Rite Aid Chemical Policy Update

The pharmacy chain Rite Aid expanded its chemical management policy on March 3, 2021 to add transparency, include additional chemicals on their restricted substance list, and update their screening method.  Transparency for the new policy requires suppliers to be more specific in listing their ingredients, such as replacing ‘fragrance’ with the ingredients that make up the fragrance.  These generic terms will be replaced with the substances in those components.  Additionally, Rite Aid is encouraging their suppliers to disclose nonfunctional constituents such as by-products and contaminants.  This additional level of detail on the packaging of products sold at Rite Aid stores will become mandatory by December 2023.

Rite Aid initially had eight chemicals on its restricted substance list (triclosan, propyl paraben, formaldehyde, dibutyl phthalate, toluene, diethyl phthalate, butyl paraben, and nonylphenol ethoxylates).  The new policy has added 61 chemicals.  These chemicals include heavy metals, PFAS, Bisphenols, and solvents.

Along with updating their chemical management policy, Rite Aid has transitioned away from survey-based assessments for identifying chemicals on the restricted substance list.  Rite Aid began the transition process to WERCSmart in September 2018 and has now finish the transition.  Rite Aid suppliers are required to report the substances in their products to WERCSmart.  WERCSmart then analyzes the substances to see if they meet the retailer’s policy.  The chemical management policy does not address CBI issues, although WERCSmart may protect confidential data.

EPA's ChemView database updated with new chemical SNURs and consent orders.

Yesterday, EPA announced updates to ChemView, its public online tool for accessing information about chemicals regulated under the Toxic Substances Control Act (TSCA). The updates include enhanced data functions as well as updated, more comprehensive information.

The improved data functions include:

  • Improving the display and content for the Chemical Data Reporting information;
  • Adding a new link that displays the pollution prevention information generated as part of the Toxics Release Inventory program; and
  • Launching an administrative tool that will save EPA resources by streamlining the loading of future information.

ChemView’s databases were updated with the following new information:

  • 244 consent orders;
  • An additional 1,205 Significant New Use Rules (SNURs) for new and existing chemicals;
  • 16 additional chemicals with test rule data, and
  • Updates to the Safer Chemicals Ingredient List (part of the agency’s Design for Environment program).

In EPA’s press release, Assistant Administrator for the Office of Chemical Safety and Pollution Prevention Jim Jones explained that the agency was acting since Congress’ attempts to reform TSCA have so far been unsuccessful: “In the absence of TSCA reform, EPA is moving ahead to improve access to chemical health and safety information, and increase the dialogue to help the public choose safer ingredients used in everyday products.”

With the updates, ChemView now covers 10,000 chemicals and includes for the first time consent orders and new chemical SNURs. ChemView was first launched in 2013 to improve the availability of information on existing chemicals by displaying “key health and safety information and uses data in a format that allows quick understanding.”

U.S. chemical industry opposes fracking disclosure rules.

Trade groups representing the U.S. chemical industry are urging EPA not to adopt rules requiring the disclosure of hydraulic fracturing chemicals and mixtures. The Society of Chemical Manufacturers and Affiliates (SOCMA) and the American Chemistry Council (ACC) both filed comments in September responding to EPA’s May 19, 2014 Advance Notice of Proposed Rulemaking. That notice announced that the agency was “initiating a public participation process to seek comment on the information that should be reported or disclosed for hydraulic fracturing chemical substances and mixtures and the mechanism for obtaining this information.” EPA’s filing was made in response to a section 21 citizen petition under the Toxic Substances Control Act (TSCA) and suggested that the contemplated reporting mechanism could be authorized under TSCA §§ 8(a) or 8(d), voluntary, or a combination of both, and “could include best management practices, third-party certification and collection, and incentives for disclosure.”

Both groups argue that mandating disclosure of hydraulic fracturing chemicals and mixtures could reveal trade secrets. In its comments, the ACC wrote that EPA should first finalize its ongoing hydraulic fracturing study, and that voluntary programs “have worked well in the past” and state level regulation is more appropriate than federal. SOCMA proposed “the use of structurally descriptive generic names if a specific name would potentially reveal a trade secret” along with better information collection via EPA’s enhanced Chemical Data Reporting (CDR) in combination with the industry’s voluntary chemical registry, FracFocus.

TSCA reform still faces obstacles in Senate.

Congress’ efforts to pass legislation modernizing the Toxic Substances Control Act (TSCA) have flown under the radar in recent months, but this weekend, the Associated Press provided an update on the difficult path for TSCA reform in the Senate. The AP reports that during the summer, Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA) rejected the revised version of the Chemical Safety Improvement Act (CSIA) presented to her by Sens. Tom Udall (D-NM) and David Vitter (R-LA). Sens. Boxer and Udall both agreed that the new draft’s state preemption provisions remained too broad and must be narrowed.

This latest draft has not been released publicly, although Sen. Udall said it makes “big progress” with regard to TSCA’s safety standard and stressed that it “is a huge improvement compared to the law as it stands now, and as it has stood since 1976.” In contrast, Sen. Boxer said the new draft does not make needed improvements to TSCA. Sen. Boxer pointed to the legislation’s long timelines for reviewing chemicals of concern, saying the bill “could leave nearly a thousand chemicals of greatest concern unaddressed.”

