|January 3, 2013|
Bergeson & Campbell, P.C.'s (B&C) thoughts are below on what may be headed our way in 2013 from the U.S. Environmental Protection Agency's (EPA) Office of Chemical Safety and Pollution Prevention (OCSPP). Although the 2012 Presidential Election is over, environmental issues will continue to be used to make distinctions between the two parties (or between the House and Senate). Speculation is currently rife with what directions a re-elected Obama Administration might take: seek a middle-ground approach to maneuver successfully through a divided Congress, or, facing no further election campaigns, play aggressively to the environmentalist base of the coalition that was, in part, responsible for making a second term possible. Beyond the rhetoric one can imagine supporting either position, most day-to-day life at EPA, like most places, will be driven by the immediate demands of the discrete issues that come before program management on a daily basis.
This memo outlines broadly many of the issues we expect to come before OCSPP in the coming year. For more detail on any issue or to review events as they occur, we invite you to review our website at www.lawbc.com. We have posted many substantive memoranda and access to B&C webinars on a broad range of topics of interest to the chemical, pesticide, and chemical products communities. Some such memoranda and webinars are specifically noted below for your convenience. As always, we would be pleased to expand upon any topic noted below upon request.
Re-election of President Obama
It is not uncommon to see significant changes among cabinet members at the beginning of a President's second term. On December 27, 2012, EPA Administrator Jackson announced her resignation, which was widely rumored well before the announcement. The list of likely nominees is short, and the current Deputy Administrator, Bob Perciasepe, appears to be the leading candidate. If Perciasepe were to be nominated, it would portend a broad continuation of the policies and approaches of Administrator Jackson, at least initially. At the same time, since Perciasepe has been Deputy for the past four years, questions about policies and decisions made in the first term will be fair game at any nomination hearings in the Senate.
Another pending nomination would be for OCSPP Assistant Administrator. Jim Jones has been Acting Assistant Administrator since Steve Owens' resignation. Jones was previously the Principal Deputy Assistant Administrator for the Office of Air and Radiation, and was designated to serve as the new OCSPP Acting Assistant Administrator, beginning December 1, 2011. Jones is a very familiar and comforting presence in OCSPP, as he has been with EPA for over two decades, including serving four years as the Office of Pesticide Programs (OPP) Office Director (2003-2007) and four years as OCSPP Principal Deputy Assistant Administrator (2007-2011). His tenure also includes six months as OCSPP Acting Assistant Administrator in 2009 after the 2008 election.
Jones is expected to be re-nominated and endure the confirmation process. Any hearings and courtesy visits along the way will present an opportunity for members of the Senate to question or advocate positions relevant to the OCSPP domain.
With any re-election, it is reasonable to presume that policies and initiatives of the first term will continue for the second term. To the extent that current incumbents such as Perciasepe and Jones will remain in office, expectations for "more of the same" are reinforced. At the same time, since much of the last two years of the first term was spent with an eye towards the 2012 campaign (especially with the Republicans taking control of the House in 2010), the next four years may see more than a renewed emphasis on past initiatives. What is less clear is how "bold" any new initiatives may be, whether as a response to frustrations with the inability to achieve climate change legislation or a more simple decision that without a need for another campaign, more innovative environmental initiatives can at least be attempted. Some indications of any trend lines may also become evident as part of the confirmation hearings for nominees.
Interactions with OMB/OIRA
The President's Office of Management and Budget (OMB) provides an important gatekeeper role through its Office of Information and Regulatory Affairs (OIRA). OIRA routinely reviews pending EPA regulations and significant policy initiatives. For many environmental advocates, OIRA is seen as a hindrance to EPA initiatives or attempts to pursue more aggressive environmental policies since the OIRA function is both to coordinate rules across agencies and to comply with various Executive Orders mandating some examination of costs and benefits of rules and more generally to examine the reasonableness of EPA activities. In the first term, the head of OIRA was Cass Sunstein, who was seen as a strong advocate of cost-benefit justification of pending rules, and perhaps more importantly, is a personal friend of the President. During his tenure, many environmental advocates lamented that the OIRA office was delaying or diluting many environmental policies and rules, even considering partisan or electoral considerations.
As a result, there are numerous EPA policies and initiatives still pending at OIRA, and it is not certain when or if all of these items might be approved for release by OMB. For OCSPP, there are some notable items in this queue. One is the proposal from the pesticides program that all nanomaterial ingredients in a pesticide formulation be identified to EPA as part of an "adverse effects" notice under Section 6(a)(2) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). For the toxics program, the list is longer and includes the "chemicals of concern" list under Toxic Substances Control Act (TSCA) Section 5(b)(4). The creation of the list was announced in December 2009 and submitted to OMB in May 2010 but two and a half years later, the rule is yet to be released. Other Office of Pollution Prevention and Toxics (OPPT) actions that remain overlong at OMB include, among others, the nanoscale materials Significant New Use Rule (SNUR) and Section 8(d) reporting rule, pending since November 2010, and the Premanufacture Notification (PMN) amendments concerning confidential business information (CBI) claims on chemical identity, pending since December 2011. As a result, another important nomination for the second term will be the President's choice to lead OIRA. That person's outlook on regulatory analysis, and their relationship to the President, may be important drivers of how aggressive one can expect EPA to be during the next four years.
Along with the general budget debate about the "fiscal cliff" and any partisan maneuvering about taxes and spending is the cold reality that federal discretionary spending is going to decline. The outstanding question is by how much, not whether, resources for programs such as EPA's will go down in both absolute and relative terms. Most of the cuts in the past few years have been met with a decline in program grant and contract dollars, though there have been personnel freezes and reduced hiring backfilling retirements and attrition.
Even if the President is successful in the current clash with the Republican leadership of Congress, EPA resources are not expected to be robust. That will translate to further reductions in the operating programs such as OCSPP, and eventually (if not already) will translate into personnel, skills-mix, and salary impacts. This will hinder the ability of both OCSPP programs to review submissions timely and meet other program objectives.
