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government update California Enacts Nation’s First Green Chemistry Program February 2009 In a move that may revolutionize the way dangerous chemicals and processes are regulated in the United States, California Governor Arnold Schwarzenegger has signed into law AB 1879 (Feuer) and SB 509 (Simitian), creating the nation’s first Green Chemistry program. In May 2007, the Governor launched his Green Chemistry Initiative — an ambitious cradle-to-grave approach to the management of chemicals. The Green Chemistry Initiative seeks to transform the way that chemicals and products are designed in order to reduce or eliminate the hazards to health and the environment that they cause. Schwarzenegger advocates a “systematic” approach to chemical regulation where experts assess the health effects and risks of chemicals of concern and recommend safer alternatives. The Governor charged the state Department of Toxic Substances Control (DTSC) to make recommendations. The DTSC released an initial compilation of options in January of 2008. In June, a Scientific Advisory Panel (SAP) followed up with 38 additional options on chemical education, research, policy and regulation. The new laws codify two of the Green Chemistry initiative’s goals: raising public awareness about the hazards of “chemicals of concern,” and finding alternatives that are less threatening to the environment and public health. AB 1879 (Feuer) gives the DTSC sweeping new authority to design a process for: (i) identifying and prioritizing chemicals or chemical ingredients for consideration as “chemicals of concern”; (ii) analyzing alternatives to chemicals of concern; and (iii) determining how to best limit exposure to, or reduce the level of hazard posed by, a chemical of concern. The law empowers the agency to take a wide variety of actions with regard to chemicals of concern in consumer products upon completion of this risk and alternatives analysis, including the imposition of restrictions or bans on use of a chemical, labeling requirements, recycling or disposal requirements. The measure directs the DTSC to prepare and submit a “multimedia lifecycle evaluation” to the California Environmental Policy Council in advance of required rulemaking. The evaluation should consider the effect of alternatives on air and water quality, including Climate Change, and on worker safety. AB 1879 also creates a Green Ribbon Science Panel comprising experts from various relevant fields to advise the agency on implementation of the measure’s provisions. (AB 1879, Chapter 559, Statutes of 2008). SB 509 (Simitian) requires the DTSC to establish a Toxics Information Clearinghouse for the collection, maintenance and distribution of specific chemical hazard traits and toxicological end point data. The measure empowers the state Office of Environmental Health Hazard Assessment (OEHHA) to specify what specific traits, end points, and other relevant data will be included in the database. (SB 509 Chapter 560, Statutes of 2008). Both measures establish a process for the protection of information that a manufacturer asserts is a “trade secret”. Manufacturers are entitled to seek injunctive relief if the agency determines that information asserted as a trade secret should be publicly disclosed. The two measures have the potential to change how toxic chemicals in consumer products are regulated. In recent years, environmental activists have bypassed the federal government and sought chemical-bychemical restrictions in state legislatures. In the past eight years, the California legislature alone has considered approximately 30 bills banning or limiting specific chemicals. In 2005, the legislature required cosmetics and toiletry manufacturers to report ingredients known to be carcinogens to the 2 California Enacts Nation’s First Green Chemistry Program California Department of Public Health. In 2006, California placed strict limitations on lead content in jewelry and, in 2007, banned the use of phthalates in baby toys. Taken together, California’s Green Chemistry Initiative and the just-enacted measures signal a shift to a more comprehensive, science-based approach wherein scientists and bureaucrats will play prominent roles in determining the risks that chemicals present to consumers and the steps needed to protect consumers. The goal of the legislation, according to Governor Schwarzenegger, is to ensure that chemicals of concern “can be removed from every product in the design stage-protecting people’s health and our environment.” California’s approach both emulates and differs from the European Union’s Registration Evaluation And Authorization of Chemicals (REACH) protocols. REACH requires data on most chemicals produced or sold into EU countries and safety testing for some chemicals before they can be used in products. Indeed, the newly authorized DTSC Clearinghouse database may draw heavily on data reporting in effect in Canada and the European Union. Significantly, California’s focus on safe design alternatives and the regulation of chemicals in consumer products goes further than the EU; it embraces the so called “precautionary principle” favored by environmentalists, which places a greater burden on industry to demonstrate that products and processes will not cause harm to the public before they are put into use. What industries will be most affected by the new program? AB 1879 confers broad authority on DTSC to regulate any and all chemicals of concern by 2011 with few guidelines on how to carryout that mandate. As a result, manufacturers of consumer products and chemicals will need to remain vigilant and engaged as regulations are drafted and adopted over the next two years. However, recent headlines and legislation lend some insights as to the chemicals and industries that may be at the top of regulator’s lists, including: manufacturers of electronics and solar panels (cadmium), baby products (bisphenolA), furniture (fire retardants), food additives (diacetyl), and food packaging (PFOS, PFOA). While DTSC has until January 1, 2011, to promulgate regulations required by AB1879 and SB 509, the department is expected to host a series of public workshops and stakeholder meetings in 2009 on implementation. For the chemicals industry, the switch to a methodical science-based approach to the regulation of chemicals in consumer products will be a welcome change in California. The industry has long argued that state legislatures are ill-equipped to make determinations on the risks that chemicals present. However, if environmental activists perceive that DTSC is not adequately addressing issues on chemicals of concern, they can be expected to prod the legislature to take up matters directly. Other states will closely watch how California’s Green Chemistry effort is implemented. Michigan Governor Jennifer Granholm has signed an executive order on Green Chemistry, and the state of Maine has developed its own comprehensive program. New York and Massachusetts are also considering such initiatives. If you have any questions about California’s Green Chemistry Initiative or any other matter addressed in this Update, please contact the Mayer Brown lawyer with whom you regularly work or the author listed below. Dario Frommer +1 213 229 5158 [email protected] Mayer Brown is a leading global law firm with approximately 1,000 lawyers in the Americas, 300 in Asia and 500 in Europe. Our Asia presence was enhanced by our combination with JSM (formerly Johnson Stokes & Master), one of the largest and oldest Asia law firms. We serve many of the world’s largest companies, including a significant proportion of the Fortune 100, FTSE 100, DAX and Hang Seng Index companies and more than half of the world’s largest investment banks. We provide legal services in areas such as Supreme Court and appellate; litigation; corporate and securities; finance; real estate; tax; intellectual property; government and global trade; restructuring, bankruptcy and insolvency; and environmental. 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