California's Proposition 65 reformed to end "frivolous" lawsuits.

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On October 5, 2013, California Governor Jerry Brown signed into law A.B. 227, amending Proposition 65. The bill aims to end “frivolous shakedown” lawsuits against businesses based on California’s Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Prop. 65, a voter-initiative-based law which requires businesses to post warnings about chemicals known to the state as causing cancer or reproductive harm. We previously discussed this legislation and Gov. Brown’s Prop. 65 reform package in June.

A.B. 227 amends the law so business owners faced with a private enforcement action may take corrective action, pay a $500 fine and provide notice of the fix – a solution that the bill’s sponsor, Assemblyman Mike Gatto (D-Los Angeles), compared to motorist “fix-it” tickets. The changes went into effect immediately, on October 5.

Under Prop. 65, private citizen enforcers must send a “60-day notice” of the violation to the alleged violator, along with the California’s Office of the Attorney General, before filing suit. Businesses sued for failing to post proper Prop. 65 warnings face steep penalties of $2,500 a day, plus the private enforcer’s attorneys’ fees and costs. Some of these private enforcement actions have led to the development of what some critics, including Gov. Brown, call a “cottage industry” based on “nuisance” suits and shakedowns.

Under A.B. 227, businesses that receive a 60-day notice of violation could avoid costly litigation or settlements by correcting the violation within 14 days. The alleged violator would send to the private enforcer the $500 penalty and a completed proof of compliance form describing the corrective action taken and attaching a copy of the new warning along with a photograph of the warning’s placement on the premises. Of the $500 penalty, 75 percent will be paid to the state’s Safe Drinking Water and Toxic Enforcement Fund and the remaining 25 percent will be paid to the private enforcer. An alleged violator could use this “fix-it ticket” option only once, and the amendments do not prevent the Attorney General or other public prosecutor from taking enforcement action.

The new amendments only apply to certain Prop. 65 actions involving exposure to (1) vehicle exhaust at parking garages; (2) alcohol; (3) second-hand smoke; and (4) certain chemicals in food or beverages that are not intentionally added and occur naturally in preparation processes like grilling or frying, such as a acrylamide or benzene.

Gov. Brown’s broader array of proposed reforms – including capping attorneys’ fees and limiting settlement payments – were not adopted in legislation this year.

U.S. retailer Target introduces sustainable product standard.

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On October 7, 2013, Target announced a new Sustainable Product Standard that it will begin using this month to evaluate the sustainability and environmental impact of products sold in its stores.

Target said that it will ask “vendors representing 7,500 products in household cleaners, personal care and beauty and baby care” to provide product ingredients and information about various environmental attributes so that the company can assess products using GoodGuide’s UL Transparency Platform, a business-to-business screening tool that allows a company to evaluate ingredient information provided by suppliers. The Platform’s assessment tool will compare the product data to hazard trait and regulatory and other environmental criteria lists.

After being evaluated, each product will be assigned up to 100 points based on the sustainability of ingredients, ingredient transparency and overall environmental impact. Target’s announcement explains that the standard was developed “over the last two years in partnership with industry experts, vendors and NGOs.” The standard “will help establish a common language and definition for qualifying what makes a product more sustainable.”

According to Target spokesperson Jessica Stevens, the Sustainable Product Standard “does not have a direct guest-facing, in-store component,” so consumers will not see product assessment scores displayed in stores. Stevens explained that “products that pass a minimum threshold to be set by Target” will have access to special merchandising and marketing support.

Many environmental advocates like the Campaign for Safe Cosmetics and Breast Cancer Fund and Campaign for Safe Cosmetics were enthusiastic about the new standard. However, BizNGO chair and Clean Production Action co-director Mark Rossi expressed concern that the UL Transparency Platform is designed for information sharing between businesses and does not require any public disclosure; the platform’s proprietary nature means consumers and safety advocates have no access to the criteria used in its assessments. Although Target has not released any details on its scoring or standard benchmarks, it is expected to do so in the near future.