If the budget debate evolves to include consideration of cuts to the pension benefit programs for federal employees, especially for those in the "old" defined-benefit plan (i.e., those hired before 1983), one might expect an exodus of older, more senior employees across government. This could have a disparate impact on EPA personnel, since given the demographics of EPA's workforce, many of the current mid-level and senior level managers were hired when they could be covered under the "old" system. EPA grew significantly in the 1970s and 1980s -- and many of those staff could be most impacted by any proposed changes to the pension system. Talk of any cuts that might apply to those more senior employees might drive more to retire sooner than they otherwise planned to avoid pending changes.
For the pesticide program, reauthorization of the Pesticide Registration Improvement Act (PRIA) fees legislation (discussed below) more likely will represent some protection from more drastic program cuts. At the same time, the pesticide program will be subject to Agency-wide policies such as hiring freezes, and in addition, current OCSPP leadership is directing some additional resources towards the toxics program, so OPP might still suffer as it continues to contribute to resources made available to OPPT.
Divided Government Continues
While President Obama was re-elected, party control in the House and Senate remained the same. This has led many observers to describe the outcome as a "status quo election." This means divided government remains a factor in predicting whether any legislative actions will be likely over the next year, and partisan bickering will continue to characterize budget and general policy debates. Also, emphasis on budget and spending issues will likely dominate most of the time and energy of the Congress for most of the year, which will reduce the amount of effort spent on environmental matters. There will be some activity, appropriation and oversight hearings, among others, and Congress will always be sensitive to an issue of the day that may arise (e.g., a massive oil spill, contamination incidents, etc.). Action on a Farm Bill during 2013 will be necessary, which will be a priority for the Agriculture Committees in both the House and Senate.
The Republican majority in the House will continue its oversight scrutiny of EPA program activities that, while especially focused on air pollution and climate change-related issues, can be expected to continue criticism of EPA's science assessment methods, some individual chemical assessments, and media program operations. In the House, the major OCSPP issue of interest will be the implementation of the Endangered Species Act (ESA) and the possible impact on pesticide use, along with any impacts of the current requirements for Clean Water Act (CWA) permits for certain pesticide applications (these are discussed more below).
Regarding ESA, two subjects likely to be the subject of hearings are the National Academy of Sciences' (NAS) report on ESA assessment, expected to issue in the first half of the year, and ongoing litigation that may at any time result in a sufficiently significant decision to warrant some Congressional attention. In addition, it will be likely that the House consider and pass legislation to address the CWA permit requirements, as they did with H.R. 872 in the 112th Congress. Lastly, if there is substantive movement on TSCA legislation in the Senate, the House Committee on Energy and Commerce, the Committee of jurisdiction, may begin to engage the issue more seriously.
The Democratic majority in the Senate will continue to press for expansion of various environmental programs generally, and can be expected to devote some attention to climate change issues. As in the last Congress, the Senate Democratic majority will be looked to for blocking or ameliorating some of the likely House Republican proposals, e.g., budget cuts or prohibitions blocking pending regulations. For OCSPP, in addition to any relevant House actions, the most visible efforts in the Senate will be an attempt to amend TSCA, an effort underway since the first year of the Obama Administration.
The Prospects for TSCA Legislation
The future prospects for any new TSCA legislation continue to be dim, even with the Democrats retaining control of the Senate. In the 112th Congress, Senator Frank R. Lautenberg (D-NJ), Chair of the Environment and Public Works Subcommittee on Superfund, Toxics, and Environmental Health, introduced the Safe Chemicals Act of 2011 (S. 847), which was intended to modernize TSCA to require chemical companies to demonstrate the safety of industrial chemicals and EPA to evaluate safety based on the best available science. The bill is co-sponsored by Senators Amy Klobuchar (D-MN), Charles Schumer (D-NY), and Barbara Boxer (D-CA). Lautenberg previously introduced TSCA reform legislation in the 111th Congress, the Safe Chemicals Act of 2010 (S. 3209).
The Senate Environment and Public Works (EPW) Committee held hearings on the legislation during the last Congress, and generally the discussion among members in 2011 spoke of attempts to find consensus and convening meetings where environmental advocates and industry representatives could attempt to formulate a single bill. These discussions are, broadly speaking, continuations of the hopeful rhetoric since 2009. Even through the end of 2011, Committee members continued to applaud and exhort the attempt at continued discussion and negotiation between the non-governmental organizations (NGO) and the chemical industry. At a November 17, 2011 hearing, however, some Democratic Senators, especially Senator Cardin (D-MD), were especially critical of the American Chemistry Council and the lack of a concrete alternative proposal developed and supported by the chemical industry. At that time, Senator Lautenberg indicated that he would bring his legislation up for a Committee vote "in the near future" and would hope that consensus can be reached -- with the implication that he will attempt to report his bill even if the industry has not agreed with the provisions in any pending legislation.
Although discussions between the interested groups continued through 2012, and some changes to the bill were made by Senator Lautenberg in light of these conversations, no consensus was reached on numerous elements of S. 847. Nonetheless, as Senator Lautenberg threatened earlier, he moved to report the legislation through the EPW Committee, which was done on a party line vote, and the legislation was reported out of Committee on July 25, 2012.
What this portends for the next session is a fraying of the attempt to reach a consensus. Before the end of the year, it was learned that Senator Vitter invited chemical company representatives and others to suggest an alternative to the reported legislation offered by Senator Lautenberg. What this represents is an official break in even the appearance of trying to reach consensus, at least for now. Once any alternative legislation is proposed, efforts can be made to assess whether competing proposals can be aligned to produce an agreed upon package.
The reported legislation offered some significant changes to S. 847 as introduced. Many important issues remain unresolved, however. Perhaps most important is the issue of the appropriate risk standard, specifically whether the standard for chemical risk evaluation in TSCA should be "reasonable certainty of no harm." This language appears in the applicable standard for pesticide exposures in food, as found in the 1996 Food Quality Protection Act (FQPA). Some argue that such a standard for food safety is inappropriate for chemical exposures, or otherwise represents a "zero risk" standard which would have uncertain and likely large regulatory costs for uncertain improvements in "real" risk reduction. Even if TSCA receives significant Congressional attention in 2013, this issue, among others, may prove to be an insurmountable hurdle towards enactment of any legislation.
