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24 ELR 10357 | Environmental Law Reporter | copyright © 1994 | All rights reserved A Practitioner's Guide to the Toxic Substances Control Act: Part IIICarolyne R. Hathaway, David J. Hayes, and William K. Rawson Editors' Summary: In this final installment of a three-part Article, the authors complete their detailed examination of the TSCA statute and regulatory program. The authors begin the installment by discussing TSCA §§ 6 and 7's regulation of existing chemicals, including asbestos, PCPs, and imminently hazardous materials. The authors stress the important potential ramifications of the 5th Circuit's Corrosion Proof Fittings decision. The authors next examine TSCA § 8's reporting and recordkeeping requirements and, then, review the import certification and export notification requirements of TSCA §§ 13 and 12(b). Finally, the authors address civil and criminal enforcement under TSCA §§ 15 and 16. Carolyne R. Hathaway is a senior environmental associate in the Washington, D.C., office of the national law firm of Latham & Watkins. David J. Hayes is a partner at Latham & Watkins and chairs the Environmental Department of the firm's Washington, D.C., office. He also chairs the Board of Directors of the Environmental Law Institute. William K. Rawson is an environmental partner in Latham & Watkins' Washington, D.C., office. The authors thank Ann Claassen for her assistance in drafting portions of this Article addressing TSCA §§ 6(e) and 8. VIII. TSCA §§ 6 and 7 -- Regulation of Existing Chemicals A. Section 6 Regulation of Existing Chemicals Section 6 of the Toxic Substances Control Act (TSCA),1 provides the U.S. Environmental Protection Agency (EPA) with the authority to restrict or ban the manufacture, processing, or distribution in commerce of chemical substances or mixtures upon a showing that the activity, or any combination thereof, "presents or will present an unreasonable risk of injury to health or the environment."2 Permissible regulatory actions include prohibiting or limiting the amount of manufacture, processing, or distribution of a substance; prohibiting or limiting manufacture, processing, or distribution for certain uses; labeling or warning requirements; recordkeeping requirements; and so forth.3 The wide-ranging authority available to EPA under § 6 to restrict or ban chemical substances, or specific uses of chemical substances, cannot be implemented until the Agency has satisfied the showings set forth in § 6(c). Under that provision, EPA must proceed by rulemaking and, in the context of the rulemaking, must consider and publish a statement with respect to the following issues: (A) the effects of such substance or mixture on health and the magnitude of the exposure of human beings to such substance or mixture; (B) the effects of such substance or mixture on the environment and the magnitude of the exposure of the environment to such substance or mixture; (C) the benefits of such substance or mixture for various uses and the availability of substitutes for such uses; and (D) the reasonably ascertainable economic consequences of the rule, after consideration of the effect on the national economy, small business, technological innovation, the environment, and public health.4 In addition, if EPA determines that a risk of injury to health or the environment could be eliminated or reduced to a sufficient extent by actions taken under another federal law or laws administered by EPA, the Agency may not promulgate a rule under § 6(a) unless it finds that it is in the public interest to protect against such risk under TSCA.5 In making such a finding, the Agency must consider: (1) all relevant aspects of the risk, (2) a comparison of the estimated costs of complying with actions taken under TSCA and under the other law or laws, and (3) the relative efficiency of actions under TSCA and under such law or laws in protecting against the risk of injury.6 1. Fleshing Out the § 6 Standard: Corrosion Proof Fittings The United States Court of Appeals for the Fifth Circuit issued a decision that may result in significant shifts in the approach taken by EPA toward regulation of existing chemicals under § 6. Corrosion Proof Fittings v. U.S. Environmental Protection Agency7 involved a challenge to a rule, promulgated by EPA under the § 6 "presents or will present an unreasonable risk" standard, which would have totally banned certain asbestos-containing products. The Fifth Circuit struck down the challenged portion of the rule on the grounds that EPA did not: (1) permit the public sufficient opportunity to comment on EPA's "analogous exposure" data; (2) consider whether a less burdensome alternative short of a total ban would achieve a marginally comparable risk reduction; (3) evaluate the availability of asbestos substitutes for the products at issue; or (4) conduct a cost-benefit analysis which accurately captured the risks presented by the asbestos products and the costs of implementing the ban. The Corrosion Proof Fittings decision marks the first time that a court has interpreted the "presents or will present an unreasonable risk" standard, and in doing so, the court struck down a rule which took EPA 10 years to promulgate. For this reason, EPA has indicated that it will reexamine ongoing § 6 rulemakings for several substances, and will rely more heavily in the future on its significant new use authority under § 5. The decision also has elicited a response from certain groups who contend that the Fifth Circuit's decision demonstrates that TSCA's risk-based approach to regulation is too cumbersome, and that the statute therefore must be amended. As discussed below, because Corrosion Proof Fittings involved the most extreme form of regulation -- a total ban -- the case may not necessarily sound the death knell for § 6 rules. Nonetheless, it clearly will influence the approach that EPA will take in future TSCA rulemakings. In particular, there is a strong view within EPA that if the asbestos rule cannot withstand judicial scrutiny despite an enormous commitment of resources by EPA, then the § 6 standard for regulating existing chemicals may simply be too high a standard for the Agency to meet. Indeed, the perception at EPA and on Capitol Hill that the Corrosion Proof Fittings decision illustrates the unworkability of § 6 may provide the single most important impetus for revising and updating TSCA. For this reason, the following sections analyze the facts and holdings of the decision in some detail. The § 6 rule challenged in Corrosion Proof Fittings involved a three-stage ban of most commercial asbestos uses, as follows: [] Stage 1. Effective August 27, 1990, the rule banned the following asbestos-containing products: floor materials, clothing, roofing felt, corrugated and flat sheet materials, pipeline wrap, and new asbestos uses. Stage 2. Effective August 25, 1993, the rule banned the following asbestos-containing products: "friction products" and certain automotive products, including beater-add gaskets, sheet gaskets, clutch facings, automatic transmission components, commercial and industrial friction products, drum brake linings and disk brake pads for light- and medium-weight vehicles. [] Stage 3. Effective August 26, 1993, the rule banned the following asbestos-containing products: certain additional automotive products, including brake blocks, drum brake linings, disk brake pads, and certain building materials, including A/C pipe, A/C shingle, specialty paper, rollboard, millboard, commercial paper, corrugated paper, non-roof and roof coatings and asbestos cement shingles. The rule allowed affected persons one year from the effective date of each stage of the ban to sell existing stocks of prohibited products. During the Stage 1 ban, the rule imposed labeling requirements on Stage 2 and Stage 3 products. Finally, the rule contained a procedure whereby an affected person could petition for a waiver from the ban upon showing unavailability of substitutes or "other appropriate circumstances."8 c. Defects in the Asbestos Rulemaking The Fifth Circuit found that EPA had improperly "failed to give notice to the public, before the conclusion of the hearings [on the asbestos rule], that it intended to use 'analogous exposure' data," i.e., data generated by a methodology that involves the extrapolation of asbestos exposure monitoring information for one product to estimate exposure resulting from other products.9 In this context, the court noted that" [f]or some of the products, such as the beater-add and sheet gaskets, the analogous exposure analysis completely altered the EPA's calculus and multiplied four- or five-fold the anticipated benefits of the proposed regulation."10 As a result of its "[f]ailure to seek public comment on such an important part of the EPA's analysis, [EPA] deprived its rule of the substantial evidence required to survive judicial scrutiny."11 Substantively, the Fifth Circuit found that EPA had not satisfied its evidentiary burden of showing that the banned asbestos products and uses in question presented an "unreasonable risk of injury to human health or the environment" within the requirements of TSCA § 6. The court reached this conclusion for three principal reasons: first, it held that EPA had not shown that a total ban was the least burdensome requirement that could be imposed; second, it held that EPA had failed to adequately consider the availability of substitutes for some of the banned products; and third, it held that EPA had erred in its analysis of the [24 ELR 10360] economic costs and benefits of the ban. These holdings are discussed in turn below. i. Least Burdensome Requirements As discussed above, TSCA § 6(a) expressly directs EPA to impose the "least burdensome requirements."12 The Fifth Circuit found that this statutory language obligates EPA to "use the least burdensome method" of achieving "an acceptable level of non-zero risk."13 Thus, EPA is affirmatively: required to evaluate, rather than ignore, less burdensome regulatory alternatives. TSCA imposes a least-to-most burdensome hierarchy. In order to impose a regulation at the top of the hierarchy -- a total ban of asbestos -- the EPA must show not only that its proposed action reduces the risk of the product to an adequate level, but also that the actions Congress identified as less burdensome also would not do the job. The failure of the EPA to do this constitutes a failure to meet its burden of showing that its actions not only reduce the risk but do so in the Congressionally-mandated least burdensome fashion.14 ii. Consideration of Substitutes As discussed above, § 6 expressly directs EPA to consider the "availability of substitutes" when limiting or banning the use of any substance.15 Based on this statutory language, the Fifth Circuit found that EPA may not simply ban products where few or no substitutes are available and then institute a procedure whereby a party can obtain a waiver from the ban under appropriate circumstances. The court held that such an approach improperly shifts to the companies the Agency's initial "substantial evidence" burden to evaluate the availability of substitutes and the relative toxicity and other risks presented by any substitutes. As the court stated: [EPA] cannot use its waiver provision to argue that the ban of products with no substitutes should be treated the same as the ban of those for which adequate substitutes are available now.… In short, a death is a death, whether occasioned by asbestos or by a toxic substitute product, and the EPA's decision not to evaluate the toxicity of known carcinogenic substitutes is not a reasonable action under TSCA. Once an interested party brings forth credible evidence suggesting the toxicity of the probable or only alternatives to a substance, the EPA must consider the comparative toxic costs of each.16 For all regulations under TSCA, EPA must consider a cost-benefit analysis. TSCA § 6, however, contains even more stringent cost-benefit analysis requirements, because it directs EPA to implement the "least burdensome requirements" taking into account "the reasonably ascertainable economic consequences" of the regulation.17 The Fifth Circuit found a number of flaws in EPA's cost-benefit analysis. EPA had prepared two different cost-benefit analyses, one that discounted only costs, and one that discounted both costs and benefits. First, the court rejected EPA's argument that it was appropriate to discount costs to present real terms, but not commensurately discount benefits, even if those benefits are measured in terms of human lives saved. The court stated that such an approach skewed EPA's first cost-benefit analysis.18 Second, the court found fault with EPA's approach which equated the risk of asbestos exposure with the risk of actual injury. The court observed that "[s]uch an approach might be proper when the exposure and injury are one and the same, such as when a person is exposed to an immediately fatal poison, but is inappropriate for discounting toxins in which exposure often is followed by a substantial lag time before manifestation of injuries."19 Third, the court noted that in EPA's second cost-benefit analysis, the Agency had not computed the costs and benefits of the proposed rule past the year 2000, yet, in attempting to justify the costs of the rule, had relied on lives saved after the year 2000 as "unqualified benefits."20 In this regard, the court stated: EPA, in its zeal to ban any and all asbestos products, basically ignored the cost side of the TSCA equation. The EPA would have this court believe that Congress, when it enacted its requirement that the EPA consider the economic impacts of its regulations, thought that spending $ 200-300 million to save approximately seven lives (approximately $ 30-40 million per life) over thirteen years is reasonable.21 2. Consequences of the Corrosion Proof Fittings Decision EPA has stated that based on the Corrosion Proof Fittings decision, it plans to revaluate other substances that it is currently considering for TSCA § 6 rules.22 Revealingly, much of the Agency's initial reaction has been to focus on tools other than § 6 which can be used to regulate new chemicals. These signals suggest that the Agency may have made an important policy determination that § 6 proceedings are too resource-in-tensive and too subject to subsequent court challenges to justify the effort. Accordingly, discussion has centered on two alternatives to the existing § 6 approach: greater reliance on regulations under § 5, and amendment of TSCA to respond to Corrosion Proof Fittings. a. Greater Reliance on Significant New Use and § 5(e) Authority EPA has indicated that it will consider relying more heavily on its significant new use authority under TSCA § 5(a)(2) [24 ELR 10361] and its authority to impose workplace and distribution limitations under TSCA § 5(e).23 As explained above, under § 5(a)(2), EPA may promulgate a "significant new use" rule, which requires advance notice of either particular types of new uses of a substance, e.g., use in a consumer product, or of any new use of a substance.24 There is no requirement in § 5(a)(2) that EPA "presents or will present an unreasonable risk" finding when promulgating a significant new use rule. However, it can only be used for "new uses," and cannot regulate existing uses. EPA also has indicated that it will rely more heavily on its authority under TSCA § 5(e) to issue orders "to prohibit or limit the manufacture, processing, distribution in commerce, use, or disposal of [a] substance or to prohibit or limit any combination of such activities."25 Limitations on manufacture or processing of substances imposed pursuant to § 5(e) orders have included workplace exposure protection requirements, such as protective clothing or respirators; detailed warning label