Report: REACH a primary trade barrier for SMEs exporting to EU.

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 USITC report highlighted several other trade barriers facing U.S. SMEs exporting to the EU, including the Biocidal Products Regulation, the EU Cosmetics Directive, the Restriction of Hazardous Substances (RoHS) Directive, and the Waste Electrical and Electronic Equipment (WEEE) Directive. Challenges for SMEs dealing with these regulations reportedly include high compliance costs, increased product costs, expensive testing requirements, and lengthy certification processes.

The report, which was conducted at the request of the U.S. Trade Representative, was primarily based on information and statements collected from SMEs on a voluntary basis. The entire report is available for download here [PDF].

Legislators in other states following example set by CA's Safer Consumer Products regulations.

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.

Various state legislatures are also considering more limited proposals targeting chemicals in children’s products, including Minnesota’s H.F. 605 and Connecticut’s S.B. 126.

ECHA finalizes REACH CoRAP list.

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:

  • 3,4,5,6,7,8,9,10,11,12,13,14-dodecahydro-2H-cyclododeca[b]pyran;
  • yellow pigment additive;
  • 1,3,4,6,7,8-hexahydro-4,6,6,7,8,8-hexamethylindeno[5,6-c]pyran (HHCB); and
  • 1-(5,6,7,8-tetrahydro-3,5,5,6,8,8-hexamethyl-2-naphthyl)ethan-1-one.

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.

ECHA encourages registrants to follow its new best practices recommendations for interactions during substance evaluation, which we have previously discussed.

The complete CoRAP list is available online.

ECHA committee takes step towards reclassifying BPA as 1B reprotoxicant.

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.

DTSC announces draft Priority Products under Safer Consumer Products program.

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 DTSC’s quarterly public meeting on March 17; public workshops on the selection of the draft Priority Products, expected to be held in May and June; and a Work Plan to be released in October. After the final Priority Products list is finalized, manufacturers and sellers of Priority Products must notify DTSC that they are a “responsible entity,” and then submit a preliminary Alternatives Analysis (AA) report for state approval. A final AA report must be submitted a year later, after which DTSC will determine its regulatory response, which may range from requiring further research to imposing an outright ban on sales in California.

Moreover, DTSC intends that the SCP program will spur manufacturers and retailers to proactively reformulate products containing Candidate Chemicals. DTSC director Debbie Raphael emphasized that the measure of the success of the program would be the ability and willingness of product manufacturers to answer the question, “Is it necessary to use this chemical?” before the agency names a particular chemical-product combination.

For more information, see DTSC’s FAQ on the draft Priority Products [PDF] and press release [PDF].

Walmart’s sustainable chemicals policy promotes transparency and DfE.

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 is described in the Guide as “proprietary to Walmart,” and suppliers who are notified that their product contains a Walmart High Priority Chemical are asked not to disclose or use that information outside the supplier’s organization.

The Implementation Guide organizes the policy’s elements into three categories: (1) transparency; (2) advancing safer formulation of products; and (3) DfE in private brands.

Transparency: Suppliers will be measured based on, for example, the percentage of products (“by number of UPCs and sales”) for which formulation information has been fully disclosed to The Wercs. Walmart expects its suppliers to disclose product ingredients on their own websites, on a product-by-product basis, by January 2015; priority chemicals are to be disclosed on product packaging by January 2018. The Guide refers to EPA’s DfE Standard for Safer Products as well as the Consumer Specialty Products Association’s Ingredient Communication Initiative for guidance on how suppliers should disclose ingredients.

Safer formulation: Suppliers will be asked to complete the Sustainability Index, a questionnaire-based program developed by the Sustainability Consortium, to report progress on chemical disclosure, risk assessment, and hazard avoidance. Walmart has been using the Sustainability Index to assess suppliers and their products since 2009, and has built the resulting scorecards into the way Walmart’s buyers work. Walmart will also evaluate suppliers based on their performance in reducing, restricting, and eliminating priority chemicals and Walmart High Priority Chemicals “using informed substitution principles.” The Guide recommends the tenets of the Commons Principles of Alternatives Assessments, and recommends certain Alternatives Assessment ingredient lists and methodologies. Suppliers’ performance will be quantified based on metrics including: the aggregate weight volume of priority chemicals; number of UPCs and sales volume of products with priority chemicals; and number of products formulated with only DfE-approved ingredients. Progress on the initiatives in this category will be compared to a 2012 baseline.