TSCA Implementation and EPA's Enhanced Chemical Management Program
EPA's shift to a "Work Plan chemicals" approach started to come into focus over 2012. Whereas OPPT had emphasized Action Plans for several years after terminating the Chemical Assessment and Management Program (ChAMP) in 2009, in September 2011, EPA announced a new Work Plan approach for identifying priority chemicals for review and assessment under TSCA and set about taking stakeholder comments and otherwise developing its thinking. The results of this effort were announced in March 2012 when OPPT released a Work Plan of 83 chemicals for further review and identified seven chemicals for risk assessment in 2012. This was followed by a June announcement of an additional 18 chemicals which EPA has scheduled for assessment during 2013 and 2014. Specifics and commentary on these developments can be found in B&C memoranda (EPA Announces TSCA Work Plan Chemicals; EPA Announces Work Plan Chemicals for Assessment During 2013 and 2014; Unanswered Questions on Timing for Data on EPA's 2013 and 2014 Work Plan Chemicals).
In August, EPA released and took comment on the Peer Review Plans for the 2012 Work Plan chemicals. The Peer Review Plans indicated that EPA has characterized the risk assessments as "influential," which indicates that they are intended to be used in a regulatory proceeding although, until an example is available for review, it is not clear how detailed the assessments may be. Given what could be involved in completing "influential" risk assessments, perhaps it is not surprising that EPA was not able to complete the seven planned for 2012 although reportedly the program remains optimistic.
Regardless, OPPT's ability to clear the assessments through interagency review and release them to the public, thereby starting the peer review process, will be telling regarding its capability to deliver on the Work Plan strategy. Another aspect to watch in this regard will be OPPT's success in moving the several "war horse" chemicals (including methylene chloride and tricholorethylene) to resolution in its Work Plan assessments in 2013. While these have the benefit of extant risk assessments, they are not without controversy.
A number of important OPPT actions remain in limbo at OMB. How these play through, and especially IF they issue, will have a lot to say about OPPT's ability to move on regulatory actions in 2013, if not for the balance of the Obama Administration.
Relatedly, a number of proposed rules are undergoing completion in OPPT and several of these are significant in the policy implications which they would signal and, accordingly, are likely to get close scrutiny in OMB. This category includes:
- The combined SNUR and test rule on three polybrominated diphenyl ethers (PBDE). The action on deca-BDE is particularly notable given that the substance, while being phased out of manufacture by the major U.S. producers at the end of 2013, seemingly will continue to be commercially available and in use after that date. How EPA will sort through the comments received and resolve the many difficult issues at play in the SNUR and associated test rule will be an important area to watch in 2013. The difficult issues include, for the SNUR, how EPA will define or describe ongoing uses, the coverage of imported articles containing deca-BDE, and how EPA will handle processing activities, including recycling, while for the test rule, key questions concern the relationship between the SNUR and the test rule, including timing aspects and scope of the required testing.
- The combined SNUR and test rule on the 4th group of High Production Volume (HPV) Challenge chemicals which remain unsponsored. While the HPV test rule approach is familiar and uncontroversial, EPA's proposal to combine this with a SNUR on any of the chemicals that are not currently "HPV" such that they could be captured by the SNUR in the future presents new and controversial policy issues.
Other OPPT actions in the queue for completion seem likely to move forward (e.g., SNURs on di-n-pentyl phthalate, certain chlorinated paraffins, certain perfluoroalkyl sulfonate (PFAS) chemicals) although several others may be delayed because of issues presented by the inclusion of imported articles and processing activities within their scope (e.g., SNURs on benzidine/congener dyes; hexabromocyclododecane (HBCD); and long-chain perfluoroalkyl carboxylate (LCPFAC) chemicals used in carpet (note that this rule does not extend to processing of articles)). More detail on these actions can be found online and online). EPA's ability to get these rules through OMB in relatively intact form will, as with the other "stuck" actions noted above, be telling regarding its short- and longer-term prospects on the regulatory policy front.
Reporting under the Chemical Data Reporting (CDR) Rule occurred during 2012 and, reportedly due to the requirements for electronic reporting, EPA may be using the data now (e.g., for its Work Plan risk assessments) and should release non-confidential information on the reporting in the coming months. The CDR Rule was intended to enable EPA to collect and publish information on the manufacturing, processing, and use of commercial chemical substances on the TSCA Chemical Substance Inventory (TSCA Inventory). This includes current information on chemical substance production volumes, manufacturing sites, and how the chemicals are used.
Other items of note from 2012 that may carry implications for 2013 include:
- A large TSCA civil penalty for violations of PMN requirements for several short-chain chlorinated paraffins that came out of a settlement with Dover Chemical Corporation (online). The enforcement action was important in the way that it signaled EPA's intention to take action against broad Inventory listings of Class 2 chemicals that EPA now believes are not sufficiently specific for TSCA Section 5 purposes. Given that there are potentially thousands of such broad listings currently on the TSCA Inventory that EPA could theoretically pursue, this will be an area to watch closely in 2013.
- In August, just before the end of the reporting period for the CDR Rule, EPA issued a "fact sheet" clarifying existing guidance on "articles" under TSCA and relating to the applicability of EPA's articles exclusion policy for CDR purposes. In the fact sheet, EPA added an entirely new concept to the definition of "article," that being "phase change," and the implication that an end use which involves a phase change means that such an item would not qualify as a manufactured article. The specific examples cited in the fact sheet included soldering wire, welding rods, and metal shapes that are melted and recast. This new interpretation seems to be at odds with existing, long-standing EPA guidance on the matter including statements in codified text or informal guidance that the following are articles despite a "phase change" during end use: candles, matches, safety flares, and cigarette lighters.
- EPA's decision to withdraw the immediate direct final reporting rule under Section 8(d) for health and safety studies on cadmium and cadmium compounds. The rule would have required manufactures and importers of cadmium and cadmium compounds, including as part of an article, that have been or are reasonably likely to be incorporated into consumer products, to report health and safety studies to EPA. The rule was notable for several reasons, including its broad scope of coverage, the broad definition of "health and safety studies," and EPA's decision to rely on its Section 8(d) model rule authority rather than use notice and comment procedures despite the significant issues raised. While EPA is to be commended for its clear and prompt decision to withdraw the rule, EPA also signaled its intent to consider its next steps regarding obtaining such information.