specifications for distribution in commerce; recordkeeping requirements, such as documentation of each person to whom the substance is sold or transferred; and waste disposal restrictions. However, it is somewhat difficult to understand how EPA could significantly increase its reliance on § 5(e) in response to the Corrosion Proof Fittings case. EPA already has made extensive use of its § 5(e) authority, which is limited to new substances and does not apply to chemicals already listed on the TSCA Inventory. TSCA has not been amended since it was originally enacted in 1976. In that regard, the statute contrasts with the other major environmental statutes that periodically have been revised and "updated" since their enactment. Currently, there does not appear to be a strong general impetus to revise TSCA. Unlike other statutes, a reauthorization process is not mandatory; TSCA contains no sunset provision. Further, while there have been periodic complaints about EPA's lack of aggressiveness in implementing TSCA, there has been no shared view that the statute is seriously "broken." Indeed, the Agency's increased use of TSCA's powerful information-gathering authority, as well as its traditionally strong TSCA enforcement program, have won a great deal of support for the statute. Although there has been no groundswell to revisit TSCA, the Assistant Administrator for Prevention, Pesticides and Toxic Substances, Lynn Goldman, has stated her intention to explore the question of whether TSCA should be revised and updated.26 A key aspect of that evaluation will be the Administration's analysis of the impact of the Corrosion Proof Fittings decision, and the question of whether § 6 establishes an evidentiary threshold for banning existing chemicals which is too high for EPA to meet. Further, based on the Corrosion Proof Fittings opinion, there also have been suggestions by members of Congress, as well as environmental groups, that it will be necessary to examine closely whether the "unreasonable risk" threshold places too high of a burden on EPA to justify regulation of chemical substances, and whether a lower strict liability standard along the lines of the Superfund and hazardous waste laws would be more appropriate. It is difficult to assess at this point whether any fundamental modification of TSCA's risk-based approach could garner broad enough support to become a reality. As a supplement to EPA's formal proceedings to restrict or ban existing chemicals under § 6, the Agency has established an administrative "risk management" (RM) process, which is designed to identify potential problem chemicals and, once they are identified, to establish a process to gather more information about them and to evaluate potential restrictions on them. The RM administrative process is a new initiative that was announced in late 1991.27 It establishes an administrative record for individual chemicals, and anticipates a two-pphase approach to analyzing existing chemicals. The first phase, known as "RM1," seeks to identify hazards associated with the chemical. In appropriate cases, the RM1 process is followed by "RM2," which focuses on developing information on potential problems identified in RM1 to determine whether risk management action is appropriate. If so, EPA will select a preferred risk management path, based on the areas of concern regarding the chemical and the availability of solutions to identified problems. EPA may address the identified risks through regulation, through workshops to educate users, and/or through voluntary joint EPA-industry actions.28 The RM2 analysis consists of analyzing the lifecycle of the chemical and identifying possible risk reduction steps, including pollution prevention opportunities and control technology opportunities. The focus of RM2 is to identify the points of exposure which are of concern during the lifecycle of the chemical. To do this analysis, EPA utilizes both contractors and in-house staff. Economists first look at the market for the chemical, and then provide the information to chemists and engineers for their evaluation. After lifecycle assessment, EPA identifies pollution prevention opportunities. Source reduction options will have a higher priority than end-of-pipe control of the chemical. The end product of the RM2 review is an RM2 scoping document. The scoping document provides the basis for an EPA decision regarding the chemical. A recommendation for this decision will be developed by a steering committee composed of the Office of Pollution Prevention and Toxics (OPPT) division directors, based on the options identified in the scoping document. The options include: (1) a decision to drop the chemical from further review; (2) identification of risk management options; or (3) a recommendation to the Occupational Safety and Health Administration (OSHA) [24 ELR 10362] or other agencies. With respect to option (2), EPA will not be relying exclusively on § 6 authorities. The Agency may determine, for example, that a workshop to educate consumers would be more advantageous than a § 6 rule. B. Section 6(e) Regulation of Polychlorinated Biphenyls (PCBs) Polychlorinated biphenyls (PCBs) are a class of compounds that had been widely used for purposes such as dielectric fluids in transformers and capacitors, hydraulic fluids, and solvents. At the time TSCA was enacted, Congress was aware of information indicating that these highvolume chemicals were persistent, bioaccumulative, and potentially carcinogenic and teratogenic. Therefore, rather than leave to EPA the finding under § 6(a) that PCBs should be controlled, Congress statutorily mandated in § 6(e) that PCB manufacture be banned (with certain exemptions) and that EPA promulgate regulations for labelling and disposal of PCBs.29 1. Definition of PCBs and PCB Items "PCBs" refers both to actual polychlorinated biphenyl compounds and to mixtures of substances that contain PCBs.30 "PCB items" are articles, containers, or equipment that contain or have been contaminated with PCBs.31 Whether a given material is subject to regulation as a PCB or a PCB item depends upon the concentration of PCBs in the material. In many instances, the regulations apply only if the concentration of PCBs is 50 parts per million (ppm) or more; the specific regulation should be consulted to determine the level of PCBs subject to its provisions. For example, certain restrictions apply to used oil containing any quantifiable level (2 ppm) of PCBs subect to its provisions. For example, certain restrictions apply to used oil containing any quantifiable level (2 ppm) of PCBs.32 It is important to note that one cannot avoid regulation by diluting PCBs below the applicable concentration.33 2. Manufacture, Processing, and Distribution of PCBs In general, the manufacture, processing, and distribution in commerce of PCBs are prohibited.34 This applies whether the PCB would be used in the United States or exported.35 There is an exclusion for PCBs which are inadvertently generated in conjunction with other manufacturing, if the generator complies with recording, reporting, and monitoring regulations.36 EPA may grant exemptions from the PCB ban if the petitioner shows: (1) that the exempted use would not result in unreasonable risk of injury to health or the environment, and (2) that good-faith efforts were made to develop a substitute.37 EPA has granted several such exemptions, primarily for research and development.38 There also is a statutory exemption that allows PCBs which were first sold prior to July 1, 1979 to be distributed in commerce;39 such PCBs must be distributed in a totally enclosed manner.40 In general, any PCBs still in use must be used in a "totally enclosed manner."41 The statute defines this phrase to mean: "any manner which will ensure that any exposure of human beings or the environment to a polychlorinated biphenyl will be insignificant as detrmined by the Administrator [of EPA] by rule."42 EPA has defined "totally enclosed manner" to mean: "any manner that will ensure no exposure of human beings or the environment to any concentration of PCBs."43 EPA may authorize use of PCBs in a manner that is not totally enclosed if it finds that such use will not present an unreasonable risk of injury to health or the environment.44 Under this provision, EPA has promulgated regulations that permit use of PCBs in nonenclosed manners in: transformers, mining equipment, heat transfer systems, hydraulic systems, carbonless copy paper, pigments, electromagnets, switches, voltage regulators, compressors, natural gas pipelines, research and development, microscopy mounting mediums, capacitors, circuit breakers, reclosers, cable, microscopy immersion oil, and optical liquids.45 Each such use is subject to various conditions. In particular, use of PCBs in transformers has many limitations and use conditions. Some of these conditions are designed to prevent transformer fires, which can result in widespread contaimination due to release of PCB vapors and generation of dioxins and furans. Containers and items containing PCBs must be marked with clear warnings and instructions regarding handling and disposal.46 EPA has specified the size, color, and content of the marks to be used.47 4. Storage and Disposal of PCBs When PCBs and PCB items are removed from service, they must be stored and disposed of in accordance with EPA regulations.48 The regulations are analogous to the regulations under the Resource Conservation and Recovery Act (RCRA) for the storage and disposal of hazardous wastes. [24 ELR 10363] However, it is important to distinguish between the two programs, since compliance with one does not necessarily ensure compliance with the other.49 Waste PCBs and PCB items can be stored for up to one year before disposal.50 The storage facility must meet certain requirements designed to prevent release of the PCBs.51 Commercial storers must obtain approval from their EPA regional administrator, and must maintain adequate closure plans and financial assurance for closure of the storage facility.52 PCBs and PCB items generally must be disposed of by incineration or by disposal in a chemical waste landfill.53 PCB incinerators must be approved by the EPA regional administrator and must comply with specific operational criteria.54 Chemical waste landfills also must be approved by the regional administrator and must comply with technical requirements designed to prevent groundwater contamination.55 No liquid PCBs may be disposed of in chemical waste landfills. There are several exceptions to the incineration or chemical waste landfill disposal requirements. Liquids containing less than 500 ppm of PCBs can be disposed of in a high efficiency boiler. Small capacitors (containing less than 3 pounds (lbs.) of PCBs) may be disposed of in municipal landfills. The EPA regional administrators may approve alternative means of disposal; methods that EPA has approved include thermal destruction, physical separation, solidification/stabilization, and dechlorination technologies.56 EPA plans to propose regulations permitting alternative disposal methods for large-volume PCB wastes and PCB items and radioactive mixed wastes.57 To permit cradle-to-grave tracking of waste PCBs, EPA has established a manifest system.58 All generators, storers, transporters, and disposers of PCBs must obtain an EPA identification number. Shipments of waste PCBs must be accompanied by a manifest, and the disposer of the PCBs must return a certificate of disposal to the generator. Facilities must keep records of the disposition of PCBs, including copies of manifests sent or received by the facility.59 Any spill of PCBs after May 4, 1987, must be cleaned up in accordance with EPA's spill cleanup policy, which specifies removal procedures and levels to which the PCBs must be cleaned.60 A spill of 10 lbs. or more must be reported to the National Response Center.61 Cleanup of soil must be to 10-50 ppm, depending on the location. Solid surfaces must be cleaned to 10-100 micrograms per 100 square centimeters, depending on the type of surface and whether it is encapsulated after cleaning. Compliance with the cleanup regulations creates a presumption against enforcement under TSCA or the need for further cleanup.62 However, EPA may require further cleanup if the regulatory levels have not been achieved, and may seek penalties if it determines that the responsible party did not make a good-faith effort to comply with the regulations.63 C. Section 7 Regulation of Imminently Hazardous Substances TSCA § 7 provides a mechanism whereby EPA may protect against unreasonable risks associated with "imminently hazardous" chemical substances or mixtures.64 An imminently hazardous chemical substance or mixture is a chemical substance or mixture which presents an imminent and unreasonable risk of serious or widespread injury to health or the environment, and is likely to result in such injury before a final rule under § 6 can protect against the risk.65 Section 7 authorizes EPA to commence a district court action for the seizure of an imminently hazardous chemical substance or mixture or any article containing such a substance or mixture.66 EPA also may seek other appropriate relief against persons who manufacture, process, distribute, or dispose of such substances, mixtures, or articles.67 The court may grant "such temporary or permanent relief as may be necessary to protect health or the environment from the unreasonable risk associated with the [imminently hazardous] chemical substance, mixture, or article."68 Such relief may include the issurance of an order requiring notice to purchasers or the public of the risks associated with the substance, mixture, or article, as well as recall, replacement, or repurchase of the substance, mixture, or article.69 IX. Reporting and Recordkeeping Requirements Under TSCA § 8 TSCA § 8 provides EPA with extensive authority to require companies to maintain records and report information concerning chemical substances. In many respects, § 8 has become the heart of TSCA as EPA has learned to use these powerful information-gathering tools to assist the Agency in implementing virtually all of its programs. Four subsections of TSCA § 8 deserve careful attention, and are discussed below.70 Under TSCA § 8(a), EPA has required that manufacturers and processors of chemical substances generate data regarding production quantities, environmental and health effects, worker exposure, and disposal practices for specified chemicals.71 TSCA § 8(c) and the regulations promulgated under its obligate manufacturers and processors to keep records of allegations concerning adverse health and environmental effects of chemical substances which they manufacture, process, or distribute.72 TSCA § 8(d) requires manufacturers and processors to submit unpublished health and safety studies pertaining to specified chemical substances.73 Finally, TSCA § 8(e) requires manufacturers, processors, or distributors to file an immediate report to EPA whenever they obtain information "which reasonably supports the conclusion that [a] substance or mixture presents a substantial risk of injury to health or the environment."74 TSCA § 8(a) grants EPA broad authority to require manufacturers and processors of chemical substances to provide detailed data about all aspects of chemical manufacture and use, including workplace exposure data and disposal-related data. The statutory language illustrates the potential breadth of the § 8(a) requirements: The Administrator may require … maintenance of records and reporting with respect to the following insofar as known to the person making the report or insofar as reasonably ascertainable: (A) The common or trade name, the chemical identity, and the molecular structure of each chemical substance or mixture for which such a report is required. (B) The categories or