California's Draft Green Chemistry Regulations

California Dreaming or Reality? California’s New Paradigm in Chemicals and Products Management Could Be Coming to a Store Near You. A Legal Perspective Webinar of the American Bar Association Section of Environment, Energy & Resources November 15, 2010 Philip A. Moffat pmoffat@verdantlaw.com 202.828.1233 www.verdantlaw.com 1

Overview of Presentation • Scope of Regulation – What’s covered – Who’s covered • Regulatory Process – Requirements – Exemptions – Public & regulated community participation – Timeline • Dispute Resolution • Enforcement • Protection of Confidential Information • Practical Considerations & Concluding Thoughts 2

What’s Covered? • Regulation focuses on consumer products with the goal of encouraging the use of safer alternatives to Chemicals of Concern. • It applies to: – “[A]ll consumer products placed into the stream of commerce in California,” and – “all chemicals that exhibit a hazard trait and are reasonably expected to be contained in products placed into the stream of commerce in California.” §§ 69301(b)(1) and 69302.1(a). 3

What’s a Consumer Product? • Broad definition: “a product or part of the product that is used, brought, or leased for use by a person for any purposes.” Health & Safety Code § 25251. – Individual chemicals packaged as such and placed into the stream of California commerce are included – Components also included • Easier to identify what’s not encompassed: – Prescription drugs and devices (and packaging) – Dental restorative materials (and packaging) – Medical devices (and packaging) – Food – Pesticides – Mercury-containing light bulbs (until 12/31/2011) 4

Other Exclusions • Products placed into the stream of California commerce solely for manufacturing those products that are excluded from the definition of consumer product. • Products manufactured in, stored in, or transported through California for use solely outside California. • Unintentionally-added chemicals not known to be present (with due diligence). §§ 69301(b)-(c). 5

Who Has Obligations? • Manufacturer – The producer of a consumer product – Owner or licensee of the brand name or trademark • Responsible Entities (RE) – Owner or licensee of the brand name or trademark – California importer – California distributor – Retailer – Any party to a contract with a California importer, distributor, or retailer concerning a consumer product, unless contract specifically prohibits placing into stream of California commerce § 69301.2 6

Safe Harbors • Remove Product from CA Commerce: – Individual RE that is not a manufacturer notifies DTSC. § 69301.4(e)(1) • Need contract w/ supplier ensuring supplier will comply w/ regs • Others may be continuing to place product on market – Manufacturer submits a Product Removal Notification or, if manufacture is also an RE, may provide other substantiation of removal. Compare § 69301.4(e)(2) w/ § 69301.4(f)(4). • Manufacturer Removes All Chemicals of Concern from Product & Files Chemical Removal Notification. – No chemical replacement or addition may occur. §§ 69301.2(15), 69301.4(f)(4), 69302.5(a) and others. 7

Prioritization • DTSC develops two lists of chemicals: – Chemicals Under Consideration – Priority Chemicals • DTSC develops two lists of products: – Products Under Consideration – Priority Products • DTSC evaluates available information, and may issue data and information call-ins to manufacturers and responsible entities. §§ 69301.6, 69302 and 69303. • Any person may petition to add to lists, but not delete. § 69304. No clearly established process for industry to comment during DTSC review of petition. 9

Prioritization • Exemptions: – Federal and/or other California programs address same public health and environmental threats throughout the product life cycle – requires “clear & convincing evidence” from claimant – No exposure pathway by which chemical might threaten health or the environment in California – same burden of proof §§ 69302.1 and 69303.1. • Public comments prior to finalizing chemical lists. §§ 69302.2(b) and 69303.2(d). 10

Prioritization • After a Priority Chemicals List is finalized, DTSC can begin posting on its website the description and identity of products determined to contain a Priority Chemical. § 69302.2(b). • Compressed Timeline for Initial Prioritization: – Initial proposed list of Chemicals Under Consideration due by June 1, 2011 – Final initial list of Priority Products due by December 1, 2013 • Summary of Obligations of Responsible Entities (REs): – Respond to data call-ins. § 69301.6. – After a product is listed as a Priority Product, must file a Priority Product Notification with DTSC. § 69303.5. 11

Alternatives Assessment – Tier I • Applies after a chemical has been added to the final Chemicals Under Consideration or Priority Chemicals List. • Responsible entities must notify DTSC prior to placing into CA commerce any voluntary product reformulations, redesigns, or replacements that had chemical removed or reduced. • Tier I AA Report must accompany notice and include: – Rationale for reformulation – Reductions in adverse health or environmental impacts – Hazard traits of any substitute chemicals • May avoid “regrettable substitutions,” but is it an impediment to innovation? § 69305.1 12

Alternatives Assessment – Tier II • Lead Assessor Prepares AA - either a Qualified Third-Party Assessment Entity or Qualified In-House Assessment Entity. – However, all AAs must be prepared or verified by a third party. • AA Work Plan: – Submitted 180 days after posting of final Priority Product list – Scope of work must include evaluation of same “methodologies and system boundaries” for both the Priority Product and potential alternatives – Required elements are extensive • AA Reports: – DTSC specifies completion date – Explain omission of any life cycle segments – Include rationale for alternative selection or retention of Priority Product – May propose regulatory response based on the selected alternative – DTSC determines what, if any, regulatory response is required and sets an implementation date • De minimis exemption may be available. §§ 69305.2 – 69305.10 13

Regulatory Response • DTSC has a range of options and will request public comment on proposal: – No response – Product information to consumers – Labeling – End-of-life management – Use restrictions – Exposure limits – Ban – R&D challenge §§ 69306 – 69306.8. • REs required to notify retailers about required response, and DTSC upon completion of response. § 69306.9. • Exemptions available for certain responses that also conflict or duplicate CA or federal law or int’l trade agreements ratified by Senate – require “clear & convincing evidence” from claimant. § 69306.7 14

Dispute Resolution • Two dispute resolution processes established: formal and informal. § 69307 – 69307.7. – Formal applies to challenges of certain regulatory response actions (e.g., sales prohibitions), as well as requests for exemptions from many of the potential responses. – Informal applies to all other matters (e.g., listings), and includes opportunity to appeal to DTSC Director. • Exhaustion of administrative remedies typically required before seeking judicial review. 15

Enforcement • REs are jointly & severally liable for noncompliance. § 69301.4(f) • Many options available to DTSC: – Notice of Noncompliance to all REs w/ a cc to all other known entities in supply chain. Id. – Added to Failure to Comply List if not remedied or exempted after receiving notice. Id. – Additional fines, penalties, and other enforcement per Article 8, Chpt. 6.5, Div. 20 Health & Safety Code. § 69301.4(g). – Manufacturers that fail to respond to information request may be added to Failure to Respond List. § 69301.6(d)(3). 16

Protection of Confidential Information • Complicated process for protecting confidential information, including trade secrets – six pages of regulations, expanding the process set out in the enabling statute. • Requires detailed legal analysis of the regulation, Health & Safety Code section 25257, any other applicable California statute, and the California Public Records Act as applicable. • Thirty (30) days to seek judicial review of DTSC determination of inadequate substantiation/justification of trade secret claim. • Thirty days to seek judicial review after notice from DTSC that information is subject to disclosure in response to a Public Records Act request. §§ 69310 – 69310.6. 17

Practical Considerations and Concluding Thoughts 18

California's Draft Green Chemistry Regulations

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California’s Draft Green Chemistry Regulations Presentation Transcript