OPPT is thus continuing its efforts to use existing TSCA authorities to assess and regulate chemicals despite the dim prospects for TSCA reform legislation. At the same time, it is evident from this brief review of 2012 developments and 2013 prospects that OPPT has many actions bottled up at OMB or undergoing completion within the Office, while at the same time it is continuing to load its plate with new actions. While OPPT is to be commended for its commitment to moving forward, one has to wonder when the tensions that are associated with the many actions caught at OMB, how OPPT can meet the many potentially difficult commitments it has made (such as are associated with new and difficult policy initiatives regarding combined SNURs plus test rules and coverage of imported articles and processing activities within SNURs, its Work Plan approach, which includes preparation of "influential" risks assessments, etc.), and the likelihood of declining resources will start to sap the energy and morale of OPPT's staff and managers.
While the first registration deadline for "phase-in" substances (i.e., high volume chemicals (>1,000 tons) and those with certain classifications) occurred at the end of November 2010, the European Chemicals Agency (ECHA) is urging companies to begin preparing for the May 2013 registration deadline, which is fast approaching. Companies manufacturing or importing chemicals in quantities at or above 100 tonnes per year are required to register these substances with ECHA by May 31, 2013. ECHA has organized the "REACH 2013 -- Act Now!" campaign to promote the best practice in fulfilling the obligations and also to publicize the various services and tools that can help companies comply with the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) registration requirements. More information is available on the ECHA website.
The Forum for Exchange of Information on Enforcement's third harmonized enforcement project will once more focus on registration obligations under the REACH program. The scope of the project will cover the verification of the registrations by Only Representatives, European Union (EU)-based companies or individuals appointed to fulfill the registration obligations that would otherwise fall on the EU importer of record, and the cooperation with custom authorities controlling imports of substances. Separately from this project, some Member States will pilot the verification of registrations for intermediates.
In 2012, the first Community Rolling Action Plan (CoRAP) was adopted for the years 2012-2014. As required annually, an update to the CoRAP list will be proposed and circulated to the Member State competent authorities and ECHA Member State Committee. The first CoRAP lists 90 substances for review under the REACH evaluation process. The substances are divided for evaluation during 2012, 2013, and 2014. On October 23, 2012, ECHA announced the draft CoRAP update for 2013-2015. The CoRAP includes substances that ECHA suspects could pose a risk to human health or the environment. The draft CoRAP includes 116 substances that are proposed for Member State review with 63 substances newly allocated to the Member States, and 53 substances already included in the current CoRAP. ECHA tentatively divided the substances for evaluation in years 2013, 2014, and 2015, and the Member State that intends to conduct the substance evaluation. For 2013, a total of 48 substances are scheduled for evaluation by various Member States. According to ECHA, "[i]n many cases the initial concerns are related to PBT-properties, suspected endocrine disruption, or carcinogenic, mutagenic and reprotoxic properties in combination with wide dispersive use or consumer uses. In general, the uses of these substances cover various areas and are not limited to particular industrial, professional or consumer uses." ECHA intends to adopt the final CoRAP update by the end of March 2013. ECHA states that, by publishing the draft CoRAP now, it "wishes to inform the stakeholders of the progress made and to facilitate early communication between the involved registrants and the relevant evaluating Member State." More information is available online.
Regulation of Nanoscale Materials
Previously, OPPT expressed interest in issuing a TSCA Section 4 test rule to require chemical manufacturers of certain multiwall carbon nanotubes, certain clays (e.g., kaolin (including halloysite) and bentonite (including montmorillonite)), alumina, and spray-applied nanomaterials to conduct testing for health effects, ecological effects, and environmental fate, as well as provide material characterization data. EPA also expressed interest in developing a SNUR for nanoscale materials under TSCA Section 5(a)(2) and developing a proposal to require reporting and recordkeeping under TSCA Section 8(a), which would require that persons who manufacture these nanoscale materials notify EPA of certain information, including production volume, methods of manufacture and processing, exposure and release information, and available health and safety data. 2012 saw none of these initiatives, in part due to election year politics and in part due to a perceived lack of support for them by the industrial chemical community.
OPPT's interest in obtaining data on existing nanoscale materials has not abated and leadership can be expected to identify new opportunities to share these data with EPA. Industry can do its part by working with OPPT to identify acceptable means by which information can be shared.
Although EPA proposed in June 2011 several possible approaches for obtaining certain additional information on the composition of nanoscale pesticide products, EPA still has not chosen a final approach, nor is it clear EPA will choose one any time soon. In its proposal, EPA focused particularly on information about what nanoscale materials are present in registered pesticide products, and defined "nanoscale material" as "an active or inert ingredient and any component parts thereof intentionally produced to have at least one dimension that measures between approximately 1 and 100 nanometers (nm)." Under one approach, EPA would use FIFRA Section 6(a)(2) to obtain information regarding what nanoscale material is present in a registered pesticide product and its potential effects on humans or the environment. Under an alternative approach, EPA would obtain such information using a data call-in (DCI) under FIFRA Section 3(c)(2)(B).
According to EPA's June 17, 2011, Federal Register notice, EPA believes FIFRA Section 6(a)(2) "is the most efficient and expedient administrative approach to obtaining information about nanoscale materials in pesticides and EPA would prefer to use this approach." The notice also proposed a "new approach" that EPA will use to determine on a case-by-case basis whether a nanoscale active or inert ingredient is a "new" active or inert ingredient for purposes of FIFRA and PRIA, even when an identical, non-nanoscale form of the nanoscale ingredient is already registered. More information is available in our June 10, 2011, memorandum.
While OPP did not address the broad category of nanopesticides, it did announce on July 6, 2012, the establishment of a registration review docket for nanosilver. According to EPA's preliminary work plan, EPA has information that there are silver-based pesticide products that were registered by EPA without the registrant disclosing to EPA the presence or characteristics of the nanosilver in their products. EPA sent a letter in August 2009 to each registrant with silver-based products requesting a statement as to whether their products contained any amount of silver in any form having a dimension that measures between 1 and approximately 100 nanometers. Four registrants responded that their products, which were registered using data for conventional silver, contain nanosilver. In the preliminary work plan, EPA states it is identifying several other products, registered using data for silver chloride, as potentially containing nanosilver. The registration review for nanosilver includes these products, as well as the two HeiQ nanosilver products conditionally registered in December 2011 (HeiQ AGS-20 and HeiQ AGS-20 U).
