Sidley Austin LLP
Judah Prero, Byron Taylor
February 12, 2018
The Toxic Substances Control Act inventory reset process is now taking place. The reporting deadline for chemical manufacturers and importers was February 7 2018, and the deadline for all other companies that use chemicals is October 5 2018. Meeting these deadlines is important because a chemical will not be legal for use in the United States if it is not identified, reported (or subject to an exemption) and included in the active Toxic Substances Control Act inventory.
The Frank R Lautenberg Chemical Safety for the 21st Century Act became law on June 20 2016. The Lautenberg Act is an amendment to the Toxic Substances Control Act and drastically changes the way that the Environmental Protection Agency (EPA) approves and regulates chemicals and microbials. The most significant change is a new four-step process that the EPA must follow to evaluate all chemicals, whether new or existing. The EPA must first determine which chemicals are in commerce in the United States. It must then prioritise those chemicals, determining which ones require a risk evaluation. The EPA must then perform a risk evaluation on high-priority chemicals and, if required, regulate the chemical to ensure safe use.
Right now, the industry must comply with the first step in the process, known as the ‘inventory reset’. The EPA maintains a list, known as the Toxic Substances Control Act Inventory, of all the chemicals that were either in existence when the Toxic Substances Control Act was enacted or approved since that time. If a chemical is not on that list, it cannot legally be used in the United States. The EPA is in the midst of determining which chemicals on the inventory are still in active commerce, referred to as the ‘inventory reset’.
Chemical manufacturers or importers must report to the EPA any chemical manufactured or imported during the 10-year period before June 21 2016. This reporting had to be completed by February 7 2018. The EPA will then compile a preliminary list and give ‘chemical processors’ – defined as any other entity that uses chemicals – an opportunity to report chemicals not previously identified. That reporting period closes on October 5 2018.
This seemingly small reporting obligation has a significant effect: if a chemical is not identified and reported or subject to a reporting exemption, it will not be placed on the ‘active’ inventory, and that chemical will not be legal for use in the United States. This includes all chemicals used in manufacturing consumer electronics, juvenile products, pharmaceuticals, clothing, paints, coatings, adhesives, lubricants and cleaners. Even if the end product is regulated under a different statute, the constituent chemicals are still regulated under the Toxic Substances Control Act and must be included in the inventory.
All companies that manufacture, use, process, import, export or sell products containing chemicals must ask themselves the following questions.
What chemicals are made or used by the company or in its products? If a chemical is not identified, it will not be legal for use. If a company does not know what it uses, it cannot guarantee the legal status of the chemicals in its products.
What can companies learn about the chemicals that they make or use or are in their products? If the supplier, formulator or distributor is unknown, it may be difficult to ensure that the responsible party is indeed reporting. This is a particular concern for entities that import chemicals solely for further distribution. Under the Toxic Substances Control Act, an importer has the same legal obligation as a manufacturer, and therefore importers must report. Companies may need to obtain new compliance certifications from suppliers to cover this new obligation.
Does anyone else make or use the same chemical? Although the law requires each manufacturer or importer to report, if users know that there are multiple manufacturers, it increases the likelihood that the chemical is being reported.
Is any information held by the company confidential business information? The EPA recognises that many manufacturers will not divulge the exact identity of chemicals supplied to customers due to concerns about confidential business information. The EPA allows for joint submissions, but these submissions must be coordinated.
As mentioned, the initial reporting period closes soon and the reporting period for chemical processors ends on October 8 2018. Accordingly, businesses should now consider whether they must take additional steps to meet these obligations.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
This article is being provided for informational purposes only and not for the purposes of providing legal advice or creating an attorney-client relationship. You should contact an attorney to obtain advice with respect to any particular issue or problem you may have. In addition, the opinions expressed herein are the opinions of Mr. Prero & Mr. Taylor and may not reflect the opinions of Synergy Environmental, Inc., Sidley Austin LLP or either of those firms’ clients.