Safe Chemicals Bill May Help Protect Exports, Attorney Says

Legislation recently introduced to overhaul the nation’s outdated chemical law is a ‘no-brainer’—so much so that the industry itself largely supports the move. Given the complexities of the global marketplace, however, the Safe Chemicals Act of 2010 easily could lead to unintended consequences that harm the U.S. economy at the worst possible time, asserted James A. Kosch, a shareholder on LeClairRyan’s Newark-based tort defense team.

“As they begin hashing out this legislation, lawmakers will be forced to confront a host of thorny issues and balance manifold competing interests,” said Kosch, director of the New Jersey State Bar Association’s environmental law section. “These include the imperative to protect consumers amid very real safety concerns about untested substances; the need for our exports to comply with Europe’s strict chemical regulations; the need to protect trade secrets, and the conundrum of what to do about trade partners who often give lip service to safety, but then turn a blind eye as businesses within their borders violate every chemical regulation known to man.”

The Safe Chemicals Act of 2010, versions of which were introduced in both the House and Senate on April 15, would give the U.S. Environmental Protection Agency new regulatory powers over the U.S. chemical industry by modernizing the 1976 Toxic Substances Control Act (TSCA).

As introduced, the bill’s provisions include compelling manufacturers to develop and submit safety-testing data on any chemicals they produce, and require EPA to use this data to identify and rank hazardous chemicals based on a variety of factors. Only those chemicals shown to be safe would be allowed on the market. This could help protect American exports from being banned under the European Union’s strict regulations known as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), passed in December 2006.

Along with those trade benefits, however, might come significant risks, Kosch said. “One of the concerns about the current bill is that it could lessen protections for trade secrets,” he noted. “That is an issue under REACH as well. These chemical-safety databases will be public information. Companies will use them to disclose those factors that might make a given chemical unsafe under certain circumstances. That is all the information an enterprising plaintiff’s attorney would need to file a lawsuit. That attorney might say, ‘Well, these circumstances might not exactly constitute a violation, but they are close enough for us to bring suit.’ Plaintiffs’ attorneys already do this now by combing through the general chemical-safety literature.”

The degree to which U.S. lawmakers will be willing to match the provisions of REACH also is unclear, he noted. “REACH has something called ‘the precautionary principle’ that sets an exceedingly high standard,” Kosch advised. “Basically, if there is any risk at all of harm, the chemical is supposed to be kept off the market. Do we want to follow suit as a matter of policy? This could be a step in that direction.”

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