proposed categories of use of each such substance or mixture. (C) The total amount of each such substance and mixture manufactured or processed, reasonable estimates of the total amount to be manufactured or processed, the amount manufactured or processed for each of its categories of use, and reasonable estimates of the amount to be manufactured or processed for each of its categories of use or proposed categories of use. (D) A description of the byproducts resulting from the manufacture, processing, use, or disposal of each such substance or mixture. (E) All existing data concerning the environmental and health effects of such substance or mixture. (F) The number of individuals exposed, and reasonable estimates of the number who will be exposed, to such substance or mixture in their places of employment and the duration of such exposure. (G) [T]he manner or method of … disposal [of the chemical substance or mixture].75 EPA has implemented § 8(a) reporting requirements through promulgation of two separate sets of rules, both of which are currently in effect. The first is the Preliminary Assessment Information Rule (PAIR), which is codified at 40 C.F.R. Part 712, Subpart B. The PAIR rule is a generic rule that utilizes a relatively simple reporting form. EPA periodically adds chemicals to the PAIR rule and requires qualifying manufacturers to complete the PAIR form for those chemicals. This reporting obligation is a "one-time only" event. The Comprehensive Assessment Information Rule (CAIR), which is codified at 40 C.F.R. Part 704, is a more complicated generic rule that utilizes an extensive reporting form. EPA intends to add chemicals to the CAIR rule periodically, thereby triggering extensive reporting requirements for any qualifying manufacturers and processors. Like PAIR requirements, CAIR reporting obligations are one-time events. a. Preliminary Assessment Information Rule (PAIR) Operation of the PAIR is linked to the biannual recommendations of the Interagency Testing Committee (ITC) concerning chemicals that the ITC believes should be priorities for testing under TSCA § 4.76 EPA automatically adds the ITC list to the PAIR,77 and also may separately designate chemicals subject to the PAIR. In this way, the Agency ensures that it has on hand relevant production and use information when making decisions regarding potential testing of chemicals under § 4. Lists of all the chemicals that have been added to the PAIR are set forth at 40 C.F.R. § 712.30. Persons that manufacture or import a chemical substance at the time it is listed are subject to the PAIR.78 However, the PAIR includes several important exemptions to this general rule. In particular, the following persons are completely exempt from PAIR reporting: persons who manufactured [24 ELR 10365] or imported the chemical solely for research and development (R&D) or for scientific experimentation,79 and persons who manufactured or imported the chemical only as a byproduct that was not used or sold or was formed by incidental means, as an impurity, or as a nonisolated intermediate.80 Persons are exempt from reporting for a particular plant site if less than 500 kilograms (kg) of the chemical was produced at that site during the reporting period;81 or if the person is a small manufacturer or importer at that site, meaning that (a) total annual sales for all sites owned or controlled by the parent company were less than $ 30 million during the reporting period, (b) less than 45,400 kg of the chemical were produced at that site during the reporting period, and (c) the chemical is not designated with an asterisk in the PAIR list at 40 C.F.R. § 712.30.82 iii. Information to Be Reported For each plant site at which a designated chemical is manufactured or imported, the manufacturer or importer must submit a two-page manufacturer's report (EPA Form 7710-35).83 The form requires information about quantities of the chemical manufactured, imported, used as a reactant, used in industrial and consumer products, or lost to the environment, and about worker exposure to the chemical. Information required under the PAIR is due within 60 days after the "effective date" for the chemical.84 The effective date is 30 days after publication of the final rule ladding the chemical to the PAIR list.85 The information must cover the last complete fiscal year as of the effective date.86 b. Comprehensive Assessment Information Rule (CAIR) As it does with the PAIR, EPA designates by rule those chemical substances for which information must be submitted under the CAIR. To date, the Agency has designated only a handful of chemicals, which are listed at 40 C.F.R. § 704.225. The CAIR list also gives the trade names under which the chemical is sold. EPA eventually plans to replace the PAIR with the CAIR. Manufacturers, importers, and processors of a listed chemical during the designated period are subject to the CAIR.87 "Repackagers" and "small processors" are exempt from the CAIR rule.88 A repackager is "a person who buys a [CAIR] substance … or mixture, removes the substance or mixture from the container in which it was bought, and transfers this substance, as is, to another container for sale," and who engages in no other processing activities.89 Small processors include: (1) those processors having total annual sales, when combined with those of the parent company, if any, of less than $ 4 million regardless of the quantity processed; and (2) those processors having total annual sales, when combined with those of the parent company, if any, of less than $ 40 million, and whose total annual processing volume of the chemical at any individual site is less than 45,400 kg.90 iii. Information to Be Reported A CAIR form must be submitted for each plant site at which the chemical is manufactured, processed, or imported.91 The CAIR form consists of a large number of question is pertaining to chemical volumes, raw materials, physical/chemical properties, treatment and disposal, worker exposure, environmental releases and fate, and economic and financial information.92 Although the CAIR rule form is "generic," EPA anticipates that rulemakings that add specific chemicals to the rule may specify a subset of questions that a manufacturer and/or processor must answer. In this way, EPA theoretically can "tailor" the information request to specific items of special interest to the Agency. Under the CAIR, reports must be submitted within 90 days of the effective date, as specified in the final rule that lists the substance.93 The final rule also specifies a two-year coverage period.94 Information in the CAIR report must be for the most recent fiscal year that falls completely within the coverage period.95 Under the CAIR, manufacturers, importers, and processors who distribute a chemical under a trade name must either submit the trade names to EPA within one day of the effective date, report on behalf of their customers, or notify their customers of their obligation to report.96 However, in response to objections that reporting the trade name to EPA or notifying customers would result in disclosure of confidential information, EPA has temporarily suspended this provision for companies which are unable to report on their customers' behalf, provided that such companies notified [24 ELR 10366] EPA by May 10, 1989. EPA will reconsider this provision when it adds further chemicals to the CAIR list.97 EPA has released several guidance documents that provide additional background regarding the scope of § 8(a) reporting requirements in general, and PAIR and CAIR reporting obligations in particular. These include the preambles to the final Federal Register publication of the PAIR and the CAIR,98 as well as the following publications available from EPA: U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (June 10, 1986). U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (May 5, 1987). U.S. EPA, Comprehensive Assessment Information Rule, Question & Answer Document (Dec. 1988). U.S. EPA, Comprehensive Assessment Information Rule, Question & Answer Document (Mar. 1988). TSCA § 8(c) requires companies to keep records on allegations of harmful effects caused by chemicals, thus enabling the company or EPA to be aware of patterns of allegations that may point to a previously unknown adverse effect caused by a chemical or group of chemicals. Any person who manufactures, processes,or distributes in commerce any chemical substance or mixture shall maintain records of significant adverse reactions to health or the environment, as determined by the Administrator by rule, alleged to have been caused by the substance or mixture.… Records required to be maintained under this subsection shall include records of consumer allegations of personal injury or harm to health, reports of occupational disease or injury, and reports or complaints of injury to the environment submitted to the manufacturer, processor, or distributor in commerce from any source.99 Unlike TSCA § 8(a), § 8(c) is not limited to chemicals that have been identified by EPA and listed in a rulemaking. Rather, it applies to allegations regarding any TSCA chemical substance or mixture. In addition, allegations of adverse health or environmental effects from a particular facility, process, or activity, an article containing a chemical substance or mixture, or a facility discharge must be recorded.100 However, EPA's § 8(c) rule lists several exceptions to the general rule that all TSCA chemical substances are subject to § 8(c) recordkeeping.101 These exemptions include allegations pertaining to chemicals produced solely by an extractive function, e.g., mining or petroleum production,102 and allegations pertaining to chemicals produced incidentally, as described at 40 C.F.R. § 717.7(a)(2).103 Although the statutory language of § 8(c) applies to any manufacturer, processor, or distributor of a TSCA chemical, the regulations promulgated by EPA under § 8(c) apply only to manufacturers and processors.104 The rule expressly exempts "sole distributors" and "retailers" of the chemical substance, as long as they are not also manufacturers or processors.105 4. Information to Be Recorded and Maintained As explained above, § 8(c) requires the recording of allegations received by the company of significant adverse health or environmental effects caused by a chemical substance or mixture. These allegations generally are recordable even in the absence of proof or evidence that the chemical in fact caused the alleged effect. Moreover, allegations which incorrectly identify the cause must be recorded as filed, although the results of the company's subsequent investigation also may be placed in the file.106 An allegation that falls within the ambit of § 8(c) can be either oral or written. Written allegations are to be signed; otherwise the company need not act on them. If the allegation is oral, the company can request that it be submitted in writing; otherwise the company must reduce it to writing.107 Sources of § 8(c) allegations may include lawsuits, workmen's compensation claims, complaints from customers or facility neighbors, newspaper articles, employee complaints to supervisor or medical staff, and so forth. Claims made in toxic tort suits, for example, may qualify as § 8(c) allegations.108 Examples of significant adverse effects are set forth at 40 C.F.R. § 717.12. They include long-lasting or irreversible health effects, such as cancer and neurological effects; impairment of normal activities experienced by a number of people exposed to the same event, or by one person each time he or she is exposed; long-lasting or irreversible damage to biological species, such as fish kills or reduction in the ability of a species to survive, and long-lasting or irreversible effects on environmental media, such as ground-water contamination.109 Allegations of known human health effects -- meaning effects that are reported in the literature or acknowledged in the company's product labeling or material safety data sheets for the chemical substance -- need not be recorded. However, if the effect is more severe, occurs at a lower exposure level, or is by a different route of exposure than previously known, it is not a known human effect, and the allegation must be recorded.110 The record of the allegation must consist of the allegation itself, as received, an abstract of the allegation, the results of any self-initiated investigation, and copies of any further required records or reports regarding the allegation (including, for example, any required OSHA reports or records).111 The abstract must include: (1) the name and address of the plant site; (2) the date the allegation was received; (3) the implicated substance, article, process, or discharge; (4) a description of the alleger's relationship to the plant; and (5) a description of the alleged health or environmental effects.112 EPA has not designed a specific form for the abstract, so it is advisable that each company design its own form to ensure that persons recording the information include all required elements. A company's § 8(c) file must be structured so that records can be retrieved by chemical identity, particular mixture, particular article, company process or operation, or site emission, effluent, or discharge.113 Such records "shall be kept at the firm's headquarters or at any other appropriate location central to the firm's chemical operations."114 A record must be made of any covered allegation made on or after November 21, 1983.115 This is an ongoing obligation that arises each time an allegation is made. Oddly enough, there is no deadline for recording qualifying allegations. However, EPA may inspect or require submission of a company's § 8(c) files at any time.116 If the § 8(c) files are not up-to-date, EPA can bring an enforcement action for failure to maintain records as required by TSCA.117 Records of allegations of adverse effects on the health of employees must be kept for 30 years; records of other allegations must be kept for five years.118 EPA has released several guidance documents that provide additional background regarding the scope of § 8(c) record-keeping requirements. These include the preambles to the final Federal Register publication of the rules,119 as well as the following publications available from EPA: U.S. EPA, Questions and Answers Concerning the TSCA § 8(c) Rule (July 1984). U.S. EPA, Answers to Your Questions About the TSCA § 8(c) Rule (1984) (pamphlet). U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (June 10, 1986). U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (May 5, 1987). C. Section 8(d) Disclosure of Health and Safety Studies TSCA § 8(d) provides broad authority for EPA to require persons who manufacture, process, or distribute in commerce chemical substances or mixtures to submit to the Agency lists and copies of health and safety studies that are: (A) conducted or initiated by or for such person with respect to such substance or mixture at any time, (B) known to such person or (C) reasonably ascertainable by such person …120 EPA has used its § 8(d) authority to gather unpublished health and safety studies on a large number of chemicals in which it has an interest. EPA's regulations under § 8(d) are codified at 40 C.F.R. Part 716.121 Section 8(d) is not self-implementing. Like § 8(a), the reporting obligations of § 8(d) apply only to those chemicals that are specifically identified by EPA in a rulemaking. To date, EPA has listed several hundred chemicals for which studies must be submitted; the list appears at 40 C.F.R. § 716.120. From time to time, EPA amends this list, either adding or deleting specific chemicals or classes of chemicals. Chemicals that are not included on the TSCA Inventory and are within the specific categories of substances listed at 40 C.F.R. § 716.120(c) typically are exemption from reporting [24 ELR 10368] under § 8(d).122 In addition, reporting is not required for substances manufactured, imported, or processed only as an impurity, unless reporting is separately proposed in the Federal Register.123 Any person who manufactured or processed a listed chemical within the 10 years preceding the effective date of the § 8(d) rule is subject to reporting requirements. In addition, any person who manufactures or processes the chemical, or who proposes to do so, on or after the effective date of the rule, is subject to § 8(d) reporting requirements.124 Persons who distribute chemicals in commerce, but who do not qualify as manufacturers or processors, are not subject to § 8(d) regulations, despite the explicit statutory reference to distributors. Further, the requirements of § 8(d) do not apply to persons who manufacture or process a listed chemical solely as an impurity.125 Section 8(d) requires the submission of health and safety studies on a listed chemical, or on mixtures containing a listed chemical. If the regulated entity possesses the study, it must submit a copy of the study. If the regulated entity knows of the study, but does not have access to a copy, it must list the study. EPA has defined "health and safety study" broadly to mean "any study of any effect of a chemical substance or mixture on health or the environment."126 The definition includes both formal studies and aggregations of data. Specific examples of covered studies include toxicology studies, environmental fate studies, physical/chemical studies, epidemiological studies, and aggregations of monitoring data.127 The determination as to whether a particular report or aggregation of data constitutes a "health and safety study" can be a complicated one, and has been particularly troublesome in the context of assessing the reportability of environmental modeling and monitoring studies. EPA has indicated that generally, modeling studies need not be reported under § 8(d) if they employ "worst case" data-input scenarios that are unlikely to occur under normal operating conditions. However, modeling studies that estimate actual or "reasonably likely" exposures are considered reportable.128 EPA had indicated that monitoring data are reportable where they have been "aggregated and analyzed" to measure human or environmental exposure. Raw monitoring data does not need to be reported, nor does routine monitoring conducted solely to determine compliance with regulatory or industry permissible exposure limits.129 Exemptions from the § 8(d) reporting requirements are identified in the regulations, and include: studies published in the scientific literature; studies previously submitted to EPA under TSCA; studies conducted by or for another person who is subject to § 8(d) and will submit the studies; studies of chemicals exempt from the TSCA Inventory, e.g., R&D chemicals, unless the chemical is specifically listed (but not if it simply belongs to a listed chemical class); for mixtures known to contain a listed chemical, studies of acute toxicity, eye and skin irritation, skin sensitization, and physical or chemical properties; * analyzed aggregations of monitoring data, if the data were acquired more than five years prior to the effective date for the chemical; analyzed aggregations of monitoring data, if the data were not analyzed to determine exposure to or concentrations of the listed chemical; studies on chemicals that are present only as impurities, unless EPA requires such studies by special rule; studies previously submitted by a trade association;130 and studies on physical or chemical properties, unless they are investigating certain specified properties.131 Reporting for any given chemical substance under § 8(d) essentially occurs in two phases. The first phase requires submissions of all existing health and safety studies possessed by or known to the person, plus lists of ongoing studies, within 60 days of the effective date for the chemical.132 When searching for existing studies, companies need not search files retired prior to December 31, 1979.133 The second phase requires that regulated persons notify EPA within 30 days of initiating a study, and that they submit copies of final reports within 30 days of receiving the final report.134 The second phase lasts for 10 years after the effective date, unless EPA determines that it has received sufficient data and therefore delists the chemical prior to the end of the 10-year period.135 When a chemical is listed under § 8(d), persons subject to the rule must search their files to identify all submittable studies. The scope of the search may be limited to records where such information normally is kept, and to the records of employees who have responsibility for advising the company on the health and safety of chemicals.136 6. Guidance Documents EPA has released several guidance documents which provide additional background regarding the scope of § 8(d) recordkeeping requirements. These include the preambles to the final Federal Register publication of the rules,137 as well as the following publications available from EPA: U.S. EPA, Questions and Answers About Reporting Under TSCA § 8(d) Health & Safety Study Reporting Rule (Nov. 10, 1982). U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (June 10, 1986). U.S. EPA, Office of Toxic Substances Existing Chemicals Program, Question and Answer Summary, EPA Seminar on Industry Obligations Under TSCA (May 5, 1987). U.S. EPA, General Questions and Answers About Reporting Under TSCA § 8(d) Health and Safety Study Reporting Rule (revised Feb. 16, 1989). U.S. EPA, Addendum #1 to General § 8(d) Questions and Answers Dated February 16, 1989 (July 27, 1989). U.S. EPA, Questions and Answers: Applicability of TSCA § 8(d) Model Health and Safety Data Reporting Rule to Modeling Studies (Oct. 1989). U.S. EPA, Questions and Answers: Applicability of TSCA § 8(d) Model Health and Safety Data Reporting Rule to Modeling Studies (Nov. 1989). D. Section 8(e) Notice of Substantial Risks Any person who manufactures, processes, or distributes in commerce a chemical substance or mixture and who obtains information which reasonably supports the conclusion that such substance or mixture presents a substantial risk of injury to health or the environmenta shall immediately inform the Administrator of such information unless such person has actual knowledge that the Administrator has been adequately informed of such information.138 This section grew out of Congress' perception that the chemical industry was not willing voluntarily to share information regarding the deleterious effects of its chemicals. In particular, evidence had accumulated that the asbestos industry kept secret information on the adverse health effects of asbestos. Another incident fueling Congress concern was the release of large quantities of kepone to the Chesapeake Bay, with no notice given until severe damage to aquatic life had occurred. To ensure that EPA would have timely notice of severe effects of chemicals, from which it could design appropriate regulations or other responses, Congress created a direct statutory obligation on the chemical industry to give EPA immediate notice when information is obtained regarding substantial risks associated with a chemical substance or mixture.139 By its terms, § 8(e) applies to all chemical substances or mixtures that are manufactured, processed, or distributed in commerce by a person who obtains information of their substantial risk of injury to health or the environment. Like § 8(c), § 8(e) is self-implementing; it does not require EPA to identify certain chemicals or classes of chemicals through the rulemaking process, but places an immediate disclosure requirement on manufacturers, processors, or distributors who obtain the relevant information. The § 8(e) reporting obligations are imposed on any person who manufactures, processes, or distributes in commerce a chemical substance or mixture. As explained above, "manufacture" is defined to include importation.140 Thus, persons who import chemical substances and mixtures also are subject to § 8(e). EPA has further defined the term "person" to include "any natural person, corporation, firm, company, joint-venture, partnership, sole proprietorship, association, or any other business entity, any State or political subdivision thereof, any municipality, any interstate body and any department, agency, or instrumentality of the Federal government."141 Clearly, most members of the chemical industry are "persons" subject to § 8(e). In addition, given the expansive definition of "processing,"142 other, less obvious entities also may acquire § 8(e) obligations. For example, an equipment manufacturer who combines chemicals to create a coating for the equipment may be considered a "processor" of those chemicals. EPA considers the officers and employees of business entities personally liable under § 8(e) if they are "capable of appreciating the significance" of the information that has been obtained.143 However, this personal liability can be discharged if the company has established an internal procedure for processing claims of § 8(e)-reportability, and if the employee has submitted information in accordance with that procedure.144 Information must be reported under § 8(e) if it reasonably supports the conclusion that a chemical substance or mixture [24 ELR 10370] presents a substantial risk to health or the environment.145 EPA has stated that the information need not be conclusive, but merely sufficient to reasonably support a conclusion of substantial risk.146 Thus, for example, study results that are only preliminary nevertheless may be reportable under § 8(e). One aspect of whether information "reasonably supports" a conclusion of substantial risk is whether the information can "reliably ascribe the effect to the chemical."147 For example, if the information is from a laboratory study that does not meet minimum professional standards for data recording, methodology, good laboratory practices, and so forth, the information may not be reportable on the ground that it is not reliable. Further, EPA considers "substantial risk" to have two components: the seriousness of the effect, and the likelihood that the effect will occur, i.e., the extent of actual exposure to the chemical.148 The more serious the effect, the less that exposure is a necessary factor in determining substantial risk. In 1978, EPA published a Statement of Interpretation, which set out the basic categories of effects which would be indicative of substantial risk,149 and subsequent guidance has elaborated on that description. The types of effects that must be reported fall into three broad categories: (1) effects seen in mammalian toxicology studies; (2) effects observed in humans, and (3) effects observed in environmental organisms. Most of EPA's guidance pertains to information in the first category. The following briefly describes the types of information that are reportable. Because reporting decisions often are complex, EPA guidance documents should be consulted in any particular case.150 Effects observed in animal studies are reportable if they reasonably support the conclusion that a chemical substance or mixture causes cancer, birth defects, mutagenicity, death, or "serious and prolonged incapacitation."151 The latter category includes neurotoxicity, immunological damage, sensitization, severe skin or eye irritation, and functional damage to an organ system. The more severe the effect, the less exposure is a factor in the reporting decision. Evidence of particularly severe effects such as cancer, birth defects, and neurotoxicity should be reported without regard to potential exposure.152 The following discusses reportability in terms of the type of study. [] Acute Toxicity. EPA has provided a "bright-line" scale for acute toxicity tests, assuming lethality is the only observed effect.153 Other effects observed in an acute toxicity test should be reported if they are indicative of severe or prolonged incapacitation, e.g., neurotoxicity.154 [] Carcinogenicity. Any study that shows a biologically or statistically significant increase in tumors, benign or malignant, should be reported.155 [] Chemical Tissue Observations. Statistically or biologically significant clinical or histological information should be reported if such information, in and of itself, would be indicative of serious or prolonged incapacitation. Examples of such endpoints are neurotoxic esterase inhibition and cholinesterase inhibition in neural tissue (indicating neurotoxicity). Other specialized endpoints, such as blood cell or liver enzyme clinical chemistry findings, are not reportable unless observed in conjunction with a serious organ-specific effect or a serious effect on the function of an organ or organ system.156 [] Dermal/Eye Irritation. Generally, a positive finding of skin or eye irritation is not reportable in and of itself. However, such studies should be considered for reporting if the irritation is severe and is unexpected in light of the pH or other characteristics of the chemical, or if other significant effects are observed during the course of the study.157 [] Developmental Toxicity. Any statistically or biologically significant developmental effect observed, regardless of whether it occurs in conjunction with maternal toxicity, is reportable.158 [] Mutagenicity/Genotoxicity. Any genotoxicological effects, such as gene mutations or chromosomal damage, observed in vitro probably should be reported. A single positive result in an in vitro study, if confirmed by other information, such as positive results in a genotoxicity study performed in another in vitro system, should be considered for reporting. If a battery of studies has been performed, the entire battery should be evaluated to determine whether the predominance of the results indicates genotoxic activity.159 [] Neurotoxicity. Evidence of neurotoxicity is of great concern to EPA and is the subject of much of the recent guidance on § 8(e). Any study in which signs or symptoms indicate that a substance has neurotoxic effects that are distinct from the general toxicity of the substance should be carefully considered for reporting. EPA considers a variety of signs (convulsions, ataxia, twitching, lethargy) as potentially indicative of neurotoxicity, depending on other factors such as duration of the effect or the number of animals showing the effect.160 [] Pharmacokinetics and Metabolism. Studies that indicate that the test substance is metabolized or transformed to [24 ELR 10371] another substance that is known to be significantly toxic should be considered for reporting. If the parent compound is significantly toxic and the study shows that the extent of metabolite formation or distribution of toxic metabolites to target organs is greaterthan previously demonstrated, the study may be reportable.161 Skin Sensitization. EPA's guidance on this subject is somewhat vague and difficult to apply in practice. Generally, the greater the percentage of subjects showing sensitization, the greater the severity of the sensitization, and the greater the potential for exposure, the more likely that the information is reportable.162 Subchronic Studies. Subchronic studies may be reportable based on observation of severe effects such as those discussed above. In addition, clinical, gross, or histopathological observations reflecting organ-specific or organ-system-specific effects indicative of serious or prolonged incapacitation, e.g., cirrhosis of the liver, immunosuppression, cataract formation, are reportable. Organ weight changes may be reportable if severe or if observed in conjunction with other evidence of functional damage.163 Information that a chemical substance or mixture poses a substantial risk to humans may be found in epidemiology studies, medical