Target’s new Sustainable Product Standard follows its competitor Walmart’s announcement of its own “Policy on Sustainable Chemistry in Consumables,” which we discussed last month. Walmart’s policy is based on GreenWERCS, its own proprietary tool that assesses products’ chemical composition and screens for potential adverse human and environmental effects. Both retailers are taking steps to increase transparency and eliminate potentially hazardous chemical ingredients in their supply chains, although Target’s policy focuses on incentivizing safer products through its point-based standard, while Walmart’s approach is to eliminate certain chemical ingredients from products in their stores altogether.

EPA agrees to update enforcement guidance for FIFRA and TSCA.

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The Environmental Protection Agency (EPA) has agreed to update its enforcement guidance for the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and Toxic Substances Control Act (TSCA) following a report [PDF] from the agency’s Office of Inspector General (OIG) released on September 27, 2013. The report contained findings and recommendations related to FIFRA and TSCA good faith reductions and “ability to pay” penalties, based on the OIG’s review of 23 FIFRA cases and 20 TSCA cases (13 lead disclosure and 7 PCB cases).

The OIG found that EPA regions differed in how they assessed FIFRA and TSCA enforcement penalty reductions; some appeared to justify reductions automatically, without considering the good faith compliance efforts of the violators. Because of the lack of adequate guidance and supporting documentation for determining and justifying good faith penalty reductions, there is a risk that EPA might treat violators inequitably and might be losing opportunities to fully collect all penalties due. Based on the OIG’s findings and recommendations, EPA has agreed to reissue the enforcement policy document GM-88, “Documenting Penalty Calculations and Justifications in EPA Enforcement Actions.”

The OIG also found that EPA’s enforcement response and penalty policy for lead-based paint disclosure rule to address violators who are unable to pay penalties is inadequate. Specifically, no guidance exists for applying non-monetary penalty alternatives (such as public service or delayed payment plans) when violators do not have the cash to pay the penalty. EPA has agreed to evaluate whether additional guidance is needed to clarify whether non-monetary alternatives must meet the agency’s existing Supplemental Environmental Projects policy.

In addition, the OIG report found that EPA’s “INDIPAY” economic model may be limited in its ability to help teams evaluate individuals’ claims of inability to afford penalties or clean-up costs. According to the OIG, the INDIPAY model does not assess an individual’s assets and should be updated to improve its accuracy. Furthermore, the report found that EPA does not provide adequate guidance or case development training to help regional teams evaluate ability to pay cases. In order to improve the agency’s consistency in handling the growing number of ability to pay cases, EPA has agreed to provide regional staff with updated training for case development of ability to pay claims. EPA also agreed to update its 1986 document “Guidance on Determining a Violator’s Ability to Pay a Civil Penalty” [PDF] to further improve guidance on evaluating ability to pay cases and address the inadequacies of the INDIPAY model.

California's new SCP law may threaten trade secrets.

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Under California’s Department of Toxic Substances Control (DTSC) Safer Consumer Products (SCP) program, discussed last week, manufacturers may be required to publicly disclose the ingredients of those products that contain one or more chemicals deemed hazardous by the DTSC.

The regulations require DTSC to evaluate a list of Candidate Chemicals for development of an initial “Priority Products” list. (See overview [PDF]). If manufacturers of products on the Priority Products list choose not to remove the relevant chemicals, they will be required to disclose all product ingredients in an Alternatives Analysis (AA) report. The AA reports will include:

  • the quantities of chemicals of concern used;
  • the function of these chemicals and rationale behind their use;
  • the brand and product names under which a product containing a chemical is sold or used;
  • the identities of both the manufacturer and importer; potential adverse impacts associated with the product;
  • disposal and handling requirements; and
  • possible alternative chemicals the company has considered using.

DTSC will post these reports online and email them to interested parties for public review and comment. The state will also publicly announce notices of ongoing review, compliance, deficiency and disapproval.

