constituents.

5.2 There are three schools of thought in relation to this issue:

(a) under Part IX of the Verification Annex, biochemical and biologically mediated processes are not covered under the term "production by synthesis" and, consequently, if a discrete organic chemical is produced by a biochemical or biologically mediated process no declaration under Part IX of the Verification Annex would be triggered;

(b) production by synthesis means the formation of a compound by combination of its elements or constituents irrespective of whether that process occurs in a chemical or biological production environment; or

(c) biochemical processes (i.e. processes involving the utilisation of biochemical processes within living organisms, such as fermentation) are not covered by the term "production by synthesis"; however, chemical production processes that utilise biological principles, such as catalysis with immobilised enzymes, could be considered as production by synthesis when the reaction results in the formation of a compound by combination of its elements or constituents.

5.3 Another possible approach to determining the scope of this term earlier identified by the Group would be to identify specific types of facilities the activities of which would be considered covered or not covered under the term "production by synthesis".

The meaning of the term "a State Party" in paragraph 8 (a) (i) (2) of Article II

5.4 When addressing the above issue, the Group concluded that it does not relate to BZ as such but to chemicals that "can be used for chemical weapons purposes" and have "no use, above 1 tonne per year on the territory of a State Party, or in any other place under its jurisdiction or control of a State Party, for purposes not prohibited under this Convention". It consequently focused its deliberations on the meaning of the term "a State Party" in paragraph 8(a)(i)(2) of Article II rather than discussing the issue in relation to BZ only.

5.5 The definition of a CWPF in paragraph 8 of Article II includes any equipment, as well as any building housing such equipment, that was designed, constructed or used at any time since 1 January 1946 as part of the stage in the production of chemicals ("final technological stage") where the material flows would contain, when the equipment is in operation, inter alia, a non-Schedule 1 chemical that can be used for chemical weapons purposes if that chemical "has no use, above 1 tonne per year on the territory of a State Party, or in any other place under its jurisdiction or control of a State Party, for purposes not prohibited under this Convention".

5.6 The Group did not resolve the issue of what the reference to "a" State Party, as opposed to "the" State Party indicates. There were two opinions on this matter:

(a) that that phrase relates not only to the State Party where the facility is located but also to any other State Party (i.e. any State Party individually).

The approach under (a) would lead to a situation where, when a single State Party had a use for such a chemical above one tonne per year, any other facility in any other State Party would not be considered a CWPF even if that facility had a capacity exceeding one tonne and the State Party on whose territory that facility is located had no use for the chemical above one tonne per year for purposes not prohibited or;

(b) that it relates not only to the State Party where the facility is located, but also to another State Party but not to all other States Parties.

The approach under (b) would lead to uncertainties as to which other State(s) Party(ies) are to be considered but is intended to prevent a situation where, if one State Party has such a facility and a demonstrated use above one tonne per year, other States Parties could start production of such a chemical above one tonne per year without having a use for purposes not prohibited at this level.

6. Task Force on recording the export and import of scheduled chemicals

6.1 The Group received a report from the Friend of the Chair, Mr. Ian Marrs of Canada, on the issue of the recording of exports and imports of scheduled chemicals. It agreed that there was no need to establish a Task Force in this respect. At the same time, a view was expressed that there would be benefits for the national implementation of the Convention for those Member States that use the Harmonised Commodity Description and Coding System (HS System) if that system were modified to take account of the requirements under the Convention to record exports and imports of scheduled chemicals.

6.2 A view was expressed that Working Group B should consider requesting the Secretariat to approach the Customs Cooperation Council, on behalf of the Commission, to have the matter considered at the November 1994 meeting of the Harmonised System Committee of the Customs Cooperation Council and to attend that meeting to justify the request.

7. Recommendations

7.1 The Group recommended that Working Group B:

(a) consider the understandings recorded in paragraph 2 above during the Eighth Session of the Commission with a view to recommending them for adoption by the Commission at its Ninth Session;

(b) set the following priority tasks for this Group's next meeting from the issues still outstanding from the task list contained in the Annex to PC-VII/8:

(i) Resolve the issue of whether or not the term "production by synthesis" used in Part IX includes biochemical and biologically mediated processes;

(ii) Resolve the issue of low concentration of Schedule 2 and Schedule 3 chemicals, including products containing scheduled chemicals and the further processing and use of formulations containing Schedule 2 chemicals;

(iii) Agree on the method of reporting aggregate national data for Schedule 3 chemicals;

(iv) Develop solutions for the issue of castor bean processing plants;

(v) Continue work on the model facility agreements for Schedule 1 facilities, Schedule 2 facilities and Schedule 3 facilities covered under Article VI of the Convention;

(vi) Agree on the Declaration forms and Handbook drafted by the Secretariat; and

(vii) Continue discussions on the tentative understandings in paragraph 3 above.

7.2 The Group also recommended that Working Group B request it to return to the remaining issues on its task list as contained in the Annex to PC-VII/8 at a subsequent meeting.

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