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California Releases Draft Outline for Green Chemistry Regulations

Beveridge & Diamond, P.C., May 6, 2010

On April 15, 2010, the California Department of Toxic Substances Control (“DTSC”) released its Draft Outline for the Safer Consumer Product Regulations called for under AB 1879, one of California’s two Green Chemistry framework laws.  DTSC issued the Draft Outline in an effort to solicit stakeholder feedback on its proposed regulatory approach prior to releasing the draft regulations.  The regulations have the potential to significantly affect the manufacture and marketing of consumer products in California.  The California framework may also have an impact on how other states and the federal government regulate consumer products in the future.  

The Draft Outline generally describes the process DTSC proposes to implement AB 1879. DTSC’s proposed approach would require DTSC to identify Chemicals of Concern (“COCs”) and Priority Products (consumer products that contain COCs).  DTSC would then require manufacturers to perform an Alternatives Assessment on Priority Products.  Based on the Alternatives Assessment, DTSC would prepare a Regulatory Response for specific Priority Products, which could range from taking no action to requiring ingredient disclosure, product labeling, or even a complete ban of the product. 

While the entire scope of implementation of this important law warrants review and comment by the regulated community, several provisions of the Draft Outline deserve particular attention.

1.      Procedural Protections for Entities Subject to DTSC Regulatory Responses

DTSC’s Draft Outline describes a regulatory approach that would be centered around DTSC’s listing of COCs and Priority Products, and the preparation of Alternatives Assessments by manufactures or suppliers of Priority Products.  Once those tasks are completed, the Draft Outline envisions DTSC’s imposition of product specific Regulatory Responses on individual products, classes of products, or manufacturers.  In general, the Draft Outline simply states that DTSC would post its final Chemicals of Concern List, Priority Products List, and Regulatory Responses on its website.  Thus, the Draft Outline leaves significant questions as to what procedures would be available to the regulated community in the event an entity seeks to challenge DTSC’s determination.  For example, would DTSC’s actions be subject to the California Administrative Procedures Act (“APA”)?  Further, it is not clear whether and how DTSC’s decisions about particular chemicals, products and regulatory responses would be subject to individualized administrative and judicial appeal procedures under the proposed framework.  Would regulated entities have recourse to a court of law?  Or would a challenge to an administrative determination be directed to the agency that made the decision?  The Draft Outline currently leaves these important questions unanswered.

2.      Public Petition Process

Under the Draft Outline, DTSC would reserve to itself the task of listing COCs and Priority Products.  However, the agency’s proposed approach would also include a petition process through which any member of the public (including an industry competitor) could petition DTSC to include certain chemicals or consumer products on DTSC’s COC or Priority Products lists.  The Outline does not include any process by which members of the regulated community could respond to such petitions.  Thus, the proposed framework could leave regulated entities with no formal role in the process until they were required to prepare an Alternatives Assessment in anticipation of a DTSC Regulatory Response. 

3.      Certification of Compliance and Penalties

DTSC’s proposed approach would prohibit any person, including retailers, from selling, promoting, manufacturing, importing, or distributing any Priority Product in California unless they first obtained a Certificate of Compliance from the manufacturer or supplier of that product.  The Certificate would be required to state that the manufacturer is complying with or exempt from DTSC’s regulations implementing AB 1879.  Further, any person who violated the Certificate provision would be subject to penalties in an unspecified amount.  Under the Draft Outline, DTSC could also impose penalties for a number of procedural infractions, including failure to submit documents by the required date, failure to implement agency-mandated modifications to alternatives assessment work plans, or failure to implement regulatory response actions.  The Draft Outline does not discuss how such wide-reaching provisions would be enforced.

4.      Confidential Business Information

The Draft Outline would give DTSC substantial authority to require entities to submit trade secret and confidential business information regarding chemicals and products marketed in California.  This authority would cover a broad range of information, including chemical information submitted under the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”), the U.S. Toxic Substances Control Act (“TSCA”), and the Canadian Environmental Protection Act (“CEPA”); “minimum data set” information as defined by REACH; information regarding product chemical inputs; and, marketing data.  Further, the Draft Outline provides that all information submitted would be in electronic format, can be shared with all appropriate government entities and would, for some classes of information, be posted on the DTSC website.  AB 1879 requires DTSC to take precautions to ensure protection of trade secrets.  See Cal. H&S Code §25257.  The statute does not, however, provide any protection for confidential business information.  Regulated entities should seek to ensure their confidential business information is protected under the DTSC’s final regulations.

Conclusion

The regulated community has expressed mixed reactions to California’s Green Chemistry Initiative to date.  On the one hand, industry supports a regulatory regime that takes chemicals and product regulation out of the piecemeal and expensive chemical-by-chemical and product-by-product approach.  On the other hand, there are significant concerns about implementing California’s Green Chemistry framework in a way that is effective and yet not unduly burdensome and costly.  It is clear that significant questions of scope and implementation remain that will require review and comment by the regulated community, and by all stakeholders.

For additional information on California’s Green Chemistry Initiative, please contact Kenneth Finney at kfinney@bdlaw.com, Laura Duncan at lduncan@bdlaw.com, Ryan Tacorda at rtacorda@bdlaw.com.  This article was prepared with the assistance of Zachary Norris.

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