Chemical Safety Board announces plans to add board members and investigators

The U.S. Chemical Safety Board (“CSB”), the federal agency created under the Clean Air Act Amendments of 1990 and charged with investigating industrial chemical releases, has announced that it will draw up a new board following a recommendation to do so by the Environmental Protection Agency (“EPA”) Office of the Inspector General (“OIG”). The CSB will also undertake an effort to hire additional investigators in order to broaden its capability to review and investigate releases. Currently, the CSB only has one sitting board member, Chairwoman Katherine Lemos, who acknowledged during a recent board meeting that there are challenges associated with a one-member quorum.

In July 2020, the EPA OIG published a report that raised concern with the lack of additional board members, resulting from the Trump Administration’s failure to nominate new members and impairing the effectiveness of the CSB “as all functions rest with that one member.” The OIG report identified challenges with workload that limit the CSB’s ability to conduct root cause investigations. In response, Lemos and CSB staff drafted a “new board order” that would allow newly appointed and confirmed board members to focus on the CSB’s mission, and further adopts best practices from other investigative agencies like the National Transportation Safety Board. Additionally, Lemos announced that the CSB will soon advertise positions for four new investigators to address the OIG’s finding that the agency suffered from reduced staffing. These positions will be posted on the USAJOBS employment website in the coming weeks.

Advanced Clean Trucks Rule — California announces extension of large entity reporting deadline

As we reported last year, the California Air Resources Board (“CARB”) adopted the Advanced Clean Trucks regulation to support its efforts to reduce air pollutants and meet state climate change targets.  The regulation has a one-time reporting requirement for large entities that operate or dispatch vehicles in California with a manufacturer’s gross vehicle weight rating (“GVWR”) greater than 8,500 lbs.  That includes medium duty vehicles like vans and ¾-ton pickups (i.e., the F250 or Ram 2500) and heavier vehicles of all configurations and fuel types.  However, the regulation does not apply to lighter vehicles such as cars and light duty pickups, among other exemptions.

This regulation applies to a wide range of businesses.  Examples include entities that meet any of the following criteria:

  • Had gross annual revenues greater than $50 million in the United States for the 2019 tax year, and had one or more vehicles over 8,500 lbs. GVWR under common ownership or control that were operated in California in 2019; or
  • Any fleet owner in the 2019 calendar year that had 50 or more vehicles over 8,500 lbs. GVWR under common ownership or control; or
  • Any broker or entity that dispatched 50 or more vehicles over 8,500 lbs. GVWR into or throughout California, in the 2019 calendar year.

Continue Reading

European Commission’s “Sustainable Products Initiative” now open for public consultation

Last week the EU Commission announced that the ‘public consultation’ phase of its Sustainable Products Initiative is now open. This begins the next step in the process, following the conclusion of the ‘feedback period’, which closed in November 2020.

More detail on what the Commission aims to achieve through this initiative is available in our earlier blog post highlighting the publication of the initiative in September of last year, available here. To recap, the initiative proposes to implement a number of the objectives established by both the EU Green Deal and the Circular Economy Action Plan, including to:

  • broaden the scope of the Ecodesign Directive beyond energy-related products;
  • establish additional legislative measures to make products placed on the EU market more sustainable; and
  • address the lack of reliable information on sustainability along value chains, including through solutions such as digital passports and tagging.

The Sustainable Products Initiative is intended to be developed in close coordination with other initiatives established under the Circular Economy Action Plan, in particular the initiative on strengthening the role of consumers in the green transition (which is expected to be adopted by the Commission in the next few months).

Public consultation on the Sustainable Products Initiative is now open as of 17 March until 9 June 2021, and the online questionnaire can be accessed here. Following consultation, adoption of draft legislation by the EU Commission is currently planned for the fourth quarter of 2021.

