On July 27, 2012, the California Department of Toxic Substances Control (DTSC) proposed stringent “Safer Consumer Products” regulations to implement California’s Green Chemistry program. After a public comment period, these regulations are expected to become final by the end of 2012. After that date, businesses will have to comply if they sell consumer products in California.
Will these new regulations affect your business? If you make consumer products sold in California, the answer is YES.
Will these new regulations impact how you manufacture your product? The answer is YES if:
- A “Chemical of Concern” is used in the production of your product. There are presently over a thousand “Chemicals of Concern” on the California list, and that is expected to grow substantially.
- Your products sold in California contain greater than the “alternative analysis threshold” concentration specified by DTSC for that “Chemical of Concern.” The DTSC intends to set this threshold on a case‐by‐case basis for each product in the future, which is likely to be below 0.01 percent and perhaps as low as the minimum concentration detectable by available laboratory equipment. For comparison, the widely accepted global standard today for triggering chemical regulatory requirements is 0.10 percent.
- Your product is listed by the DTSC as a “Priority Product” using a series of vague criteria concerning “safety” and “exposure”. Once the regulations become effective, this list is expected to expand rapidly.
What will happen if you are regulated?
If you make products that are sold in California, you may be required, at the sole discretion of the DTSC, to provide to that agency, for public review, data on the “toxicity” characteristics of your products for dozens of newly created California “hazard traits,” many of which:
- are not considered to be “hazards” anywhere else;
- have no known test methods to measure “hazards”; and
- are inconsistent with recognized global hazard trait standards.
The DTSC may also use such data to expand both the list of Chemicals of Concern and the list of Priority Products.
Potential Impacts = reputational damage to the product by being labeled “hazardous”; $5,000 – $100,000 (depending upon availability and cost of the test method) to test for 40‐plus hazard traits for chemical ingredients; retool lab equipment to meet a 0.01 percent threshold; and to hire third‐party labs.
- If you use a Chemical of Concern in a Priority Product, you will be required to conduct a lifecyclebased “Alternatives Analysis” to determine how you could design your product without using the Chemical of Concern.
Potential Impacts = $500,000 ‐ $6,000,000 to obtain information from a global supply chain and to conduct analysis (and potential fees paid to DTSC to conduct review).
- As part of this “Alternatives Analysis” your product design and development processes that are not considered to be trade secrets will be subject to public review and criticism in California hearings by any member of the public, including plaintiffs’ attorneys and environmental activists.
Potential Impacts = damaging disclosures of trade secrets; major reputational damage to the product through unfounded claims of a “hazard” based on junk science; and costs of technical analysis to refute such claims.
- Based upon the DTSC’s review of your Alternatives Analysis, and the public comments, you could then be subject to a California government‐mandated redesign of the product to use what DTSC considers to be “safer” chemicals.
Potential Impacts = substantially increased costs of manufacture; inferior product functionality; loss of market share; and damage to your brand by being associated with “unsafe” products.
- In the Alternatives Analysis process, you may attempt to protect your product information from public disclosure as a “trade secret.” However, if the DTSC decides that your information is not a trade secret, you will be required to file a lawsuit in a California court to protect it. Such lawsuits could cost $500,000 or more (if appealed), and might not be successful.
Potential Impacts = public disclosure of sensitive information if the trade secret claim is not upheld; and substantial litigation costs.
Please click here to view table.