House Democrats' negotiating language on TSCA reform: user fees and tighter deadlines.

Democrats on the House Subcommittee on Environment and the Economy have proposed a revised version [PDF] of the Chemicals in Commerce Act (CICA), the bill which Rep. John Shimkus (R-IL) first introduced in April to modernize the Toxic Substances Control Act (TSCA). However, spokespeople from both sides of the aisle expressed that continued bipartisan work was still needed. A spokesperson for Rep. Paul Tonko (D-NY) told Chemical Watch that Democrats have “not heard back on the legislative language” they proposed, while Rep. Shimkus’ office said that the Congressman’s “door remains open to any serious attempts to find common ground and move bipartisan TSCA reform through the House this year.” The Democrats’ negotiating language, presented as a redlined version of CICA, proposes user fees that would be assessed on chemical manufacturers and processors and shortens deadlines. According to Bloomberg BNA, Republican committee aides called the Democratic proposal a nonstarter.

Meanwhile, there have been no reported updates on progress toward a new version of the Chemical Safety Improvement Act (CSIA) on the Senate side.

Comments from industry and NGO stakeholders reflect tempered hopes for the prospect of passing TSCA reform this year. The American Chemistry Council (ACC) stated that, “With good-faith efforts from the Committee Democrats to develop a workable consensus, we believe there may still be opportunities to pass meaningful reform this year,” while Bill Almond, Vice President of Government Relations of the Society of Chemical Manufacturers and Affiliates (SOCMA), said that if Democratic leaders would “move toward a more reasonable position,” then “TSCA reform still has a chance of passage this year.” Andy Ingrejas, director of the Safer Chemicals, Healthy Families coalition, said the chance for passage depends on whether Republicans decide “to negotiate for real on language now that they have it” or if they are “punting for next year.”

India's industry seeks to make National Chemicals Policy a top priority.

Following the recent election of India’s new prime minister, Narendra Modi, the country’s burgeoning industry is making the adoption and implementation of the National Chemicals Policy (NCP) a top priority. According to Chemical Watch, analysts and industry members are supportive of Modi and hopeful that the NCP will be adopted by the end of the year. The Indian Chemical Council (ICC) has reportedly already engaged with the new coalition government and plans to continue urging that the NCP and the roadmap to the Strategic Approach to International Chemicals Management (SAICM) be pursued “on a high priority basis.”

Modi has appointed Ananth Kumar at the head of the Ministry of Chemicals and Fertilizers, which he has vowed to make an engine of growth.

The NCP was to have been approved by the last coalition government in April or May, but was not addressed in the buildup to the general election.

Priority Products workshop: California's Safer Consumer Products program continues to develop.

Yesterday, California’s Department of Toxic Substances Control (DTSC) held the second of three public workshops on its initial Priority Products in Oakland. These workshops are being held to elicit feedback from stakeholders before the start of the formal rulemaking process, which is anticipated to begin in late June.

In his introductory presentation, DTSC Branch Chief of the Safer Consumer Products (SCP) program Karl Palmer explained that only three (instead of the possible five) Priority Products were initially chosen because the agency wanted to be deliberate, slow, accurate, and effective in rolling out the new SCP program. Palmer also noted that the agency was developing a new data system that may be available as soon as August, which would manage confidential business information (CBI) in submissions to the agency as well as rulemaking processes.

Agency staff explained various refinements that have been made since the first public workshop, focusing on revisions to the Priority Product profiles. Responding to industry comments, the profiles now contain a second-page “disclaimer” explaining that the profiles are non-regulatory documents showing a “snapshot in time” of the agency’s thinking, and are not meant to assert that certain products cannot be used safely, or to endorse alternatives. At the workshop, various commenters from the chemical industry continued to push back that the profile for Spray Polyurethane Foam (SPF) Systems contained inaccurate information and should require a more explicit disclaimer.

In addition to the profiles, product definitions have been revised on the program’s draft regulatory concepts [PDF]. Agency staff noted that, as shown in this document with strikeouts, the SPF definition was narrowed to focus only on applying unreacted diisocyanates to produce rigid foam. The regulatory concepts draft also updates the definition of paint strippers containing methylene chloride from the one contained in the Priority Product profile, now removing reference to surface cleaners, which are already barred from containing methylene chloride under the California Air Resources Board (CARB) General Consumer Products Regulation.

A general theme repeated throughout the workshop was that DTSC was eager to accept information from stakeholders, especially quantitative data on the products’ markets and supply chains, and the availability or viability of alternative products.

The third public workshop will take place on June 4 in Los Angeles. More information, including how to register to attend or file comments, is available on the Safer Consumer Products Workshops page. That page also links to various new documents, including presentations from the workshops. DTSC continues to accept comments on the Priority Products before rulemaking begins, through June 30.