The disclosure requirements may present potential hurdles to companies seeking to comply with the SCP regulations. First, companies that may not know the complete chemical make-up of their product ingredients will have to research their suppliers to gather more detailed information on their supply chains. Given the size of California’s economy, its product regulations could greatly affect global supply chains beyond state borders; if companies marketing products in California choose to reformulate their products in response to the SCP program, the impact will likely be felt throughout the country. Second, protecting confidential business information (CBI) might also complicate disclosure because, although some ingredients may be redacted if they are considered trade secrets, DTSC is entitled to deny such claims under certain circumstances.

Companies seeking to comply with the new rules may benefit from reviewing and documenting their strategies to protect trade secrets. Certain documentation is required by DTSC to substantiate trade secret claims. Companies may want to consider seeking patent protection for new products, new formulations of existing products, or new manufacturing methods. There may also be additional limited opportunities to obtain patents for existing products under the Leahy-Smith America Invents Act.

EPA issues SNUR restricting imports of allegedly harmful category of chemicals used in carpets.

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The U.S. Environmental Protection Agency (EPA) announced on Monday that it will soon finalize a Significant New Use Rule (SNUR) that will allow the agency to restrict imports of potentially harmful long-chain perfluoralkyl carboxylates (LCPFACs) that could be used in carpets. The regulation will require companies to submit a notification 90 days in advance of manufacturing, importing, or processing LCPFACs that will be used as part of carpets or carpet treatment products. LCPFACs, a sub-category of perfluorinated chemical (PFC), include perfluorooctanoic acid (PFOA, also known as “C8”), other higher homologues, and their salts and precursors.

The final rule [PDF], which is authorized under the Toxic Substances Control Act (TSCA), was originally proposed in August 2012, following the U.S. chemical industry’s voluntary phase-out of these chemicals. In 2006, the eight major U.S. manufacturers of fluoropolymers and telomers committed to the EPA’s voluntary 2010/2015 PFOA Stewardship Program. The companies committed to achieving a 95% reduction in emissions and product content levels of PFOA and related substances by 2010, and elimination of such chemicals by 2015.

While the new final rule makes TSCA’s articles exemption inapplicable to imports of LCPFACs in carpets, other articles containing LCPFACs are not affected. EPA has previously issued three other SNURS addressing perfluoroalkyl sulfonates (PFAS), another sub-category of PFC. The new rule will add new chemicals to the existing PFAS SNUR and amend the SNUR to include ”processing” in the definition of “significant new use” for PFAS chemicals. EPA anticipates proposing another SNUR on additional PFCs in early 2014 as well as SNURs on other chemicals that will include imported products.

As part of its long term action plan regarding long-chain PFCs, EPA will also evaluate the effects of such chemicals on children and other sub-populations Although long-chain PFCs have not been found to cause significant adverse effects in the general human population, they have caused reproductive, developmental, and systemic toxic effects on laboratory animals, bioaccumulate in humans and wildlife, and are persistent in the environment. Therefore, EPA anticipates that continued exposure could result in adverse outcomes.

Further information on the new final rule and other actions EPA has taken on perfluorinated chemicals can be found at: http://www.epa.gov/oppt/existingchemicals/pubs/actionplans/pfcs.html#final.

House Subcommittee convenes hearing on role of TSCA preemption.

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On September 18, 2013, the House Energy and Commerce Subcommittee on Environment and the Economy held its third in a series of hearings on Toxic Substances Control Act (TSCA) issues. The hearing focused on TSCA’s section 6, which relates to unreasonable risk from existing chemical substances, and section 18, which relates to preemption.

Section 6 has become a focal point for determining TSCA’s effectiveness in regulating hazardous chemicals. During the hearing, members of the subcommittee discussed the concepts of “unreasonable risk” and “least burdensome” alternatives, which have been pivotal in how the EPA approaches restricting or banning chemical use. Other issues raised by members of the subcommittee include whether the section 6 standard should be changed to eliminate cost-benefit analysis when EPA regulates existing chemicals, and the effects of the Corrosion Proof Fittings decision on EPA’s willingness to use its section 6 authority. Members disagreed over which aspect of the decision was more problematic—the court’s interpretation of the “least burdensome” requirement or the deficiencies in EPA rulemakings.

