GlobalChem 2013: Seeking clarity for chemical commerce

22 February 2013 10:31  [Source: ICB]

As chemical industry executives, government officials and environmentalists gather for the annual GlobalChem conference, the regulatory outlook is increasingly complex and fraught with uncertainty, but may also offer opportunities.

"We're very proud of GlobalChem because it is one of the significant events where we can bring together industry leaders, the regulatory community and other constituents to discuss how we manage chemicals in commerce," says Cal Dooley, president and CEO of the American Chemistry Council (ACC), a co-sponsor of the conference alongside the Society of Chemical Manufacturers & Affiliates (SOCMA).

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The meeting, which provides up-to-date reviews and insights on chemical regulatory initiatives in key global areas, is nearing its 30th anniversary.

"This conference," explains Dooley, "is a validation of the individual investments and resources that our industry has committed to help develop a more effective assessment of the chemicals we are putting into commerce."

SOCMA president and CEO Lawrence Sloan agrees. "This conference is arguably the single most important gathering place each year for chemical industry professionals who need to stay up to speed on the latest regulations, both domestic and foreign."

EXTENSIVE CONFERENCE AGENDA

For the US-based chemicals sector and foreign producers who export to the US, any discussion of chemical controls quickly comes to focus on the longstanding Toxic Substances Control Act (TSCA), the principal regulatory vehicle for ensuring the safety of chemicals in commerce.

TSCA and hopes for modernisation of this 37-year-old statute are major topics among GlobalChem participants meeting at National Harbor, Maryland, at the end of February. But there is a lot more on the agenda.

One session details challenges facing US producers to meet final federal rules designed to see US hazard communication standards conform to the UN's Globally Harmonized System (GHS) of chemical classification and labelling.

Experts will also review efforts being made by the US Environmental Protection Agency (EPA) to improve the quality and reliability of its Integrated Risk Information System (IRIS), which is supposed to give regulators, industry and stakeholders accurate health-impact assessments that in turn are used to determine risk levels and rulemaking.

The next phase of Canada's Chemicals Management Plan (CMP) will be outlined and analysed, as will newly completed plans by the US and Canadian governments to share information and develop joint approaches for regulating nanomaterials.

ASIAN DEVELOPMENTS

The multiple chemical control programmes being revised among Asian nations - regarded as "a moving regulatory target for global companies" - will be aired, including changes coming in South Korea, Japan, Australia, Taiwan, Malaysia and India.

China's recent GHS requirements and its earlier "measures on environmental management of new chemical substances" warrant their own session, a reflection of both how significant the country's market is and the international impact of Beijing's rulemaking.

More broadly, a GlobalChem session will examine progress being made on improvements to the Strategic Approach to International Chemicals Management (SAICM) and whether target goals in the program will be met by the 2020 deadline.

All of this serves to illustrate the hydra-headed regulatory challenge facing chemicals producers worldwide. "In a nutshell, uncertainty defines the regulatory landscape," says SOCMA's Sloan. He adds that many of the specialty chemicals producers among SOCMA member firms have done well in the last year, but the future is in question.

"A lot of our members are reporting strong sales for 2012, but the problem going forward is [that there are] so many unanswered questions about TSCA, corporate taxes and other regulations. Uncertainty and the costs related to uncertainty are clouding the horizon."

Cal Dooley

"This conference is a validation of the individual investments and resources that our industry has committed to help develop a more effective assessment of the chemicals we are putting into commerce"

Cal Dooley
President and CEO, ACC

Part of that uncertainty, says Sloan, is the sense among many SOCMA members that the Obama administration, having won a second four-year term in office, may unleash a rash of new regulatory initiatives this year.

Sloan and SOCMA members contend that they already have enough on their plates without a new onslaught of rulemaking. For example, Sloan cites the EPA's new Chemical Manufacturing Area Source (CMAS) standards, which cover emissions by smaller producers and take effect this year.

He notes that SOCMA had worked with EPA regulators to mitigate some aspects of the new rule, but that complying with CMAS is likely to cost some small, individual producers tens of thousands of dollars each "for what we feel will be a really small environmental return."

Those compliance costs and others, he says, "take funding from new product or services development, research and marketing, and we don't know if those additional costs can be passed on to customers." As a consequence, "it is hard to forecast spending and budgeting when there are so many ­uncertainties".

In addition, SOCMA is concerned that the EPA's new revisions for premanufacture notices (PMNs) will put US specialty chemical technology at risk by exposing confidential business information (CBI) to foreign competitors. Although the new, online PMN process is still pending final approval, Sloan is worried.

"We are concerned that, if our confidential business information is required to be included in the electronic PMNs, overseas firms can scour the internet and get that data - and put our members out of business by duplicating technology that has taken us years of research at great cost," he says.

TSCA REFORM PROVOKES DEBATE

The premanufacture notice requirement is part of TSCA, so once again, almost any discussion of US chemicals regulation gets sucked into the black hole of TSCA reform legislation. Everyone on all sides of the TSCA reform debate agrees that the statute is in need of modernisation. Beyond that fundamental meeting of the minds, the routes to reform take wildly differing directions.