Looking ahead, DTSC will release a three-year Work Plan and hold a public workshop on it in the late summer. The Work Plan, which should be finalized by October 1, 2014, will identify product categories the agency plans to consider next. Draft guidance on alternatives assessments, including input from the Green Ribbon Science Panel, is expected by the end of the year.

 

Court denies motion to stay SEC conflict minerals rule, disclosures required by June 2.

Last week, the saga of the U.S. Securities and Exchange Commission’s (SEC) conflict minerals disclosure rule took another turn as the U.S. Court of Appeals for the District of Columbia Circuit denied an emergency motion filed by industry groups to stay the rule. The rule, known as Exchange Act Rule 13p-1, was authorized by section 1502 of the Dodd-Frank Act and requires companies to make their first disclosures about their use of conflict minerals – such as gold, tantalum, tin, and tungsten from the Democratic Republic of Congo and adjacent countries – by June 2, 2014. The motion for stay was filed by three trade groups: the National Association of Manufacturers, the U.S. Chamber of Commerce, and the Business Roundtable.

We previously reported that in April, the D.C. Circuit Court of Appeals partially struck down the conflict minerals disclosure rule in National Association of Manufacturers v. Securities and Exchange Commission, finding that the rule’s requirement that companies describe whether their products have been found to be “DRC conflict free” constituted compelled commercial speech in violation of the First Amendment. Following that decision, the SEC released a statement on April 29 clarifying how companies should make disclosures under Rule 13p-1 while the court case continues. In that guidance, the SEC said companies need not use the phrase “DRC conflict free,” although companies could elect to do so as long as an independent private sector audit (IPSA) was conducted. Companies required by the rule to file a Conflict Minerals Report should describe “the due diligence that the company undertook.” In the case of products that cannot be determined to be DRC conflict-free, companies should disclose “the facilities used to produce the conflict minerals, the country of origin of the minerals and the efforts to determine the mine or location of origin.”

On May 2, the SEC itself issued a stay [PDF] applying to “those portions of [the rule] subject to the Court of Appeals’s constitutional holding… pending the completion of judicial review, at which point the stay will terminate.”

Following the Court’s denial of the motion for stay, companies must file their first Rule 13p-1 disclosures by June 2 in accordance with the SEC’s April 29 guidance. Yesterday, the Court held its en banc rehearing of oral arguments in a related case, American Meat Institute v. USDA, which the SEC has not sought to join.

European negotiating position on chemicals aims for regulatory cooperation in trade deal with U.S.

Last week, the European Commission (EC) published papers describing its negotiating positions on five topics associated with the current EU-US talks on the Transatlantic Trade and Investment Partnership (TTIP). The position papers, released as part of the EC’s efforts at increasing transparency, propose improving the compatibility of rules governing chemicals, cosmetics, motor vehicles, pharmaceuticals, and textiles and clothing. Across all sectors, the EC proposes to end “unnecessary” or duplicative product testing and inspections; to recognize or better align existing regulations; and to harmonize procedures for registering and approving new products. The papers were published just before the latest round of trade talks begin this week in the U.S., and follows the late March release of a report by the U.S. International Trade Commission identifying REACH regulations as a main trade barrier for small and medium-sized businesses seeking to export chemicals to the EU.

With respect to chemicals [PDF], the EC’s position recognizes that the significant differences between existing regulations in the EU and US make harmonization and mutual recognition unattainable. Nevertheless, the position paper identifies four main objective areas in which “a higher degree of convergence” and cooperation in exchanging information would result in improved efficiency and reduced costs while maintaining the existing regulatory frameworks. These four areas are:

  • Prioritization of chemicals for assessment and agreed-upon testing procedures;
  • Classification and labeling;
  • Identifying and addressing new and emerging issues; and
  • More effective data-sharing and protection of confidential business information (CBI).

The position paper makes four concrete suggestions for achieving these objectives:

  • Establish a mechanism for mutual consultation on prioritizing chemicals for assessment or risk management as well as developing assessment methodologies. In addition, both sides would keep each other informed about related developments on the Member State/state level.
  • Determine a date by which the UN Globally Harmonized System (GHS) will be implemented for a broad range of chemicals in the U.S. A mechanism for mutual consultation on the process of classifying and labeling substances should also be established.
  • Establish a mechanism for regular consultation on new and emerging issues, focusing on those with regulatory relevance (e.g., endocrine disruptors, nanomaterials).
  • Identify and consider potential benefits and challenges to exchanging CBI, with the possibility of establishing a mechanism – including periodic reviews – to achieve such exchange if found to be appropriate.

