Need-to-know: The major cosmetics regulatory issues on the agenda for APAC in 2023
Packaging and sustainability
With the importance of sustainability in the cosmetics industry, we can expect regulation around packaging to continue to trend globally, including in APAC.
In the ASEAN region, Singapore started the Mandatory Packaging Reporting on March 31, 2022.
It required brand owners, manufacturers and importers with an annual turnover of more than SGD10m to file a report on the amount of packaging used annually to the National Environment Agency (NEA) annually.
According to Roy Lu, director of regulatory affairs and product integrity APAC, Estée Lauder Companies, neighbouring ASEAN countries the Philippines and Vietnam are aiming to catch up on this front.
In the Philippines, the National Department of Environmental and National Resource (DENR) announced the Extended Producer Responsibility (EPR) regulations, which would be effective July 2024.
“It has the similar requirements as Singapore in terms of mandatory reporting. But also a few differences. One is that the data you report to the government has to be audited by a third party, like your financial results,” said Lu.
In the meantime, the government has also set a target for plastic recovery. Companies are expected to recover or divert 20% of their 2022 plastic footprint by the end of 2023. This target will double to 40% in 2024, with 10% annual increments till it reaches 80% by 2028.
“I believe this is quite a challenge and aggressive goal. But the Philippine government has also allowed companies to either run the EPR programme by themselves, or engage a third-party organisation to run this programme,” said Lu.
This year, the Environmental Protection Law came into effect in Vietnam, and it introduced a new EPR regime this year. As part of it, it pushed packaging recycling obligations that would come into effect January 1, 2024.
This would require companies to meet package-specific recycling requirements. Furthermore, treatment solutions employed must meet the requirements of environmental protection for the collection, storage and treatment of the specified waste.
It would apply to producers with a total annual turnover of VND30bn or more in the previous year; or importers with a total import value of VND20bn or more in the previous year.
However, companies can also contribute to Vietnam Environmental Protection (VEP) Fund for the initial few years if they are unable to submit all the data.
“The government know that some smaller companies may not be able to do everything immediately, so from my understanding, they are providing an alternative option, which is contributing to a national fund, then you can get an exemption from preparing the submission. This could be an interim solution to help small and medium-sized enterprises to prepare themselves,” said Lu.
However, Lu noted that the regulations are not “100% clear”. Details like the amount companies will have to contribute to the fund have not been clarified. “All this is under discussion. The local trade associations have been working quite closely with the ministry to clarify the report.”
Over in South Korea, new packaging material and labelling requirements were put in place back in 2021. However, cosmetic companies and regulators are still in discussions on how to improve the current rules.
According to Mike Sohn, general manager of REACH24H Korea, cosmetic players are eager for the authorities to loosen the regulations and even make exceptions for cosmetics.
“There is a strong issue, for instance, the colour use is limited but this is a competitive market for design and colour. Even for paper packaging, it’s limited to brownish, organic colours. Also, for the materials, you have to find safety assessment information and all that. So, it takes a lot of time to change the packaging.”
Customised cosmetic regulations
Another regulatory trend Lu has observed is the push towards more regulation for product refills and customisation as the demand for personalised products grow.
“These products are not traditional products that are manufactured in a plant or in a factory. It could be a consumer bringing their empty bottle to a department store and like a vending machine refill your product. Or they can go to a department or pop-up store where they can blend the cosmetics base on their requirements or needs,” Lu said.
He added that there is a common interest across the cosmetic industry in personalised products but from a regulation standpoint, most countries have not provided clear guidelines. In APAC, only South Korea has put in place regulatory framework for customised cosmetics.
However, with more interest in personalised beauty, Lu has started seeing some developments in other parts of Asia.
He highlighted that Thailand’s Food and Drug Authority have recently solicited industry opinions for guidelines on refilling cosmetics.
“Based on the draft, there are only two product categories are allowed. Number one is rinse-off hair cleansing and body cleansing in liquid form. Number two is liquid fine fragrances,” said Lu.
Indonesia has also released a draft regulation in regard to fine fragrances. These guidelines not only including refilling but also over-the-counter mixing and blending. According to the draft, companies are required to comply with basic good manufacturing practices (GMP) principles.
The Philippines is another market that is considering regulations for customised cosmetics. It has been noted in the draft Unified Licensing Requirements and Procedures that refilling and customisations are allowed.
However, more detailed requirements will be introduced at a later stage.
In November 2022, China launched a year-long pilot personalised cosmetic programme in Beijing, Shanghai, Zhejiang, Shandong and Guangdong.
The programme would only apply to general cosmetics and exclude special cosmetics, childrens’ cosmetics and new ingredients still in the monitoring period.
This was organised by China’s National Medical Product Administration (NMPA) and its purpose was to “explore feasible models and effective regulatory measures for personalised cosmetics services in light of local conditions, form reproducible and scalable experience and practices, better meet consumer needs, and promote the construction of Chinese cosmetics brands and high-quality industrial development.”
ASEAN ingredient updates
Cosmetic companies should take note on the following updates and amendments on cosmetic ingredients and their restrictions in the ASEAN region. The following changes were discussed during the 35th ASEAN Cosmetic Scientific Body (ACSB) Meeting held in May 2022.
During the meeting it was agreed that the use of deoxyarbutin would be banned with effect from May 11, 2023, as a safety study had found that this chemical could potentially produce hydroquinone in finished goods, posing a safety risk to consumers.
