Broad New Chemical Regulations and Liabilities Proposed

Vermont businesses are expected to face a number of new chemical regulatory and legal liability proposals this legislative session.  These proposals could be contentious and controversial, and if enacted they could have significant impacts on Vermont manufacturers and retailers.

The Senate Natural Resources Committee Thursday heard an overview of a recently filed working group report outlining a wide range of proposals, and legislation based on these proposals can be expected to be introduced in the near future.

All Vermont manufacturers should be aware of what is being proposed, stay informed about developments, and consider ways in which they might want to engage in the legislative process.  To learn more, you can contact us at info@aivt.org.

Background

As reported previously, the detection of PFOA and PFOS in groundwater in southern Vermont last year provoked new interest in a wide range of proposals long espoused by activist organizations seeking aggressive chemical regulations.  Owing in part to the late timing of this attention, concrete proposals were largely put off in favor of a stakeholder working group coordinated by ANR to consider and develop proposals over the summer and fall.  This working group was established under what became Act 154.

A report outlining legislative and administrative recommendations of the Act 154 Working Group has been filed with the Legislature (click here for the full report and appendices).  AIV and a number of Vermont manufacturers participated in the Working Group.  However, the make-up and direction of the group resulted in proposals that are effectively rubber-stamped versions of what has been previously proposed by groups like VPIRG, VNRC, and representatives of the Vermont Law School.  With significant time constraints on the Working Group relative to the breadth of issues discussed, the proposals were not subjected to any meaningful consideration of cost or technical feasibility, leaving such questions to be addressed in the context of any actual legislation introduced.  This was both a major failing of the Working Group and a significant challenge that will be faced with any legislation that is introduced.

Overview of Proposals

The proposals fall generally into three categories:  (1) operational regulations potentially impacting all Vermont manufacturers, (2) product regulations impacting consumer products sold in Vermont, and (3) legal liabilities impacting primarily Vermont manufacturers.  The proposals are discussed in general terms below.  For the complete list of proposals and language or justifications provided, you can review Appendix G of the report at the link above.  If you have any questions about the recommendations or related issues and prospects for this legislative session, please contact us at info@aivt.org.

Expanding Operational Regulations

The Working Group report recommends several different ways to expand operational chemical reporting and public disclosure requirements on Vermont manufacturers and retailers.  These can be summarized as follows:

  • Expand the number of chemicals reported, lower the reporting thresholds, and increase compliance requirements required under Vermont’s Toxics Use Reduction and Hazardous Waste Reduction statutes (10 V.S.A. §§ 6623 – 6632, often referred to as Act 100).
  • Require inventory reporting on all chemicals used by manufacturers or inventoried by retailers.
  • Increase public access to reporting information.

Act 100 compliance can be costly and administratively burdensome, and increasing the number of chemicals, lowering thresholds, and increasing compliance requirements (e.g., mandating certified planner sign-off on chemical management plans) could pose significant new compliance costs for manufacturers covered by the statutes under current law and an unknown number of manufacturers who would be newly covered by expansions.

The impact of requiring reporting on all chemicals used or sold in the state would also be expected to be costly and burdensome.  However, a reporting mechanism has not yet been put forward to effect this proposal, so the full extent of costs or administrative requirements remains uncertain.

There are a number of problems and uncertainties associated with these requirements, and the primary issue of concern is cost and benefit.

With regard to Act 100, the stated intent of the statutes is “to encourage reduction of toxic substances and to reduce the generation of hazardous waste whenever technically and economically practicable ” (10 V.S.A. § 6623(b)).  Before chemicals are added to reporting requirements or other changes are made, health and safety risks should be assessed and compliance costs weighed to determine whether changes are warranted and if more effective or affordable alternative approaches could be taken.  This has not been done in the case of these proposals.

Similarly, it is not reasonable or warranted to propose requiring reporting on all chemicals, without regard to toxicity, quantity, or other relevant factors, without significantly more due diligence.  The more expensive or administratively burdensome a new reporting regime might be, the less justified the inclusion of less toxic chemicals or the lowering of reporting thresholds.  Again, this required due diligence has not been done.

With regard to making more reported information public, there are concerns about ensuring understanding about what information actually means with regard to health and safety, countering misinformation and mischaracterization, protecting confidential business information and trade secrets, and other issues.

Expanding Regulation of Consumer Products

The Working Group report also recommends major changes affecting products sold in Vermont.

First, the draft report recommends expanding the scope of Vermont’s Chemicals of High Concern to Children statutes (18 VSA §§ 1771 – 1779, often referred to as Act 188), which currently covers children’s products, to all consumer products.  Act 188 requires extensive reporting on 66 chemicals present in products, whether intentionally used or present as contaminants.  Expanding these statutes to all consumer products would significantly increase reporting burdens on many Vermont manufacturers and other manufacturers selling consumer products in Vermont.

The full burden remains to be understood because the first reporting deadline for children’s products under the current statute was January 1, 2017, and implementation issues and experiences have yet to be fully reviewed and understood both for the current scope of children’s products as well as any possible expansion.

In addition to expanding the scope of Act 188, the draft report also recommends eliminating the current statute’s role for a stakeholder working group in deciding whether to restrict or ban chemicals in specific products, leaving that authority solely with the Department of Health, and also reducing the scientific standards the Department must use in making such decisions.  This would threaten the integrity of the existing law as it applies to children’s products and would only compound concerns with any expansion to additional consumer products.

Finally, the report recommends banning outright certain products containing PFAS, the larger family of chemicals related to the PFOA/PFOS contaminations found in southern Vermont.  Specifically, the draft report targets dental floss and food contact packaging.  Unfortunately, there was no serious or extensive discussion or review of the merits and implications of such a ban, either on its face or with potential stakeholders.  Clearly these are among several substantive questions and issues that should be examined and considered before any such ban might be contemplated.

Legal Liabilities for Manufacturers

The report also recommends several new legal liabilities for manufacturers.  There are three primary proposals:

  • Allowing citizen suits to enforce waste management and water pollution statutes.
  • Allowing lawsuits against companies to pay for the expense of monitoring for latent diseases and other ailments they claim connected to chemicals used by that company.
  • Allowing lawsuits against companies for any alleged “harm” related to a chemical release, whether permitted or not.

These proposals raise concerns about nuisance suits, second guessing of compliance and enforcement decisions of agencies, additional legal costs on top of standard penalties, and unwarranted liabilities generally, particularly for activities that are permitted or otherwise legal.

Next Steps

AIV is working with Vermont manufacturers and national trade associations to engage legislators and the Administration on these issues.  Legislative proposals based on the Working Group’s recommendations are expected to present significant challenges.  It remains to be seen whether proposals will be introduced singly or in combination in legislation, and whether there might be different variations.

AIV is actively promoting a focus on making more effective use of, streamlining, and reducing costs and administrative burdens associated with existing reporting regimes prior to considering expanding any existing or new reporting requirements, and carefully considering costs, benefits, and feasibility if expanded or new requirements are discussed.

Companies interested in keeping informed and considering working with AIV on these issues are strongly encouraged to contact us at info@aivt.org.