California proposes revisions for marijuana smoke and THC Proposition 65 warnings

The California Office of Environmental Health Hazard Assessment (OEHHA) seeks to amend the regulations under the Safe Drinking Water and Toxic Enforcement Act of 1986 (aka “Proposition 65”) to add specific tailored “safe harbor exposure warning methods and content” for retail products that can expose consumers to cannabis (marijuana) smoke or delta-9-THC via inhalation, ingestion, or dermal application, and for environmental exposures to cannabis smoke and delta-9-THC at businesses where smoking of cannabis or vaping or dabbing of delta-9-THC occurs. OEHHA added cannabis (marijuana) smoke and delta-9-tetrahydrocannabinol (delta-9-THC) to the Proposition 65 list for developmental toxicity on January 3, 2020 (effective January 3, 2021), and marijuana (cannabis) smoke has been listed for cancer since June 19, 2009.

OEHHA believes it would be beneficial to adopt safe harbor warning regulations for exposures to cannabis smoke and delta-9-THC to provide guidance to the businesses affected by this new listing. Exposure-specific “tailored warning” methods of transmission and content will provide certainty to businesses subject to the warning requirements of Proposition 65, as long as those warnings are followed verbatim.

The proposed warnings would be optional. Businesses may choose to use a different method or content for required warnings, as long as the warning satisfies the statutory “clear and reasonable” standard.   Historically, however, businesses that stray from the State’s safe harbor option risk receiving and defending claims alleging warning violations.

OEHHA is proposing to amend the warning regulations to provide tailored safe harbor warning methods and content for:

  • Exposures from cannabis products that are smoked
  • Exposures to delta-9-THC from products that are ingested
  • Exposures to delta-9-THC from products that are vaped or dabbed
  • Exposures to delta-9-THC from products that are applied dermally
  • Environmental exposures to cannabis (marijuana) smoke or delta-9-THC vapor in establishments where such exposures can occur on the premises of the business

Finally, products made with CBD or other cannabinoids or purified extracts of the cannabis plants (i.e., that do not cause exposures to delta-9-THC or other Proposition 65 listed chemicals) do not require a Proposition 65 warning. The proposed amendments discussed above do not apply to those products.

OEHHA is accepting public comments until May 18, 2021, the designated close of the written comment period. For specifics on the proposed “tailored warnings” and how they may help your business, please contact one of the attorneys listed in this post or the Reed Smith attorney you regularly work with.

SCOTUS rules the federal government does not need to disclose draft documents under FOIA

Federal agencies aren’t required to hand over draft documents related to the harm an EPA rule would pose to endangered plants and animals, the Supreme Court ruled in U.S. Fish and Wildlife Serv. v. Sierra Club , U.S., No. 19-547.

In a 7-2 decision, and the first majority ruling led by Justice Amy Coney Barrett, the Court said that the Freedom of Information Act (FOIA) does not require the release of a draft document that would offer the public more detail about what prompted federal regulators to change their conclusions in an Endangered Species Act consultation done in support of an EPA rule.  “The deliberative process privilege protects the draft biological opinions from disclosure because they are both predecisional and deliberative,” Barrett wrote.

At issue in the case was a 2013 draft biological opinion and other records underpinning a 2014 EPA rule governing power plant cooling water intake structures. The draft’s biological opinion from FWS determined that a proposed version of the EPA rule would harm plants and animals covered under the Endangered Species Act. EPA later finalized a revised version of the regulation.

It is important to note that the Court did not hold that the documents may be wholly withheld; the agencies will need to release any factual, non-deliberative information within them.

This is a first glimpse at how Barrett’s addition to the bench could affect the outcome of environmental cases.  Given that Barrett is a conservative jurist, this outcome is not surprising. Perhaps more  interesting is that Justice Kagan joined Justice Barrett’s majority opinion. Perhaps we may see them voting together more in future cases? Justices Stephen Breyer and Sonia Sotomayor dissented.

California to increase fuel sample analysis during ocean-going vessel inspections

Beginning in May 2021, California Air Resources Board (“CARB”) enforcement staff will begin additional analysis of fuel samples taken during ocean-going vessel inspections. CARB is seeking to improve compliance due to changing international regulatory sulfur limits, which has created situations where a vessel’s fuel may meet international and California regulatory sulfur limits, but not meet distillate grade fuel standards, as required by California law.

