Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 1
TSCA Reform for EU Stakeholders22 September 2016
Don’t forget to dial-in. View the slides by computer and hear the audio via phone.
Please refer to your REMINDER email for your dial-in information.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 2
Introduction
Marcus Navin-JonesPartner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 3
Preliminary Word
This presentation provides information about the law. Legal
information is not the same as legal advice, which involves
the application of law to an individual’s specific
circumstances. The interpretation and application of the
law to an individual’s specific circumstance depend on
many factors. This presentation is not intended to provide
legal advice.
The information provided in this presentation is drawn
entirely from public information. The views expressed in
this presentation are the author’s alone and not those of
the author’s clients.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 4
Your Moderator and Speakers Today
Herbert Estreicher, Ph.D.Partner
Martha E. MarrapesePartner
Marcus Navin-JonesPartner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 5
Acronyms FRL21 – The Frank R. Lautenberg Chemical Safety for the 21st Century Act amending TSCA
TSCA – US Toxic Substances Control Act
EPA – US Environmental Protection Agency
CDR – Chemical Data Reporting
CBI – Confidential Business Information
PMN – Premanufacture Notice
SNUR – Significant New Use Rules
SNUN – Significant New Use Notice (NB SNAc – Signif New Activity(Canada))
HPV – High Production Volume Challenge Program
SAR – Structure-Activity Relationships
CDX – Central Data Exchange https://cdx.epa.gov/
PBTs – Persistent Bioaccumulative Toxic (PBT) Chemicals (NB Toxics Release Inventory
(TRI) Program: https://www.epa.gov/toxics-release-inventory-tri-program/persistent-
bioaccumulative-toxic-pbt-chemicals-rules-under-tri) – Section 6(h)
Work Plan Chemicals – TSCA Chemicals Work Plan for Chemical Risk Assessment
Priority Chemicals – High Priority Chemicals for Risk Evaluation
TSCA New Chemicals Review Program – NB Section 5 TSCA
Rule-making – Procedural rules establishing EPA process for, for example, evaluating the
risks regarding high priority chemicals
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 6
http://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter53&edition=prelim
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 7
Overview
The New TSCA in comparison to the REACH Regulation
Use of alternatives to animal testing to meet information needs
Opportunities for Data Sharing of REACH dossiers with U.S. companies
Tips for EU companies doing business in the U.S.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 10
How Does TSCA Stack Up in
Comparison to REACH?
Herbert Estreicher, Ph.D.Partner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 11
U.S. Has Struggled with the Legacy of the Past
TSCA enacted in 1976.
Some 80,000 Substances Grandfathered onto the TSCA Inventory as Compared to Some 100,000 Substances on EINECS.
Difficult for U.S. EPA to Take Regulatory Action to Control Existing Chemicals.
1990s-2000s High Production Volume (HPV) Chemical Challenge Program Similar to EU Existing Substance Regulation (793/93) but Voluntary Program (similar to OECD SIDS)
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 12
Efforts to Reform TSCA
U.S. Congress was well aware of REACH.
Major drivers for TSCA reform were patchwork of State Regulation and Bans (Common Market Problem) and No Direct Mandate Under Old TSCA to Review Existing Chemicals.
Early Proposed Legislation (2005-2011) by Democratic Party Considered Too Ambitious.
Republican Party Majority in 2012 Allowed the Legislation to Progress.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 13
Frank R. Lautenberg Act
Changes effective as of June 22, 2016.
Nearly every major section of the law is affected, with
the most significant change being a new program to
notify existing chemical substances in the coming
year that are actively manufactured or imported in
U.S. commerce.
These substances are to be screened and prioritized
for more in-depth risk evaluation and risk
management.
Federal Administering Agency - Environmental
Protection Agency, Office of Chemical Safety and
Pollution Prevention (OCSPP) within the Office of
Pollution Prevention and Toxics (OPPT).
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 14
EPA – OPPT Organization
Chemical Control Division*
Chemistry, Economics and Sustainable Strategies Division*
Environmental Assistance Division
Information Management Division
National Program Chemicals Division
Risk Assessment Division*
Toxics Release Inventory Program Division
TSCA Interagency Testing Committee
*Key Implementation Divisions
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 15
Main Elements of the New TSCA
Identification of Substances Actively in Commerce.
Preservation of Existing Class II Nomenclature• Including Statutory Mixtures and Soap and Detergent
Association (SDA) Nomenclature.
No Lock-step Information Requirements. • QSAR and Alternative Testing to Play a Central Role.
Risk-based Safety Standard Evaluated Under Conditions of Use Not Taking into Account Costs or Other Non-risk Factors but Requiring Consideration of Potentially Exposed or Susceptible Populations.
