EPA’s new Strategic Plan: continuity in chemicals while enforcement focuses on Next Generation Compliance.

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In April, EPA published its final Strategic Plan for FY 2014-2018, which includes ensuring chemical safety as a top-level goal and emphasizes the agency’s new paradigm of “Next Generation Compliance.” As proposed in the draft plan released in November, EPA plans to reduce the number of inspections and enforcement actions in order to focus instead on large, complex cases with the “highest impact on protecting public health and the environment.” In the final Plan, the agency clarifies that the advanced monitoring and electronic reporting entailed in its Next Generation Compliance approach will be used to supplement traditional enforcement techniques, rather than replace them.

The Strategic Plan is organized around the following five goals:

  • Goal 1: Addressing climate change and improving air quality
  • Goal 2: Protecting America’s waters
  • Goal 3: Cleaning up communities and advancing sustainable development
  • Goal 4: Ensuring the safety of chemicals and preventing pollution
  • Goal 5: Protecting human health and the environment by enforcing laws and assuring compliance

We will discuss goals 4 and 5 in this blog post.

Goal 4: Safe chemicals and pollution prevention

In pursuit of Goal 4, the Agency’s announced “Priority Goal” for the next year is to “[a]ssess and reduce risks posed by chemicals and promote the use of safer chemicals in commerce.” EPA plans to complete more than 250 assessments of pesticides and other commercially available chemicals by September 30, 2015. These assessments will include the evaluation of potential risks to endocrine system disruption. By 2018, EPA plans to make Endocrine Disruptor Screening Program (EDSP) decisions for all “chemicals for which complete EDSP data are expected to be available by the end of 2017,” as well as complete assessments of all currently identified TSCA Work Plan chemicals. In addition, one of EPA’s strategic measures for pollution prevention is to increase the number of safer chemicals and safer chemical products by 1,900 by 2018 – currently, EPA’s Design for the Environment program recognizes 600 safer chemicals and 2,500 safer chemical products.

The Plan also emphasizes the agency’s support for strengthening and modernizing the Toxic Substances Control Act (TSCA), arguing that EPA needs the “mechanisms and authorities to expeditiously target and promptly assess and regulate new and existing chemicals.” In particular, EPA points to “large, troubling gaps” in the data available and current knowledge on many widely used chemicals.

The Plan also emphasizes EPA’s continuing effort to increase public access to the agency’s chemical information and assessment tools, such as ChemView and the Chemical Information System (CIS). EPA is planning to enhance both of these tools, which are both part of the Next Generation Compliance initiative. CIS will be upgraded to allow electronic reporting for “nearly all required TSCA submissions” and to add tools and models related to chemical risk management. Planned improvements to ChemView will expand public access to TSCA chemical information and enable faster, automated posting of non-confidential data for the public.

EPA plans to complete several evaluations of its work in this area over the next four years, the results of which may direct future agency efforts. In FY 2014, EPA will begin reviewing key factors affecting TSCA Work Plan chemical assessments, followed by an evaluation of the effectiveness of new aspects of the pesticide registration review process, in FY 2015. In addition, biennial reviews are scheduled for 2015 and 2017 of the fee levels charged to submitters of New Chemical Pre-Manufacture Notices.

Goal 5: Enforcement and compliance assurance

The EPA’s main objective under Goal 5 is to target the most serious hazards for enforcement actions, particularly cases “where noncompliance is a significant contributing factor, and where federal enforcement attention can have a significant impact.” EPA’s intent here is not only to address the problems with the biggest impact, but to take on the largest and most complex cases that states might not be equipped to handle. Notably, this includes situations where “the patterns of noncompliance are broad in scope and scale such that EPA is best suited to take action.”

Under the Plan, the Next Generation Compliance approach not only relies on improvements in monitoring and reporting technology, but also entails “embracing new strategies for rule design and case targeting.” Of particular interest to regulated entities is the agency’s focus on expanding transparency and sharing data. The agency plans to build “compliance drivers” into rules and permits to make them more effective, such as improved monitoring, self- and third-party certifications, public disclosure, and “easily monitored product designs or physical structures in facilities.” Another part of Next Generation Compliance is EPA’s use of data analysis and targeting tools to improve identification, public notification, and responses to serious violations. EPA is currently considering new enforcement approaches, such as “electronic responses to electronically reported violations.”

Notably, in the Plan’s table of “Strategic Enforcement and Compliance Measures,” the Next Generation Compliance Measures are described as supplemental “examples” which are still under discussion with states and other parties. These measures include: the number of settlements resulting from or incorporating advanced monitoring technologies; use by regulated entities of advanced self-monitoring technologies; and public use of compliance technology tools (such as ECHO). In addition, the Plan notes that new ways of measuring effectiveness under Next Generation Compliance may emerge in the future, such as credit for avoiding violations.

Effects of the Strategic Plan

EPA’s goals in the realm of chemicals management likely come as no surprise to those in the sector. The agency’s support for TSCA modernization has been clear for years, and the Strategic Plan maintains EPA’s commitment to assessing TSCA Work Plan chemicals – of course, both of these efforts may be affected if Congress manages to successfully pass new TSCA legislation this session. Likewise, the Plan renews the agency’s commitment to increasing the number of safer chemicals and safer chemical products through its Design for the Environment program, and to the evaluation of endocrine disruptors. The Strategic Plan’s incorporation of various programs to improve information access and handling may be of more immediate significance to regulated entities as new electronic reporting processes are rolled out. Firms will also have to continue to manage the balance between protecting Confidential Business Information and EPA’s desired transparency goals.

Ultimately, EPA’s enforcement focus on targeting the largest and most complex cases will likely mean that fewer federal enforcement actions will be pursued in the case of less serious violations and hazards. At the same time, the agency’s commitment to the Next Generation Compliance initiative means that EPA may be able to use more sophisticated data analytics and targeting to recognize broad patterns of noncompliance. More speculatively, the enhanced focus on self-certification, public disclosure, transparency and data sharing, together with improved cooperation with states, may result in increased citizen suits, toxic tort litigation, and state-level enforcement actions along with pressure on companies to reduce or eliminate certain chemicals.