On Monday, a federal appeals court struck down a rule implementing the Dodd-Frank Act’s requirement that companies disclose whether their products contain conflict materials originating from the Democratic Republic of Congo (DRC), or adjoining countries. A divided (2-1) panel of the U.S. Court of Appeals for the D.C. Circuit ruled [PDF] that the U.S. Securities and Exchange Commission (SEC) rule compelled commercial speech in violation of the First Amendment.
Industry groups challenged the SEC’s final rule on Administrative Procedure Act (APA), Exchange Act, and First Amendment claims. In National Association of Manufacturers v. Securities and Exchange Commission, the industry groups appealed the District Court’s rejection of their claims, but only prevailed with respect to the First Amendment challenge.
The APA claim in part attacked the rule’s lack of a de minimis exception. As we reported in November, because the SEC rule does not contain a de minimis exception, the disclosure requirement – which also calls for due diligence and auditing – could apply to firms that use conflict minerals in very small amounts as catalysts in the manufacturing process. The Court upheld the decision not to include a de minimis exception, finding that the SEC, “relying on text, context, and policy concerns, inferred that Congress wanted the disclosure regime to work even for small uses,” and a de minimis exception would thwart the statute’s goals.
The Exchange Act challenge also failed, as the Court found that the [Read the full article...]
Last week, the U.S. International Trade Commission (USITC) released a report identifying the high costs of complying with REACH as one of the primary trade barriers affecting American small and medium enterprises (SMEs) seeking to export to the EU. Although SMEs account for as much as 35 percent of U.S. chemicals exports to the EU, the complexities and costs of REACH disproportionately affect SMEs, meaning firms with less than 500 U.S.-based employees. SMEs reported that REACH compliance could add over 20 percent to the cost of the product.
REACH’s testing requirements and the need for a special representative in the EU are reportedly particularly burdensome for SMEs. Other problems with REACH cited by SMEs include what firms consider to be excessive disclosure requirements, especially of trade secrets; the prohibitive cost of registering chemical additives; the difficulty of communicating with the European Chemicals Agency (ECHA); and ECHA’s opaque rulemaking process. SMEs also reported that the Substance Information Exchange Forums (SIEFs) maintained under REACH “can hinder competition in that SMEs may have challenges accessing the necessary information and negotiating with the larger companies in the SIEF.” The report cited hearing testimony from the Society of Chemical Manufacturers and Affiliates (SOCMA) that the 2018 REACH deadline, applying the quantity threshold of just 1 metric ton per year, has already driven some companies to decide not to export to the EU market because of REACH’s costs and complexity.
In addition to REACH, the [Read the full article...]
California led the way in state-level regulation of chemicals in products, and now, other states are beginning to follow its example. Bills pending in both Massachusetts and Vermont are modeled after California’s Safer Consumer Products (SCP) regulations.
In Vermont, the State Senate yesterday voted to approve S. 239, a bill which has provoked controversy in the state and must pass final approval in the Senate today before moving to on to the House. Last week, the Massachusetts Joint Committee on Environment, Natural Resources and Agriculture held a hearing on H. 235, which would establish a SCP-like program. The proposals in both states entail creating a list of “priority” chemicals, as in the California program, which would likely be based on existing authoritative lists. Both bills also call for manufacturers to conduct alternatives assessments for certain products containing priority chemicals, and authorize state regulators to ban the sale of certain products. The Vermont bill provides for companies to apply for a waiver, and the Massachusetts bill provides for a range of regulatory responses besides an outright ban.
The European Chemicals Agency (ECHA) has adopted its final substance evaluation plan for 2014-2016. This updates the REACH Community Rolling Action Plan (CoRAP) list to contain 120 substances, 51 of which will be evaluated by member states this year. The plan provides that 48 more substances will be evaluated in 2015 and 21 in 2016, although it will be updated annually. The update includes 52 substances which are new entries to the plan, including 17 to be evaluated in 2014.