Environmentalists would like to see TSCA recast as a US version of the EU's Reach programme for registration, evaluation, authorisation and restriction of chemicals, a system that US chemical makers see as based on the precautionary principle.

That EU view was reflected in the introduction of Democratic Senator for New Jersey Frank Lautenberg's Safe Chemicals Act in both the 111th and 112th Congress, a bill described by industry as a "non-starter" but which would, if enacted, choke off innovation and starve the US chemicals sector of progress. Chemical makers instead would prefer modernisation of TSCA based on the same risk- and science-based principles that underlie the existing statute.

A TSCA reform bill more to industry's liking is expected soon from Senator David Vitter of Louisiana, the new ranking Republican on the Senate Environment and Public Works Committee. ACC's Dooley says his member firms are looking forward to Vitter's proposal, especially because they expect it may garner some co-sponsors and support from Senate Democrats.

For Dooley and the ACC, modernisation of TSCA is essential to give industry some level of certainty going forward and, equally important, to give the public renewed confidence in the safety of chemicals in commerce. "Legislation to modernise and improve TSCA is one of our highest policy priorities for 2013," Dooley says.

Getting Republicans and Democrats in the sharply divided and fractious Congress to agree on comprehensive reforms for such a major and complex law as TSCA seems to most observers a bridge too far. But Dooley disagrees, and he argues that the admittedly high challenge of getting a reform bill to the president's desk should not deter the effort.

"I recognise that we have a difficult working environment in Congress," Dooley says, speaking from his own first-hand experience in the House as a former seven-term representative from California.

The political profile on Capitol Hill was not substantially changed by the US national elections in November last year. Democratic President Obama has another four years in the White House and as head of his party. And while Democrats gained some seats in Congress, the House remains in firm Republican majority control, just as Democrats strengthened their narrow majority in the Senate.

A DESIRE TO PROGRESS

"But at ACC, we are fully committed to trying to recruit a number of bipartisan sponsors of TSCA reform legislation that can pass in the Senate and then encourage action in the House," Dooley says. "The way we approach this is: 'Yes, we all know it is a difficult political environment, but we are still fully committed to moving forward with constructive legislation that would effectively modernise TSCA.'

Lawrence Sloan

"We are concerned that, if our confidential business information is required to be included in the electronic premanufacture notices, overseas firms can scour the internet and get that data"

Lawrence Sloan
President and CEO, SOCMA

"The way I look at it, there's just not a whole lot of upside in approaching this effort by concluding that the political environment is not going to be conducive to moving forward," he adds. "We can put together a bill that will be an appropriate response to the public interest, to give the public confidence about the safety of chemicals in commerce. We think we can achieve that enhanced level of safety assessment and still ensure that the US chemicals industry is at the forefront of innovation and technology."

Bill Allmond, SOCMA vice president for government and public relations, is less optimistic about prospects for a congressional consensus on TSCA reform, in part because Congress, the White House and the broader Obama administration are already consumed by controversy on any number of major issues, including but not limited to the national debt limit, the debt itself, the federal budget deficit, social spending programs verging on bankruptcy, taxes, immigration reform, Obama's new global warming goals, and many more.

"I don't think the House, in particular, is interested in a TSCA reform bill," Allmond says. "When you consider all the major concerns facing this country and Congress, TSCA doesn't come close to the level of public concern that surrounds the national debt, the economy and jobs. I don't think TSCA ranks very high on the congressional list or the presidential list of concerns, so I think it will be another couple of years before a TSCA reform bill can get to the president's desk."

PIECEMEAL APPROACH

Allmond explains that SOCMA is instead supporting a piecemeal approach to changes in TSCA. "There are a half-dozen areas in TSCA that could be worked and adjusted, rather than waiting for a single silver bullet that would address and correct everything in TSCA at one time," he says.

Although he continues to advocate a comprehensive reform of TSCA this year or next, the ACC's Dooley also seeks changes to the existing TSCA statute. "If you look at the agenda of GlobalChem, you'll see that we're not waiting for major legislation to find ways to improve TSCA functions under the existing statute. We're working with the EPA and other regulatory agencies in a collaborative way to find ways to enhance the assessment of chemicals in commerce. We also are fully committed to working as a constructive partner with the EPA in improving the effectiveness of the TSCA as it is now."

NON-TRADE BARRIERS

In the closing session of GlobalChem, participants will review efforts to promote trans-national regulatory cooperation, with the goal of increased international chemicals trade by reducing or eliminating needless non-tariff barriers to trade (NTBs).

NTBs usually come down to conflicting national rules and regulations. To reduce those conflicts, ACC and the European Chemical Industry Council (Cefic) are working to harmonise chemicals regulations between the two major trading groups.

In a proposal submitted to US trade officials, ACC and Cefic argued that there is "significant potential to enhance regulatory transparency and cooperation, streamline chemical regulatory reviews and minimise the cost and burden to governments and industry alike."

The two groups suggest that US and EU governments increase information-sharing and work to prioritise chemical substances for review and assessment, align their chemical assessment processes and institute a mandatory consultation process when drafting new chemical regulations.

  • Joe Kamalick is chief correspondent for the Americas for ICIS news. He is based in Washington, DC, and covers regulatory and political affairs in the US capital

By: Joe Kamalick
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