Prioritization of Active Substances into High and Low Priority for Risk Evaluation.
Data Sharing Based on Market Share.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 16
Agency-driven Process.
Science-based Risk Assessment.
Broad Authority to Regulate But Bans and Phase-Outs Must Offer Alternatives.
No Authorization-type Scheme but PBTs/vPvBs are Given Priority for Assessment.
Regulatory Pace is Measured.
Preservation of CBI But More Liberal Disclosure Similar to Art. 119 REACH.
Industry Pays a Portion of the Cost or Roughly 25%. Downstream users likely to play a role in gathering
exposure and use information.
Main Elements of the New TSCA (con’t)
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 17
Schedule – Some Key RulemakingsDeadline EPA Must -
Within 1 year by June 22,
2017
Proposed rules to issue
by December 2016
• Promulgate a rule setting risk based screening
process for prioritization of existing substances in
commerce as high or low priority for risk evaluation
• Promulgate a rule establishing risk evaluation
process
• Require reporting of active chemicals in US
Commerce
Within 3 years • Propose risk management rules for select group of
PBT substances that are scored moderate to high.
Risk is assumed.
Within 3.5 years • Be in the process of publishing risk evaluation
decisions and risk management measures for
approximately 40 chemicals.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 18
Schedule, cont.
50 percent of chemicals in risk evaluation
in the first 3.5 years have to be ones EPA
identified as high priority in 2014 Work
Plan.
At least 25 percent of the risk evaluations
must consist of voluntary requests.
These cannot comprise > 50 percent of
the ongoing evaluations at any one time.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 19
Stewardship (Risk Management)
By rule (or in certain cases by order) EPA can require
testing and impose limits on process and use conditions.
By rule, EPA can impose bans/phase outs, and regulate
articles. To do so, EPA must consider:
• Effects on human health, environment and magnitude of
exposure
• The benefits of the substance/mixture for various uses
• Reasonably ascertainable economic consequences on
national economy, small business, innovation, environment,
public health, costs/benefits, and cost effectiveness of the
proposed rule and alternative
• Availability of alternatives
Agency may request and defer to action under another
statute unless the contacted agency/office declines to act.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 20
What the New TSCA Does Not Do
No Statutorily Mandated Producer Responsibility.
• This is Left to the Tort Liability System.
No Concept of No Data-No Market for Existing Chemicals
• Uses of unsafe chemicals ultimately to be withdrawn from the
market unless appropriate controls can be implemented.
EPA has authority to assess and protect worker health
• However, safety data sheets remain the purview of the US
Occupational Safety and Health Administration (OSHA).
New chemicals must have sufficient data to establish
safety
• 3 Rs will play a central role in determining data needs.
No Candidate List of SVHCs or other purely hazard
based provisions with the exception of PBTs.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 21
Comparison
Identification of Substances Actively in Commerce -
Similar to EU REACH pre-registration.
Preservation of Existing Class II Nomenclature - A
sharp and positive effort to coordinate with EU
REACH.
Absence of Lock Step Data Requirements - More
aligned with Canadian and Australian approaches.
More Limited Scope – TSCA does NOT include
cosmetic ingredients, food contact substances.
Different Approach to Polymers – Reporting
necessary for monomers and their polymers.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 22
Comparison, cont.
Agency-driven Process Follows the Approach
in Other Countries although the EU has a
Bifurcated Scheme.
Measured Pace and Science-based Risk
Assessment and Decision-making may
become the Major Contribution of the New
TSCA to the Global Debate.
More Modest Cost and Burden on Industry
Relative to the EU.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 23
Some Statistics
EU: Registration of 13,441 unique substances from 51,920 Dossiers
to-date with the largest number of substances still to be registered by
mid-2018; 1130 compliance checks; 270 substances on the
Community Rolling Action Plan (CoRAP) list; 168 substances on the
Candidate List of Substances of Very High Concern (SVHCs); 31
substances on the Annex XIV authorization list with 11 additional
substances recommended for authorization; and 105 Restrictions.
400+ ECHA staff and 200 MM € budget plus 28 member states plus
EU Commission.
CANADA: 2,740 screening assessments under its Chemical
Management Plan (CMP 1 and 2); 276 final risk management
instruments covering 325 substances or groups of substances have
been developed; and 363 substances (or groups) have been
assessed as toxic.
Korea: 510 substances subject to registration by 2018 with additional
500 by 2021, and 500-600 by 2024.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 24
In Sum
New TSCA envisions a more hands on role for
EPA than EU REACH does, but process is most
similar to Substance Evaluation under REACH.
