After multiple proposals and nearly four years of public consultation, California recently reproposed its groundbreaking "green chemistry" regulations. Referred to as the "Safer Consumer Products" regulations, this program will ultimately require manufacturers to eliminate particular "Chemicals of Concern" from an array of consumer products. These rules will affect consumer products — large and small, complex and simple — offered for sale in California, regardless of where manufactured. Given the size of the California market, this regulation likely will lead to de facto consumer product standards across the United States. Complicating matters, a variety of other green chemistry requirements have been enacted or proposed in other states, and at the federal and international levels, with little coordination. Accordingly, consumer product manufacturers, importers, and retailers everywhere should take notice and plan for the final adoption of the California regulations, integrate those plans with requirements in other jurisdictions, and consider incorporating green chemistry practices into product development and sustainability efforts.
California's Green Chemistry Rules
California has long been on the leading edge of environmental regulation. Since 1986, the state’s Proposition 65 has required warnings on products that may expose consumers to an ever-growing list of substances identified by the state to cause cancer or reproductive harm. Enacted in 2008, the California green chemistry initiative (AB 1879) went further by requiring the California Department of Toxic Substances Control (“DTSC”) to establish a process for evaluating potentially harmful chemicals, referred to as “Chemicals of Concern,” in consumer products, potential safer alternatives to those formulations, and the best means to limit exposure or to reduce the level of hazard posed by a Chemical of Concern. After several previous attempts, DTSC proposed revised regulations in July 2012, which appear on path to adoption possibly by year’s end, despite significant objections expressed by a broad spectrum of businesses.
If adopted, starting with an initial list of approximately 1,200 Chemicals of Concern from existing authoritative lists, DTSC will select the consumer products containing Chemicals of Concern that warrant an assessment of potentially safer alternative formulations. Manufacturers (or importers and retailers, if necessary) of these so-called “Priority Products” will then need to determine how best to limit exposures to, or the level of adverse public health and environmental impacts posed by, Chemicals of Concern in their “Priority Products,” and conduct an assessment of potentially safer alternative formulations. DTSC is authorized to take a host of actions in response to these assessments, including requiring notice to consumers, establishing end-of-life product stewardship programs, restricting the use of particular Chemicals of Concern in a product or the use of the product itself, or simply banning sales of the product in California altogether. Fortunately, DTSC’s initial set of Priority Products, scheduled within 180 days of the regulation’s effective date, will be limited to no more than five products, but additional products will be added over time.
Getting Ready for Change
The performance of required alternative assessments could present a host of challenges, so potentially affected businesses should plan now to meet those requirements. In some circumstances, significant data collection and sophisticated expert analysis in the areas of risk assessment, toxicology, product performance, and economics may be required. Yet, the time afforded by the proposed regulations for conducting alternative assessments may prove insufficient. Businesses that do not have the resources to address these matters on their own will need to allow time to form consortia with others, as permitted by DTSC’s proposed regulations, or find other means for complying. On the other hand, larger companies that have not already done so should now start to consider how to integrate green chemistry principles across their organizations, including research and development, engineering, supply, and procurement. Although the goal of the rules may be to force reasonable substitutions for Chemicals of Concern, sufficient planning may enable businesses to substantiate that no viable alternative exists, that the Chemical of Concern in a product presents no significant risks, or that it should not be replaced for other reasons. Early planning and product changes may also give some businesses a competitive advantage.
Manufacturers, importers and retailers will each have their own compliance considerations. For instance, manufacturers will need to understand their product compositions and, where Chemicals of Concern are involved, begin long-term planning for supporting or replacing their use. This may include involving the underlying chemical manufacturer in the process. New product development should take into account that listed chemicals may need to be justified in the future, while existing products may need to be assessed and reengineered. Importers and retailers may need to update product specifications, supply agreements and assurance procedures to address responsibility for compliance and the use of Chemicals of Concern. Some businesses will need to assess whether they have sufficient access to product and chemical data to determine compliance, while others will have trade secret concerns over the disclosure of information. Intellectual property rights and antitrust laws may further complicate compliance or industry cooperation in assessing potentially suitable alternatives.
Taking on the Challenge
Despite a laudable goal, green chemistry requirements for safer alternative assessments carry a risk of significant adverse economic consequences, especially if a business is not sufficiently prepared. Particularly in the absence of federal chemical regulatory reform, green chemistry requirements are only expected to proliferate across jurisdictions over time, with little likelihood that the different mandates will be harmonized. Consumer product businesses throughout the supply chain should, therefore, initiate measures now to ensure that they are equipped to timely adapt and take on the challenge and, perhaps, even take advantage of green chemistry initiatives.
Peter R. Duchesneau is a partner in the Los Angeles office of Manatt, Phelps & Phillips, LLP. His practice focuses on environmental law involving litigation, administrative proceedings, regulatory compliance and business transactions. He holds a B.S. degree in Chemical Engineering, is admitted to practice before the U.S. Patent and Trademark Office, and has significant experience with emerging chemicals and counseling clients on regulatory compliance involving green chemistry and other matters. Mr. Duchesneau can be reached at (310) 312-4209 or pduchesneau@manatt.com.
James G. Votaw is Counsel in the Washington, D.C. office of Manatt, Phelps & Phillips, LLP. His practice focuses on conventional, nanoscale, industrial, pesticidal and specialty chemical product regulation, policy and approval matters; environmental, health and safety law compliance auditing and enforcement defense, and associated business counseling and litigation issues. Mr. Votaw can be reached at (202) 585-6610 or jvotaw@manatt.com.
This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns have discussed The Case for Dam Removal, Sustainable/Energy Retrofits of Commercial Buildings, Demand-Response and Energy Efficiency Programs, California’s Cap and Trade Program, Demise of Redevelopment in California, What’s Next for the Renewable Power Industry and Renewable Energy Projects On Tribal Lands.
