California's proposed chemical regulations are drawing opposition from industry associations whose member companies will likely be affected.
The Adhesive and Sealant Council (ASC), a North American trade association, expressed its concern with the California Department of Toxic Substance Control's (DTSC) proposed "Safer Consumer Products" regulation, part of a statewide effort to require manufacturing companies to perform exhaustive, costly analyses of hundreds and hundreds of chemicals they use. The ASC -- which counts 119 adhesive and sealant manufacturers, raw material and equipment suppliers, distributors and industry consultants as members, "representing more than 75 percent of the U.S. industry" -- last week issued a media statement warning that the legislation, if passed, "could lead companies to abandon California markets or relocate manufacturing facilities to other states."
The legislation would establish an initial list of 1,200 chemicals labeled "Chemicals of Concern." But because of the size of such a list, the ASC's statement said that "many of those listed would not be subject to DTSC review for a number of years." In other words, those chemicals could be unjustly labeled and stuck in limbo for years before getting their day in court. The trade group's press release suggested that the state start with a far smaller list that focuses on actual known offenders, such as proven carcinogens.
Also concerned with DTSC's plan is the American Cleaning Institute (ACI), which says the Safer Consumer Products regulations are "unclear, would cause confusion in the marketplace, place heavy burdens on business and provide little benefit to consumers."
It does seem as if the state of California is looking for ways to drive business out of the state. This specific chemical regulation is seen as part and parcel of a crushing wave of regulations that are likely to drive up costs and burdens on manufacturing in the Golden State.
My recent ThomasNet.com Green & Clean article noted that California is also instituting a carbon cap-and-trade program, being handled by the California Air Resources Board, as part of AB32, described as a "landmark greenhouse gas emissions law" by the Associated Pressthat its critics, including oil refiners and other manufacturers, say "would impose enormous costs on businesses at a time when the state's economy is sputtering."
Dorothy Rothrock of the California Manufacturers and Technology Association, commenting on the cap-and-trade program, told AP that "manufacturers are making plans this year for the next three to five years and capital investments may or may not happen in California based on the current regulations." And the Los Angeles Times reported, "The independent Legislative Analyst's Office concluded that jobs probably will be lost because businesses can move elsewhere."
The Safer Consumer Products proposal is a result of the 2008 passage of the California Green Chemistry Initiative (A.B 1879), which, according to the ASC, was a way to "address the reduction or elimination of adverse public health and environmental impacts from hazardous chemicals utilized in consumer products." I wrote another Green & Clean article in August that noted if the proposed set of regulations under the Green Chemistry Initiative is enacted, manufacturers would need to identify and substitute alternative chemicals in their manufacturing processes if they want to continue doing business in the state. The comprehensive set of rules could affect up to 3,000 chemicals if state officials deem them as harmful, ASC stated.
Crowell & Moring, a Los Angeles-based law firm, posted on its website in August that, according to the Green Chemistry Initiative regulations as worded, even manufacturers that don't sell products into California would have to be vigilant because they would be subject to the regulations if their products do end up in the state. Product importers would bear the responsibility if manufacturers fail to comply, and retailers will be required to comply only if the manufacturers and importers fail to comply, according to the law firm.
Expressing support of the Green Chemistry Initiative, La Opinion wrote:
Credit: Ty Nigh, CC BY 2.0
There are currently 1,200 so-called Chemicals of Concern; from those, the Department of Toxic Substances Control (DTSC) will designate "Priority Products." Manufacturers of these products will have to conduct scientific assessments to basically find replacements for these dangerous chemicals. If they find no such replacements, the options range from expanding the information provided to customers to banning the product.
The DTSC "so far has decided to include only five products in the Priority Products category, showing restraint in its strategy," La Opinion did note, adding that "the implementation of this law will give the industry the incentive to consider ingredient replacements that benefit everyone."
One major area of concern for those that could be affected by the proposed Safer Consumer Products regulation, according to Mark Collatz, ASC's director of government relations, is the opportunity to poach trade secrets from filings. The ASC "questioned some of the detailed trade secret information that the new proposal could demand, and charged that the agency seemed to be setting itself up in a role to judge one company's innovative approach against another's."
ACI officials, meanwhile, crtiticized the DTSC's proposed threshold where an "alternatives analysis" (AA) is required. ACI's senior director of environmental safety, Paul DeLeo, called it "disturbing" that the expensive, time-consuming analysis is required "even though it acknowledges that the AA threshold may well be below a level that represents an insignificant or negligible risk, too small to be of concern."
When Collatz was reached by e-mail to elaborate on just how serious is the threat of manufacturing companies leaving California should the regulations be enacted, he replied, "For any manufacturer, adhesive and sealant or otherwise, much will depend on what the 1,200 Chemicals of Concern are. Do I think adhesives or sealants will be targeted in the first five products? Probably unlikely. But a few years down the road, if the regulation plays out as presently proposed and manufacturers are asked to provide a lot of detailed information about formulas, companies could very likely decide not to sell some (or most) of their products in California."
In comments to the DTSC, ACI officials called the green chemistry law "vague," saying it leaves "many critical details" for future rule-making. "While such an approach is not unusual to some extent for regulatory development, the scope in this case is breathtaking, and will result in significant confusion in the marketplace," said DeLeo in a statement. "Because the regulations contain so many vagaries, the regulated community will not know how to comply."
And whereas the DTSC says it is targeting roughly 1,200 chemicals, ACI officials say a review of DTSC's lists "found they contain over 4,000 chemicals, many of which are not used to manufacture consumer products."
The proposed legislation appears to be generating opposition from unexpected quarters, as well. Loren Kaye, president of the California Foundation for Commerce and Education (CFCE), recently wrote that DTSC's "cavalier treatment of their obligation was so egregious that 16 Democratic legislators wrote to [California Governor Jerry Brown] asking that the regulations be delayed until a thorough economic analysis is completed."
Kaye charged that the DTSC "never adequately completed a fiscal and economic analysis to divulge the economic, jobs, competitiveness and budget impacts of their rule -- as required by law." And he noted that the CFCE, a policy institute affiliated with the California Chamber of Commerce, commissioned a well-regarded policy analysis firm, Andrew Chang & Co., to independently assess the impacts of that regulation. It found "that over the next 25 years the potential net costs to California businesses and consumers could reach $150 billion and could lead to more than 100,000 direct lost jobs at the peak of implementation," he wrote.
California can ill-afford to antagonize businesses these days -- either the manufacturers that are already laboring under the state's already-heavy regulatory regime and high tax rates or the businesses that are looking to base themselves there. While the intentions behind the initiatives are meant to be good -- we're all for getting rid of toxic substances -- less-burdensome approaches to businesses are more welcomed.