Federal enforcement of chemical product laws is alive and well, despite a broadly held misconception to the contrary. We have seen over the past 18 months or so an uptick in federal enforcement under the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). We write to alert you to this fact and focus here on TSCA enforcement, as we believe we will see this trend continue in 2020. We will devote a second client alert to FIFRA enforcement.

What We Observe

EPA regional offices and EPA headquarters often begin the enforcement process by sending a letter to a company expressing interest in reviewing a wide variety of company documents and the letter recipient’s chemical manufacturing operations. Here is a typical EPA letter. The information in this letter is taken directly from a very recent letter sent by an EPA regional office and is essentially a boilerplate TSCA inspection letter.

It is seldom clear why a company is the unlucky recipient of such a letter. The company might have in the not too distant past have submitted TSCA premanufacture notifications (PMN) to EPA that resulted in a consent order or Significant New Use Rule (SNUR). The company may have been involved in another enforcement action brought by EPA, a fact that in our experience makes the company statistically more likely to be subject to enhanced enforcement scrutiny. The company may simply be subject to TSCA and be located in an area proximate to where an EPA inspector may happen to be visiting at a particular time. Who knows? Once a company receives the letter, it would be wise to consider carefully next steps, as outlined below.

What Should You Do?

If you receive such a letter, unless you are confident your company has nothing to fear and TSCA compliance is ensured, we urge you to consider calling the EPA contact person identified in the letter and seeking more time to prepare the requested response. Often the letter seeks both information and announces a planned site visit. In our experience, most companies are ill-prepared to accommodate both a site visit and preparing a robust response to the document request within the specified time frame.

Assuming that the company prevails in securing additional time to prepare for a visit and sending a response, we offer a few thoughts on how best to prepare for each of the components set forth in EPA’s typical TSCA inspection letter. We set forth each such element below and provide some thoughts to each immediately below each element.

• Document 0. General Company Information. Provide details on the following:

  • Brief company history of ownership and business.

  • Corporate structure (including foreign and domestic parent companies).

  • Listing of all U.S. facilities owned by the company, including subsidiaries, and their locations, as well as a listing of all U.S. facilities leased by the company, including their locations.

  • Number of employees at each facility operated by the company.

  • Gross annual sales at the corporate level for the last two complete years or accounting cycles (note the fiscal cycle) rounded to at least three significant figures.

  • Identifying information for each facility and U.S. parent company, including data universal numbering system (DUNS) number.

  • Importer of Record ID for all sites that import into the U.S. that are owned by the U.S. parent company.

  • Scope of business, main North American Industry Classification System (NAICS) codes under which the site operates, and main industries that the company and site supply.

Document 0 is the most straightforward and generally the easiest to which to respond. It seeks information largely about the identity and structure of the company and the chemical products it manufactures.

• Document 1. Process Flow Diagrams. Manufacturing and process flow diagrams listing each raw material input and the resulting products (by Chemical Abstracts Service Registry Number (CASRN)) for each step between the particular raw material and the commercial product, including intermediates, byproducts, and catalysts, that are part of the commercial production but are not intended for sale or distribution. For each facility operated by the company indicate all steps including on-site use, marketing, transfer, recycling, and waste disposal. Provide the certificate of analysis from a representative lot for each manufactured product that is used in commerce.

Here EPA is looking to understand what chemical reactions are occurring and what substances result from them. The records underlie the understanding of whether the company is only manufacturing substances that are listed on the TSCA Inventory or exempt from Inventory listing. There are several strategies that, if implemented, can reduce the number of diagrams provided. For example, if one process is used for a variety of starting materials, one diagram can be provided, with a table of the starting materials and resulting products and byproducts.

• Document 2. TSCA Section 4 Documentation. Letters of intent to conduct testing and proof of data submittal, or requests for exemption from testing, for chemicals manufactured or used by the company that are subject to an active TSCA Section 4 final test rule.

In this section, EPA is looking for documentation of compliance with any TSCA test rules. Because of the dearth of active test rules, this section may not contain any information other than a statement that the company has no Section 4 obligations.

• Document 3. TSCA Section 5(a)(1) and 5(a)(2) Documentation. Any Bonafide Intents. Premanufacture Notices (PMNs) submitted by your company, or requests for exemption from the PMN review process, including Low Volume, Test Marketing, and Polymer Exemptions, and any EPA responses to these submittals or requests. Similarly, Significant New Use Rule Notices [sic] submitted by your company and any EPA responses to these submittals or requests. Also include Notices of Commencement submitted by your company, where applicable.

