Growing pains in implementing the new TSCA: Section 5 and its critical role in innovation

On December 14, 2016, the Environmental Protection Agency (EPA) will host a public stakeholder discussion on the implementation of section 5 of the Toxic Substances Control Act (TSCA).  The section was revised by the Lautenberg Chemical Safety Act, approved by an overwhelming bipartisan majority of Congress in mid-2016.  At issue in the stakeholder meeting will be how well EPA’s implementation effort comports with congressional intent.  For many stakeholders, particularly chemical manufacturers and their customers, the impact of EPA’s interpretation of the statutory provisions on innovation is a key concern.

We’re now several months into the implementation effort.  EPA has acted expeditiously and conscientiously, making  progress on many fronts.  EPA is clearly making serious efforts to meet its statutorily mandated deadlines; the release of the first ten work plan chemicals to move to risk evaluation was even ahead of schedule.

EPA’s section 5 implementation effort is a marked contrast to progress in other areas.  Some 350 pre-manufacturing notices (PMNs), the mechanism by which EPA reviews new chemicals, were pending as of the date the amendments were enacted.  Since that time, some 200 new PMNs have been filed with the Agency.  In a program that has regularly reviewed about 1,000 PMNs a year, EPA’s pace of review has dropped off dramatically.  Since the date of enactment, only 27 PMNs (each finding that a substance is “not likely to pose an unreasonable risk”) have been posted.  Interim recommendations for 172 others are posted on EPA’s website, but progress toward a final decision has been extremely slow.

Part of the delay can be attributed to the fact that Congress directed EPA to “show its work” on PMN decisions.  In an amendment meant to increase public transparency and enhance public confidence, Congress instructed EPA to document the reasons for all its decisions.  But Congress also cautioned the Agency that the change should not  delay or impede reviews and entry of chemicals to market.

A substantial part of the delay is attributable to EPA’s interpretation of the section 5 changes, an interpretation that is having measurable impacts on innovation.  EPA has expanded its review of new chemicals well beyond the uses designated by the PMN submitter, and in some cases has focused on uses (and in some cases manufacturing processes) that are remote or speculative, well beyond those reasonably anticipated from the conditions of use described in the PMN.

Delay is also caused by EPA’s refusal to apply its so-called “non-section 5(e) significant new use rule (SNUR)” authority —  authority that was not changed by Congress.  In 1995, EPA adopted non-section 5(e) SNURs (a SNUR that does not also include a consent order impacting the PMN submitter’s use) as an efficient regulatory control to address cases where deviations from the uses described in a PMN might pose an unreasonable risk.  Non-section 5(e) SNURs can be issued more quickly than 5(e) orders, and they’re effective – they address new uses outside the PMN by requiring advance notice to the Agency through a Significant New Use Notification.  Now, however, EPA seems poised to issue section 5(e) consent orders in the vast majority of PMN cases.  The refusal to issue non-5(e) SNURs and instead issue orders means the Agency is opting to return to the status quo before 1995, when it  admitted it was issuing unnecessary orders.  And this change has created a significant burden for both the Agency and PMN submitters, covering the drafting, negotiation and adoption of orders.  The public, and the marketplace, are burdened by the delays as well, as innovative technologies are kept from the market for extended periods.  Some of the PMNs awaiting a decision by EPA date back to 2015 – well beyond the basic 90-day review period required by the statute.

Importantly, Congress didn’t change its expectation for how long EPA would take to conduct reviews under the new statute.  Because chemicals are building blocks for everything else, delays bringing new chemistries to market work just like construction delays – the lag time to get approval affects everything down the value chain.  A delay doesn’t just hurt the PMN submitting  company; it hurts all the companies in the supply chain – and the consumer.  The ability to create and offer new product formulations helps U.S. businesses compete and win globally, and the predictability, timeliness, and efficiency of the new chemical review program under Section 5 is the critical first step to making this happen.

Some have suggested that industry’s concerns about the impact of section 5 decision-making to date amount to playing the “innovation card” in an attempt to short-change necessary health and environmental reviews.  That concern does not stand up to scrutiny.  The chemical industry has been fully engaged with EPA on the implementation of the TSCA amendments.  We want this new law to meet its objectives and deadlines, and we’ve made this clear, among other things, with our substantial efforts to address questions raised by EPA in PMN reviews.  When we invoke the importance of American innovation, we do so proudly, and seriously.  Right now, innovation is stuck, because completion of new chemical reviews has ground to a halt.

EPA has an important opportunity on December 14 to explain to all stakeholders the practical and legal logic behind its section 5 implementation efforts, and particularly how its implementation effort stacks up against Congress’ clear direction.  And hopefully, the experience of the section 5 program over the last 6 months will be seen simply as a “growing pain,” and not a permanent condition.

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