INSIGHT: EPA chemical disclosure proposals worry industry

18 May 2012 19:36  [Source: ICIS news]

By Brian Ford

HOUSTON (ICIS)--US chemical producers are becoming more concerned that the Environmental Protection Agency (EPA) is undoing the delicate balance between the need for public disclosure of what goes into various products, and the industry’s need to maintain trade secrets.

The EPA has proposed a rule change that would prohibit claims to protect confidential chemical identities in health and safety studies that producers are required to submit to the agency before products can be brought to market, according to the American Chemistry Council (ACC).

ACC president Cal Dooley said the EPA has taken the position that a section of the US Toxic Substances Control Act (TSCA) means that a trade secret chemical identity “must be disclosed whenever it is part of, or underlying data for, a health and safety study submitted under TSCA”.

Such disclosures would hurt innovations, jobs and the economy, the chemical trade group says.

Dooley said the EPA’s interpretation of the act is wrong.

“That section provides very broad protection of trade secrets and confidential business information, but permits EPA to disclose health and safety effects information while still protecting confidential chemical identities,” Dooley said in a 3 February letter to the Office of Management and Budget (OMB).

Members of Congress are also weighing in the debate.

Nine members of the House Subcommittee on Intellectual Property, Competition, and the Internet, have voiced their concerns.

In an 11 May letter to the OMB, the subcommittee members said trade secret protection is crucial to US competiveness.

“Much of the innovation in chemistry with both new and existing chemicals depends on trade secret protection for confidential chemical identities,” the letter said.

The panel members noted that new chemicals, uses and mixtures of existing chemicals usually take millions of dollars to develop.

“The public disclosure of confidential chemical identities would make those substantial investments readily available to a company’s competitors, both inside and outside the United States,” according to the letter.

As an example of the potential repercussions of the rule change, the ACC’s Dooley points to a clothes detergent innovation by Procter & Gamble.

“The company’s technological breakthrough enables consumers to obtain strong performance benefits from washing in cold water as expected from washing with standard detergents in warm or hot water, allowing consumers to save money on energy bills and reducing CO2 emissions from the energy-intensive process of heating water in the laundry wash cycle,” Dooley said in his letter to the OMB.

Proctor & Gamble spent $150m (€119m) to develop the product and submitted two pre-manufacturing reports to the EPA, both of which claimed the specific chemical identities as confidential business information.

“Had the erroneous interpretation of Section 14 [of TSCA] that EPA proposes now been in effect, the company would have been forced to disclose those chemical identities to its competitors,” Dooley said.

The ACC said in a white paper on the subject that many businesses – particularly smaller ones – often innovate by combining existing chemicals in new ways, but such recombinations are not eligible for patent protection.

“Their combination creates considerable value, however, but only if protected from disclosure,” according to the white paper. “EPA’s CBI [confidential business information] disclosure policy applies to the components of mixtures, and thus may inhibit innovation in development of new and improved formulations.”

The rule change could even squelch the development of “green” chemicals to replace those with greater health or environmental risks, according to the white paper.

“Without the potential for economic returns on investment made possible through CBI protection, those greener chemicals may never be introduced.”

Dooley said Congress recognised the need to maintain trade secrets when it first passed TSCA. Those protections have repeatedly been recognised in subsequent laws, and in court rulings, he said.

The Society of Chemical Manufacturers and Affiliates (SOCMA) has also warned against the potential consequences of the proposed change.

Speaking at an industry conference, SOCMA president Lawrence Sloan said without a proper balance between public access to proprietary information and protection of critical business data, the US would be unable to maintain its global technological lead and create “new market opportunities and the jobs that come with it”.

Sloan said that 70% of global intellectual property is US-generated.

Dooley said health and safety studies can provide meaningful information to the public without disclosing chemicals identities, specifically through the use of structurally-descriptive generic names in lieu of trade secrets or confidential chemical identities.

Likewise, the EPA should not require the disclosure of specific components of chemical mixtures that were made during research and development (R&D) and have not been offered for commercial distribution.

Finally, the EPA should work with the industry non-governmental organisations (NGOs) to improve the process for determining generic names for chemicals used in health and safety studies and for those at the pre-manufacturing phase, Dooley said.

($1 = €0.79)

By: Brian Ford
+1 713 525 2653

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