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Will New California Regulations Impact Industry?

Safer Consumer Products Regulation enters stage 2.

California, here we come…again. When it comes to regulation activity no state rivals the activity within The Golden State. The new Safer Consumer Products regulation is entering the next stage of its development and ACI enlisted the talents of three attorneys to decipher what it means for member companies.

According to Mark Duvall of Beveridge & Diamond the regulation has its impetus in a 2005 paper entitled, “Rethinking the Role of Information in Chemical Policy.” As a result of that publication, California regulators are determined to push companies toward safer alternatives at earlier stages of product development.

“This is a hazard-based program that is designed to drive companies to find alternatives,” explained Duvall, who added that regulators are also pushing for more disclosure that would put confidential business information at risk.

In Stage 1, the Department of Toxic Substances Control developed a list of 1,200 chemicals that deserved scrutiny. From there, the DTSC whittled the list down to 166 chemicals of concern (COC) or categories of chemicals that are ripe for regulation.

“It’s a curious list,” observed Duvall. “It includes chemicals like BPA, phthalates, parabens and ethylene glycol.”

In Stage 2, which will be implemented on April 1, 2014, DTSC will it prioritize product/COC combinations to develop a list of Priority Products for which an Alternatives Assessment must be prepared. The purpose of the Alternatives Assessment is to require that manufacturers evaluate ways to reduce or eliminate COC concentrations.

In Stage 3, Alternative Analysis, the responsible party must find an alternative chemical and has 12 months after DTSC issues a notice of compliance.

In Stage 4, DTSC will review the assessments and can adopt restrictions on priority products.

Sounds ominous. So what is a company to do?

“Don’t panic,” advised Herbert Estreicher of Keller and Heckman. “Many of the ingredients on the list are the usual suspects. California regulators are only adding their voices to the choir.”

Still, he advised attendees to fight DTSC every step of the way when the time comes.

“Don’t let them think that your industry is low-lying fruit,” he warned.

But what ingredients or classes of ingredients will be the first to get scrutinized? Right now, nobody know, nor does anyone know if the list will impact just certain ingredients, a particular dose or the entire product that utilizes that ingredient?

“It’s bedeviling,” admitted Cheryl Falvey of Crowell & Morning.

Also unknown is when will reformulation implementation actually take place? One thing the speakers did know is that alternative analysis will be expensive in more ways than one.

“An alternative assessment will cost more than $1 million to perform and put your trade secrets at risk,” warned Duvall.