surveys, clinical studies, and reports or allegations of worker or consumer effects (such as information in a company's § 8(c) file). The types of reportable effects are the same as those described under mammalian toxicology. However, additional factors may come into play with human health studies. First, the fact that an effect actually is observed in humans weighs on the side of reporting. The more severe the effect, the fewer the number of persons in which it must be seen. 164 However, isolated reports of nausea, skin rash, or other minor effects need not be reported. Second, other than epidemiological studies, human effects information tends to be somewhat sketchy and anecdotal. The decision of whether the information reliably ascribes the effect to a chemical may be more difficult to determine than with mammalian toxicological studies. Evidence that may reasonably support a substantial risk finding includes: * an epidemiological study showing a statistically significant increase in the incidence of an effect in an exposed group versus a non-exposed group; * expert opinion, e.g., a physician's conclusion that exposure to a chemical caused an observed effect; * animal data that indicate that the chemical may cause the observed effect; * medical surveys showing an increase in the incidence of an effect in persons exposed to the chemical versus the general population; * a large number of allegations that exposure to a chemical has caused a particular effect; * a structural activity relationship between the chemical alleged to have caused the effect and a chemical known to cause that effect.165 Other than the 1978 Statement of Interpretation just described, EPA has provided little guidance on when information indicates that a chemical substance or mixture poses a substantial risk to the environment. EPA plans to propose new guidance regarding the reportability of information on environmental releases and contamination.166 It is hoped that the proposed guidance also will provide insight into § 8(e) reportability of other types of environmental information, such as ecotoxicity information. EPA has stated that in all cases, information about the environment is § 8(e)-reportable only if there is potential for significant exposure to the chemical.167 In general, information that a chemical bioaccumulates or that it causes significant ecological damage or imbalance should be evaluated for reporting. The definition of "significant adverse environmental effects" under EPA's significant new use regulations provides guidance on what EPA has found to be significant acute aquatic toxicity in another TSCA context.168 Information of which EPA has been adequately informed need not be reported under § 8(e) if the submitter has "actual knowledge that the Administrator has been adequately informed of such information."169 EPA considers itself "adequately informed" only if at least one of the following criteria is met: [24 ELR 10372] * the information is published in a major scientific journal or a major news media source; * the information previously has been submitted to EPA under a mandatory reporting requirement, such as data required to be submitted under FIFRA or other federal statutes;170 * the information is contained in an EPA study or report; * the information is contained in a formal publication or statement made available to the public by another federal agency; * the information is corroborative of a well established, known effect. EPA has defined "corroborative" in such a manner that one study must virtually duplicate another, e.g., same species, same dose levels, same route of administration, in order to meet this definition.171 Section 8(e) requires that a person who obtains reportable information must "immediately inform" EPA. EPA has interpreted this to mean that the Agency should receive the information "not later than the 15th working day after the date the person obtained such information.172 The Agency has provided the following guidance as to when a person is regarded as having obtained information: A person obtains substantial-risk information at the time he first comes into possession or knows of such information. Note. -- This includes information of which a reasonably prudent person similarly situated could reasonably be expected to possess or have knowledge. An establishment obtains information at the time any officer or employee capable of appreciating the significance of such information obtains it.173 Since the trigger point is when relevant information is "obtained," even old information can be § 8(e)-reportable. For example, if while cleaning out files a toxicologist discovers a pre-TSCA memorandum reporting severe health effects from a company chemical, the information may be currently reportable.174 6. Sources of Information Subject to § 8(e) Reportable information can be obtained from virtually any source, written or oral. The most common source of § 8(e) information is a study report, but reportable information also can be included in newspaper or other media reports, in speeches made at conferences, in preliminary study results communicated over the telephone or in an internal memorandum, and so forth. A series of § 8(c) allegations, taken together, could form a pattern that will rise to the level of § 8(e)-reportability. Even a single § 8(c) allegation could be reportable under § 8(e) ff the effect is serious, e.g., mesothelioma, and the connection to a specific chemical is strong. As long as the other elements of § 8(e) are met, the key is whether a person subject to § 8(e) knows (or should know), about that information, in whatever form it is transmitted.175 Because it provides much of the current context of the § 8(e) program, it is useful briefly to explain EPA's TSCA § 8(e) Compliance Audit Program (CAP). This program was initiated in 1991 in response to a realization that EPA and industry had not shared a common understanding regarding the reportability of information under § 8(e). To encourage companies to audit their files and submit reportable information, EPA established a one-time voluntary audit program.176 Companies wishing to participate were required to register by July 1, 1991. Registrants entered a consent agreement that provided for penalties of $ 6,000 for each study submitted under the CAP ($ 15,000 if the study involved effects on humans) with a cap of $ 1 million. In exchange, the company's liability for failure to timely submit such reports is extinguished. The first phase of the CAP, which covered toxicological information, ended on October 30, 1992. Thousands of studies were submitted by approximately 125 CAP registrants. A second phase, covering environmental release and contamination information, is scheduled to end six months ater EPA finalizes guidance on reporting such information.177 Unlike the other subsections of § 8, Congress did not direct EPA to promulgate regulations regarding implementation of § 8(e). EPA has provided details on compliance with § 8(e) through policy guides, question-and-answer documents, and other informal modes of communication. In 1978, EPA published its Statement of Interpretation that explains the procedure for submitting § 8(e) information, and provides EPA's interpretation of the statutory terms.178 With one exception, it remains the fundamental statement of EPA's position on § 8(e) issues. The exception relates to information on environmental contamination and releases to the environment, and is discussed further below. Subsequent to the Statement of Interpretation, EPA has generated several other sources of guidance on the interpretation of § 8(e). Most of these sources are summarized in the 1991 Reporting Guide produced in conjunction with initiation of the CAP and sent to all CAP registrants. In a question-and-answer format, it provides an overview of the § 8(e) program, summarizes the Statement of Interpretation and other guidance, and provides addresses and telephone numbers for EPA personnel involved with the § 8(e) program. From 1979 to 1991, EPA generated status reports on § 8(e) submissions. These reports summarize the contents of the submissions and other information readily available on the chemicals that are the subject of the submissions. In some cases, EPA comments on whether the information in the submission is in fact reportable under § 8(e). The reports are published sequentially in seven bound volumes, each entitled "Preliminary Evaluations of Initial TSCA Section 8(e) Substantial Risk Notices," and can be purchased from the National Technical Information Service (NTIS). An index to the status reports is provided in the 1991 Reporting Guide. In 1986 and 1987, EPA produced general question-and- answer documents for the TSCA program that included questions on § 8(e).179 b. Guidance on Reportable Health Effects Information In July 1989, EPA made available a question-and-answer document that specifically addressed § 8(e) reportability of certain types of toxicological information; those questions and answers are reproduced in the 1991 Reporting Guide.180 While the 1989 Question and Answer document answered some questions, it raised many others. The Chemical Manufacturers Association (CMA) subsequently created case studies designed to illustrate reporting issues in the areas of information on lethality, neurbehavior, skin/eye irritation, sensitization, and subchronic toxicity. The CMA submitted these case studies to EPA, requesting clarification of the issues raised. EPA's responses are included in the 1991 Reporting Guide.181 During the course of the CAP, participating companies discovered further health effects reporting issues that did not seem to be definitively answered by previous guidance. In December 1991, an ad hoc coalition of several CAP registrants created a working paper that presented questions regarding health effects reporting issues, and submitted it to EPA with a request for amplification of existing guidance.182 EPA responded with further guidance in April 1992, and copies of the response were sent to all CAP participants.183 c. Guidance on Reportable Environmental Information The 1978 Statement of Interpretation's list of § 8(e)-reportable information included the following two categories: (1) information on "widespread and previously unsuspected distribution in environmental media," and (2) information on "emergency incidents of environmental contamination." During the CAP program, registrants raised many issues regarding the scope of these categories, and a request for further guidance was sent to EPA. EPA responded by withdrawing those two sections of the Statement of Interpretation, promising the promulgation of additional guidance, and postponing completion of the CAP with respect to information in those categories.184 ii. Proposed Guidance: Triggers for Reporting After an extended delay, EPA promulgated its proposed § 8(e) environmental reporting guidance in the form of a "clarification" published in the Federal Register.185 The proposed guidance provides only limited additional clarification regarding the types of environmental information that may qualify for reporting under § 8(e). Importantly, for example, the Agency provided no additional guidance on the types of emergency incidences that may need to be reported under § 8(e). Instead, the Agency simply stated that it is deferring publication of any additional guidance on this important question "until issues associated with chemical emergency reporting policy are more fully defined and evaluated."186 In the meantime, "[t] he regulated community is again directed to focus on the statutory language of section 8(e) as the standard by which to determine the reportability of information on EIECs [emergency incidences of environmental contamination] until that time."187 With regard to information regarding "widespread and previously unsuspected distribution in environmental media" that may be reportable under § 8(e), the Agency provided some general benchmarks, but left many questions unanswered. For example, EPA explained that it interprets § 8(e) to require reporting of information that provides evidence of widespread environmental distribution of a chemical substance or mixture, and which because of the extent, pattern, and amount of the contamination seriously threatens or may seriously threaten: (1) [h]umans with cancer, birth defects, mutation, death or serious or prolonged incapacitation (e.g., neurotoxicological effects, reproductive/developmental effects), or (2) non-human organisms with large-scale or ecologically significant population destruction.188 The Agency also stated that "the greater the amount, extent, and pattern of the contamination, the less heavily one should weigh the known or suspected toxicity of the chemical(s)."189 As for the application of these benchmark criteria, EPA signaled its intent to apply the criteria in a conservative fashion. It stated, for example, that information concerning a nonemergency chemical release or detection in an amount less than the chemical's maximum contaminant level under the Safe Drinking Water Act nonetheless "could 'reasonably support the conclusion of substantial risk,' thus requiring reporting under TSCA § 8(e)."190 Also, the Agency explained that the term "widespread" contamination in the context of a nonemergency situation that may require reporting under Section 8(e) could include "presence in a product that is distributed commercially, multiple (e.g., 3 or more) reports of contamination (even in a single environmental medium) involving different sites inside and/or outside the boundaries of a facility, or presence in more than one environmental medium (e.g., discovery of a chemical in both soil and groundwater)."191 Finally, EPA suggested that [t]here are also non-emergency situations in which a significant chemical contamination is discovered inside physical stuctures within the plant site boundaries, which, when combined with other pertinent information (e.g., potential for exposure, toxicity of the chemical), can trigger section 8(e) reporting; examples include but are not limited to: [t]he detection of significant amounts of a toxic chemical substance in workplace air and/or on surfaces within a facility in which the chemical is typically handled in a closed system, and (2) the detection of significant levels of a toxic byproduct not already generally known to be associated with a given chemical process, or known to be associated with the chemical process but found at levels significantly above those previously believe to be associated with that process.192 The open-ended nature of EPA's proposed reporting guidance, and the suggestion that environmental reporting obligations under § 8(e) may be more widespread than previously signaled by the Agency, has prompted extensive comments by a large number of interested parties. The Agency is in the process of considering these comments, and is not considered likely to promulgate final guidance until some point in late 1994 or, potentially, in 1995. iii. Proposed Guidance: Reporting Exemptions The recent proposed guidance also addressed the questions of the types of information that need not be reported to EPA under § 8(e) because the potential submitter has "actual knowledge" that the Administrator has been "adequately informed" of such information.193 This question is particularly important in the context of environmental reporting because environmental contamination currently is subject to extensive reporting under a variety of federal and state laws, many of which postdate TSCA. EPA has proposed to address this issue by exempting from § 8(e) only those reports that are submitted to EPA or a state under a mandatory federal statutory requirement.194 Thus, for example, reporting would be required even if information already had been reported to federal authorities on a voluntary