Regulation of New Chemicals, Protection of Confidential Business Information, and Innovation

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Testimony of Heather White, Esq.

Executive Director
Environmental Working Group

Before the

U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON ENERGY AND COMMERCE
SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

On

Regulation of New Chemicals, Protection of Confidential Business Information, and Innovation

Thursday, July 11, 2013

Mr. Chairman and distinguished members of the subcommittee, my name is Heather White. I am the Executive Director of Environmental Working Group, a nonprofit research and advocacy organization based in Washington, D.C., with offices in Ames, Iowa, and Oakland, California. Thank you for holding this important hearing and the opportunity to testify.

For two decades, EWG has advocated greater protection of people and the environment from exposures to toxic chemicals. EWG has published extensive research on the chemical pollution in people as evidenced by our numerous biomonitoring studies. We have tested more than 200 people for 540 industrial chemicals and found up to 482 of them in people’s bodies. In two groundbreaking studies conducted in 2005 and 2009, EWG detected nearly 300 industrial chemicals in the umbilical cord blood of newborn babies.[i] Our research showed that these children were exposed in utero to toxic chemicals, including dioxins and furans, flame retardants and active ingredients in stain removers and carpet protectors. Chemicals that were banned more than 30 years ago – including lead, polychlorinated biphenyls (PCBs) and the pesticide DDT – also contaminated these babies. We also discovered the presence of bisphenol A (BPA), a synthetic estrogen that disrupts the endocrine system, and perchlorate, a rocket fuel component and thyroid toxin that can alter brain development. (For more results, see Attachment A.) Modern science shows us – unequivocally – that industrial chemical pollution begins in the womb. 

In April 2010, the President’s Cancer Panel reviewed the compelling scientific research on biologically active chemicals at low doses and the canon of biomonitoring studies from the Centers for Disease Control and Prevention and other public health organizations. The panel declared: “to a disturbing extent, babies are being born ‘pre-polluted.’”[ii] The panel also found that the number of cancers caused by toxic chemicals is “grossly underestimated” and warned that Americans face “grievous harm” from largely unregulated chemicals that contaminate air, water and food.[iii]

We must reform our federal toxics law to ensure that new chemicals are safe – especially for children, our most vulnerable population – before they are allowed on the market. Toxic chemicals are ubiquitous in our daily lives, in our consumer products and, ultimately, in our bodies, yet many of these substances have never been adequately assessed for safety. Here’s why: The federal Toxic Substances Control Act of 1976 (TSCA),[iv] the principal law governing the use and safety of the thousands of chemicals on the market, is fundamentally broken. The current federal toxics law has many flaws, but I will focus on two of them today:

• TSCA’s framework for reviewing new chemicals ensures that most new chemicals are on the market before regulators can adequately review them for safety; and

• TSCA’s provisions for protecting confidential business information invite chemical manufacturers to make overbroad and unwarranted confidentiality claims.

Make no mistake. EWG wants the United States to be the world leader in innovative chemical production. We have the best and the brightest scientists in our research centers and at many of the companies represented here today. But the goal of innovation cannot be just to reduce cost, increase market share and boost profits. The American public has a much broader notion. Most of us believe that “innovation” must also mean creating chemicals that are not just cheap to produce but safe – and that do not contaminate our blood, build up in our bodies and never break down. As our colleagues at the Center of International Environmental Law have noted, strong chemical regulation promotes innovation.[v] We cannot compete internationally on labor or production costs. We will not win that race to the bottom. But America can win and ultimately will win on chemical quality and safety through toxics law reform.

TSCA’s New Chemicals Framework Fails to Adequately Protect Public Health.

In the nearly 40 years since the passage of TSCA, more than 23,000 new chemicals have been approved by the U.S. Environmental Protection Agency and added to the agency’s “inventory list” of chemicals allowed for use in commerce.[vi] As the growing body of evidence on the potential health impacts of toxic chemicals demonstrates, we need to strike a better balance between getting new chemicals to the market quickly and ensuring that these substances do not harm those who are disproportionately affected by exposure, including children, workers, pregnant women and fence-line communities.

