+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
By Keith B. Walker,
Cox, Castle & Nicholson
Most notable among the changes made to the Green Chemistry proposal, the number Chemicals of Concern (COCs) to be regulated in Priority Products, to be designated by DTSC, has been reduced from over 3,000 chemicals (as previously anticipated) to approximately 1,200. Also, possibly in response to comments from the Panel, the lists of hazardous materials and toxic substances from which the COCs are drawn has been narrowed by imposing more stringent criteria.
DTSC has not yet indicated the Priority Products that will be regulated for concentrations of COCs, however, which is the multimillion-dollar question. Another key question is how the costs of implementing the initiative will be funded—a topic that underlies nearly all discussions regarding the regulations.
The Green Chemistry Initiative, a front-end pollution regulation established through two companion bills (Assembly Bill 1879 and Senate Bill 509), reflects Cal-EPA's desire to reduce pollution at the point of origin by reducing the use of toxic chemicals in manufacturing. More specifically, the Green Chemistry Initiative focuses on the use of COCs in products to be sold in California. If adopted, the regulation would require manufacturers to review the COCs to be included in designated Priority Products and then determine whether less-toxic chemicals could be substituted in their place.
DTSC described its approach to identifying safer consumer product alternatives as a continuous, four-step, science-based iterative process. First, DTSC will establish its list of COCs. Then, it will evaluate and prioritize product/COC combinations to develop a list of Priority Products for which an Alternatives Assessment must be prepared. The purpose of the Alternatives Assessment is to require that manufacturers evaluate ways to reduce or eliminate COC concentrations. Third, DTSC will require that manufacturers perform an Alternatives Assessment for their Priority Products to determine how best to reduce the use of—and exposure to—COCs and to limit environmental impacts. Fourth, DTSC will evaluate the manufacturer's Alternatives Assessment, with responses that range from requiring additional information and/or submittal of another assessment, to potentially prohibiting the sale of the Priority Product within California.
Although the number of potential COCs to be regulated in Priority Products has significantly decreased, the goal has remained the same: to identify chemicals that (1) exhibit a hazard trait or an environmental or toxicological endpoint (specified in regulations enacted by the Office of Environmental Health Hazard Assessment (OEHHA)) and (2) are listed or identified by one or more authoritative bodies specified by the regulations. In addition, DTSC may designate additional COCs based on potential adverse impacts, especially in the context of special considerations that include (i) children, pregnant women, and other sensitive subpopulations; (ii) environmentally sensitive habitats, endangered and threatened species, and environments in California designated as impaired; and (iii) widespread adverse public health and/or environmental impacts.
DTSC has also expressed that a main objective in composing its list of COCs is to send a signal to the marketplace regarding the substances designated as potential concerns, and to enable DTSC to move ahead expeditiously with respect to identifying Priority Products that contain one or more COCs. Another of DTSC's key objectives is to prevent manufacturers from being able to make a “regrettable substitution” by swapping out a COC with a chemical that is no better—or potentially worse—than the COC, merely because the alternative chemical had not been listed. Ultimately, the initial list of COCs seems less significant than the list of the Priority Products to be regulated. This Priority Product list will set the initial parameters of DTSC's initiative and kick-start industry's response to the pending requirements.
The Priority Product list will set the initial parameters of DTSC's initiative. The factors to be considered by DTSC in composing its Priority Product list include (1) potential adverse impacts posed by the COCs; (2) potential exposures resulting from the presence of the COCs in the Priority Products; and (3) the availability of information indicating the potential adverse impacts and exposures posed by the COCs. DTSC has further expressed that singling out specific products would not be legally defensible, as opposed to identifying particular Priority Product/COC combinations that focus not on the nature of the product but on the COCs within the products.
Narrowing the initial focus of its regulations, DTSC has expressed that its initial list of Priority Products will include no more than five product-chemical combinations. Part of the professed benefit of the conservative scope is to enable DTSC to experiment with the implementation of its initiative on a small scale, as it prepares to expand the list of Priority Products. In addition, this pilot program approach seems to reflect DTSC's pragmatic budget considerations.
At this point, it remains unclear when DTSC will issue its list of Priority Products.
There are two stages to the Alternatives Assessment (AA) process. In the first stage, the responsible entity must identify the function, performance, technical feasibility, and legal requirements associated with the Priority Product, and evaluate the feasibility of excluding COCs. Next, the responsible entity must identify chemical alternatives to the COCs in the Priority Product, collect and evaluate information identifying adverse public health and environmental impacts associated with each alternative chemical, and develop a work plan for implementation of Alternatives Assessment's second stage. This information must then be submitted to DTSC in the form of a “Preliminary AA Report.” In Stage 2, responsible entities must identify relevant factors for comparing alternative product formulations, compare the Priority Product with the alternatives, select the alternative that will replace or modify the Priority Product, and then submit these analyses to DTSC in a detailed “Final AA Report.”
In the November 2010 draft regulations, the primary responsibility for compliance was limited to the manufacturer. Expanding the scope of DTSC's authority, however, the current draft regulations impose requirements on (1) the person who controls the design of the product, (2) the U.S. importer and, potentially, (3) the retailer. The principal compliance duty remains with the manufacturer. If the manufacturer does not comply, however, then the duty applies next to the importer, if there is one. If there is no importer, or if both the manufacturer and importer fail to comply, then DTSC may shift the responsibility for compliance to the retailer. DTSC anticipates that manufacturers will retain the principal duty for compliance, and that the burden shift to the retailer will most commonly occur when DTSC lacks authority over an overseas manufacturer or importer.
If these parties fail to comply, or if an otherwise-complying party submits an Alternatives Assessment that fails to select a safer alternative for a COC (and DTSC determines that a safer alternative exists), the responsible party has one year to ensure that the Priority Product is no longer sold in California. In addition, the responsible party must complete an inventory recall program within three years. To avoid these requirements, the responsible party must submit to DTSC an Alternatives Assessment selecting an alternative that does not contain a COC.
The proposed 2012 regulations differ from the October 2011 Informal Draft regulations in several important ways:
Alternatives Analysis Threshold Exemption
Although the Governor's budget proposed redirecting 39 staff positions and more than $6 million to cover the first phase of implementing the Green Chemistry Initiative, several Democratic legislators signed a joint letter (known as the Perea Letter) asking that the fee proposal be excised from the budget trailer bill. Ultimately, the question as to whether the existing funds will be sufficient to implement the initiative, without the benefit of the additional fees, is a question that remains to be answered.
Keith Walker is an attorney in the Environmental Group of the law firm of Cox, Castle & Nicholson in Los Angeles. Mr. Walker's practice focuses on environmental due diligence in the context of real estate acquisition, financing and development; compliance with environmental laws and regulations, including completing voluntary cleanup programs and obtaining regulatory closure from a wide variety of regulatory agencies; and counseling property owners, developers, and lenders regarding the most effective methods for managing environmental risk, including through the negotiation and purchase of environmental insurance policies.
This article does not represent the opinions of Bloomberg BNA, which welcomes other points of view.
©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.
This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).