As we’ve previously reported here, California is close to finalizing regulations to implement the “Safer Consumer Products Regulations” enacted by the Legislature and signed by former Gov. Arnold Schwarzenegger in 2009. On June 6, the California Department of Toxic Substances Control (DTSC), the agency tasked with finalizing the regulations and putting them into everyday use, closed a sixth public comment period on green chemistry regulations that would require manufacturers to prepare lengthy reports analyzing alternatives to “chemicals of concern.” The new regulations, five years in the making, will take effect this year and likely within the next few months. Companies that sell products in California, no matter where they are based, need to get familiar with these regulations. DTSC has faced a withering barrage of criticism from business and the California Chamber of Commerce, which has estimated over 10 years the cost of the regulations to California’s business will exceed $100 million.
The way the regulations will work is DTSC will establish a list of approximately 1,200 “Candidate Chemicals” with recognized environmental or toxicological risks, such as carcinogens, reproductive toxins, neurotoxins, or other pollutants. Initially, DTSC will then select only five “Priority Products” (such as, for example, an automobile or latex gloves) determined to contain Candidate Chemicals from the big list. Once a Candidate Chemical is in a Priority Product it becomes a “Chemical of Concern” or a “COC.” Producers of these Priority Products, referred to as the “Responsible Entity” (which can include any party placing a Priority Product in the stream of commerce in the state – and even assemblers), must then evaluate ways to remove the COC from the product at issue, evaluate possible alternatives to the COC, or opt to halt distribution of the product in California entirely – all demonstrated to the satisfaction of the DTSC, which will have a wide berth in terms of decision making under the law.
The final phase of the regulatory process may include appropriate response by DTSC, which could include consumer notification of the presence of a COC or an approved alternative, restrictions on use, requiring the use of other chemicals, or even banning the chemical and product altogether. The official list of Candidate Chemicals will be published on the effective date of the regulation, meaning within a few months. The initial proposed Priority Product list will be published for review and public comment no later than 180 days after the effective date of the regulations. The public comment period will then last for at least 45 days, with required technical and other disclosures required of responsible parties for Priority Products due within 60 days after the proposed list of Priority Products is finalized.
Manufacturers, importers, assemblers and retailers will bear the double burden of notifying the DTSC when their product is listed and submitting a preliminary “alternatives analysis” (AA) report within 180 days of the product’s listing (unless they request a one-time 90-day extension). A final AA report must be submitted 12 months after that, containing next steps to reduce exposure. Though both reports will require a tremendous amount of detail and scientific study, only the executive summary of each will be made public in order to protect trade secrets. Failure to comply could result in audits, fines and penalties.
Critics have noted that the scope of the DTSC was formerly limited to environmental pollution, and the agency has no experience in the field of consumer products. The airline, auto, electronics and fashion industries submitted comments decrying the murky definition of acceptable compliance. For example, must a manufacturer complete an alternatives analysis for each product, each component, or each chemical-product combination? The recent addition of “assemblers” to the list of responsible parties could rope in virtually any entity, including small repair businesses. Some have requested that efforts be aimed at establishing a universal standard, rather than a state regulatory scheme. Proponents and opponents alike say the consequences of the new regulations will undoubtedly affect international trade. DTSC has said it will only name five Priority Products to start with. Hence, while sweeping, these regulations will begin on a small scale. Small scale or not, however, the regulations are about to kick off uncharted territory for business.
We will continue to keep our clients and contacts advised on this developing law.