Importantly, EPA notes that, on February 29, 2012, it sent DCIs to registrants with products included in the silver and compounds registration review case requesting information on particle size. EPA is currently reviewing responses to the DCIs and "may determine that some of the products covered by that case and DCI should also be included in this Nanosilver Registration Review case." If EPA determines that any of these silver and compounds products needs to be included in the nanosilver registration review case, it will include a statement in the docket, and reflect that determination in the final work plan for nanosilver.
Regarding the HeiQ products that EPA conditionally registered in December 2011, on January 26, 2012, the Natural Resources Defense Council (NRDC) filed a lawsuit in the U.S. Court of Appeals for the Ninth Circuit (California) challenging the conditional registration of HeiQ AGS-20. In its April 16, 2012, brief, NRDC spells out in great detail exactly what it believes EPA did wrong in approving the FIFRA registration application. NRDC argues that EPA's decision that HeiQ AGS-20 will not cause unreasonable adverse effects on human health was not supported by "substantial evidence," the legal standard that applies under FIFRA. According to NRDC, in calculating the risks to human health, "EPA failed to evaluate the risks to infants, even though they have an especially high likelihood of exposure to AGS-20 because they are more likely than other age groups to chew on textiles coated with it." NRDC states that had EPA properly taken infants into account, application of its own risk criteria "would have shown that AGS-20 poses unacceptable risks, and thus may have 'unreasonable adverse effects.'" NRDC further argues that EPA failed to consider the risk of aggregate exposures from other nanosilver on the market. Had it done so, according to NRDC, EPA's analysis would have shown that registering AGS-20 creates unacceptable risks.
On June 14, 2012, EPA filed its answering brief, arguing that NRDC lacks standing to challenge EPA's decision because NRDC has not demonstrated that it or its members face an injury that is "actual or imminent," rather than "conjectural or hypothetical." EPA states that, on the merits, its determination that HeiQ AGS-20 will not cause unreasonable adverse effects to consumers "is reasonable and supported by substantial evidence in the record." According to EPA, it "conservatively estimated potential consumer exposure to nanosilver from HeiQ AGS-20, assuming, among other things, that 35% of the silver contained in an AGS-20 treated textile that is chewed or worn could be ingested or absorbed as nanosilver, and that a three-year-old child could be exposed to a new textile daily for six months." Despite data gaps concerning HeiQ AGS-20, EPA determined it had sufficient evidence to conclude "that even a three-year-old chewing and wearing a new AGS-20 treated textile every day for six months could potentially be exposed to no more than 1/1000th of the quantity of nanosilver which did not cause any adverse health effects in relevant scientific studies." Given the low risk, EPA states that it reasonably concluded that HeiQ AGS-20 will not cause unreasonable adverse effects to consumers, and its risk assessment "warrants substantial deference from the Court."
On June 28, 2012, HeiQ Materials AG and four companies separately filed briefs as an intervenor and amici curiae, respectively, supporting EPA's registration action. The briefs largely reassert many of the arguments included in EPA's brief, and are very well crafted and persuasive. Oral argument is currently scheduled for January 16, 2013. More information regarding the case is available in our June 21, 2012, memorandum.
California Safer Consumer Products Regulations
Developments in California are also relevant. The California Depart of Toxic Substances Control (DTSC) continues to work on developing Safer Consumer Products Regulations (SCPR). DTSC released on October 31, 2011, an "informal draft" SCPR. In 2012, at the request of California Governor Jerry Brown (D), DTSC withdrew the informal draft regulations, as well as a revised formal draft scheduled for release in April 2012. Brown reportedly had concerns regarding the scope of the regulations, the treatment of CBI, and duplication of existing federal and state regulations. Brown asked DTSC to issue new informal draft regulations for a limited one-week comment period. DTSC released a revised informal draft SCPR on May 18, 2012, and, on July 27, 2012, a proposed SCPR. At this time, DTSC intends to revise its July 27, 2012, proposed SCPR and circulate revisions for at least a 30-day comment period, and adopt final regulations by late spring 2013. Whether DTSC will succeed remains to be seen. More information regarding DTSC's numerous versions of the SCPR is available online. Our July 30, 2012, memorandum on the July 27, 2012, SCPR is available online.
Of critical importance to most companies doing business in California is DTSC's directive to establish, within 30 days after the effective date of the regulations, an initial Chemicals of Concern (COC) List. Under Section 69502.2(a), the COC List would include those substances that exhibit a hazard trait or an environmental or toxicological endpoint and meet one or both of the following criteria:
- The chemical is identified as exhibiting a hazard trait or an environmental or toxicological endpoint on one or more of 14 different lists already selected by other state, federal, and international agencies and organizations; or
- The chemical is identified by one or more of eight lists of certain types of chemicals.
DTSC estimated in October 2011 that the list would include approximately 3,000 COCs. DTSC now plans to release a COC List with approximately 1,200 COCs, noting that the difference is based on the removal of chemicals covered by other regulations (e.g., pesticides) and other chemicals determined not to be relevant to consumer products. DTSC notes, however, that there are approximately 500 additional chemicals currently used only in pesticides and drugs that are currently excluded but could be added to the COC List in the future if they are used in products that are not excluded.
The July 27, 2012, SCPR eliminates an exemption for products regulated by other laws that provide protections with respect to the same public health and environmental adverse impacts and exposure pathways that are addressed by these regulations. Instead, DTSC will "consider" this factor during the product prioritization process. In addition, older versions of the regulations had contemplated an exemption for nanomaterials, however, that exemption (of nanomaterials generally) is not mentioned in the July 27, 2012, SCPR. To the extent that any nanomaterials have not yet been identified by regulatory agencies on the lists from which DTSC will derive the COC List, the nanomaterials will not, at least initially, be subject to these requirements.