There are five major flaws with the new chemical review process under current law:

·      When a company is looking to manufacture or import a new chemical into the U.S., current law gives EPA just 90 days to review the substance before it goes on the market. The ultimate effect of this narrow window is to give profits a higher priority than public safety.

·      The company must submit a pre-manufacture notice to EPA with basic information on the chemical’s name, anticipated uses and disposal, as well as any test data that is known or reasonably ascertainable.[vii] EPA cannot require companies to perform even basic health and safety testing before filing that notice, but if the company has health and safety data, it is supposed to turn it over to EPA for review. This regulatory disconnect actually discourages manufacturers from doing safety testing because doing so would likely invite additional review by the agency. As a result, approximately half of all pre-manufacture notices include no test data at all; nearly 85 percent provide no toxicity data.[viii]

·      EPA faces a Catch-22 when it comes to new chemicals. The agency cannot request additional data unless it has safety concerns and it cannot adequately address safety concerns without relevant testing data. With no test data to evaluate the safety of a new chemical, EPA must use computer models, chemical comparisons and other analyses to predict how it may affect human health and the environment. At best, it operates on incomplete information. Its models and estimates are based on data about previously studied chemicals, but these do not necessarily predict how a new chemical will behave.

·      Even if EPA receives complete information about a new chemical in a pre-manufacture submission, the agency makes its initial assessments based on the uses listed in that notice. The company, however, is not bound to follow those stated uses. A manufacturer can quickly adopt new uses when it goes to market and produce the chemical at much higher volumes than those estimated in the pre-manufacture notice, and EPA and the public receive no notice that the manufacturer is changing its plan.

·      EPA evaluates a new chemical against a safety standard of “unreasonable risk of injury to human health or the environment.”[ix] The agency bears the burden of proof and must provide evidence if it wants to delay or restrict the new chemical. The paradox is that the less information there is about a new chemical’s safety, the faster it can reach the market. Not surprisingly, EPA attempts to restrict less than 10 percent of new chemicals.[x]

TSCA is so weak that it effectively presumes that new chemicals are safe without requiring pre-market testing. The law places the burden on EPA, not the chemical manufacturer, to determine whether a chemical is safe before it goes into use. Moreover, the fees companies pay to submit pre-manufacture notices cover just 10 percent of EPA’s cost of reviewing these submissions.[xi] This framework is inadequate to protect human health and the environment.

TSCA’s Secrecy Provisions are Overbroad and Threaten Public Health & Safety.

The provisions for confidential business information under TSCA undermine the public’s right to know about substances to which they are exposed in their daily lives, including such basic information as the chemical’s name. Companies have a legitimate interest in keeping some kinds of information confidential, but sweeping and unwarranted secrecy claims directly threaten human health and the environment.[xii] In practice, TSCA acts as “a regulatory black hole” where critical information goes in and little, if anything, comes out.[xiii]

TSCA permits a manufacturer to designate as confidential virtually any information it submits to EPA. In most instances, a company does not have to substantiate these confidentiality claims or pay a fee for making them. Moreover, once a secrecy claim has been asserted, it generally exists indefinitely, with no sunset provision. Once it is deemed confidential under TSCA, it almost always remains confidential. Even the National Security Agency releases top secret, highly sensitive information after a period of time, but trade secret claims under federal toxics law never expire.

EPA can disclose confidential business information only in the most limited of circumstances,[xiv] and agency employees can face criminal penalties for sharing such information with unauthorized parties.[xv] In contrast, a company faces little risk if it abuses confidential business information provisions under TSCA.[xvi] This lack of penalties for abuse provides a perverse incentive to make frequent and unjustified claims that information is confidential.[xvii]

To illustrate the pervasiveness of secrecy claims under current law, consider:

•     The very identity of approximately 17,000, or 20 percent, of the more than 84,000 chemicals on EPA’s inventory is deemed confidential, meaning the public has no access to any information about them[xviii];

•     Industry has made confidential the identity of nearly two-thirds of all new chemicals introduced since TSCA’s enactment in 1976, including substances used in numerous consumer and children’s products[xix]; and

•     Approximately 95 percent of all pre-manufacture notices for new chemicals contain information the manufacturers have designated as confidential.[xx]