There are also several changes made to the preservative ingredient lists. First, the list of permitted preservatives now includes 4-(3-ethoxy-4-hydroxyphenyl)butan-2-one (HEPB).
“Now it has been added, which has been a positive change for the companies who wish to use it. Based on the scientific result they found out the use in the finished product up to 0.7% would not pose a safety risk,” explained Lu.
Additionally, as of November 11, 2023, rinse-off hair conditioners will be able to use climbazole as a preservative. At the same time, climbazole would not be able to be used in foot care.
“This is because of the lack of safety results and also the use of climbazole in foot care in this region is not common,” said Lu.
Starting next year, cosmetic companies can expect a revision in the restrictions of titanium dioxide, climbazole, and dyhydroxyacetone.
Climbazole, will also be allowed in anti-dandruff hair care products as the ASEAN Cosmetics Association (ACA) had determined its anti-dandruff efficacy in rinse-off anti-dandruff conditioners, and believes it was safe to use up to 0.5%. This would be effective from November 11, 2023.
The maximum authorised concentration of dihydroxyacetone was also amended to be 6.25% in hair dye and 10% in self-tanning products. This would also be effective form November 11, 2023.
The use of titanium dioxide will be brought in line with the European Union (EU) regulations. The EU’s concern was that the use of titanium dioxide in powder form containing 1% or more of particles with aerodynamic diameter ≤ 10 μm could pose an inhalation risk to the end-user.
As such, restrictions were added to the ASEAN Cosmetic Directive (ACD) to its use as face products in loose powder form and in hair aerosol spray products. This would come into effect May 11, 2024.
“In loose powder, less than 25% is regarded as safe. For hair aerosol spray products, it is up to 1.4% for home use. If it is a salon product that is more frequently used by stylists, it is lowered down to 1.1%,” said Lu.
China ingredient submissions updates
From January 1, 2023, the safety information of all ingredients will be required for filing and registering cosmetics in China.
For cosmetics previously registered or notified, registrants or notifiers shall supplement the safety information of all the ingredients in the product formula before May 1, 2023.
One of the biggest changes is the need for an ingredient code during submission. The submission of ingredient submission code will be mandatory from 2023.
“This is one of the biggest changes. It’s becoming easier for the authorities because everything is in this system, but I think it’s another obstacle for overseas companies to come into China. It’s a lot of information and it takes time to do it.
The ingredient code submission is the responsibility of the ingredient manufacturers. This means more pressure and workload for these manufacturers. There have been cases of ingredient codes not matching, so it’s taking a lot of time and money for the ingredient manufacturers.”
Furthermore, cosmetics cosmetic companies are also being asked to provide efficacy test dates for their finished products.
He explained that companies must declare the function of the product – such as moisturising or brightening – and provide data to back up the claims.
“It used to be mandatory for products like sunscreen and it wasn't mandatory for every function. Now if you claim moisturising, you have to have literature data for reference at least. And for whitening claims, you have to test within the China territory. All these are just taking time. Not only is it time-consuming, but it’s also money consuming as well.”
According to Sohn, this has caused some cosmetic companies to “filter” their product offerings and remove some of them as they are unable to update the information on all their products.
He believes this may encourage cosmetic companies to simplify cosmetic formulations.
“The more ingredients you use, the more information you have to provide. That’s more time and money. Then you must have all that data for safety and efficacy. All of it can be really intensive.”
ACCC greenwashing crackdown
Given the broad meanings of terms like environmentally friendly, green, or sustainable. Consumers can be easily misled by brands to believing they are making the greener choice.
Rita Sellars, founder and chief chemist of pH Factor told us it was becoming increasingly important that businesses can back up the claims they are making, be it through data or transparent supply chain information.
“There's so much greenwashing, there are so many lies and exaggerations. I get that brands are just trying to find a point of difference. But they're trying to find a point of difference in a way that's misleading the consumer.”
Greenwashed claims are something the Australian Competition & Consumer Commission (ACCC) has become increasingly concerned about and Sellars believes they would not hesitate to act against brands that mislead consumers with green claims.
“That's going to be a big one, so watch this space for that. I reckon the ACCC is going to come down hard on that.”
In a press statement from September 2022, ACCC Deputy Chair Delia Rickard stated that businesses must substantiate any environmental or sustainability claims when marketing products and services.
“As consumers become increasingly interested in purchasing sustainable products, there are growing concerns that some businesses are falsely promoting their environmental or green credentials. Misleading claims about products or services undermine consumer trust and confidence in the market,” she said.
“It is important that businesses can back up the claims they are making, whether through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence. Where we have concerns, we will be asking businesses to substantiate their claims.”
This is also being driven by legislation in the home care sector which makes it mandatory for companies to substantiate the claims on the packaging.
“It’s big in home care at the moment, so it’s definitely coming from there. These terms like CO2 reduction, reducing carbon emission, less plastic – the legislation says you have to back it up [in the home care sector]. All these claims are also being made in personal care. It’s the same terminology, so if you can’t do it in home care, you shouldn’t do it in personal care,” said Sellars.
Sellars highlighted that not only brands but influencers too will be held accountable. “They're not only looking at claims as something that's just on a box. They're now looking at claims that are having have either been verbalised or have been written on a social media platform.”
The ACCC has already conducted an online sweep in 2022 for misleading environmental claims across sectors, including cosmetics. It has targeted online reviews on websites, Facebook pages, and third-party review platforms.
It is also targeting misleading advertising by influencers on social media. The ACCC highlighted that it will focus on “identifying posts that fail to clearly disclose advertising or sponsorship”.