Moreover, the position paper suggests that the TTIP’s “horizontal chapter” – a proposed section of the treaty that would set a framework for future regulatory convergence – should provide for an effective bilateral cooperation and consultation mechanism, as well as an improved way to provide feedback, so that both parties have sufficient time to comment on proposed regulations. In the chemical sector, this mechanism would apply to risk management proposals for substances at the federal/EU and Member State/U.S. state levels.

According to Chemical Watch, the proposals were well-received by the European Chemical Industry Council (Cefic). The industry group’s executive director, Lena Perenius, said the position papers applied the “same logic” as Cefic’s own.

Partnering with EPA's Design for Environment at Walmart Sustainable Products Expo.

EPA is a significant partner to companies leading innovation efforts in the arena of safer consumer products, according to Assistant Administrator Jim Jones, of EPA’s Office of Chemical Safety and Pollution Prevention. In a blog post yesterday, Jones describes how EPA’s Design for Environment (DfE) program recently participated in a “Supplier Panel on Sustainable Chemistry” at Walmart’s first ever Sustainable Products Expo, which brought together leaders from EPA, NGOs, and product manufacturers.

As we have previously discussed, EPA’s DfE program – which establishes voluntary sustainability-related standards for consumer products like household cleaners – plays a major role in Walmart’s Sustainable Chemistry Initiative. Jones writes that EPA’s contribution is “providing scientific expertise and understanding of health and environmental impacts throughout the supply chain, educating consumers and companies alike, and bringing people to the table to stimulate dialogue and partnerships.” Jones notes that with “growing consumer recognition” and trust for the DfE’s “Safer Products” label and program criteria, EPA’s partnerships with companies like Walmart and its participating suppliers can promote sustainability, health, and the environment while meeting consumer demand and growing their business.

The Expo also featured announcements from Walmart and its suppliers of various new sustainability commitments and initiatives. One such initiative is the Closed Loop Fund, which will invest $100 million seeded from suppliers including Coca-Cola, Pepsico, and Johnson & Johnson in recycling infrastructure with the goal of “transforming the recycling system in the United States.” Cargill made commitments to increase supply chain transparency in beef and Procter & Gamble pledged to reduce water use for liquid laundry detergent. Together, the suppliers participating across all of these voluntary sustainability efforts account for over $100 billion in sales at Walmart.

EPA exploring data-sharing possibilities with European regulators.

The EPA is considering ways to share chemical data with European regulators, including research on endocrine disrupting chemicals (EDCs) and information submitted for REACH compliance. Chemical Watch reports that Jim Jones, EPA Assistant Administrator of the Office of Chemical Safety and Pollution Prevention, will discuss sharing EDC data with regulators in Brussels in late June. Mr. Jones also commented that the U.S. and EU will likely take different approaches to regulating EDCs, but that data-sharing could improve the development of regulations for both sides.

Speaking this week at the Safer Consumer Products Summit in Santa Clara, California, Mr. Jones noted that EPA is considering how to access data submitted via Substance Information Exchange Fora (SIEFs) for the preparation of REACH dossiers. Under current rules and data-sharing agreements, this information is restricted, but EPA has previously stated that it is contemplating using its subpoena authority under the Toxic Substances Control Act (TSCA) to require U.S. companies to submit such information. Mr. Jones said that EPA has selected one chemical as a starting point to test whether European regulators would be open to sharing health and safety information with the agency.

National Research Council issues two reports reviewing EPA's chemical testing and science.

In the past week, the National Research Council (NRC) has released two reports on aspects of EPA’s chemical testing and science programs. Today, the NRC published a report reviewing EPA’s Integrated Risk Information System (IRIS) process for assessing chemical hazards and concluding that the agency has made substantial improvements in response to the NRC’s general recommendations made in 2011. The report published on May 2 found several key flaws in EPA’s draft “state-of-the-science” evaluation of nonmonotonic dose-response relationships for endocrine disruptors. Both reports were authored by committees of the NRC’s Board on Environmental Science and Toxicology.

The IRIS report was commissioned by Congress in response to a 2011 NRC report on EPA’s IRIS assessment of formaldehyde that found deficiencies in the agency’s general assessment methods. According to the new review, EPA is on track to make the IRIS process more effective and efficient. The agency has followed several of NRC’s 2011 recommendations; for example, EPA has implemented a new document structure that streamlines assessments, added a standard preamble explaining the process and its underlying principles, and drafted a handbook describing the process in greater detail. Noting that EPA is still in the process of making the changes recommended by the NRC, the study makes additional suggestions to strengthen to the IRIS process. Looking forward and considering the constantly evolving nature of the science involved, the report identifies critical steps to improve assessments in the future, calling for continuous updates to assessment methods, systematically identifying and addressing inefficiencies, and regular evaluation of chemical-assessment teams’ expertise and training.