Clients often ask if they must submit copies of Section 5 notices that EPA already has, and the answer is yes, that is EPA’s expectation. One option is to send EPA the Copy of Record downloaded from CDX. Of course, the company must be able to access submissions in CDX, which means that the company has a registered authorized official (AO) and the AO has all the necessary passphrases for the documents in CDX. In our experience, this is not always the case as employees come and go, and access to CDX is sometimes overlooked.

• Document 4. TSCA Section 5(e) and 5(f) Documentation. A list of TSCA Section 5(e)/(f) Consent Orders to which your company is subject.

Document 4 is fairly straightforward. It requires only a list of orders that the company entered into, including orders for which the company is a successor-in-interest, not copies of the orders. Of course, the company should have copies of all such applicable orders.

• Document 5. TSCA Section 5(h) Documentation. Research and development activities and procedures in effect at the company, specifically as related to compliance with the requirements of a TSCA Research and Development (R&D) Exemption. Provide documentation of prudent laboratory practices and of the notification and evaluation of risks, where appropriate. Also include operating manuals or written procedures that are used by laboratory personnel to manage chemicals with unknown hazards.

The R&D section may seem daunting, but it is chiefly a request for the company’s policies and practices related to R&D and how the company ensures that employees in the R&D functions are properly protected. This includes procedures such as ensuring that experiments are run in a hood, that proper personal protective equipment is used, and that waste is managed correctly. Clients often react, “Of course, we use gloves, goggles, and lab coats!” What EPA is looking for is something written down that documents this fact. We urge our clients to develop Standard Operating Procedures (SOP) for R&D activities and for many other TSCA functions. We have developed comprehensive TSCA SOP templates, and if you are interested to learn more, please let us know.

• Document 6. TSCA Section 8(a) and 8(b) Documentation. Recordkeeping and reporting under the Preliminary Assessment Information Rule (PAIR) and Chemical Data Reporting Rule (CDR). For CDR, provide a Copy of Record of the 2016 Chemical Data Reporting submittal filed by or on behalf of each facility operated by the company and a sample calculation of the volumes reported to 2016 CDR, including sources used for each facility.

Document 6 relates to the company’s compliance with data call-ins under Section 8(a) and quadrennial reporting requirements under the CDR rule. EPA requests copies of all such submissions and, if appropriate, a sample of how the company determines the quantity to be reported to CDR (e.g., an average weight percentage of a substance imported as part of a formulation). As with the Section 5 notices requested in Document 3, all CDR and TSCA Section 8(a) submissions should be available for download from CDX.

• Document 7. TSCA Section 8(c), 8(d), and 8(e) Documentation. Documentation of allegations of adverse reactions that may be subject to TSCA Section 8(c) reporting. A list of 8(d) health and safety studies submitted to EPA and copies of any known health and safety studies that were not submitted to EPA. Also provide TSCA Section 8(e) substantial risk information not known to EPA.

Document 7 focuses on the reporting requirements that apply if the company becomes aware of adverse effects information, such as employee reports (TSCA Section 8(c)) and potential substantial risk notices (TSCA Section 8(e)), even if the company has determined that the information was not reportable (e.g., that a health and safety study does not rise to the concern level to trigger a TSCA Section 8(e) notice.

• Document 8. Corporate Policies and Procedures. Company policies developed by the company or individual facilities to ensure compliance with TSCA Sections 5, 8, 12, and 13.

Document 8 seeks submission of a copy of internal policies and procedures developed by the company to ensure compliance with TSCA.

List 1:

Prepare a list of chemical substances that were imported or manufactured between January l, 2012, and December 31, 2018, in tabular format. The list should include the following information for each chemical substance on an annual basis (i.e., 2012, 2013, 2014, 2015, 2016, 2017, and 2018):

1. Accepted chemical name;

2. CASRN or the EPA Accession Number;

3. Brand name or product identifier;

4. Indicate the physical form and any product specification changes that have occurred;

5. If the substance is a mixture, indicate the CASRN or the EPA Accession Number and percentage of each component;

6. Indicate if the chemical is a byproduct, is an impurity, or is an intermediate. If you identify a chemical as a byproduct or an intermediate, indicate in the process diagrams (Document 6) how it is produced;

7. Volume in pounds or kilograms produced (a) annually if by continuous process, or (b) per batch and batch number, or (c) quantity imported per shipment and shipment number, as applicable to the chemical substance or mixture;

8. For imports, also list the name of the supplier, the country of origin for the chemical, the U.S. port of entry(ies), the Harmonized Tariff Schedule (HTS) code, and representative import certification(s) submitted for each chemical or group of chemicals; and

9. For manufactured chemicals, also note if the chemical is toll manufactured or co-manufactured (if so, include the name of the party for whom the chemical is manufactured), whether the manufacturing process is continuous or batch, and how many employees are directly involved with the manufacturing process for each chemical (including engineers, foremen, packagers and handlers).

