2013 will mark the end of one struggle and the beginning of another in industry’s attempt to understand and prepare for the obligations and expectations for the design and manufacture of products sold in California.
Leading up to the formation of California’s Green Chemistry Initiative in early 2007 was an increasing volume of legislative proposals to ban chemicals and ingredients used in consumer products. The Initiative was supported by industry interested in moving the debate about the safety of chemicals to a regulatory agency staffed with scientists and resulting in decisions grounded on peer-review studies and sound science, not emotional arguments made in three minutes of testimony at a legislative hearing. Now, in 2013, industry is faced with compliance with 74 pages of regulations that fall far short of what was supported in 2008. It’s a giant paperwork morass with not a scintilla of science in sight.
Who Needs to Get Prepared?
The applicability of the new regulations is potentially very broad. The definition of “consumer product” is any “product or part of the product that is used, bought, or leased for use by a person for any purpose.” (Cal. Health and Safety Code § 25251.) A very large universe of products is potentially impacted. The list of candidate chemicals for selection in those products is also large. The agency has not published the list yet, but it is estimated to contain over 1,200 chemicals.
The key question on the minds of all industry is: who will be selected in the first round? Playing a game of regulatory Russian roulette, the agency has promised to select only five (5) product types (e.g., nail polish, carpet adhesive, furniture seating foam) in the first round. However, the agency has allowed others to add to this initial list by petition, by seeking an executive order, or by legislative action. This initial list of product types will be published for review and comment 180 days after the effective date of the regulations, which is currently expected to be July 2013.
There are four stages of significant compliance obligations: (1) threshold decision in first 60 days, (2) stage 1 alternatives analysis (AA) in next 180 days, (3) stage 2 AA in following 24 months, and (4) regulatory response stage. This article only addresses the obligations in the first sixty (60) days.
First 60 Days of Compliance: A Crazy Flurry of Notification Requirements
The first sixty (60) days of compliance could present incredible, and for many, insurmountable challenges to compliance, if proper planning is not done well in advance of being selected by the agency.
Every business involved in the sale of the selected product in California could potentially have a compliance obligation, if prior contractual arrangements have not been made. Each business will have to supply a document termed the “Priority Product Notification.” § 69503.7. It must include:
- Name and contact information
- Statement that business is product manufacturer, importer, assembler or retailer
- Type, brand name(s) and product name(s) sold
- If a component, a description of all known product in which the component is used.
If the business has made prior contractual arrangements, then it can merely submit the name and contact information of the other business in the supply chain that will be complying for them.
Alternatively, and concurrently with the “Priority Product Notification,” the business can submit a set of two notices that indicate that it is either removing the product from sale (termed “Product Removal Intent Notification”), removing the chemical from the product (termed “Chemical Removal Intent Notification”), or replacing the chemical in the product (termed, “Product-Chemical Replacement Intent Notification”). After the first notice is submitted, the business is also required to submit a second notice that it has done so (termed the “Confirmation Notification”), or it must proceed to compliance with the rest of the regulations. § 69605.2.
Another potential avenue of compliance in the first 60 days is for a business to submit a notification that its product contains less than the threshold amount of the chemical of concern, termed the “Alternatives Analysis Threshold Notification,” concurrently with the Priority Product Notification. § 69505.3. The AA Threshold Notification must include:
- The name and contact information of the person submitting the notification
- The name and contact information for all manufacturers, importers, assemblers and retailers Certification that the chemical is present in the product only as a contaminant and the concentration does not exceed the PQL threshold l, and the method used to determine the PQL
- The source of the chemical in the product
- All brand name(s) and labeling information for products, and if a component, the names of all known product(s) in which the component is used
- Laboratory methodologies, location, and QA/QC protocols used to measure the chemical Certification that controls will assure the threshold will not be exceeded.
Thus, depending on the course of action, a business may have between one and three notifications it must submit in the first 60 days. Failure to supply the requisite notifications or their information content is a violation, subject to severe fines and penalties. The agency has created no means of electronic submission, so one can imagine that they will be swimming in notifications, given how many businesses may be engaged in the sale in each product category.
Many businesses will have no knowledge whatsoever of what chemicals are contained in their product, or the capability of conducting the analytical testing in the short time frame. Yet, if their product is selected, they must obtain this information. Even the large businesses with the means and capability of doing so will face tremendous technical and feasibility challenges since the regulations do not contain any specified level to design to, search for, request supplier testing of, or develop analytical chemistry methods for.
Given the gross uncertainties about what may be considered compliant, some businesses in the supply chain may submit “Product Removal Intent Notifications” even if another entity is willing to comply, for fear of liability if they fail. Stoppage of sales along the supply chain from poor planning and communication may be a greater risk than the notification requirements themselves.
Therefore, it is recommended that business establish clear rules, contractual arrangements, and protocols with their suppliers and retailers as soon as possible to ensure that the proper notifications are filed by the proper entity in the supply chain in the first 60 days.
Maureen F. Gorsen is a partner in the Los Angeles office of Alston & Bird LLP and focuses her practice on environmental and regulatory issues. She can be reached at Maureen.firstname.lastname@example.org.