1. Overview & Implications for Affinia Registration, Evaluation, and Authorisation of Chemicals

2. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 2 REACH in a nutshell The most ambitious chemicals policy change in history (40 Directives 1 Regulation) Basic principle of REACH: ensure substances that are manufactured, placed on the market or used without adversely affect human health or the environment…. REACH will have enduring impacts globally Cost to Industry- EU estimates Eur 2.8bn to 5.2bn overt 11 yrs. Testing cost alone are estimated at Eur 2.6bn. Non-Compliance with REACH legislation means: Business Risk Potential law suits Heavy fines Removal from preferred vendor lists Loss of company image

3. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 3 REACH: Changes to Responsibilities Pre-REACH Responsibility is with the authorities to assess safe use of chemicals Generic information on the substance is provided by the producers Appropriate controls are identified and implemented by the users Little information on use is required to be supplied by downstream users Post-REACH Responsibility is with industry to generate and evaluate substance data Industry is required to assess exposure associated with each identified use against the substance data Appropriate risk management measures need to be agreed between suppliers and downstream users Downstream users are required to identify use of each substance and ensure it is communicated up the supply chain

4. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 4 REACH – What is It? A regulatory system for management of chemicals (substances) in the EU Establishes information (testing) requirements for registration of new and existing chemicals Registration requirement applies to new and existing chemicals manufactured, imported, or used in the EU in volumes greater than 1 tpa Substances must be registered for their uses Authorises uses of Substances of Very High Concern (SVHCs = CMRs, PBT/vPvB, and endocrine disruptors)

5. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 5 REACH – Why is It? Aims to achieve a high level of protection of human health and the environment, while reducing the need for animal testing Brings a complicated patchwork of existing laws under one regulatory system for management of chemicals in the EU Former system was slow, inefficient, and was seen as a competitive disadvantage to the EU chemicals industry Overcomes the lack of data on existing chemicals (“Burden of the Past”) – applies to thousands of chemicals in broad commercial use for which limited environmental and toxicity data are currently available

6. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 6 REACH – Consequences Some substances (or their uses) may be restricted or banned Increases communication along the Supply Chain Shifts the burden of proof for chemical safety and risk from government to industry Targets the risk assessments to specific uses Considers the entire life cycle of substances (“cradle to grave”) Promotes substitution of “dangerous” chemicals with less hazardous alternatives Threat to business continuity – companies that do not comply will have no market

7. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 7 The Main Elements of REACH Registration – documentation and testing conducted by industry, requirements vary depending on volume and hazard classification Evaluation – agency review of registration dossiers (minimum of 5% of Technical Dossiers) and all proposals for additional animal testing; may lead to requests for further information or proposals for “restrictions” or no further action Authorisation – for specific uses of SVHCs industry must apply for their use and demonstrate adequate control of risk, or benefits outweigh the risk and there are no viable substitutes Restriction – designed as a safety net to the above, authorities provide strict limits on marketing and use or bans when industry measures to control risks are not sufficient

8. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 8 REACH - An Overview Registration  Technical dossier  Chemical Safety Report (>10 t/yr) Evaluation Dossier Evaluation, e.g., Animal testing Substance Evaluation, e.g., Risk assessment Authorisation Supplier & user specific uses of substance only Restriction Ban certain substances completely or for certain uses When it has very hazardous properties When it poses unacceptable risks ECHA requests more information No additional control if it does not require an authorisation/ restriction

9. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 9 The REACH Process * Carcinogenic, mutagenic or reprotoxic ** PBT = Persistent, bio-accumulative and toxic – vPvB = very persistent and very bio-accumulative use-related for CMR*, PBT and vPvB** substances for endocrine disruptors limited in time > 2,000 Evaluation dossier evaluation substance evaluation further tests > 5,000 30,000 substances + intermediates before production or import product quantity use Chemical Safety Report for volumes of > 10 tons/ year RegistrationAuthorization

10. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 10 REACH – Who Does it Affect? Everyone – companies importing into, manufacturing, or using individual substances, preparations, and articles in the EU Manufacturers and importers must register their chemicals in order to sell them Downstream Users (DU) must ensure that the chemicals they are using have been registered for their applications Article manufacturers or importers may be required to register or notify substances in articles Note – only businesses established as “legal entities” in the EU are able to register

11. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 11 REACH Exemptions Exempt from REACH Radioactive substances Substances under customs supervision Substances used in defense Waste Non-isolated intermediates Transported substances Exempt from Registration Food or feedingstuffs Medicinal products Substances in Annexes IV and V of the regulation Recycled or recovered substances already registered Re-imported substances Polymers (but not their monomers) PPORD Regarded as Registered Biocides Plant protection products Notified substances according to Directive 67/548/EEC

12. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 12 REACH Compliance Timeline

13. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 13 Implications and Obligations Depend on … Type of REACH product: Substance Preparation (mixture) Article with or without intended release Position in supply chain: Manufacturer or Importer Downstream User Distributor Geographical location (EU or non-EU) & organization of business units (legal entities) Substance classifications and volumes

14. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 14 Information Requirements of Manufacturers and Importers for Pre-Registration Identity of manufacturer/importer Substance identity Applicable tonnage band and “envisaged” deadline for registration For purposes of registration, multiple manufacturers will be grouped into SIEFs (Substance Information Exchange Forums)

15. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 15 Information Requirements for Registration Identity of manufacturer/importer Substance identity Identified uses (Annex VI section 3) Classification & labeling (Annex VI section 4) Guidance on safe use (Annex VI section 5) Study summaries (Annexes VII-XI) Robust study summaries if required by Annex I Indication of information reviewed by an “assessor” Testing proposals (Annexes IX & X) Exposure information (Annex VI section 6) for substances in the 1-10 ton range Confidentiality requests Chemical Safety Report, if required Key Only submitted by the lead registrant Other registrants may submit jointly or separately Other registrants submit the remaining items after the lead registrant submits his dossier

16. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 16 Company Organizations Potentially Involved with REACH R&D/Product Development Production Sourcing/Supply Chain EHS Regulatory Affairs Legal IT Marketing

17. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 17 Compliance Actions To Take Right Now Identify role in supply chain Track and review evolving guidance Initiate communications with suppliers Develop inventory listing with information needed for pre-registration, registration, and/or notification Assess data gaps and prioritise substances for registration and notification Assess business risk of substances that may be removed from the market Identify roles, responsibilities and resources Identify and develop data management tools

18. Delivering sustainable solutions in a more competitive world REACH Overview & Implications for Affinia, 15 July 2008, 18 Business Value of Effective REACH Management Reduced potential liabilities and risks related to regulation and litigation Coordinated and proactive response to current and future regulations Identification of opportunities for improvement of corporate environmental performance Market advantage through branding of environmentally friendly products and practices Streamlined testing, data collection, and data management requirements Integration of environmental considerations into all stages of the product life cycle