Section 18, which addresses when TSCA can pre-empt state law, has become particularly contentious in discussions about the draft Chemical Safety Improvement Act (CSIA). In the absence of federal action, U.S. states have enacted many local laws regulating certain chemicals, and they are concerned that proposed changes to TSCA might prevent these state laws from working effectively. Specific issues raised regarding TSCA preemption include the need for automobile manufacturers to have one national program for chemical regulation and for states to have access to confidential business information (CBI) in order to protect human health and the environment.

The Subcommittee’s background memorandum and an archived webcast of the September 18, 2013 hearing are available online.

California’s Safer Consumer Products program launches.

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As October begins, California’s long-awaited Safer Consumer Products (SCP) program is finally launching as the first step in carrying out the state’s Green Chemistry Initiative. The regulations implementing the program go into effect today, October 1, 2013. The state’s Department of Toxic Substances Control (DTSC) will administer the SCP program, which identifies potentially harmful products and requires manufacturers to evaluate their safety and, if necessary, reformulate with safer alternatives or otherwise decrease risks. In addition, the SCP website has launched with some new features: an informational list of candidate chemicals and a Toxics Information Clearinghouse.

We have discussed the development of the SCP regulations over the past several months on this blog. Writing in ChemicalWatch, DTSC Director Debbie Raphael describes the regulations as taking a “preventive approach to keeping dangerous chemicals out of everyday products,” to help keep consumers safe, while providing industry with “a more predictable process for ensuring product safety” and offering a “competitive advantage for innovators who see an opportunity in the growing market for toxic-free or toxic-reduced products.” The SCP program contrasts with the piecemeal, chemical-by-chemical approach which state regulators have previously used, as well as the federal Toxic Substances Control Act (TSCA), which generally does not require safety testing for existing chemicals in consumer products.

The DTSC has made available an initial candidate chemicals informational list, which includes 164 substances. The agency describes this list as a “subset” of Candidate Chemicals that meet the two regulatory criteria (based on hazard traits and exposure potential) for developing the initial list of “Priority Products” which will be evaluated for safety. Those seeking revisions to the Candidate Chemicals list may submit a petition to the agency, which will post proposed revisions online for public review and comment before adopting regulations to enact them; however, the SCP regulations do not allow petitions “to remove an entire chemicals list” until October 2016. The DTSC is required to identify the first Priority Products by April 2014.

The Toxics Information Clearinghouse (TIC) is a decentralized, publicly-accessible system for information on certain chemicals. The TIC is initially using an open approach as a web-based portal to both public and private information sources on chemical hazard traits and environmental and toxicological endpoint data. The TIC was authorized separately from the SCP program by legislation passed in 2008, and represents another of the DTSC’s six policy recommendations for implementing the California Green Chemistry Initiative.

Walmart to phase out chemicals in cosmetics and household products.

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Walmart, the world’s largest retailer, announced on Thursday a new initiative to eliminate certain chemicals of concern in cosmetics and household products. The company will also expand ingredient disclosure and begin to label its own brand of cleaning products using U.S. Environmental Protection Agency (EPA) Design for Environment (DfE) guidelines.

Under its “Policy on Sustainable Chemistry in Consumables,” [PDF] Walmart will work with suppliers to phase out an initial list of ten “priority” substances. Walmart will not disclose the list of substances until it has further discussed the new policy with suppliers, said the company’s senior vice president for sustainability, Andrea Thomas. However, Thomas said the list was developed with input from suppliers, academics, nonprofits, and the EPA, and that the chemicals were chosen based on their use in products, potential impact, and the availability of viable alternatives. In order to ensure that any replacement chemicals comply with established “green chemistry” requirements, Walmart is requiring its suppliers to use a tool called GreenWERCS, which Walmart developed with the help of the Environmental Defense Fund (EDF) and other public health groups in 2009.

Beginning in 2014, Walmart will start monitoring progress of its new policy, and will also begin to identify some its private brand cleaning products for inclusion in the DfE labeling program. Beginning in 2015, the policy will require suppliers to provide public online ingredient disclosure for products in the categories covered. By 2018, any products still containing “priority” chemicals on Walmart’s list—which will be regularly reviewed to see if additional chemicals should be prioritized—will have to disclose these ingredients on package labels.