No Authorization type-process and therefore
different from EU and Korea REACH.
Decision-making based on risk rather than
hazard.
Use of alternatives to animal testing likely to
play a central role
Far lower through-put than in the other
countries.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 25
Use of Alternatives to Animal
Testing to Meet Information
Needs
Herbert Estreicher, Ph.D.Partner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 26
Greater Authority to Require Testing
EPA can proceed by rule, order or consent agreement.
If EPA decides to issue a testing order, it must justify
the use.
However, EPA must proceed in a tiered fashion unless
it can justify that more advanced testing is required.
EPA is given express authority to require exposure
information.
EPA can require development of new information to
implement a regulation of new and existing chemicals
including biomonitoring and environmental monitoring.
Other Federal Agencies or States acting under Federal
authority can request EPA to require toxicity/exposure
testing to support other Federal programs.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 27
Authority to Require Testing Limited in Context
of Prioritization
EPA is expected to prioritize based on
existing data and screening techniques.
Can require development of new
information but only upon a showing of
need, the testing must be tailored to
prioritization, and must complete
prioritization decision within 90 days of
receiving the information.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 28
Use of Alternatives to Animal Testing
Significant Focus on Three R’s (Replacement, Reduction and Refinement) in order to avoid unnecessary animal testing:
• Use Existing Info where available
• Use QSAR and Biometrics
• Use High-throughput Screening Methods
• Test with Reduced Animal Numbers
• Use Grouping and Read-across
• Encourage Joint Testing through Consortia
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 29
Within 2 Years of Enactment EPA is to
Develop a Strategic Plan for Alternative
Testing including a list of Scientifically
Sound Alternative Methods (to be updated)
Public to be given Notice and Opportunity to
Comment.
Report to Congress Every 5-years on
Progress.
Industry Encouraged to Use Alternative
Testing When Voluntarily Developing TSCA
Data.
More on Three R’s
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 30
Opportunities for Data
Sharing of REACH Dossiers
Martha E. MarrapesePartner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 31
OVERVIEW
When Testing Will Be Required
Compensation Requirements
Possible Manifested Forms of Compensation
• Data Compensation Agreements
• Letters Of Access
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 32
When Testing Will Be Required
In the case of an order;
In the case of a rule, 30 days after
publication, manufacturers and importers
must submit:
• letter of intent to test; or
• request for exemption from test
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 33
Forum/Alternatives
Industry consortiums
Categories and testing of representative
substances
Use of alternative test methods
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 34
Compensation
• Manufacturers, importers bear test costs
• Can apply to processors (rare)
Must provide “fair and equitable
reimbursement” to those that test
EPA reimbursement orders rare
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 35
Data Compensation Under TSCA
No change from old TSCA
When persons subject to test rules (or orders) are unable to
reach an agreement on the amount or method of
reimbursement, either party may initiate arbitration before
the American Arbitration Association (AAA).
EPA publishes a notice in the Federal Register that a
request for an arbitration hearing has been made.
Any other person wishing to participate in the hearing must
notify EPA within 45 days of the Federal Register notice.
Opportunity for foreign data owners to participate?
The parties may mutually agree on the location where the
hearing is to be held. If parties cannot decide AAA sets the
locale.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 36
Arbitration Procedure
EPA publishes a notice in the Federal Register advising those
subject to the test rule that a request for an arbitration hearing
has been made.
Any other person wishing to participate in the hearing must
notify EPA within 45 days of the Federal Register notice.
The parties may mutually agree on the locale where the
hearing is to be held. If the locale is not designated within 45
days from the time the complete list of parties is received, the
American Arbitration Association shall have power to
determine the locale.
Expedited procedure for claims of $5,000 or less.
The award is made promptly by the hearing officer and, unless
otherwise agreed by the parties, no later than 30 days from the
date of closing the hearings, or if oral hearings have been
waived, from the date of transmitting the final statements and
proofs to the hearing officer.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 37
Oral Hearing
One arbitrator unless AAA decides more are needed.
If one of the parties is a foreign national, the arbitrator is appointed from a third country.
Any party may be represented by counsel.
Testimony given under oath.
The party seeking reimbursement must present a claim and proofs and witnesses, who shall submit to questions or other examination.
The party from whom reimbursement is sought then presents a defense and proofs and witnesses, who shall submit to questions or other examination.
Fees and expenses usually paid by the parties equally but arbitrator can order one party to pay more than an equal share.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 38
Basis for the Award
Based on share of total production volume of the test chemical.
However, arbitrator can use a different sharing basis that may take into account the effect of the reimbursement share on competitive position.
Production volume measured over a period that begins one calendar year before publication of the final test rule (or issuance of the order) and continues up to the time of the arbitration.