DTSC will evaluate and prioritize products that contain COCs to develop a list of Priority Products (PP) for which alternative analyses (AA) must be conducted. To determine products of high priority, DTSC will evaluate the potential adverse health and environmental impacts posed by the COCs in each product. DTSC removed as a factor the existence, if any, of a known "readily available safer alternative, that is functionally acceptable and technologically and economically viable." The proposed SCPR no longer distinguishes between "assembled" and "formulated" products. DTSC defines "consumer product" to include, in part, "component" and "homogeneous material" to provide it "flexibility to name any identifiable constituent or part or a homogeneous layer of material in the finished product or that makes up the finished product as a Priority Product."
DTSC previously stated that it expected its initial list of PPs would include only two to five products; this is now explicitly stated in the July 27, 2012, SCPR. In addition, prior to January 1, 2016, DTSC may list a product as a PP only if the product is being listed on the basis of one or more COCs in the product that meet both of the criteria noted above, even though the July 27, 2012, SCPR states that either criterion can be met.
DTSC made some revisions in the July 27, 2012, SCPR in response to concerns identified in earlier versions. Certain controversial lists upon which the COC List could be derived have been eliminated, the prior de minimis exemption has been revised so that there is no default concentration, the time for responsible entities to remedy non-compliance notices regarding an AA or regulatory response is extended from 60 to 90 days, and inventory recalls have been eliminated as a regulatory response. The procedure that runs from developing a COC List to determining appropriate regulatory responses remains complicated, however, with a large variety of factors to be applied and evaluated at every turn.
A new element of the July 27, 2012, SCPR is the requirement that DTSC develop, no later than January 1, 2014, a Priority Product Work Plan that "identifies and describes the product categories that the Department will evaluate to identify products to be added to the Priority Products list during the next three (3) years." The work plan "must include a general explanation of the decision to select the identified product categories for evaluation during the life of the work plan." Subsequent work plans will be issued no later than one year before the three-year expiration date of the current work plan.
Although recognizing that the SCPR will have an economic impact on businesses, DTSC states that generally, it "does not expect the regulations to result in cost increases, given the wide variety of comparable safer products readily available at competitive prices." While it is true that many companies already conduct these types of assessments as part of their product stewardship efforts, it remains to be seen whether compliance with these particular regulations will increase costs. The cost to the State of California to administer the program also remains unclear. Companies that conduct thorough and useful assessments of this kind may find it difficult to fit their models into that now required by DTSC. Fortunately, DTSC will only subject a small number of PPs to these regulations initially, a fact that may provide interested parties with an opportunity to see how these regulations will be implemented, what AA Reports will look like, and what changes or refinements may be needed.
2013 will likely see mostly a continuation of issues that have dominated EPA's pesticide program during the past few years. The re-election of President Obama is not expected to bring fundamental changes to the pesticide program, although some long simmering initiatives may be more likely to emerge after an election year -- including issuance of a cancellation notice for certain rodenticide products, and issuance of revisions to the worker protection standards program. Otherwise, the most notable issues will be ones that have garnered much attention for the past two years or longer: implementation and litigation surrounding the ESA, and the requirement for CWA permits for certain pesticide applications. Lastly the budget situation of the federal government could have adverse impacts as program cuts and hiring restrictions may start to have disruptive impacts on daily operations across EPA.
One notable success of 2012 was the successful reauthorization of PRIA, now known as "PRIA 3." PRIA 3 will allow EPA to continue to collect registration activity fees. With support from the pesticide registrants, renewing PRIA was not expected to be controversial. In 2012, however, any legislative action encountered difficulties as anything to do with government revenues was controversial and made more difficult by an intense distrust of EPA among many House members. If PRIA had not been renewed for whatever reasons, it would have caused a severe and adverse impact on the ability of the pesticide program to make timely decisions on pending registration applications. Fortunately, however, on the last days of Fiscal Year 2012, Congress did reauthorize the legislation and President Obama signed the bill into law in time to avoid any lapse in authority.
The most contentious and difficult issue facing EPA's pesticide program remains implementation of ESA. There remains a context of continued and repeated litigation by various parties over EPA compliance with the ESA in its pesticide approvals. Litigation continues by environmental advocates and pesticide companies and users over ESA requirements and how to resolve disputes between EPA and the Services (the Fish and Wildlife Service at the Department of Interior and the National Marine Fisheries Service of the Commerce Department) over appropriate measures to protect species.
In particular, a "mega" suit was filed in January 2011 by the Center for Biological Diversity alleging that EPA is out of ESA compliance on more than 300 pesticides on 214 endangered species (Center for Biological Diversity v. EPA, N.D. Cal., No. CV-11-0293, 1/20/11). This "mega" suit is national in scope and could affect agricultural producers across virtually all crops in all major growing regions. If successful, one result, at a minimum, would be to consume significant regulatory resources in OPP currently devoted to other programmatic activities. During 2012, there were repeated settlement discussions between the parties of the "mega" suit, but by the end of 2012, the parties came to no conclusion. Instead, in November 2012, EPA filed a motion to dismiss the case on various grounds. A decision on the motion to dismiss could be one of the more important milestones in the case determined during 2013.
Also, the first half of 2013 is expected to see a report by the Academy of Sciences to review scientific and technical issues behind the methodologies used to assess pesticides as part of the ESA review. This report was requested by EPA and the other affected agencies in March 2011. The EPA position generally has been that their registration support analysis is more reliable than much of the criticism or otherwise vague assessments they have received from the Services (the Services may have a different opinion). A major goal of the NAS study is to better define, for all parties, what a reasonable assessment (or the components of assessments) should be, make recommendations which could lead to a more predictable pathway about how to conduct an ESA assessment, and offer comments on the current approach of EPA and the Services (including, for example, EPA's use of modeling as part of a registration decision, geospatial information, and the possible cumulative effects of pesticides).
The report, once released, could have significant recommendations or conclusions which could affect the current debate over the quality and content of ESA assessments issued by the Services and how EPA and the Services can or should coordinate their work. Whenever the report is released, and almost regardless of its content, it is likely that Congress will hold hearings on the report, its conclusions, and its implications.