Consumer and environmental health advocates welcomed the initiative, which many said was the first chemical policy of this scope by a global retailer. Over the past several years, major Walmart suppliers like SC Johnson, Johnson and Johnson and Procter & Gamble have taken steps to phase out hazardous chemicals. However, as the world’s largest retailer, Walmart’s policy has the most significant potential to encourage large companies to use safer chemicals in their products.

US EPA unveils ChemView, substance information web portal.

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The U.S. Environmental Protection Agency (EPA) has launched ChemView, a web portal that will serve as a hub for chemical-specific regulatory information developed by EPA, as well as data collected under the Toxic Substances Control Act (TSCA).

The portal presents key health and safety data in a format that allows users to compare chemicals by their use as well as their health and environmental effects. ChemView will also allow searches by chemical name or Chemical Abstracts Service (CAS) number, use, hazard effect or regulatory action. Users can customize their views of the information on individual chemicals, or compare multiple chemicals by use, hazard effect or other criteria. Links to background documents are also provided for more detail.

At this time, ChemView contains:

  • test rule data for 90 chemicals;
  • hazard characterizations for 1,016 chemicals;
  • Design for the Environment (DfE) Alternatives Assessments for 48 chemicals; and
  • Significant New Use Rules (SNURs) for 349 chemicals that did not go through pre-market EPA review – the so-called existing chemicals.

It also links to other data, including:

  • health and safety studies submitted under TSCA section 8(d) for 140 chemicals;
  • substantial risk reports submitted under TSCA section 8(e) for 261 chemicals;
  • high production volume voluntary submissions for 1,169 chemicals;
  • Integrated Risk Information System (IRIS) assessments for 548 chemicals;
  • DfE list of safer chemical ingredients for 602 chemicals;
  • Chemical Data Reporting information for 7,221 chemicals; and
  • Toxics Release Inventory data for 611 chemicals.

EPA said that in the months ahead, it will be continuously adding additional chemicals, functionality and links. When fully developed, the portal will hold data on thousands of chemicals. The agency stated that increasing health and safety information, as well as identifying safer chemical ingredients, would help manufacturers and retailers better differentiate their products by using safer ingredients.

The agency has considered stakeholder input in the design of the site and is currently seeking comments from the public on its usability.

Biocidal Products Regulation Enters Into Force in EU.

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The Biocidal Products Regulation (BPR; Regulation (EU) 528/2012), which repeals and replaces the Biocidal Products Directive (BPD, 98/8/EC), entered into force on September 1, 2013. The BPR retains the legal framework established by the BPD, including the two-tier approval system for biocidal substances, but also introduces a number of new provisions, such as those relating to treated articles and food contact materials containing biocides.

In order to prepare applicants for the new changes, ECHA recently published priority guidance on applying information requirements for biocidal active substances (Annex II) and biocidal products (Annex III). The head of ECHA’s biocides unit, Hugues Kenigswald, says that there are a number of further documents in development that will complement it. However, applicants can begin submitting biocidal and technical equivalence dossiers immediately.

Unless they are included in ECHA’s list of approved active substance suppliers, all manufacturers or importers of active substances contained in biocidal products must submit a dossier before placing products on the market. Applicants can prepare a dossier by using the first versions of BPR submission tools, the Iuclid report generator software and the R4BP3 register for biocidal products. The ECHA has published guidance for using these tools on their website.

Some in the industry worry that the submission process, particularly the Iuclid software, will be too complex for companies. Yet overall, industry is expected to benefit from the Regulation, which will allow industry to request an EU-wide authorization for biocidal products, thereby removing national barriers to trade. This simplified and more efficient product authorization, along with data sharing and information requirements, is estimated to save industry € 2.7 billion over a period of 10 years. However, Mr. Kenigswald did express concern as to whether member states will have enough resources to provide the support needed to make the BPR an effective Regulation.