CARB believes the concern caused by the differing regulatory limits is significant because “the use of distillate fuel vs. lower sulfur residual grade fuel reduces the formation of directly emitted particulate from diesel engines considerably.” CARB argues that by administering the additional level of scrutiny, it will:

  • Clearly identify non-compliant vessels that are operating on contaminated fuels that may meet the sulfur limit as perhaps a residual grade ultra-low sulfur fuel oil would, but not meet the strict determination of a distillate grade fuel, as specified in the regulation.
  • Eliminate excess ash particulate emissions that affect disadvantaged communities in and around California ports.
  • Create a more level playing field by identifying vessels that are not following established fuel changeover procedures to mitigate these excessive emissions.

An enforcement advisory was released in October 2020 that outlined this significant amendment to CARB’s Ocean-Going Vessel Fuel Regulation enforcement procedures.

 

 

EPA indicates intention to regulate certain PFAS in drinking water

The EPA is moving towards establishing a drinking water standard for PFOA and PFOS, and has stated that it is considering avenues for regulating additional groups of PFAS under the Safe Drinking Water Act (SDWA) as well.  On February 22, 2021, the EPA announced two actions under SDWA to address PFAS.

First, the agency reissued the final regulatory determination to implement a National Primary Drinking Water Regulation (NPDWR) for PFOS and PFOA (the “Determination”).  This Determination is a continuation of an intended action under the Trump administration, but indicates the Biden administration intends to continue to move forward.  The Determination also states that the EPA is considering the regulation of additional PFAS chemicals.

Continue Reading

Cal/OSHA moves forward with development of permanent COVID-19 standard while legislature considers bill to increase enforcement

California continues to move forward with new proposals for regulation and enforcement of workplace hazards associated with COVID-19.  As the Division of Occupational Safety and Health (“Cal/OSHA”) continues to develop a draft permanent standard to address COVID-19 hazards in cooperation with an advisory committee of various stakeholder groups, state legislators have proposed a senate bill to increase enforcement of “willful” violations on a per-employee basis.

Emergency temporary standard and permanent rule

Earlier this month, Cal/OSHA convened an advisory committee to provide input on possible changes to the COVID-19 Emergency Temporary Standard (“ETS”).  Over the course of three days of public meetings, the advisory committee discussed and debated potential clarifications as well as broadening or narrowing the scope of certain requirements.  Although no decisions were made during the meetings, the following were areas of focus where we can expect to see some changes to the ETS:

Continue Reading

Upcoming public hearing announced regarding California modifications to use of “Short-Form” Proposition 65 warnings

As we reported, the California Office of Environmental Health Hazard Assessment (OEHHA) seeks to significantly amend the regulations under the Safe Drinking Water and Toxic Enforcement Act of 1986 (aka “Proposition 65”) to revise the method of transmission and content of State-approved “safe harbor” short-form warnings for consumer products. If passed as proposed, manufacturers, distributors and downstream retailers would need to identify “at least one” regulated chemical in each “exposure category” (i.e., carcinogens and / or reproductive toxicants) in their short form warning.  This would require significant restructuring for thousands of regulated companies, including increased need for testing, etc.

After initiating the 60-day comment period, OEHHA received a request from a stakeholder company to hold a public hearing on the proposed amendments.  OEHHA has now scheduled a public remote hearing on March 11, 2021 at 10:00 a.m. Information concerning how to participate in the hearing will be posted on OEHHA’s website prior to the hearing. The public comment period for this regulatory action is also being extended to March 29, 2021, to accommodate the hearing.

If your company is using (or relying upon) current “short form” safe harbor warnings which do not list any specific chemicals, you will want to track this regulatory process and its outcome.

Environmental, Social & Governance (ESG) Update: Towards new European laws and guidance on Sustainable Corporate Governance

In our “What to expect in 2021” blog, one cross-sectoral EU initiative we flagged was forthcoming Commission proposals for far-reaching new EU-wide Sustainable Corporate Governance requirements.