DfE in private brands: Starting this year, Walmart and Sam’s Club’s own brand of cleaning products will be reformulated and relabeled to meet the criteria of EPA’s DfE program. This program will be expanded to other product categories in the future, although the Guide did not specify further details. Progress on this initiative will be measured by the percentage of private brand products which are DfE-certified.

Walmart will begin monitoring progress of all the initiatives this year, and aggregate progress will be reported publicly starting in 2016.

House subcommittee holds first hearing on Chemicals in Commerce Act.

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 human health or the environment may result from exposure to a substance in the article and that restrictions on the chemical at issue cannot adequately address the risk presented by the substance in the article.

In his testimony, Dr. Philip J. Landrigan, a pediatrician, professor, and Director of the Children’s Environmental Health Center in the Icahn School of Medicine at Mount Sinai, called the discussion draft “not satisfactory.” Dr. Landrigan referred to research on the sensitivity of children and fetuses to “even minutely low levels of chemicals,” which can cause injury to developing organs including the brain, and emphasized the need to conduct safety testing for new and existing chemicals. He called for prioritizing the testing of those chemicals “found through biomonitoring to be most widespread” in the population, for which there is evidence of toxicity, and that are persistent and bioaccumulative. Dr. Landrigan also advocated for a safety standard of “reasonable certainty of no harm,” compared to the “unreasonable risk” standard found in current law as well as the CICA draft.

The Environment and the Economy Subcommittee will likely hold at least one more hearing on “an adjusted draft” of the bill, according to Rep. Shimkus.

New warning requirements proposed for California's Prop. 65.

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:

  • Acrylamide
  • Arsenic
  • Benzene
  • Cadmium
  • Chlorinated Tris
  • 1,4-Dioxane
  • Formaldehyde
  • Lead
  • Mercury
  • Phthalates
  • Tobacco smoke
  • Toluene

In addition, the proposal recognizes court-approved warning language and provides for “tailored” warning language for certain scenarios, such as dental care, apartment buildings and hotels, parking facilities, and amusement parks. OEHHA also proposes a new “Opportunity to Cure” provision for small retailers to fix certain minor violations within 14 days and avoid private enforcement actions, with the goal of avoiding frivolous litigation.

OEHHA will hold a public workshop to discuss the proposal on April 14 and will accept comments through May 14, 2014. After the workshop and comment period, OEHHA plans to propose the formal regulation in early summer 2014, with the expectation that final regulations could be adopted in the summer of 2015.

GlobalChem presentation: TSCA Enforcement and Compliance Issues for Industry.

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]

House TSCA reform bill draws mixed reactions.

More reactions and commentary from a range of stakeholders are beginning to roll in following last week’s release of the Chemicals in Commerce Act (CICA), the proposed House legislation to modernize the Toxic Substances Control Act (TSCA). As we discussed earlier, key Democrat Rep. Henry Waxman has said he does not support CICA in its current form, although he hopes to work with Republicans in crafting an improved version. Industry groups including the American Chemistry Council, American Cleaning Institute and Society of Chemical Manufacturers and Affiliates have expressed support for the draft bill by Rep. John Shimkus (R-IL), while many NGOs, including the Center for Environmental Health, Environmental Working Group, and Natural Resources Defense Council, have strongly criticized it. On its blog, Environmental Defense Fund (EDF), which expressed qualified support on the introduction of CICA, has identified two major flaws in the bill: state preemption and the “regulatory hoops” EPA would have to jump through in order to take any action, which EDF Senior Scientist Richard Denison says is “even more onerous and paralyzing” than the current law, and better addressed in the exemption provision in the Chemical Safety Improvement Act (CSIA), which was introduced in the Senate last May.

Both bills were a popular topic at this week’s GlobalChem Conference in Baltimore, where panelists were optimistic that bipartisan support could mean TSCA reform could pass Congress this year. Connie Deford, Director of Products Sustainability and Compliance at Dow Chemical, emphasized that passing reform was a priority for the chemical sector, noting that consumer confidence in the industry was at an all-time low, the current approach is short-sighted, and reform is needed to continue to foster domestic innovation and competitiveness in the global arena. David McCarthy, Counsel to the House Energy and Commerce Committee, also emphasized the need for reform to keep the U.S. competitive globally. Mark Duvall, Partner at Beveridge & Diamond, highlighted differences between CICA and CSIA, including varying reporting requirements for processors and tort implications regarding the admissibility of EPA’s safety determinations.

We will be bringing you more in-depth analysis of CICA, including side-by-side comparisons to CSIA and current law, in the near future.