basis, or to state authorities on a voluntary basis or pursuant to a mandatory, but nondelegated, state requirement.195 EPA's proposed view has sparked considerable debate, particularly by parties that are concerned about duplicative reporting obligations under different federal and state reporting requirements. Until further guidance is provided, however, companies or individuals who identify information about environmental conditions that meet § 8(e)'s reporting criteria, i.e., information that indicates the presence of a "substantial risk" to the environment, reporting may be required under § 8(e) even if the same information already has been reported to appropriate authorities under other federal or state statutes. X. TSCA §§ 13 and 12(b) -- Import Certification and Export Notification Requirements A. TSCA § 13 Import Certification Substances that are imported into the United States are subject to the same restrictions and requirements under TSCA §§ 4,5,6, and 8 as those that are domestically manufactured or produced. As explained above, TSCA defines the term "manufacture" to include "import into the customs territory of the United States."196 In addition, § 13 requires that the Treasury Department refuse entry into the customs territory of the United States197 of any chemical substance, mixture, or article containing a chemical substance or mixture offered for entry if it fails tocomply with any rule in effect under TSCA; or if it is offered for entry in violation of TSCA §§ 5 or 6, a rule or order under TSCA §§ 5 or 6, or an order issued in a civil action brought under TSCA §§ 5 or 7.198 If a substance, mixture, or article is refused entry, the Treasury Department must notify the consignee, and store or dispose of the shipment unless it is exported by the consignee within 90 days of receipt of the notice of refusal of entry.199 However, the Treasury Department may release the substance, mixture, or article to the consignee, pending review of the entry refusal by EPA, upon execution of a bond for the invoice amount with any duty thereon.200 All storage, cartage, labor, and disposal charges for substances, mixtures, or articles which are refused entry must be paid by the owner or consignee.201 2. Treasury Department and EPA Regulations TSCA § 13(b) authorizes the Treasury Department, after consultation with EPA, to issue rules implementing TSCA § 13.202 The Treasury Department promulgated its final TSCA § 13 import certification rules on August 1, 1983.203 EPA issued a policy statement on December 13, 1983, explaining its interpretation of and responsibilities under the customs rules.204 The customs regulations require importers of chemical substances in bulk or as part of a mixture to provide, at the [24 ELR 10375] port of entry, a signed certification statement indicating either that the shipment complies with TSCA or that the shipment is not subject to TSCA. The invoice or other entry documents must include either a positive certification of TSCA compliance, for chemical substances subject to TSCA,205 or a negative certification that the shipment is not subject to TSCA.206 A positive certification is required for any shipment containing a chemical substance or mixture of chemical substances as defined by TSCA. The certification reflects compliance with TSCA §§ 5, 6, and 7 and any rules or orders issued under these sections.207 Although the requirements of §§ 4 and 8 may apply to imported substances, their importation does not depend upon an importer's satisfying those requirements at the time of certification.208 Substances such as those imported for R&D purposes or those imported solely for export, which are subject to TSCA but exempt from specified provisions of TSCA, require a positive certification reflecting their compliance with the exemption criteria as well as with any other applicable provisions of TSCA. A negative certification is appropriate for substances excluded from the definition of "chemical substance" under TSCA if the import is not already clearly identified as a pesticide or other product not subject to TSCA.209 These excluded substances include those imported solely for use as a pesticide under FIFRA; a food, food additive, drug, cosmetic, or device under the FFDCA; source material, special nuclear material, or byproduct material under the Atomic Energy Act; and firearms and ammunition subject to tax under § 4181 of the Internal Revenue Code.210 No certification is required for the importation of tobacco or tobacco products.211 In addition, the import certification requirements do not currently apply to chemical substances imported as part of an article, although future rules may specifically require certification of articles containing certain chemicals.212 With regard to the exemption for articles, it is important to note that the customs regulations adopt the same definition of "article" included in the TSCA PMN regulations.213 Under the premanufacture notice (PMN) regulations, articles include only those items which: (1) are formed to a specific shape or design during manufacture; (2) have end use functions dependent on the shape or design; and (3) have no change in chemical composition during end use, or only those changes that have no commercial purpose separate from the article.214 Chemical substances in containers used to transport, contain, or dispense them are not considered to be part of an article, nor are metals, ingots, or blooms formed to a particular shape for shipping convenience, or substances intended to be released from the article where the substance serves a function related to its removal or release. Such substances are subject to the import certification requirements.215 B. TSCA § 12(b) Export Notification TSCA § 12(b) requires that persons notify EPA if they export (or intend to export) to a foreign country chemical substances or mixtures for which: submission of test data is required under §§ 4 or 5(b); an order has been issued under § 5; a rule has been proposed216 or promulgated under §§ 5 or 6; or an action is pending or relief has been granted under §§ 5 or 7.217 EPA then must notify the government of the foreign country of destination of the availability of test data submitted on the substance or mixture under §§ 4 or 5(b), and of any rule, order, action, or relief under §§ 5, 6 or 7.218 EPA promulgated regulations implementing § 12(b) in December 1980.219 These regulations require that written export notices be submitted to EPA for the first export or intended export to a particular country in a calendar year. Notices must be postmarked within seven days of forming an intent to export (based on a definite contractual obligation or on an equivalent intra-company obligation) or on the date of export, whichever is earlier.220 The export notice to EPA must include the name of the regulated chemical, the name and address of the exporter, the country(ies) of import, the date(s) of export or intended export, and the section of TSCA under which EPA has taken action.221 Export notification is not required for articles unless they are PCB articles, or unless otherwise specified in the context of individual actions under §§ 5, 6 or 7 of TSCA.222 Exporters of PCBs or PCB articles for any purpose other than disposal must notify EPA of such export or intent to export.223 EPA has modified the process for submitting export notices for chemical substances subject to § 4 test rules.224 Under the revised regulations, which took effect on January 1, 1994, persons who export or intend to export a substance subject to a § 4 test rule to a specific country will berequired to submit a one-time, rather than yearly, notice for each chemical substance and country of destination.225 EPA then will provide a one-time notice to each importing country for each chemical subject to a test rule.226 EPA has not changed the annual notice requirement for chemicals subject to a rule, order, or action under TSCA §§ 5, 6, or 7. This modification was adopted to address the increasing volume of § 12(b) submissions received by EPA each year, and the increasing proportion of these submissions on substances subject to § 4 test rules.227 This has led to a corresponding increase in the number of notices that EPA sends to foreign governments. Since many of these are repeat notices submitted on the same chemical to the same country, EPA believes that the revisions will enhance the effectiveness of the notice system and reduce the administrative burden on industry, EPA, and the importing governments by eliminating redundant notification on chemicals subject to § 4 test rules.228 XI. TSCA §§ 15 and 16 -- Enforcement TSCA § 15 makes it unlawful for any person to: (1) fail or refuse to comply with any rule promulgated or order issued under TSCA § 4, § 5, or § 6, or any requirement prescribed by § 5 or § 6; (2) use for commercial purposes a chemical substance or mixture which the person knew or had reason to know was manufactured, processed, or distributed in violation of § 5 or § 6 or a rule or order under § 5, § 6, or § 7; (3) fail or refuse to establish or maintain records, submit reports, notices or other information, or permit access to or copying of records required by any portion of TSCA; or (4) fail or refuse to permit entry or inspection as required by § 11.229 TSCA § 16 provides civil and criminal penalties for violations of § 15.230 Section 16(a) establishes civil penalty and enforcement procedures. Civil penalties of up to $ 25,000 may be assessed for each day that a violation of TSCA continues.231 Penalties are assessed by administrative order on the record following written notice to the person against whom penalties are to be assessed, and an opportunity for a hearing before an administrative law judge.232 The statute allows EPA to compromise or modify the amount of any civil penalty that is proposed, and requires the Agency to consider a number of specific factors in determining the penalty amount.233 A party assessed penalties by order following an administrative hearing may petition the U.S. Court of Appeals for judicial review of the order.234 TSCA § 16(b) provides criminal sanctions for knowing or willful violations of TSCA. A person convicted of knowingly or willfully violating any provision of § 15 may, in addition to or in lieu of any civil penalty, be subject to fines of not more than $ 25,000 for each day of violation, imprisonment for not more than one year, or both.235 In assessing a civil penalty under § 16(a), EPA is required to take into account a number of factors, including: the nature, circumstances, extent, and gravity of the violation; the violator's ability to pay and the effect of the penalty on the violator's ability to continue to do business; any history of prior violations; the violator's degree of culpability; and such other matters as justice may require.236 In 1980, EPA issued general guidelines for assessment of civil penalties.237 The general penalty guidelines were "designed to assign penalties for TSCA violations in accordance with the requirements of TSCA Section 16."238 The guidelines provide a two-step approach for determining the penalty amount to be assessed for a particular violation. First, a "gravity-based penalty" (GBP) is calculated for the violation based on the nature, extent, and circumstances of the violation. The gravity-based penalty amount then is adjusted in consideration of the other factors listed in the statute. Under EPA's general approach, the GBP is determined by plotting the violation on a penalty matrix which purports to reflect the "nature" or character of the violation, the "extent" of the harm that may result from the violation, and the "circumstances" of the violation as they affect the probability of the occurrence of the harm. The matrix establishes a penalty amount that is intended to reflect the overall seriousness, or "gravity," of the violation. The GBP then may be adjusted either upward or downward to reflect the violator's culpability and attitude, history of prior violations of TSCA, gains from noncompliance, [24 ELR 10377] ability to pay and ability to continue in business, the cost to the government, and other factors as justice may require. Finally, a determination is made as to whether penalties for particular continuing violations will be assessed on a per day or one-time basis. EPA subsequently implemented its general penalty guidelines in a series of enforcement response policies addressing particular types of violations under the major sections of TSCA.239 These enforcement response policies establish specific "extent" and "circumstance" levels for various categories of violations, assign gravity-based penalty amounts based on the circumstance and extent levels assigned, and indicate whether the penalty is assessed on a per day or one-time basis. Under the enforcement response policies, there is a potential for assessment of substantial civil penalties for some violations of TSCA. For example, failure to submit a required PMN for a substance not subject to a § 5(e) or (f) order or exemption is classified as a circumstance "Level 3" violation if the substance is further distributed or processed for commercial use. The extent of the violation is based on the volume of the substance produced or imported; a violation is considered to be of "major" extent if the production or import volume exceeded 7,500 lbs. Level 3 PMN violations of major extent are assessed penalties of $ 15,000 per day of production. Thus, a total penalty of $ 360,000 could be assessed for the failure to file a PMN for a substance that was produced monthly over a two-year period. Of course, higher penalties could accrue as the result of a more frequent or longer production history.240 The enforcement response policies provide for a number of adjustments to the calculated gravity-based penalty amount. These adjustments provide strong incentives for companies to inform EPA of their discovery of potential violations of TSCA. Reductions of 25 percent are applied to violations of §§ 4, 5, 12, or 13 that are voluntarily disclosed to EPA by the party responsible for the violation. A further 25 percent reduction is available if the disclosure is made within 30 days of the company's discovery of the violation.241 In addition, the enforcement response policies permit further adjustments to the calculated penalty amount for having taken all steps required to mitigate the violation and for the attitude of the violator. EPA also may use any history of prior violations to increase the calculated penalty amount in cases where the violation was discovered by EPA. The violator's prior violations generally will be disregarded in calculating penalties for violations voluntarily disclosed to EPA.242 3. Supplemental Environmental Projects The enforcement response policies contemplate further penalty reductions, at the Agency's discretion, for "environmentally beneficial expenditures above and beyond those specifically required by TSCA."243 This adjustment is given as a credit against the calculated penalty amount, and generally is available only in negotiated settlement agreements."244 EPA recently issued a memorandum addressing the Agency's policy regarding the use of supplemental environmental projects (SEPs) in EPA consent agreements and consent orders (CACOs) settling environmental enforcement cases.245 The memorandum identifies five categories of projects that EPA will consider as SEPs to be credited against monetary penalty assessments.246 These categories include: * Pollution Prevention Projects that substantially reduce or prevent the generation of pollutants; * Pollution Reduction Projects that substantially reduce the amount of pollution discharged into the environment; * Environmental Restoration Projects that go beyond remediation to enhance the environment in the vicinity of the violating