Production volume includes amounts of the test chemical imported in bulk form and mixtures, and the total domestic production of the chemical including amounts produced as a byproduct. Impurities not included unless the test rule/order specifically includes them.
Amounts of the test chemical manufactured for export generally not included unless covered by a finding under TSCA’s export provisions.
Chemicals excluded from the TSCA jurisdiction not included in the computation of production volume.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 39
Testing Costs
All costs reasonable and necessary to comply with the test
rule/order, taking into account the practices of other
laboratories in conducting similar tests, are eligible for
reimbursement. Necessary costs include:
• Direct and indirect costs of planning, conducting, analyzing and
submitting the test results to EPA.
• A reasonable profit, and a reasonable rate of interest and
depreciation on the tester's initial capital investment.
• The cost of repeating or repairing tests where failure was
demonstrably due to some cause other than negligence of the
tester.
• EPA fees associated with the test rule/order.
• Costs attributable to tests beyond those specified by EPA shall
not be eligible for reimbursement under this rule.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 40
Data Access
EPA must base decisions on sound science.
Likely to require peer reviewed published data and/or full study reports.
Robust summaries generated for REACH likely will not be sufficient.
Therefore only REACH data owners will have data in a form suitable for sharing.
EPA will make full study reports public and the effect of this on data compensation under EU REACH and Korea REACH will need to be considered.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 41
Tips and Traps
Martha E. MarrapesePartner
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 42
Some Points to Consider
For purposes of notification requirements, there is no “only representative” option under TSCA - must work through US importers
It is anticipated that non-U.S. companies who seek to do so will be able to participate in industry testing consortia for existing, high priority chemical reviews
The timing of EU restrictions or authorization prohibitions may influence US risk management schedules
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 43
2017 - Attention on Inventory Reset and CBI
EPA will maintain public and confidential Inventories.
Must work with an importer to submit an active chemical notice.
Inventory “Reset” submitter must assert/substantiate CBI claims for confidential Inventory substances.
EPA will review all chemical identity CBI claims• Can approve, deny, approve in part, etc.
• If approved, EPA will protect for 10 years but submitter must renew or protection will expire.
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 44
Slated for Regulation
Preferred High Priority: § 6(b)(2)(D). (1) score 3 for persistence and bioaccumulation; (2) known human carcinogen; and (3) high acute and chronic toxicity.
• Cadmium and cadmium compounds
• Chromium and chromium compounds
For carcinogenic effects generally, non-linear approach may be proposed if supported by the science.
Mercury compounds: § 8(b)(10).
• Hg export ban beginning 1/1/2020 for:
• Hg(I) chloride, Hg(II) oxide, Hg(II) sulfate, Hg(II) nitrate, Cinnabar, or Hg sulphide
Endocrine disruption in the mix
• US evaluation lags behind EU and has yet to adopt a “no threshold? approach
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 45
PBT’s Also A Priority for Regulation
Initial candidates may include:
• Pigment Yellow 83 (CASRN 5567-15-7)
• DecaBDE (CASRN 1163-19-5)
• Ethanone, 1- (1,2,3,4,5,6,7,8- octahydro-2,3,5,5-
tetramethyl-2- naphthalenyl)- (CASRN 54464-59-4)
• Ethanone, 1- (1,2,3,4,5,6,7,8- octahydro-2,3,8,8-
tetramethyl-2- naphthalenyl)- (CASRN 54464-57-2)
• 4-tert-Octylphenol (4-(1,1,3,3- Tetramethylbutyl)- phenol)
(CASRN 140-66-9)
• Pentachlorothio-phenol (CASRN 133-49-3)
• Phenol, isopropylated, phosphate (3:1) (iPTPP) (CASRN
68937-41-7)
• 2,4,6-Tris(-tert- butyl)phenol (CASRN 732-26-3)
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 46
Penalties/Enforcement
Penalties
• Civil: Maximum penalty $25,000 $37,500
• Criminal: Maximum penalty $25,000 $50,000
• Imminent Endangerment: Persons that know that violation places individual in imminent danger of death or serious bodily injury subject to fine of $250,000, imprisonment not more than 15 years, or both
–Organizations subject to fine not more than $1MM
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 47
Questions?
Visit TSCAReformCenter.com to stay
updated on new and developing TSCA
Issues and Regulations
Copyright © 2016 | www.khlaw.com Keller and Heckman LLP 48
Washington, DC • Brussels • San Francisco • Shanghai • Paris
Keller and Heckman LLP
THANK YOU
Herbert Estreicher, Ph.D.Partner
Martha E. MarrapesePartner
Marcus Navin-JonesPartner