On October 31, 2011, EPA issued a National Pollutant Discharge Elimination System (NPDES) general permit to comply with what began as a January 2009 court decision that vacated an earlier EPA rule which had exempted pesticide users from needing a permit to apply pesticides in or near water bodies. This general permit covers only those states where EPA is the permitting authority, but the larger issue is the now effective requirement for water permits for many pesticide applications. To comply with the court decision, throughout 2012 states not covered by the general federal permit had to also implement a CWA permit program for certain pesticide applications. This has been and remains controversial, with concerns about the ability of pesticide users to comply either in terms of getting permits in time or otherwise following any subsequent requirements, and now facing citizen suit provisions available under CWA (unlike any similar provisions in FIFRA).
EPA provided compliance assistance for the first 120 days, through the end of February 2012. Generally, initial implementation of the requirements has not seen significant disruptions in most users' ability to use pesticide products. There have been reports, however, of some pesticide applicators (e.g., commercial applicators) that simply declined to offer certain pesticide services to avoid the possibility of needing a CWA permit or otherwise avoid certain liabilities. By the end of 2012, there were reports of disease incidence (e.g., mosquito-borne West Nile virus) that ordinarily might have been reduced through mosquito abatement programs that were not available in some jurisdictions due to the CWA requirements (costs may have increased, certain product vendors may have curtailed their services, and related factors).
Fears of potential negative impacts, such as increased costs or reduced availability of products, led to Congressional efforts to enact legislation that would generally remove the requirement for a water permit for FIFRA-compliant applications. The House approved such legislation (H.R. 872), and in the Senate, the bill never saw floor action. The legislation was reported by the Senate Agriculture Committee, but the full Senate never considered the legislation. In particular, Senators Boxer (D-CA) and Cardin (D-MD) reportedly blocked consideration of the bill, and efforts to address any concerns of those members were unsuccessful.
Efforts to reintroduce similar legislation in 2013 can be expected. This will be more likely if, as expected, some critics of pesticide use file citizen suits concerning compliance with the required CWA permits. Citizen suits are allowed under CWA, and, as mentioned, FIFRA contains no such provision.
One new issue begun in 2011 that will see significant activity in 2013 is EPA's proposal to initiate cancellation proceedings against certain rodenticide products, including consumer products containing the second generation rodenticides brodifacoum and difethialone. In May 2008, EPA announced its intention to restrict certain rodenticide active ingredients due to concerns for non-target wildlife and risks to children, and stated that, as of June 2011, it would consider those products misbranded. That approach was challenged by Reckitt-Benckiser Inc., maker of D-Con products, insisting that EPA should instead issue a cancellation notice to implement its decision and not rely on the threat of considering such products misbranded. In a court challenge to determine the issue, the court agreed with Reckitt (Reckitt Benckiser Inc. v. EPA, D.C. Cir., No. 09-1314), and so EPA in 2011 initiated the cancellation process. In November 2011, EPA released it draft Notice of Intent to Cancel, and began three days of meetings by the Scientific Advisory Panel (SAP) as required by the cancellation procedures outlined in FIFRA.
The next step will be for EPA to issue its Notice of Intent to Cancel, that will then commence a potentially long and laborious evidentiary hearing concerning affected products before an Administrative Law Judge. In such a hearing, all evidence admitted into the record is typically sponsored by a witness subject to cross-examination, and affected parties may obtain pre-hearing discovery. Although EPA could have issued its cancellation notice sometime in 2012, it seems that the decision was made to delay until after the election. EPA can now be expected to issue the cancellation notice early in 2013. It is less clear how much programmatic attention will have to be devoted to any proceedings during the year as the situation unfolds, but hearings can be very resource intensive and consume significant amounts of time and attention on the part of senior program managers.
An issue which has been increasing concern in the world of pesticide regulation is the potential impact of pesticide use on pollinators. Many consider this an issue of how to avoid (or investigate) bee-kills, but the overall issue is more general than simply adding label language to reduce any impacts of pesticide use on bees. Pollinators/bees has been a subject of a sub-group of EPA's Pesticide Program Dialogue Committee (PPDC), and the pesticide program has been more active, devoting more time, attention, and regulatory concerns about the issue.
Much of the focus in recent years has been on the use of some newer chemistries, specifically the use of neonicotinoid compounds, that have replaced past applications of organophosphate and carbamate products. These newer compounds have a greatly improved mammalian hazard profile, but remain as potent insecticides, and bees are insects. A key concern is that these neonicotinoid compounds, used as seed treatments, allow fugitive dust during application to contact pollinators and result in bee kills. These compounds may also result in residues in nectar and other parts of the plant that could be a source of exposure to pollinators. Bee-keepers have been especially critical of what they see as a lack of attention paid to the issue of bee-kill incidents and the lack of label language that might help further prevent or mitigate possible exposure to pollinators.
EPA has become more concerned about the issue, and is considering what additional data requirements or specific label restrictions might be appropriate to address the issue. The pollinator issue is affecting more products and overall is receiving more program attention. This increase in program activity is expected to continue in the immediate future, and continued PPDC work group activity will further keep the issue before EPA. Meanwhile, the more general issue of "bee health" had become part of the conversation to broaden the possible solutions to include hive disease (mite control products), additional habitat, and general good hive management practices -- steps that could improve the situation beyond any particular label restrictions that may be appropriate for any specific product.
Endocrine Disruptor Screening Program (EDSP)
EPA has been implementing the endocrine effect testing requirements in FQPA since 1996. After lengthy delays and difficulties in getting the program started, EPA is now planning to complete its review of the initial round of testing in the next year, and issue test orders for Tier 2 testing sometime in Fiscal Year 2014. Critics of the program argue that the program is requiring lower tier, less informative tests on many pesticide active ingredients that already have higher tier, multi-generation tests completed as part of existing FIFRA requirements. Further, EPA has not yet validated its Tier 2 studies, nor has it indicated how the results of any Tier 1 tests will be interpreted to lead to the requirement for any Tier 2 tests that will be eventually validated.
Along the way, in 2013, EPA will hold a FIFRA SAP meeting in January, and has indicated intention to complete the validation of its Tier 2 assays this year. Results of these efforts will also tie into the broader EPA effort to develop its 21st Century Toxicology strategy, where even more EDSP-like assays will be developed to make chemical testing less costly, quicker, and with reduced animal testing.
Below we summarize key Asian chemical management developments anticipated in 2013. The Acta Group, B&C's consulting affiliate, has offices in China and addresses regulatory issues in virtually all Asian markets.
