California Passes Landmark Green Chemical Laws

by Sheppard Mullin Richter & Hampton LLP
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On August 28, 2013 the California Office of Administrative Law (“OAL”) approved California Department of Toxic Substances Control’s (“DTSC”) Safer Products Regulations. These regulations will go into effect on October 1, 2013. These important regulations, also referred to as “Green Chemical” regulations, establish a process to identify and prioritize consumer products containing chemicals of concern, permit evaluation of safer alternatives and provide for the potential imposition of product or chemical restrictions by DTSC. The legislative purpose of the regulations is to implement California Assembly Bill 1978, or the “Green Chemistry” law, enacted in 2008. (Health and Safety Code §§ 25215-25257.1.) The regulations have been five years in the making, and are the result of several prior drafts and multiple public comment periods. The consequences of these unprecedented regulations are far reaching, and carry the potential to affect a wide range of consumer products placed into the national stream of commerce.

The following is a brief summary of the key provisions of these new Green Chemical regulations. The full text can be found here.

The adopted regulations establish a four-step process under which DTSC will identify safer product alternatives:

  1. Establishment of a list of Candidate Chemicals by DTSC, which will initially include approximately 1200 chemicals incorporated from existing lists from around the globe.
  2. Designation of Priority Product/Candidate Chemicals combinations by DTSC for which an assessment of safer alternatives must be conducted.
  3. Performance of Alternatives Assessments for designated Priority Products by manufacturers or other responsible entities, including importers, assemblers and retailers.
  4. Imposition of conditions by DTSC – “Regulatory Responses” – for Priority Products or selected alternatives to protect public health and/or the environment, such as requiring notice to consumers, establishing end-of-life product stewardship programs, restricting the use of chemicals in a product or the use of a product, or banning sales of a product in California.

Chemicals of Concern and Priority Products

DTSC’s first order of business is to assemble a list of “candidate chemicals,” which is expected to contain over 1,200 chemicals selected from preexisting potentially hazardous chemicals lists assembled by 23 international, federal and California authoritative bodies. This combined list, which will be posted to the DTSC website on November 1, 2013, may be subsequently revised under DTSC’s traditional rulemaking procedures.

Following the establishment of the initial list, DTSC will evaluate and identify products that contain candidate chemicals for the development of the first “Priority Products List.” In evaluating products for this subsequent list, DTSC will consider the potential for exposure to the candidate chemical in the product, the potential for that exposure to contribute to or cause adverse health or environmental impacts and the potential adverse effects from the disposal of the products. No later than 180 days after the effective date of the regulations (April 1, 2014), DTSC must post the Priority Products List for public review and comment. This list shall not contain more than five priority products. Once priority products are listed, identified candidate chemicals will be classified as “chemicals of concern.”

Consumer Product Supplier Obligations

Sixty days after a product has been included on the Priority Products List, the entity responsible for the distribution of product (“Responsible Entity”) must notify DTSC, and submit a Preliminary Alternatives Analysis Report (“Preliminary Report” [or “Alternatives Analysis”]) no later than 180 days after the product’s listing. Once DTSC approves a Preliminary Report, the Responsible Entity has 12 months in which to submit a Final Alternatives Analysis Report (“Final Report”), pending potential extensions.

DTSC will review the Final Report to ensure the conclusions in the report are supported by reliable information and that the Responsible Entity sufficiently evaluated regulatory requirements. When determining whether to adopt a Final Report, DTSC will consider the following factors:

  • The inclusion of alternatives that avoid or reduce adverse impacts through redesign of the product or the process;
  • The degree to which the actions proposed in a Final Report can address the product’s potential adverse impacts;
  • The ability of the end-user to understand and act upon the information or directions provided by the Responsible Entity; and
  • Cost of the action to Responsible Entity relative to the cost of other actions.

If a Final Report is accepted, DTSC will determine if additional actions are necessary to protect the environment and/or public health. DTSC is permitted to require a number of alternative actions, including, but not limited to, requiring the Responsible Entity to provide product information, restricting the use of chemicals of concern or product, requiring safety measures that will contain or control access to the chemicals of concern in the product, and prohibiting the sale of the product in California.

A Responsible Entity can avoid preparation of an Alternative Analysis [or Preliminary Report] under the following scenarios:

  • Chemicals of concern have been removed from the product without the use of any replacement chemicals;
  • The Responsible Entity ceases from participating in the distribution of the product in California; or
  • Chemicals of concern have been removed from the product and the replacement chemical is either not on the chemical candidate list or is a chemical candidate that is already in use in the same product produced by a different manufacturer.

Next Steps

The next steps to be taken by DTSC under the Green Chemical regulations include:

  • Posting an informational list of Candidate Chemicals on its website by November 1, 2013;
  • Proposing and posting an initial list of up to five Priority Products for public comment by April 1, 2014; and
  • Preparing guidance for conducting Alternative Assessments.

Conclusion

Despite the risk of future legal challenges to these regulations, consumer product manufacturers have the primary responsibility to comply with these regulations. If, for some reason, a manufacturer is not in compliance, the duty falls on the importer upon notice of noncompliance of the manufacturer from DTSC. If both manufacturer and importer fail to comply, the responsibility then falls on the assembler or retailer once DTSC posts a notice on its website. In order to avoid criminal and civil penalties of up to $25,000 per violation as provided for in the regulations, businesses in all levels of the supply chain should be taking measures now to prepare for complex compliance regulations to come.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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