facility; * Environmental Auditing Projects designed to seek and correct management or environmental practices that may contribute to recurring or future violations; and * Environmental Public Awareness Projects that underscore the importance of complying with environmental laws, or disseminate technical information about the means of compliance. EPA will consider appropriate SEPs for inclusion in settlement agreements if there is a demonstrated "nexus" or relationship between the violation and the environmental benefit to be derived from the SEP, and if the SEP furthers the "statutory mandate" of EPA under relevant environmental laws. For example, EPA's memorandum indicates that, in settlement of a PMN violation, a company might agree to "establish a closed-loop recycling system to reduce the amount of that facility's product manufacturing waste which must be sent to a RCRA Subtitle C landfill."247 The use of SEPs in the settlement of TSCA enforcement actions can provide a useful vehicle for the implementation [24 ELR 10378] of pollution prevention and reduction programs. They therefore may represent an attractive settlement option for both EPA and the regulated community. TSCA compliance audits have been included in a number of CACOs negotiated in settlement of enforcement actions involving alleged violations of TSCA.248 Discussions regarding the inclusion of an audit in a settlement agreement may be initiated either by EPA or by the respondent. EPA may seek to include an audit requirement in settlement agreements in which the cited violations or the company's compliance history suggest that there may be broader or more general TSCA noncompliance. Companies sometimes may find an audit with stipulated penalties to be an attractive opportunity for ensuring the company's overall compliance with TSCA. Where audits are included in CACOs, they have been cited by EPA as a basis for concluding that the violator took steps necessary to mitigate the violations, and accordingly for reducing the amount of the assessed penalty. Audits typically are conducted either by independent third-party auditors or under the supervision of outside counsel. The scope of the audit may be limited to one section of TSCA, or may encompass multiple sections. Audits often include stipulated penalties for any violations identified, with penalties assessed on a one-time (rather than a per day) basis. The agreements also may include a cap on total penalties assessed in the audit. Violations discovered during the audit must be reported to EPA and steps taken to cure or mitigate the violations. EPA audit agreements typically require the transmittal of several audit reports. The final report generally must include a certification stating that the audit has been conducted and is complete, and an accounting of the costs incurred. In determining the amount of a civil penalty, § 16(a) requires EPA to consider the violator's "ability to pay" and the effect of the penalty on the violator's "ability to continue to do business."249 For purposes of adjusting a calculated penalty amount, EPA considers these two factors as one.250 The issue of ability to pay generally is raised by the company in its answer or in the course of settlement discussions. A company raising this issue typically is required to provide EPA with supporting documentation, including tax returns and financial statements, to demonstrate its inability to pay. EPA's 1980 penalty guidelines indicate that a firm's net income, determined as 4 percent of total sales, "will generally yield an amount that the firm can afford to pay." The guidelines further indicate that "[i]f the proposed penalty exceeds 4% of total sales, the penalty may be reduced to an affordable level."251 In 1986, EPA issued a memorandum providing additional guidance regarding the assessment of a violator's ability to pay a civil penalty.252 The memorandum does not address the 4 percent approach included in the general penalty guidelines, but focuses on the use of a financial computer program (ABEL) to evaluate "the financial health of for-profit entities, based on the estimated strength of internally-generated cash flows." The ABEL model evaluates financial information included in the company's tax returns and other financial statements for the past three to five years to develop standard financial ratios to evaluate the company's ability to borrow money and to pay current and long-term expenses. The model also projects the probable availability of future cash flow to pay the calculated civil penalty. EPA's ABEL user's guide and user's manual provide some additional information about the model's operation.253 C. Civil Administrative Proceedings Although most TSCA civil penalty proceedings result in negotiated settlement agreements, companies have the opportunity to contest violations alleged by EPA, as well as the amount of the proposed civil penalty, in a hearing before the administrative law judge (ALJ).254 A civil penalty proceeding is initiated when EPA serves a civil administrative complaint on the party alleged to have violated TSCA.255 The complaint must include: * the section of TSCA authorizing issuance of the complaint; * the sections of TSCA and the implementing regulations alleged to have been violated; * the factual basis for the alleged violations; * the proposed civil penalty amount; * the reasoning for the proposed penalty; and * notice of the respondent's right to request a hearing on the factual allegations or the proposed penalty amount.256 The respondent may, within 20 days of service of the complaint, file an answer admitting or denying each factual allegation in the complaint, identifying affirmative defenses and facts in issue, and requesting a hearing.257 The parties may confer regarding settlement of the matter.258 The ALJ then may require a prehearing conference and an exchange [24 ELR 10379] of witness lists, documents, and exhibits to be introduced at the hearing.259 A hearing then may be held, at which evidence is taken and witnesses are examined.260 EPA must prove by a preponderance of the evidence that a violation has occurred, and that the proposed civil penalty is appropriate. Following thehearings, the parties may submit proposed findings of fact and conclusions of law, a proposed order, and supporting briefs. The presiding ALJ then issues an initial decision on the matter. If the ALJ determines that a violation has occurred, he or she determines the amount of the recommended penalty to be assessed, consistent with the criteria set forth in § 16. The ALJ is not bound by, but must consider, any civil penalty guidelines issued by EPA under TSCA. The initial decision must include specific reasons for any increase or decrease in the penalty amount. The parties may, within 45 days of service, appeal the initial decision to the EPA Administrator. Following appeal to the Administrator, a party may petition the U.S. Court of Appeals for judicial review of final orders.261 The ALJ must consider, but is not necessarily bound by, the criteria in EPA's enforcement response policies. Thus, even where the ALJ finds that the evidence supports the violations alleged in the complaint, the penalty amount may be reduced below that proposed by EPA based upon its application of the established criteria. As an example, although the § 5 enforcement response policy provides for reductions of up to 80 percent for voluntary self-disclosure, good attitude, and mitigation of the violation, in a case involving the 3M Company, the chief judicial officer in the appeal of the ALJ's decision concluded that an additional 15 percent reduction in the penalty amount was appropriate "to account for such other matters as justice may require," for a total reduction of 95 percent.262 TSCA § 16(b) authorizes criminal penalties for knowing and willful violations of TSCA. Upon conviction, violators may be subject to "a fine of not more than $ 25,000 for each day of violation, or to imprisonment for not more than one year, or both."263 Criminal matters typically are referred to the U.S. Department of Justice (DOJ) for investigation and prosecution.264 To date, EPA and the DOJ have pursued virtually no criminal proceedings for violations of TSCA outside of the limited context of the illegal disposal of PCBs. Despite its relatively low public profile, TSCA clearly is one of the major federal environmental laws, imposing significant potential civil and criminal liabilities, and providing EPA with broad regulatory and data-gathering powers. In part because of its emphasis on regulating and testing products, TSCA's structure is unique and can be a challenge to the practitioner. Although no article can purport to substitute for experience, the authors hope this three-part guide will help orient those new to the field and provide a useful reference for seasoned practitioners. 1. 15 U.S.C. §§ 2601-2629, ELR STAT. TSCA §§ 2-30. 2. Id. § 2605(a), ELR STAT. TSCA § 6(a). 3. Id. § 2605(a)(1)-(7), ELR STAT. TSCA § 6(a)(1)-(7). 4. Id. § 2605(c)(1), ELR STAT. TSCA § 6(c)(1). 5. Id. 6. Id. 7. Corrosion Proof Fittings v. U.S. Environmental Protection Agency, 947 F.2d 1201, 22 ELR 20037 (5th Cir. 1991). 8. See Asbestos, Manufacture, Importation, Processing and Distribution in Commerce Prohibitions, 54 Fed. Reg. 29460 (July 12, 1989). In addition, the rule imposed asbestos handling requirements and exposure limitations on those workplaces not covered by Occupational Safety and Health Administration standards; established annual reporting requirements for all commercial and industrial users of asbestos as well as secondary processors and importers; and developed a scheme for addressing any hazards created by asbestos in public schools and workplaces. 9. Corrosion Proof Fittings, 947 F.2d at 1212, 22 ELR at 20041. 10. Id. at 1212 n.11, 22 ELR at 20041 n.11. 11. Id. 12. 15 U.S.C. § 2605(a), ELR STAT. TSCA § 6(a). 13. Corrosion Proof Fittings, 947 F.2d at 1215, 22 ELR at 20042. 14. Id. at 1217, 22 ELR at 20043. 15. 15 U.S.C. § 2605(c)(1)(C), ELR STAT. TSCA § 6(c)(1)(C). 16. Corrosion Proof Fittings, 947 F.2d at 1220-21, 22 ELR at 20045-46. 17. 15 U.S.C. § 2605(c)(1)(D), ELR STAT. TSCA § 6(c)(1)(D). 18. Corrosion Proof Fittings, 947 F.2d at 1218, 22 ELR at 20044. 19. Id. 20. Id. at 1218-19, 22 ELR at 20044. 21. Id. at 1223, 22 ELR at 20046. 22. With regard to the specific consequences of the Corrosion Proof Fittings decision for the asbestos ban, EPA requested clarification from the court to confirm that the opinion did not affect the ban on products that had already been banned under the first phase of the rule. The court confirmed this view, and the Agency subsequently has identified the asbestos products that continue to be banned despite the decision. See Asbestos, Manufacture, Importation, Processing and Distribution Prohibitions, 58 Fed. Reg. 58964 (Nov. 5, 1993). 23. See generally EPA Challenges Court Decision Overturning Asbestos Ban, Phase-Out Rule, DAILY REP. FOR EXECUTIVES (BNA), Nov. 15, 1991, at A-7; Hazardous Substances, Asbestos Products Not in Commerce, DAILY REP. FOR EXECUTIVES, Nov. 21, 1991, at A-1. 24. See 15 U.S.C. § 2604(a)(2), ELR STAT. TSCA § 5(a)(2). 25. Id. § 2604(e), ELR STAT. TSCA § 5(e). 26. Congress May Hold Hearings On Whether Law Needs Reauthorization, Goldman Says, DAILY ENV'T REP. (BNA), Oct. 12, 1993, at A-2. 27. See generally Memorandum from Mark Greenwood, Director, Office of Pesticides and Toxic Substances, U.S. EPA (Oct. 21, 1991). 28. See id.; see also U.S. EPA, CHEMICALS IN PROGRESS BULLETIN, Sept. 1992, at 16-23. 29. 15 U.S.C. § 2605(e), ELR STAT. TSCA § 6(e). 30. 40 C.F.R. § 761.3 (1993). 31. Id. 32. Id. § 761.21(e). 33. Id. § 761.1(b). 34. 15 U.S.C. § 2605(e)(3)(A), ELR STAT. TSCA § 6(e)(3)(A); 40 C.F.R. § 761.20 (1993). 35. EPA has made the necessary finding under TSCA § 12(a)(2) to prevent export of PCBs. 40 C.F.R. § 761.20 (1993); see 15 U.S.C. § 261(a)(2), ELR STAT. TSCA § 12(a)(2). 36. 40 C.F.R. §§ 761.185-.193 (1993). 37. 15 U.S.C. § 2605(e)(3)(B), ELR STAT. TSCA § 6(e)(3)(B). 38. 40 C.F.R. § 761.80 (1993). 39. Id. 761.20(c)(1); see 15 U.S.C. § 2605(e)(3)(C), ELR STAT. TSCA § 6(e)(3)(C). 40. 40 C.F.R. § 761.20(c)(1) (1993). 41. 15 U.S.C. § 2605(e)(2)(A), ELR STAT. TSCA § 6(e)(2)(A); 40 C.F.R. § 761.20(a) (1993). 42. 15 U.S.C. § 2605(e)(2)(C), ELR STAT. TSCA § 6(e)(2)(C). 43. 40 C.F.R. § 761.3 (1993). 44. 15 U.S.C. § 2605(e)(2)(B), ELR STAT. TSCA § 6(e)(2)(B). 45. 40 C.F.R. § 761.30 (1993). 46. 15 U.S.C. § 2605(e)(1)(B), ELR STAT. TSCA § 6(e)(1)(B); 40 C.F.R. § 761.40 (1993). 47. 40 C.F.R. § 761.45 (1993). 48. Id. §§ 761.60, 761.65 (1993). EPA is considering creating an exemption for household wastes. Disposal of Polychlorinated Biphenyls, Advance Notice of Proposed Rulemaking, 56 Fed. Reg. 26738, 26739 (June 10, 1991). 49. Compare 40 C.F.R. § 761.205(b) (1993) (separate notification requirements for RCRA and TSCA) with id. § 761.65(d)(6) (RCRA-permitted storage facilities may not require separate TSCA approval). Waste PCBs are not considered hazardous wastes under the federal RCRA regulations. Many states, however, list waste PCBs as hazardous wastes. In such states, waste PCBs may be subject to dual requirements under TSCA and the state's RCRA program. 50. 40 C.F.R. § 761.65(a) (1993). EPA is considering extending the one-year limit where biological destruction is being used as the disposal method and where the PCB is part of a radioactive mixed waste for which there is limited disposal capacity. 56 Fed. Reg. at 26743. 51. 40 C.F.R. § 761.65(b)-(c) (1993). 52. Id. § 761.65(e)-(g). 53. Id. § 761.60. 54. Id. § 761.70. 55. Id. § 761.75. 56. See U.S. EPA, INTERIM GUIDANCE ON NON-LIQUID PCB DISPOSAL METHODS TO BE USED AS ALTERNATIVES TO A 40 C.F.R. § 761.75 CHEMICAL WASTE LANDFILL (CWL) (Draft) at 3-7, July 3, 1990, which may be obtained from the Environmental Assistance Division of EPA's Office of Pollution Prevention and Toxics. 57. 56 Fed. Reg. at 26738. 58. 40 C.F.R. §§ 761.202-218 (1993). 59. Id. § 761.180 (1993). 60. Id. §§ 761.120-.135. Spills that occurred prior to May 4, 1987, will be evaluated by EPA on a case-by-case basis. Id. § 761.120(a). 61. EPA is considering changing the reportable quantity to one pound. 56 Fed. Reg. at 26742. 62. 40 C.F.R. § 761.125(a)(1) (1993). 63. The spill cleanup policy is meant to apply only to recent spills for which cleanup is immediately begun. 56 Fed. Reg. at 26742. 64. 15 U.S.C. § 2606(a), ELR STAT. TSCA § 7(a). 65. Id. § 2606(f), ELR STAT. TSCA § 7(f). 66. Id. § 2606(a)(1), ELR STAT. TSCA § 7(a)(1). 67. Id. Such an action must be commenced if EPA has not made an immediately effective rule under § 6(a) with respect to the chemical substance or mixture. Id. § 2606(a)(2), ELR STAT. TSCA § 7(a)(2). Where appropriate, EPA may initiate a rulemaking proceeding under § 6(a) concurrently or as soon as practicable after the filing of the § 7 action. Id. § 2606(a), ELR STAT. TSCA § 7(a). 68. Id. § 2606(b)(1), ELR STAT. TSCA § 7(b)(1). 69. Id. § 2606(b)(2), ELR STAT. TSCA § 7(b)(2). EPA also may bring action against the substance, mixture, or article (rather than its manufacturer, processor, or distributer) by process of libel conforming to admiralty in rem proceedings. Id. § 2606(b)(3), ELR STAT. TSCA § 7(b)(3). 70. A fifth subsection, id. § 2607(b), ELR STAT. TSCA § 8(b), addresses compilation and maintenance of the TSCA Inventory. This provision is discussed in detail in Carolyne R. Hathaway, David J. Hayes, and William K. Rawson, A Practitioner's Guide to the Toxic Substances Control Act: Part I, 24 ELR 10207, 10213-15 (May 1994) (Chapter III.A.-D.). 71. Id. § 2607(a), ELR STAT. TSCA § 8(a). 72. Id. § 2607(c), ELR STAT. TSCA § 8(c). 73. Id. § 2607(d), ELR STAT. TSCA § 8(d). 74. Id. § 2607(e), ELR STAT. TSCA § 8(e). 75. Id. § 2607(a)(2), ELR STAT. TSCA § 8(a)(2). 