List 1 is the information that supports CDR reporting and Section 5 compliance. In this sample, EPA asks for import records from 2012, a year that appears to fall outside of the TSCA five-year statute of limitations, because those imports would have been reported to the 2016 CDR, which is within the statute of limitations.

List 2:

Prepare a list of all R&D chemicals manufactured or imported by the company and an indication of whether or not the R&D chemical is transferred off-site or outside the control of the company for the purposes of manufacture, processing, use, transport, storage and disposal related to the R&D activities. For those chemical substances transferred off-site, also provide:

1. Names and addresses of those who received the R&D chemical;

2. The amount distributed to each addressee; and

3. Safety Data Sheet (SDS) and/or other documentation to indicate that written notification has been provided to the recipient of the R&D chemical that the chemical substance is for R&D purposes only and if applicable, a notification of potential risks identified by the facility.

For all chemical substances for which the company has concluded that the exemption applies and the amount manufactured is greater than 100 kilograms per calendar year (kg/yr), also provide the amount manufactured and the disposition of those chemicals.

List 2 is a list of all substances manufactured or imported for R&D purposes. Some of this information may also appear on other lists.

List 3:

Prepare a list of all health and safety studies relating to any chemical substance that the company manufactured under the R&D exemption (not just chemical substances that have a potential for commercialization).

EPA requests a list of studies, not copies of the studies. EPA reserves the right later to request submission of the actual studies.

List 4:

Prepare a list of all the chemical substances (including mixtures) that were purchased from domestic suppliers (U.S. distributors) and used at individual facilities operated by the company in manufacturing and processing activities. The list should include the following information for each chemical component:

1. Brand or product name;

2. Accepted chemical name(s) of each component;

3. CASRN or the EPA Accession Number of each component. If a CASRN is proprietary, provide an SDS from the supplier.

4. Indicate the physical form and any product specification changes that have occurred; and

5. The supplier and location.

List 4 relates to substances processed or used by the company. List 4 is typically developed from purchase records.

List 5:

Prepare a list of chemical substances (along with mixtures and the components of each) by CASRN and the total volume (in pounds) of each of the chemicals or mixtures that were exported to foreign countries. The list should include the following information for each component:

1. Accepted chemical name of each component;

2. CASRN or the EPA accession number of each component;

3. Indicate the physical form and any product specification changes that have occurred;

4. The percentage of each component;

5. The destination country; and

6. A copy of any export notification(s) required under TSCA 12(b).

List 5 should also be available from business records. The company should gather records of shipments of products by the company to countries outside the United States. Such records need to include the identity of all components. The company also needs to have records of TSCA Section 12(b) export notices. Because most substances subject to Section 12(b) export requirements only require one export notice per country (so-called one-and-done reporting), rather than annual reporting, the TSCA Section 12(b) notice for a particular substance being shipped to a particular country might not have been filed in the past five years.

Finally, the responding company may seek to protect information in its response as TSCA confidential business information (CBI), but the respondent must, at the time of submission, assert the CBI, provide both unredacted and redacted copies of all documents containing CBI, include substantiation (or an explanation of exemptions from substantiation), and apply the TSCA CBI certification statement. If the CBI claims are deemed deficient (without substantiation or the certification statement), EPA may (and likely will) invalidate the CBI claim(s) without notice to the submitter. EPA may also deny requests to redact information not claimed as CBI at the time of submission if the submitter missed something.

Site Visits

In situations where EPA intends to visit a site, we strongly recommend ensuring that a person knowledgeable about TSCA and its application to the company’s operations accompany the EPA representative during the visit. If the company does not have an employee versed in TSCA, you should consider retaining a consultant for this purpose. It is money well spent. An incorrect response or innocent misstatement of fact can land you in hot water, and the consequences can be truly regrettable and legally consequential. We have also witnessed situations where the EPA representative was not entirely correct, and having a knowledgeable TSCA expert there in the moment to rectify the misunderstanding can prevent an assertion of non-compliance and the transaction costs incurred in correcting the error.