Common initial concerns for listing these substances include: persistent, bioaccumulative and toxic (PBT) effects; suspected endocrine disruption; and carcinogenic, mutagenic, and reproductive toxicity (CMR); combined with wide dispersive or consumer use. Substances of note on the list include a handful of phthalates, shale oil bitumen, and silver nanoparticles.
The adopted plan differs only slightly from the draft update circulated in the fall of 2013 and approved by ECHA’s Member State Committee last month. The final CoRAP list adds trixylyl phosphate and removes four substances:
- yellow pigment additive;
- 1,3,4,6,7,8-hexahydro-4,6,6,7,8,8-hexamethylindeno[5,6-c]pyran (HHCB); and
Aluminum chloride and aluminum chloride, basic were originally covered as one entry but are treated separately in the final list. In addition, several other substances were evaluated under the last CoRAP – including shale oil bitumen and naphthalene – and were found to qualify for re-evaluation.
The Risk Assessment Committee of the European Chemicals Agency (ECHA) has adopted an opinion to strengthen the harmonized classification and labeling (CLH) of bisphenol A (BPA), in line with a proposal by France regarding the substance’s adverse effects on sexual function and fertility. BPA is currently classified as a category 2 reproductive toxicant and would be reclassified as a category 1B reproductive toxicant.
The committee’s consensus-made action was based on “‘rock-solid’ multigenerational rodent studies” and tees up a final decision to be made by the European Commission. France’s reclassification proposal has received mixed responses [PDF] from member states and industry. If approved, the reclassification of BPA as category 1B would trigger Substance of Very High Concern (SVHC) criteria under REACH.
BPA is a monomer widely used in the production of polycarbonate plastics and epoxy resins and as a developer in thermal paper. In late 2013, ECHA followed up a German substance evaluation of BPA by issuing a request for further data on skin absorption and environmental exposure. The European Found Safety Authority (EFSA) also recently closed a public consultation period on a draft assessment of the human health risks of BPA via food exposure. A recent rodent study conducted by U.S. researchers at the National Center for Toxicology Research, however, concluded that orally-ingested BPA did not affect body weight, reproductive organs, or hormones at levels comparable to the amount Americans typically ingest.
This morning, California’s Department of Toxic Substances Control (DTSC) revealed its highly anticipated draft list [PDF] of Priority Products, a key step in rolling out agency’s new Safer Consumer Products (SCP) regulations.
As expected, the draft list is composed of three products. The products are:
- Children’s foam padded sleep products containing TDCPP (chlorinated TRIS);
- Spray Polyurethane Foam (SPF) systems containing unreacted diisocyanates; and
- Paint and varnish strippers and surface cleaners containing methylene chloride.
The agency chose these products because they are widely used and contain at least one Candidate Chemical that has the potential to cause serious harm to human health or the environment. According to DTSC, all three of the products are known to cause serious health effects in humans, including cancer, severe asthma, and neurotoxicity. People who are at risk from these products include children and daycare workers in the case of foam sleeping products, and independent contractors, workers, and Do-It-Yourselfers in the case of SPF systems and paint strippers. Alternatives in the marketplace exist for children’s sleeping products and paint/varnish strippers and surface cleaners; however, DTSC officials said they were not aware of any spray-application alternatives for SPFs, which will present “a challenge for manufacturers.”
DTSC’s action today does not ban the products; rather, it starts an extended process that will include formal rulemaking procedures for the finalization of the Priority Products list, which may take up to a year. Next steps include [Read the full article...]
Last month, Walmart released the details of how its sustainable chemicals policy will be implemented, a move that will likely push suppliers to use safer chemicals in reformulating consumer products like cosmetics and cleaners. Walmart’s chemicals policy was first announced in September, and was quickly followed by the announcement of a “Sustainable Product Standard” developed by rival retail chain Target.
Walmart’s Sustainable Chemistry Implementation Guide is aimed at suppliers and provides details, resources, and metrics by which suppliers will be evaluated in their efforts to meet each element of the policy. The policy draws on various preexisting governmental, private sector, and voluntary programs addressing various aspects related to safer chemicals in products, particularly U.S. EPA’s Design for Environment (DfE) program.