Here are some more details of what that might entail.

Background

Recent studies have suggested that companies performing well on ESG factors outperform their peers and that those with better social and environmental performance have proved to be more resilient to the COVID-19 crisis.

Against this explicit backdrop, the Commission’s initiative on sustainable corporate governance aims to foster long-term sustainable and responsible corporate behaviour across the Union to support and drive many of the EU’s other flagship ESG policies including the Green Deal, the climate neutrality by 2050 commitment, the Action Plan on the Circular Economy, the Farm to Fork strategy and others, as well as delivering on the EU’s commitments to meet the UN’s Sustainable Development Goals.

To that end, the Commission has promised to introduce legislative proposals this year relating to a range of environmental, social and governance (ESG) issues including the protection of essential human rights, environmental supply chain due diligence, enhanced directors’ duties and sustainable corporate governance.

The initiative is also complementary to the ongoing review of the EU’s Non-Financial Reporting Directive, according to which large public-interest companies need to disclose non-financial (such as environmental/climate change) information. The Commission considers that the reporting obligation in the NFRD needs to be more firmly underpinned by a corporate obligation to actually carry out due diligence on such matters.

The initiative seeks to beef up the EU regulatory framework on company law and corporate governance with the goal of pushing companies to focus more on long-term sustainable value creation instead of short-term benefits and better manage sustainability-related matters as part of their own operations and value chains concerning social and human rights, climate change and the environment. A key aim is to re-balance what the Commission sees as a current imbalance between short-term shareholder profit and longer-term, sustainable growth and investment.

The initiative builds on two market studies the Commission undertook last year, which sought to identify obstacles to businesses’ transition to an environmentally and socially sustainable economy.

One of the studies considered directors’ duties and sustainable corporate governance. The study concluded that sustainability was more often than not disregarded, making EU intervention necessary to strengthen the role of directors in combining long-term company profitability and sustainability.

The second study focussed on the role due diligence has to play in tackling adverse sustainability impacts, including human rights issues and climate change. According to the study, merely a third of EU businesses currently undertake adequate due diligence on human rights and environmental impacts.

Specifics

ESG legislation of various kinds already exists in some EU countries (NL, FR, IT for instance) and is under development in many others.  However, the Commission sees it as vital to create a pan-European “level playing field” on such issues rather than allow fragmented national intervention, and that is an objective likely to be shared by most multi-national companies.

The Commission is due to publish a formal proposal in furtherance of this initiative in Q2, although a first glimpse of where the new initiative is heading may already become visible in the Commission’s Renewed Sustainable Finance Strategy, expected to be published in the coming months.

Specific proposals may take the form of revisions to the EU’s company law directive (2017/1132) and the directive on shareholder rights (2007/36) and/or completely new legislation/guidance and are likely to include some combination of the following:

  • A possible new corporate due diligence duty requiring companies to establish and implement adequate processes for preventing, mitigating, and accounting for human rights, health, and environmental impacts in companies’ operations and supply chains (building on established definitions developed by the UN and OECD which we already see reflected for example in the EU Timber Regulation and the EU Conflict Minerals Regulation and expanding such requirements into a much wider range of products/sectors);
  • Options to enhance sustainability expertise in the board;
  • methods of integrating sustainability into corporate strategy and decision-making by, for example:
    • changing the basis for remuneration of directors and tying it to more closely to non-financial performance (such as by measurable and time-bound sustainability metrics); and
    • strengthening the role of civil society stakeholders groups (e.g. those representing employee or environmental concerns) in the enforcement of directors’ duty of care; and
  • introducing appropriate enforcement measures accompanying these new duties, including the possibility for required remediation in the event of non-compliance.

This initiative symbolises a significant further step in the EU’s sustainability/ESG policy programme.

Please do not hesitate to contact any member of the Reed Smith EHS team if you would like more detailed information on this topic.

LexBlog