The NRC took a dimmer view of EPA’s draft evaluation of nonmonotonic dose-response relationships, which intended to answer basic questions about the phenomenon wherein lower doses may be associated with larger responses, which may not be detected by traditional toxicological models. EPA’s evaluation tried to address, for example, the implications of nonmonotonic dose-response relationships for toxicity testing, weight of evidence conclusions, and risk assessment determinations. However, the authoring committee found that the process adopted by EPA in conducting the evaluation was “poorly described and inconsistent” in its approach to analyzing and summarizing data. The NRC report recommends that EPA develop and apply an “analytic plan” to predefine and document literature search strategies and establish criteria for selecting and analyzing studies, and analyze toxicity-testing strategies under more specific constraints. In addition, the NRC cited the lack of analysis supporting EPA’s conclusion that nonmonotonic dose-response relationships can have both qualitative and quantitative effects which would be considered appropriately using current risk-assessment practices. The report urges EPA to address how nonmonotonic dose-response relationships for estrogen, androgen, and thyroid pathways would be treated under current risk-assessment practices. Although the report does not address more fundamental questions – such as whether endocrine-disrupting chemicals are harmful, or the adequacy of EPA’s testing techniques – the NRC’s critique may raise issues in other areas, including the U.S.’ trade in chemicals with the European Union, which has adopted a more aggressive approach to regulating potential endocrine disruptors.

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

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.

House Committee holds hearing on new Chemicals in Commerce Act.

Today, the House Energy and Commerce Committee held its second hearing on the Chemicals in Commerce Act (CICA), introduced by Rep. John Shimkus (R-IL) as the House’s proposal to modernize the Toxic Substances Control Act (TSCA). Today’s hearing was based on an updated version of CICA which Rep. Shimkus, who is Chair of the Subcommittee on Environment and the Economy, unveiled last week.

Rep. Shimkus began the hearing by highlighting “significant changes” from the earlier version, including: new authority for EPA to develop information for priority designation purposes; new deadlines for EPA to take action on existing chemicals; and limits on the preemption effects of a low-priority designation, which now would leave in place state regulations that were in effect before the low-priority designation was made.

In his opening remarks, Environment and the Economy Subcommittee Ranking Member Paul Tonko (D-NY) argued that, as industry witnesses have agreed, CICA must restore the public confidence in the safety of chemical products by establishing a safety standard based on health and environmental information alone, while costs and benefits should be separately incorporated in risk management actions. Energy and Commerce Committee Ranking Member Henry Waxman (D-CA) alleged that the unilateral process of developing CICA and pointed out that under the bill, “EPA would be prohibited from revealing the identity of chemicals that cause serious health and environmental harms,” which would harm companies marketing safer consumer products.

In the hearing’s first panel, EPA Assistant Administrator Jim Jones of the Office of Chemical Safety and Pollution Prevention testified that the Administration had not yet developed a “formal position” on CICA, but noted that the bill did not align with the Administration’s announced principles for TSCA reform.  Mr. Jones commented that CICA does not provide EPA with a way to review existing chemicals that may pose a concern in a timely fashion, because the legislation uses a “significant risk” standard very similar to the current law. Similarly, according to Mr. Jones, the bill’s treatment of new chemicals, like current law, does not require EPA to conclude that a chemical is safe before it is allowed to enter the marketplace.

As in previous legislative hearings on TSCA reform, all of the witnesses agreed on the importance of modernizing the law. Industry witnesses included representatives from BASF, Procter & Gamble, the Society of Chemical Manufacturers and Affiliates, and the American Chemistry Council. These witnesses supported many of the changes in the updated version of CICA, including the bill’s risk evaluation provision, new authority for EPA to develop information for prioritization, and protection of Confidential Business Information (CBI). Industry witnesses did, however, raise questions about some issues related to the bill, including the length of EPA’s deadlines, the meaning of “significant risk,” the definition of “best available science,” and appropriate fee approaches to provide appropriate resources for EPA. Witnesses from the NGO Safer Chemicals and Healthy Families and the National Conference of State Legislatures criticized the bill’s broad preemption provisions.

Outside of today’s hearings, reactions to the new version of the bill continue to trickle in. Yesterday, leading Democrats Rep. Waxman and Rep. Tonko sent a letter to Rep. Shimkus expressing concern that the bill’s preemption provisions “could jeopardize state or local laws and regulations relating to hydraulic fracturing and the chemicals used in the hydraulic fracturing process.” Environmental and public health NGOs have also been critical; the Natural Resources Defense Council called it “a dud” and the Environmental Working Group described it as a “bad piece of legislation, pure and simple.”