How does the “Safe Chemicals Act of 2011” affect toll blending companies?

Last week U.S. Senator Frank R. Lautenberg introduced legislation intended to modernize the very outdated “Toxic Substances Control Act of 1976” (TSCA).  The Safe Chemicals Act of 2011 is the most significant legislation in 35 years for the chemical industry, which has lobbied for years to update the TSCA.

What does the “Safe Chemicals Act of 2011” mean for small processing companies, in particular those companies that provide blending services?

Of particular interest and likely concern to toll blending companies are provisions for “chemical processors” to determine safety of their products, this puts the burden of proving safety on the industry and requires reporting on all chemicals regarding identification and usage. Further provisions regarding open access to “reliable chemical information” introduce a host of concerns regarding patented formulas and proprietary processes.

Links to a full version and summary are below, but here are the highlights as posted on Lautenberg’s website:

Highlights of the “Safe Chemicals Act of 2011”

Provides EPA with sufficient information to judge a chemical’s safety.  Requires manufacturers to develop and submit a minimum data set for each chemical they produce, while also preventing duplicative or unnecessary testing and encouraging the use of rapid, low-cost, non-animal tests that provide high quality data.  EPA will have full authority to request additional information needed to determine the safety of a chemical.

Prioritizes chemicals based on risk.  Calls on the EPA to categorize chemicals based on risk, and focus resources on evaluating those most likely to cause harm.

Takes fast action to address highest risk chemicals.  Requires EPA to take fast action to reduce risk from chemicals that have already been proven dangerous.  In addition, the EPA Administrator is given authority to act quickly if any chemical poses an imminent hazard.

Ensures safety threshold is met for all chemicals on the market.  Places the burden of proof on chemical manufacturers to prove the safety of their chemicals.  All uses must be identified and determined safe for the chemical to enter the market or continue to be used.

Creates open access to reliable chemical information.  Establishes a public database to catalog the chemical information submitted to the EPA by manufacturers, as well as the safety determinations made by the EPA.  The EPA will impose requirements to ensure the information collected is reliable.

Promotes innovation and development of green chemistry.  Establishes grant programs and research centers to foster the development of safe chemical alternatives, and brings some new chemicals onto the market using an expedited review process.

At first glance, the main question most companies are asking is who exactly is responsible for the cost of complying with this bill.  The section on ensuring a safety threshold for all chemicals on the market is a good example. While the full version does talk about avoiding redundancy and waste to lower the burden on companies, it’s difficult to ascertain whether the formulators, processors, or end distributors will be required to determine the safety of a chemical,  or a process. Given the complexity of the chemical industry particularly with regards to the widespread outsources of blending services, its difficult to pinpoint who exactly the burden of proof eventually falls. Even though most blending companies provide a specialty product or service, many manufacture hundreds if not thousands of different formulations representing dozens of independent companies.

The section on creating “open access to reliable chemical information” is likely to cause the greatest controversy with regard to manufacturing at every level, from formula to store shelf. The full version discusses everything from improved MSDS’s, to greater reporting on transportation, to documenting background baseline levels at facilities, to full disclosure on accidental releases. While some of these regulations are already on the books, it’s clear that small companies will likely struggle to cover the costs of compliance.

The new legislation, which is very heavy in consumer protection (as expected) has been closely followed by industry associations and their recent comments tell us a great deal about how these new regulations could end up affecting small blending companies.

Here is an excerpt from the statement released by Charles T. Drevna, president of NPRA, the National Petrochemical & Refiners Association (press release here)

“We continue to support the responsible modernization of our nation’s chemical safety laws. Nothing is more important to NPRA’s members than the safety of the products they produce. Ensuring the continued protection of human health and the environment through effective chemicals risk management policy is vital.

“However, health and environmental protection need not – and should not – come at the expense of American jobs and the economy. If enacted in its current form, Senator Lautenberg’s bill threatens to further damage America’s already fragile manufacturing base.

Here is an excerpt from the American Chemistry Council (ACC) President & CEO Cal Dooley (press release here)

“ACC supported many of the goals and objectives of the senator’s legislation in the last Congress, but his earlier proposal was inconsistent with the principles that we have set out for a successful TSCA modernization in several important respects. Further, the bill contained provisions that would not have produced the benefits intended by its authors. Unfortunately, it appears many of our concerns have not been addressed in this new version, and the bill introduced today could put American innovation and jobs at risk.

From Chris Cathcart, Consumer Specialty Products Association (CSPA) President and CEO (press release here)

“The new bill introduced today moves in the right direction as it seeks to adopt important concepts of prioritization and tiered minimum data set requirements,” Cathcart said.  “These two elements, along with the preservation of a risk based system, are essential components of any workable regulatory framework under TSCA.  However, we remain concerned about other sections of the bill, including its approach on Reporting and Declarations, the protection of confidential business information (CBI) and the safety standard. A bi-partisan dialogue can resolve these issues.”

From the looks of things, lawmakers are happy to have the chemical industries attention and seem open to sitting down at the table to work out a plan that works for everyone.

A summary of the bill can be found here: http://lautenberg.senate.gov/assets/SafeChem-Summary.pdf

Read the full version here: http://lautenberg.senate.gov/assets/SafeChem.pdf

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