Companies assert that secrecy protects their competitive advantage, but reverse engineering of competitors’ products is often just a routine cost of doing business in the chemical world. As a result, the only people left in the dark are typically the public – including scientists, academic researchers, medical personnel, state and local governments, and first responders. And when it comes to health and safety data, there is a huge risk to the public when the identity of the referenced chemicals is kept secret. TSCA prohibits health and safety studies themselves from being deemed confidential, [xxi] but companies may still mask the specific name of chemicals in these studies on the grounds that disclosing their identity would reveal trade secrets.[xxii] Even when publicly available studies have tied a specific chemical to an adverse health effect, the chemical’s name may be legally redacted because the manufacturer designated it as confidential. In 2008, the Milwaukee Journal Sentinel reviewed more than 2,000 filings submitted to EPA under TSCA and found that chemical identity was designated confidential in more than half of them.[xxiii] In one case, a filing cited a study linking a chemical to liver damage associated with cancer, yet the name of the chemical was redacted.[xxiv] Studies sanitized in this way are largely meaningless for researchers. (See Attachment B). When scientific data is constrained this way, the public pays.

The chemical industry downplays concerns about TSCA’s confidential business information protections by arguing that EPA has access to the information and can make informed decisions. But as a practical matter, only a handful of EPA employees have complete access to information that industry deems confidential.[xxv] Even EPA’s own scientists get incomplete information. For example, when EPA reviewed the safety of the flame retardant Firemaster 550 in 2005, information about key chemical ingredients was kept from the agency’s leading scientific expert.  This secrecy, coupled with the inadequacy of EPA’s testing models, resulted in the failure to predict that this flame retardant would accumulate in living organisms.[xxvi] The health concerns of Firemaster 550 only came to light when a university researcher was able to crack the chemical’s code through some groundbreaking research. Recent research has shown that Firemaster 550 can cause hormone disruption, a hazard that EPA should have identified when it approved the chemical.

TSCA makes it nearly certain that medical professionals and first responders do not have access to confidential business information about a chemical even when treating a person harmed by it. The law prevents EPA from sharing this information with state and local governments responsible for developing and carrying out emergency plans. This secrecy directly threatens communities where chemicals are made, as well as “hot spots” where people have been disproportionately burdened with health and environmental problems. Consider the implications in a plant explosion or train accident. When manufacturers have failed to disclose the identities of about 20 percent of all chemicals and nearly two-thirds of all new ones, it is easy to imagine a scenario in which first responders and medical personnel would be in the dark as to how to protect the lives of first responders, workers and bystanders. In addition, communities of color and poor communities often have less access to health care needed to treat exposures to harmful chemicals. Secrecy can make this problem worse. Information relevant to detecting, assessing and responding to chemical exposures should not be shielded by confidentiality.

We applaud EPA’s recent efforts to audit secrecy claims for chemical identities in health and safety studies.[xxvii] Since 2010, the agency has declassified nearly 900 previously secret chemicals referenced in these studies.[xxviii] Without fundamental reform to address abuse of the confidentiality provisions, however, the secrecy problem will remain. 

We support the following reforms to TSCA’s confidential business information provisions:

·      Require advance justification and substantiation for confidential business information claims so that EPA can decide if secrecy is legitimate.

·      Establish an automatic sunset for confidential business information claims, requiring the maker to establish the need for continued secrecy. 

·      Make all data in health and safety studies, including chemical identity, ineligible for confidential business information protection.

·      Assess fees on companies making secrecy claims to defray the cost of administering EPA’s confidential business information review program.

·      Create a mechanism to allow the public to track the number of secrecy claims, and the identity of companies that file them, in order to ensure greater accountability.

·      Levy penalties against companies for making overbroad or unjustified secrecy claims.

·      Allow EPA to share confidential business information within and outside the agency, including its scientists, medical professionals, first responders and state and local governments.[xxix]

In conclusion, there is widespread consensus that Congress should overhaul TSCA to protect the American public from toxic chemicals while continuing to spur the development of better chemical alternatives. I thank you for the opportunity to speak before you today, and welcome any questions you may have.