The policy identifies “Walmart Priority Chemicals,” which are compiled from a list of authoritative and regulatory lists, including the EU’s endocrine disruptors priority list, various REACH lists, IARC’s and the U.S. NTP’s carcinogens lists, and California’s Proposition 65 developmental and reproductive toxicants list. From that compilation, the company has selected a subset of “approximately ten” “Walmart High Priority Chemicals,” which have not been publicly identified because of “business reasons.” Suppliers will learn whether a product contains a Walmart High Priority Chemical through The Wercs, a company whose WERCSmart platform facilitates the submission of product formulation information and lets retailers access and compile regulatory compliance and hazard communication data. The list of Walmart High Priority Chemicals [Read the full article...]
Today, the House Environment and the Economy Subcommittee of the Energy and Commerce Committee held its first hearing on Rep. John Shimkus’ (R-IL) Chemicals in Commerce Act (CICA), currently the only legislation to reform the Toxic Substances Control Act (TSCA) proposed on the House side. In his opening statement, Rep. Shimkus emphasized that bipartisan collaboration on the proposal was ongoing and that changes to his discussion draft version of the bill were expected. Rep. Henry Waxman (D-CA), ranking member of the Energy and Commerce Committee, repeated his opposition to the bill in its current state, particularly because of the legislation’s treatment of the state preemption issue. Rep. Waxman also repeated his willingness to work with Rep. Shimkus to find common ground, on which he said there had been little progress made since CICA was released. Witnesses representing industry, unions, and the public health sector testified on their views of the draft, generally agreeing on the need to modernize TSCA, although differing in their assessment of the bill’s overall effectiveness.
Dr. Carolyn Duran, Director of Chemical Risk and Compliance, Global Sourcing and Procurement at Intel Corporation, praised the discussion draft’s Section 6 provisions which would let companies like Intel “develop a technically feasible alternative” that is demonstrably safer within a “reasonable transition timeline.” In particular, Dr. Duran supported the draft’s treatment of articles, which would be regulated by EPA if the agency finds that an unreasonable risk of harm to [Read the full article...]
This week, California’s Office of Environmental Health Hazard Assessment (OEHHA) announced its proposal to amend Proposition 65 warnings. OEHHA’s proposal is aimed at improving the quality of Prop. 65 warnings, and is part of the suite of Prop. 65 reforms advocated by Governor Jerry Brown.
A pre-regulatory public workshop on the same topic was held in July; the new proposal provides more detail and incorporates changes and feedback from comments received in response to the agency’s initial pre-regulatory proposal. OEHHA has prepared a Draft Pre-Regulatory Initial Statement of Reasons for the Warning Regulation [PDF] and Draft Pre-regulatory Warning Regulation [PDF], as well as a side-by-side comparison [PDF] between the draft regulatory language and current regulations.
Generally, the proposal establishes certain standards for what warning language counts as “clear and reasonable.” The draft regulations would require the word “WARNING” to appear in all capital letters and bold print, and specifies use of the word “expose” in the following warning language. Notably, the new proposal requires the use of a standard pictogram for toxic hazards from the Globally Harmonized System (GHS), except for on food products, drugs, and medical devices. A new OEHHA website would provide the public with more detailed information on warnings, including exposure pathways and methods of reducing exposure. The proposal also specifies the following twelve common substances (already listed under Prop. 65) that must be identified by name in the warning:
For those of you who weren’t able to make it to GlobalChem 2014 in Baltimore last week, we’ve posted Irene Hantman’s presentation on enforcement and compliance issues associated with the Toxic Substances Control Act (TSCA). Irene’s presentation is targeted towards industry members, and was part of a panel discussing various aspects of TSCA compliance and enforcement which also featured Rosemarie Kelley, Director of the Waste and Chemical Enforcement Division at U.S. EPA, and Kindra Kirkeby, HSES Counsel at NewMarket Services. If you have any questions about the presentation, please feel free to contact Verdant or email Irene directly.
Download here: TSCA Enforcement and Compliance Issues for Industry [PDF]