The Ministry of Environment Protection (MEP)-Chemical Registration Center (CRC) is continually fine tuning the implementation of the Environmental Management of New Chemical Substances in China (Decree 7). To date, implementation has been regarded as successful. Although many of the available guidance documents remain vague in some areas or do not explicitly identify all situations, MEP-CRC appears to be receptive to understanding better the need for clarity and offering guidance on situations not addressed. Experience is being gained by the team at MEP-CRC as well as by the Expert Review Committee. Submission numbers increased in 2012 as well as technical reviews of substance specific issues, i.e., nuances, read-across, Quantitative Structural Activity Relationship (QSAR). This trend is expected to continue in 2013. Many hope that 2013 will bring about a more consistent approach of enforcement at the provincial/local level. Nonetheless, MEP-CRC is expected to remain as supportive as possible to ensure the intent of the regulation is met.
As predicted last year, many regulations were modified and/or proposed to bring the program into alliance with the provisions outlined in China's Regulations on the Safe Management of Hazardous Chemicals and GHS implementation (Decree 591), which is considered a "keystone" legislation. 2013 is expected to be similar in that additional regulations are anticipated to continue alignment with Decree 591. Emphasis will be placed on activities that involve the production, storage, transport, and marketing of "dangerous" chemicals, redefined under Decree 591 as those substances that are: corrosive, explosive, combustible and supporting of combustion; and harmful for humans, facilities (property), and the environment. The revised hazardous substance list is anticipated to be agreed upon and published in the first quarter of 2013.
Chinese Taipei (Taiwan)
The Inventory of Existing Chemical Substances called the Chemical Substance Nomination and Notification (CSNN) inventory was published in 2012 and recently updated. The inventory is searchable in English and Chinese and contains >79,000 substances This past summer, the Existing Chemical Notification (ECN) nomination period was re-opened for those substances not previously notified and meeting the requirements for notification. Although the New Chemical Notification (NCN) was expected to be released in 2012, the legislation remains under review. We expect in 2013 other aspects of the NCN will be adopted and implemented.
In late 2012, the Occupational Safety and Health Act Amendment was adopted and was expected to be approved by year end. Approval will extend into early 2013, however. The amendment is significant as it specifies the requirement that those substances not listed on the CSNN are considered "new" substances and thus the manufacture, import, supply of, or operation involving new chemical substances will require a notification/registration be performed.
We also expect in 2013 that Taiwan will further advance its chemical control programs.
Full United Nations (UN) Globally Harmonized System of Classification and Labeling of Chemicals (GHS) implementation is scheduled by 2015. 2012 saw an increase in inspection and enforcement activities pertaining to hazardous substance labeling and communication, including material safety data sheets (MSDS). The Council of Labor Affairs (CLA) is also targeting worker safety, emergency-response mechanisms, and education and training. Continued inspection and enforcement activity is also expected in 2013.
2012 saw continued progress in the evaluating priority assessment chemicals (PAC). Additional substances were added to the PAC list bringing the total number to 138 at the end of December 2012. Revisions are expected in 2013. As part of the changes in the Chemical Substances Control Law (CSCL), manufacturers and importers of PACs must notify the Ministry of Economy, Trade, and Industry (METI) annually and communicate to customers if its substances or products are or contain PACs. This remains a fairly new provision and enforcement implications remain unclear. We expect, however, that this situation will be clarified in 2013. Effective January 1, 2013, the notification procedures for new chemical substances are modified as required under the Industrial Safety and Health Act. The provisions streamline the notification requirements when notification documents under the CSCL are available. The reduced notification requirements are significant and care should be taken in reviewing them. In addition, simplified notification procedures for polymer compounds take effect. Polymers meeting the revised criteria are now considered existing substances and no longer need notification. This is a significant change.
Notification dates for new chemical substances at low volumes, >10 mt/annum and 1-10 mt/annum were agreed upon and published in late 2012. Four time frames exist for low volume substances and ten pre-submission dates for the other tonnages.
METI issued a guide to the UN GHS classification and labeling in late 2012. The current classification standard in Japan (JIS Z 7252) is based on the second revision of the UN Purple Book while hazard communication, labeling, and Safety Data Sheets (SDS) (JIS Z 7253) are based on the fourth revision. Classification is being updated and scheduled for early 2013.
The key legislation pertaining to chemical control activities in Korea is the Toxic Chemicals Control Act (TCCA), which was expected to be amended in 2012. Amendments, however, are still under review and are expected to be adopted in the first half of 2013.
The draft amendment adopts provisions similar as to those in the REACH legislation. The amendment is commonly referred to as K-REACH although it is drastically more streamlined. In 2012, the amendment was slightly modified based on extensive public comments. The most current proposal no longer includes the requirement to pre-register existing substances but substances manufactured and imported at >1 mt/annum must be notified. The notification must include volume details and basic hazard information. Based on these data, the Ministry of Environment will determine which substances must be identified as priority evaluation chemicals (PEC).
New chemicals and PECs will need to be registered. PECs will benefit from a staggered registration time period (eight years) similar to the EU's REACH approach. The first list of PECs is expected to be released in late 2013. It is possible that additional modifications can be made to the amendment as it undergoes final adoption. Any modifications are expected to be minimal.
2013 will prove to be an active year for chemical control law modifications in South Korea. B&C is a proud sponsor of ChemCon Asia 2013. Importantly, the conference venue is Seoul, South Korea. Lynn Bergeson and Leslie Scott MacDougall will present multiple topics at the conference. More information is available online.
Periodically in 2012 both the Toxic Chemicals Substance List (TCSL) and GHS Classification List were modified to include additional substances. Additions are anticipated in 2013 as more substances are reviewed.
In early 2012, the Standard for Classification and Labelling of Chemical Substances and MSDS provisions were amended by the Ministry of Employment and Labor. The modifications are meant to allow for further harmonization with GHS classification criteria. It is expected that further enhancements based upon the effectiveness of the Standard will occur in 2013.
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We hope you have found this forecast useful. As noted, B&C's website contains many more substantive memoranda on a wide range of subjects. Please go to www.lawbc.com and click "KNOWLEDGE & RESOURCES" and then click "Regulatory Developments" for more information.
We wish you all much good health, success, and happiness in the New Year.