76. The ITC and its recommendation process are discussed in detail in Carolyne R. Hathaway, David J. Hayes, and William K. Rawson, A Practitioner's Guide to the Toxic Substances Control Act: Part II, 24 ELR 10285, 10294-95 (June 1994) (Chapter VII.C.). 77. See 40 C.F.R. § 712.30(c) (1993). 78. Id. § 712.20. 79. Id. § 712.25(a). 80. Id. § 712.25(d). 81. Id. § 712.25(b). 82. Id. § 712.25(c). 83. A fascimile of this form and instructions is provided at id. § 712.28 (1993). 84. Id. § 712.30(c). 85. Id. § 712.30(a)(2). 86. Id. 87. Id. § 704.206 (1993); see definitions at id. § 710.2 (1993). 88. Id. § 704.210(a)-(b). 89. Id. § 704.203. 90. Id. 91. Id. § 704.212(c). 92. A detailed description of the types of information covered by the CAIR is given at id. § 704.207 (1993). 93. Id. § 704.223. 94. Id. §§ 704.214(b), 704.225. 95. Id. § 704.214(b), 704,225. 96. Id. § 704.208. 97. See Comprehensive Assessment Information Rule, Notice of Temporary Administrative Relief, 54 Fed. Reg. 14324 (Apr. 10, 1989). 98. Chemical Information Rules, Manufacturers Reporting, Preliminary Assessment Information, 47 Fed. Reg. 26992 (June 22, 1982); Comprehensive Assessment Information Rule, 53 Fed. Reg. 51698 (Dec. 22, 1988). 99. 15 U.S.C. § 2607(c), ELR STAT. TSCA § 8(c). 100. 40 C.F.R. §§ 717.5, 717.10 (1993). 101. See id. § 717.7. 102. See Records and Reporting of Allegations That Chemical Substances Cause Significant Adverse Reactions to Health or the Environment, Recordkeeping and Reporting Procedures, 48 Fed. Reg. 38178, 38182-83 (Aug. 22, 1983). 103. See Records and Reports of Allegations of Significant Adverse Reactions to Health or the Environment, 50 Fed. Reg. 46766 (Nov. 13, 1985). 104. 40 C.F.R. § 717.5 (1993). 105. Id. § 717.7(c)-(d). 106. U.S. EPA, QUESTIONS AND ANSWERS CONCERNING THE TSCA SECTION 8(c) RULE, QUESTIONS RECEIVED AT SEMINAR ON TSCA SECTION 89(c) RECORDKEEPING AND REPORTING ALLEGATIONS OF ADVERSE REACTIONS, November 10, 1983, at 2 (July 1984) [hereinafter 1984 SECTION 8(c) Q&A]. 107. 40 C.F.R. § 717.10 (1993); see 1984 SECTION 8(c) Q&A, supra note 106, at 26-28. 108. U.S. EPA, Office of Toxic Substances Existing Chemicals Program, QUESTIONS AND ANSWER SUMMARY, EPA SEMINAR ON INDUSTRY OBLIGATIONS UNDER TSCA at 10 (June 19, 1986) [hereinafter 1986 INDUSTRY OBLIGATIONS Q&A]; 1984 SECTION 8(c) Q&A, supra note 106, at 23. 109. See 48 Fed. Reg. at 38179-80. 110. 40 C.F.R. §§ 717.12(b), 717.3(c) (1993); see 48 Fed. Reg. at 38180; 1984 SECTION 8(c) Q&A, supra note 106, at 45-46. 111. 40 C.F.R. § 717.15(b) (1993). 112. Id. 113. Id. § 717.15(c). 114. Id. § 717.15(a). 115. Id. § 717.10(a). 116. Id. § 717.17. 117. 15 U.S.C. § 2614(3), ELR STAT. TSCA § 15(3). 118. Id. § 2607(c), ELR STAT. TSCA § 8(c); 40 C.F.R. § 717.15(d) (1993). 119. Allegations That Chemical Substances Cause Significant Adverse Reactions to Health or the Environment, Recordkeeping and Reporting Procedures, 48 Fed. Reg. 38178 (Aug. 22, 1983); Records and Reports of Allegations of Significant Adverse Reactions to Health or the Environment, 50 Fed. Reg. 46766 (Nov. 13, 1985). 120. 15 U.S.C. § 2607(d)(1), ELR STAT. TSCA § 8(d)(1). 121. See also Health and Safety Data Reporting, Submission of Lists and Copies, 51 Fed. Reg. 32720 (Sept. 15, 1986); Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, 47 Fed. Reg. 38780 (Sept. 2, 1982). 122. 40 C.F.R. § 716.20(a)(5) (1993). 123. Id. § 716.20(a)(6), (a)(9). 124. Id. § 716.5. 125. Id. § 716.20(a)(9). 126. Id. § 716.3. 127. Id. 128. See U.S. EPA QUESTIONS AND ANSWERS: APPLICATION OF TSCA § 8(d) MODEL HEALTH AND SAFETY DATA REPORTING RULE TO MODELING STUDIES 1 (Oct. 1989). 129. U.S. EPA, QUESTIONS AND ANSWERS: APPLICABILITY OF TSCA § 8(d) MODEL HEALTH AND SAFETY DATA REPORTING RULE TO MONITORING STUDIES 1 (Nov. 1989). 130. 40 C.F.R. § 716.20(a)(1)-(10) (1993). 131. See id. § 716.50. 132. Id. § 716.60(a). 133. Id. § 716.25. 134. Id. § 716.60(b). 135. Id. § 716.65. 136. Id. § 716.25. 137. Health and Safety Data Reporting, Submission of Lists and Copies, 51 Fed. Reg. 32720 (Sept. 15, 1986); Health and Safety Data Reporting, Submission of Lists and Copies of Healty and Saftey Studies, 47 Fed. Reg. 38780 (Sept. 2, 1982). 138. 15 U.S.C. § 2607(e), ELR STAT. TSCA § 8(e). 139. See S. REP. NO. 698, 94th Cong., 2d Sess. 22 (1976), reprinted in 1976 U.S.C.C.A.N. 4491, 4512. 140. 15 U.S.C. § 2602(7), ELR STAT. TSCA § 3(7). 141. Statement of Interpretation and Enforcement Policy, Notification of Substantial Risk Under Section 8(e), 43 Fed. Reg. 11110, 11111 (Mar. 16, 1978). 142. See Carolyne R. Hathaway, David J. Hayes, and William K. Rawson, A Practitioner's Guide to the Toxic Substances Control Act: Part I, 24 ELR 10207, 10211-13 (May 1994) (Chapter II.C). 143. 43 Fed. Reg. at 11111. 144. Id. 145. 15 U.S.C. § 2607(e), ELR STAT. TSCA § 8(e). 146. 43 Fed. Reg. at 11112. 147. Id. 148. Id. at 11111. 149. Id. at 11110. 150. The relevant documents are listed at the end of this chapter. 151. 43 Fed. Reg. at 11112. 152. Id. at 11111. 153. See U.S. EPA, TSCA SECTION 8(e) REPORTING GUIDE 31 (June 1991) [hereinafter 1991 REPORTING GUIDE]. This document was compiled in connection with the § 8(e) Compliance Audit Program. It summarizes much of the available EPA guidance regarding the application of § 8(e). 154. Id. at 29-34. 155. Id. at 21. 156. Id. 157. Id. at 34-38. 158. Id. at 21-22. 159. Id. at 23. 160. See id. at 23, 33-34. 161. EPA's 1991 REPORTING GUIDE does not explicitly address pharmacokinetics and metabolism, but Agency staff have confirmed that these end points can trigger Section 8(e) reporting obligations. 162. 1991 REPORTING GUIDE supra note 183, at 34-36. 163. Id. at 36-37. 164. See Statement of Interpretation and Enforcement Policy, Notification of Substantial Risk, 43 Fed. Reg. 11110, 11112 (Mar. 16, 1978). 165. See generally id.; 1984 SECTION 8(c) Q&A, at supra note 106, at 24. 166. See Registration and Agreement for TSCA Section 8(e) Compliance Audit Program Notification, 56 Fed. Reg. 49478, 49479 (Sept. 30, 1991). Chemical manufacturers, importers, processors, and distributors nevertheless have a current obligation, based on the statutory language, to report substantial risk information even though EPA's guidance is not yet available. 167. 43 Fed. Reg. at 11111. 168. See 40 C.F.R. § 721.3 (1993). 169. 15 U.S.C. § 2607(e), ELR STAT. TSCA § 8(e). 170. The time limits of § 8(e) still must be met. For example, if a company obtains § 8(e)-reportable information and then submits it under a mandatory FIFRA requirement, but the submission is more than 15 days after the information was obtained, then EPA would consider that TSCA § 8(e) had been violated. 171. 43 Fed. Reg. at 11112; 1991 REPORTING GUIDE, supra note 153, at 8. 172. 43 Fed. Reg. at 11111, 11114. 173. Id. 174. See id. at 11115. 175. See id. at 1110; see 1984 SECTION 8(c) Q&A, supra note 106, at 24-25. 176. See generally Registration and Agreement for TSCA Section 8(e) Compliance Audit Program, 56 Fed. Reg. 4128 (Feb. 1, 1991). 177. Registration and Agreement for TSCA Section 8(e) Compliance Audit Program, 56 Fed. Reg. 28458 (June 20, 1991); Registration and Agreement for TSCA Section 8(e) Compliance Audit Program, 56 Fed. Reg. 49478 (Sept. 30, 1991). 178. 43 Fed. REg. at 11110. 179. 1986 INDUSTRY OBLIGATIONS Q&A, supra note 108; U.S. EPA, Office of Toxic Substances Existing Chemicals Program, QUESTION AND ANSWER SUMMARY, EPA SEMINAR ON INDUSTRY OBLIGATIONS UNDER TSCA (May 5, 1987). 180. 1991 REPORTING GUIDE, supra note 153, at 21-23. 181. Id. at 29-37. 182. WORKING PAPER: UNRESOLVED HEALTH EFFECTS REPORTING ISSUES UNDER TSCA SECTION 8(e), attachment to letter from Robert M. Sussman, Latham & Watkins, to Victor J. Kimm, Deputy Assistant Administrator, Office of Pesticides and Toxic Substances, U.S. EPA (Dec. 26, 1991). 183. U.S. EPA, Response to "Working Paper," attachment to letter from Victor J. Kimm, Deputy Assistant Administrator, Office of Pesticides and Toxic Substances, U.S. EPA, to Robert M. Sussman, Latham & Watkins (Apr. 2, 1992). 184. Registration and Agreement for TSCA § 8(e) Compliance Audit Program Modification, 56 Fed. Reg. 49478 (Sept. 30, 1991). 185. See TSCA Section 8(e), Notice of Clarification, 58 Fed. Reg. 37735 (July 13, 1993). 186. See id. at 37736. 187. Id. 188. Id. at 37737. 189. Id. 190. Id. 191. Id. at 37738. 192. Id. 193. See 15 U.S.C. § 2706(e), ELR STAT. TSCA § 8(e). 194. 58 Fed. Reg. at 37738. 195. The draft guidance explains that the reporting exemption would not "pertain to information reported solely to a State or locality under a State or local law or a program not delegated or authorized by EPA, such as information reported solely to State and local emergency response committees under EPCRA." Id. 196. See 15 U.S.C. § 2602(7), ELR STAT. TSCA § 3(7). 197. "The term 'customs territory of the United States' … includes only the States, the District of Columbia and Puerto Rico." Harmonized Tariff Schedule of the United States, General Note 2; see 15 U.S.C. § 2612(a)(1), ELR STAT. TSCA § 13(a)(1). 198. 15 U.S.C. § 2612(a)(1) § 13(a)(1). 199. Id. § 2612(a)(2), ELR STAT. TSCA § 13(a)(2). 200. Id. 201. Id. 202. See id. § 2612(b), ELR STAT. TSCA § 13(b). 203. See 19 C.F.R. §§ 12.118.127 (1992); Customs Regulations Amendments Relating to Special Classes of Merchandise, 48 Fed. Reg. 34734 (Aug. 1, 1983). These regulations became effective on January 1, 1984. See Chemical Imports and Articles Containing Hazardous Chemicals, Delay of Effective Date of Regulations, 48 Fed. Reg. 44771 (Sept. 30, 1983). 204. 40 C.F.R. pt. 707, sbpt. B (1993); see General Import Requirements and Restrictions Policy for Import of Chemical Substances, 48 Fed. Reg. 55462 (Dec. 13, 1983). 205. The required certification states: "I certify that all chemical substances in this shipment comply with all applicable rules or orders under TSCA and that I am not offering a chemical substance for entry in violation of TSCA or any applicable rule or order thereunder." 19 C.F.R. § 12.121(a) (1992). 206. The required certification states: "I certify that all chemicals in this shipmentare not subject to TSCA." Id. 207. See 40C.F.R. § 707.20(c)(ii) (1993). 208. See 48 Fed. Reg. at 55462; U.S. EPA, TOXIC SUBSTANCES CONTROL ACT, A GUIDE FOR CHEMICAL IMPORTERS/EXPORTERS 4-5 (1991) [hereinafter GUIDE FOR CHEMICAL IMPORTERS/EXPORTERS [. 209. See 40 C.F.R. § 707.20(b)(2)(ii) (1993). 210. See 15 U.S.C. § 2602(2), ELR STAT. TSCA § 3(2). These exclusions are described in detail in Carolyne R. Hathaway, David J. Hayes, and William K. Rawson, A Practitioner's Guide to the Toxic Substances Control Act: Part I, 24 ELR 10207, 10209-11 (May 1994). 211. GUIDE FOR CHEMICAL IMPORTERS/EXPORTERS, supra note 208, at 4. 212. See 19 C.F.R. § 12.121(b) (1992); 48 Fed. Reg. at 55463. 213. Id. § 12.120(a) (1992); see 40 C.F.R. § 720.3(c) (1993). 214. GUIDE FOR CHEMICAL IMPORTERS/EXPORTERS, supra note 208, at 17. 215. See id.; see also U.S. EPA, 1989 TSCA INDUSTRY SEMINAR QUESTIONS & ANSWERS 8-9 (1990) (Question & Answer Number 26). 216. EPA regulations provide that, if notification is required on the basis of a proposed rule, the requirement to submit an export notice commences 30 days after publication of the action in the Federal Register. 40 C.F.R. § 707.65(b) (1993). 217. 15 U.S.C. § 2611(b), ELR STAT. TSCA § 12(b). 218. Id. 219. 40 C.F.R. pt. 707, sbpt. D (1993); see Chemical Imports and Exports, Notification of Export, 45 Fed. Reg. 82844 (Dec. 16, 1980). 220. 40 C.F.R. § 707.65(a) (1993). 221. Id. § 707.67. 222. Id. § 707.60(b). 223. Id. § 707.60(c). 224. See Export Notification Requirement, Change to Reporting Requirements, 58 Fed. Reg. 40238 (July 27, 1993) (to be codified at 40 C.F.R. pt. 707). 225. Id. at 40242 (to be codified at 40 C.F.R. § 707.65(a)(2)). 226. Id. 227. In 1983, EPA received 438 notices on 15 chemical substances under § 12(b); none of these submissions was in response to § 4 test rules. In contrast, in 1985, EPA received 819 notices on 115 substances, 283 of those in response to § 4 actions. In 1988, EPA received approximately 4,300 notices with 3,350 in response to § 4 actions, and through September 30, 1992, EPA had received 12,488 notices, approximately 10,500 of which were in response to § 4 actions. Id. at 40239. 228. Id. 229. 15 U.S.C. § 2614, ELR STAT. TSCA § 15. 230. Id. § 2615, ELR STAT. TSCA § 16. 231. Id. § 2615(a)(1), ELR STAT. TSCA § 16(a)(1). 232. Id. § 2615(a)(2)(A), ELR STAT. TSCA § 16(a)(2)(A). 233. Id. § 2615(a)(2)(B)-(C), ELR STAT. TSCA § 16(a)(2)(B)-(C). 234. Id. § 2615(a)(3), ELR STAT. TSCA § 16(a)(3). 235. Id. § 2615(b), ELR STAT. TSCA § 16(b). 236. Id. § 2615(a)(2)(B), ELR STAT. TSCA § 16(a)(2)(B). 237. Guidelines for Assessment of Civil Penalties Under Section 16 of TSCA, 45 Fed. Reg. 59770 (Sept. 10, 1980). 238. Id. 239. See U.S. EPA, TSCA SECTION 5 ENFORCEMENT RESPONSE POLICY (Aug. 5, 1988) [hereinafter SECTION 5 ENFORCEMENT POLICY]; U.S. EPA, RECORDKEEPING AND REPORTING RULES, TSCA SECTIONS 8, 12 AND 13 ENFORCEMENT RESPONSE POLICY (May 15, 1987) [hereinafter SECTIONS 8, 12 AND 13 ENFORCEMENT POLICY]; U.S. EPA, ENFORCEMENT RESPONSE POLICY FOR TEST RULES UNDER SECTION 4 OF THE TOXIC SUBSTANCES CONTROL ACT (May 20, 1986) [hereinafter SECTION 4 ENFORCEMENT POLICY ]. 240. See SECTION 5 ENFORCEMENT POLICY, supra note 239, at 10-16. 241. See id. at 17; SECTION 4 ENFORCEMENT POLICY, supra note 239, at 7; SECTIONS 8, 12 AND 13 ENFORCEMENT POLICY, supra note 239, at 14. For most violations of § 8 reporting requirements, self-disclosed violations are treated as late reports rather than as failures to report. The difference in the circumstance level between late reports and failures to report results in a significant penalty reduction for self-reported violations. Thus, no additional percentage reduction is provided for voluntary disclosure of these violations. See SECTIONS 8, 12 AND 13 ENFORCEMENT POLICY, supra note239, at 9, 14. 242. See SECTION 5 ENFORCEMENT POLICY, supra note 239, at 18-19. 243. See id. at 18. 244. 45 Fed. Reg. at 59778. 245. U.S. EPA, MEMORANDUM, POLICY ON THE USE OF SUPPLEMENTAL ENFORCEMENT PROJECTS IN EPA'S SETTLEMENTS (Feb. 12, 1991). 246. EPA generally will allow credit against the assessed penalty amount for a portion (often in a ratio from 2:1 to 5:1) of the cost incurred by the company in implementing the SEP. Id. 247. Id. 248. See, e.g., In the Matter of Ciba-Geigy Corp., EPA Docket No. TSCA-93-H-03, Consent Agreement and Consent Order (Jan. 8, 1993); In the Matter of Moore Business Forms, Inc., EPA Docket No. TSCA-91-H-11, Consent Agreement and Consent Order (July 1, 1991); In the Matter of Alcolac Inc., EPA Docket No. TSCA-89-H-22, Consent Agreement and Consent Order (Oct. 2, 1990); In the Matter of Monsanto Co., EPA Docket No. TSCA-89-H-21, Consent Agreement and Consent Order (Jan. 3, 1990). 249. 15 U.S.C. § 2615(a)(2)(B), ELR STAT. TSCA § 16(a)(2)(B). 250. 45 Fed. Reg. at 59775. 251. Id. 252. U.S. EPA, MEMORANDUM, GUIDANCE ON DETERMINING A VIOLATOR'S ABILITY TO PAY A CIVIL PENALTY (Dec. 16, 1986). 253. U.S. EPA, ABEL USER'S GUIDE (Freedom of Information Act version) 21E-2006 (Oct. 1991); U.S. EPA, ABEL USER'S MANUAL 21E-2005 (Oct. 1991). 254. 15 U.S.C. § 2615(a)(2)(A), ELR STAT. TSCA § 16(a)(2)(A). 255. See 40 C.F.R. § 22.13 (1993); Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties and the Revocation or Suspension of Permits, 45 Fed. Reg. 24360 (Apr. 9, 1980). 256. 40 C.F.R. § 22.14(a) (1993). 257. Id. § 22.15. 258. Id. § 22.18. 259. Id. § 22.19. 260. Id. pt. 22, sbpt. D. 261. 15 U.S.C. § 2615(a)(3), ELR STAT. TSCA § 16(a)(3). 262. In the Matter of 3M Co., TSCA Appeal No. 90-3, Final Decision (Feb. 28, 1992). 263. 15 U.S.C. § 2615(b), ELR STAT. TSCA § 16(b). 264. See generally U.S. DOJ, FACTORS IN DECISIONS ON CRIMINAL PROSECUTIONS FOR ENVIRONMENTAL VIOLATIONS IN THE CONTEXT OF SIGNIFICANT VOLUNTARY COMPLIANCE OR DISCLOSURE EFFORTS BY THE VIOLATOR (July 1, 1991). 24 ELR 10357 | Environmental Law Reporter | copyright © 1994 | All rights reserved |