Sen. Boxer also told the AP she would propose a provision to specifically address toxic chemicals that could endanger drinking water, like the chemical MCHM that contaminated drinking water in a massive spill in West Virginia last January.

The AP article quotes NGO representatives from Safer Chemicals, Healthy Families and the Environmental Defense Fund as optimistic that TSCA reform will eventually pass. The American Chemistry Council, which backs the CSIA, has set passing TSCA reform as its top legislative priority, and spent almost $6 million in lobbying during the first half of the year.

EPA recognizes industry leaders using safer chemicals, reiterates need for TSCA reform.

Making products with safer chemicals meets consumer demand while improving companies’ bottom lines and benefiting human health and the environment at the same time, says EPA Assistant Administrator for Chemical Safety and Pollution Prevention Jim Jones. Today, Jones wrote on the agency’s “EPA Connect” blog to highlight several U.S. companies leading in the area of safer chemicals in consumer products, including as partners in EPA’s Design for Environment (DfE) program. Jones lauded these product makers and retailers for “advancing industry beyond the safety ‘floor’ set by the outdated Toxic Substances Control Act (TSCA).”

Acknowledging that the absence of a DfE label does not necessarily mean a product is unsafe, Jones points out that the DfE label promotes supply chain transparency: “With the DfE label, you know what is going into a product and that the formula is the safest for human health and the environment based on the best available science and protective criteria—above and beyond the minimum legal requirements set by existing TSCA.”

Jones’ focus on the need to update TSCA, which has been the subject of significant legislative activity this session, is consistent with his previous public statements. In today’s post, he pledged EPA’s continuing commitment to its DfE partners regardless of the outcome of the current TSCA reform effort.

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.

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.

D.C. Circuit Court partially strikes down SEC conflict minerals rule.

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 SEC’s cost-benefit analyses as required by the Exchange Act were “reasonable,” even though the rule’s “compelling social benefits” were not quantifiable.

However, the Court sided with the industry groups with regard to the SEC rule’s requirement that companies describe its products as not “DRC conflict free” in reports filed with the Commission and on the companies’ own websites. Writing for the Court (and joined by Judge Sentelle), Judge Randolph found that rational basis review was not appropriate for this type of speech, because it only applies to “purely factual and uncontroversial information,” in cases in which “disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers.” In this case, the SEC did not argue that the rule related to preventing consumer deception. Judge Randolph concluded that requiring the use of the “conflict free” label was found to convey a “moral responsibility for the Congo war,” tantamount to “compelling an issuer to confess blood on its hands” in interference with the First Amendment.

The Court further found that the SEC’s rule failed to meet the intermediate standard for commercial speech set out in Central Hudson, which “invalidates regulations for which narrower restrictions on expression would serve the government’s interest as well.” (Quotations omitted.) In this case, the SEC presented no evidence that less restrictive means would be ineffective, and the Court rejected its argument that the rule’s minimal impact was dispositive of the “narrowly tailored” requirement.

Notably, Judge Srinivasan declined to join the Court’s opinion with respect to the First Amendment claim, arguing that the issue should have been held in abeyance and part of the SEC rule stayed until the Circuit’s en banc re-hearing of a related case, American Meat Institute v. United States Department of Agriculture, regarding meat labeling.

Moving forward, the rule’s effective date for compliance is June 2, and the SEC has not yet offered a stay or guidance to companies on how to comply with the partially-invalidated rule. The SEC has also not yet announced whether it will seek to participate in the AMI case; otherwise, the case will be remanded to the D.C. District Court.

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.

Changes for TSCA CBI claims on the horizon.

According to the OMB’s regulatory agenda, EPA is planning to issue a proposed rule on confidential business information (CBI) claims under TSCA.  The proposed rule, which is expected to be released in spring 2014, would require companies making CBI claims to reassert and re-substantiate those claims on a periodic basis. EPA’s intent in proposing the new regulation is to increase transparency and the availability of environmental and health effects information for existing chemicals in the marketplace.

Details about the proposed rule are not yet available, but ChemicalWatch identified two critical issues that will need to be addressed: (1) whether CBI claims will be evaluated immediately and (2) whether individual chemicals must be disclosed. According to ChemicalWatch, stakeholders expect that CBI claims would stand for five years before review and renewal is required.

The future of CBI claims may be further complicated by current legislative efforts to reform TSCA. The Chemical Safety Improvement Act (CSIA), the TSCA modernization bill currently before the Senate Environment and Public Works Committee, contains complex CBI provisions which have been criticized by NGOs as overly burdensome for EPA’s resources.

It is also unclear how the new CBI rule would affect EPA’s voluntary CBI Declassification Challenge. In December, Bloomberg discussed the state of the CBI Declassification Challenge with Jim Jones, EPA’s Assistant Administrator for chemical safety and pollution prevention. Through this initiative, EPA has determined that over half of the 22,000 CBI claims the agency had thought were submitted by chemical companies were in fact never made. The inflated number was due to a newly identified problem in EPA’s tracking system. Of the remaining claims, 909 cases have been declassified, 3,349 claims have been assessed as valid, and EPA is still investigating the last 7,000 claims.