The Business Case for Comprehensive TSCA Reform

Leading companies from electronics manufacturers to health care providers are highly motivated to identify and use safer alternatives to toxic chemicals. Today’s business leaders are concerned about the health and business impacts that could arise if the products they use or sell contain toxic chemicals. They recognize that safer chemicals protect human and environmental health and cut the costs of regulation, hazardous waste storage and disposal, worker protection, and future liabilities. Such steps also offer new business opportunities, by making U.S. businesses more competitive in a global marketplace and creating new jobs.

Every week, new scientific research links exposure to chemicals commonly found in products to the increasing incidence of serious chronic health problems, including asthma, childhood cancers, infertility and learning and developmental disabilities. The uncertainty surrounding the safety of chemicals is eroding consumer confidence in a wide range of products. Yet the main federal law that is supposed to protect Americans from toxic chemicals has not changed in 34 years. The Toxic Substances Control Act of 1976 (TSCA) — intended to give the U.S. Environmental Protection Agency (EPA) the power to identify and regulate dangerous chemicals — simply does not work.

“We’ve taken a cautious approach to materials, meaning that where there is credible evidence that a material we’re using may result in environmental or public health harm, we should strive to replace it with safer alternatives.”

Kathy Gerwig, Vice President Workplace Safety and Environmental Stewardship Officer, Kaiser Permanente

In the absence of federal government action to ensure the safety of chemicals, leading users of chemicals are taking action. Product formulators, manufacturers, retailers, state and local governments, health care organizations and consumers are searching for products made with chemicals that have low toxicity and degrade into innocuous substances in the environment. But due to the lack of government action, they are often unable to determine what chemicals are in their products, what hazards they may pose, and whether safer alternatives are on the market. It’s time for Congress to set common sense limits on toxic chemicals. Stronger chemical laws will not only make our families safer and healthier, but also help businesses restore faith in the American market.

Companies downstream of chemical makers in the supply chain—who are the major users of chemicals—are now demanding federal change. For the first time in decades, there is a real opportunity to fix this problem at its source and to rebuild our economy based on safer chemicals.

Leading American businesses are changing how they use chemicals

Business-NGO Working Group's Guiding Principles for Chemicals Policy

Leading businesses that use chemicals—“downstream users”—are endorsing a common set of guiding principles for moving away from toxic chemicals to safer alternatives:

Know and disclose product chemistry.
Assess and avoid hazards.
Commit to continuous improvement.
Support public policies and industry standards (to achieve the above three principles).

These four principles reflect both the vision for best business practices and the needs of downstream users for government chemicals policy reform.

Leading businesses are redesigning their products and working with their suppliers to reduce the use of toxic chemicals. Companies in the healthcare, building, retail, electronic and cleaning product sectors are at the forefront of this movement. Catholic Healthcare West, Construction Specialties, Hewlett-Packard, Hospira, Kaiser Permanente, Method, Perkins+Will, Premier, Seventh Generation, Staples, Steelcase and Whole Foods are among the business leaders that have endorsed and are implementing a set of core principles on how to manage the use of chemicals in their own operations and their supply chains (see box). For a complete list of the businesses and other organizations that have endorsed the Business-NGO Guiding Principles for Chemicals Policy go to www.BizNGO.org.

Yet, American business leaders are hampered by a failed national program for managing chemicals. In many cases, even for large organizations, it is difficult to get useful chemical hazard information, even when requesting it directly from suppliers. Succeeding in such a request typically requires extensive vendor education and persistent demands for hazard and ingredient information. Even where information is provided, it is often of little value, due to the vendor’s lack of knowledge, trade secret constraints or the general dearth of hazard information for most of the thousands of chemicals in commerce today.

Policy reforms can support these business efforts, which will be good for business and will enable market transitions to a healthy economy as well as a healthy environment.

Failed federal system for managing industrial chemicals—the Toxic Substances Control Act (TSCA) of 1976 is broken

TSCA has failed to protect human and environmental health from exposure to toxic chemicals. In January 2009, the U.S. Government Accountability Office (GAO) added TSCA reform to its list of “High Risk” areas of government needing immediate reform. The EPA concludes the GAO, “does not have sufficient chemical assessment information to determine whether it should establish controls to limit public exposure to many chemicals that may pose substantial health risks.” United States Government Accountability Office, 2009, High-Risk Series: An Update (GAO-09-271). www.gao.gov/new.items/d09271.pdf. Accessed October 15, 2009. TSCA falls short in many areas:

It fails to require the development of hazard data on chemicals in commerce: The EPA has only required testing on about 200 of the more than 82,000 chemicals that have been on or entered the market since the law passed in 1976. United States Government Accountability Office, 2005, Chemical Regulation: Options Exist to Improve EPA’s Ability to Assess Health Risks and Manage its Chemical Review Program (GAO-05-458). www.gao.gov/new.items/d05458.pdf. Accessed October 15, 2009.
It does not require the EPA to identify chemicals of greatest concern to human health and the environment: The EPA has no obligation to assess chemicals in commerce to determine whether they are safe, and as a result has adequately scrutinized very few. Richard Denison, 2007, Not That Innocent: A Comparative Analysis of Canadian, European Union and United States Policies on Industrial Chemicals. www.edf.org/documents/6149_NotThatInnocent_Fullreport.pdf. Accessed October 15, 2009.
It fails to restrict uses of the most toxic chemicals: Over the course of the 34 years since TSCA was enacted, EPA has succeeded in restricting only limited uses of five chemicals. The burden of proof TSCA places on the EPA to prove actual harm before it can regulate a chemical and to show its regulatory action is the least burdensome of all options is so onerous that it prevented the EPA from restricting asbestos, a known human carcinogen. United States Government Accountability Office, 2005, "Chemical Regulation: Options Exist to Improve EPA’s Ability to Assess Health Risks and Manage its Chemical Review Program" (GAO-05-458). www.gao.gov/new.items/d05458.pdf. Accessed October 15, 2009. The only full chemical ban enacted under TSCA, for PCBs, was mandated in the original legislation.
It does not promote safer alternatives to toxic chemicals: TSCA perpetuates a chemicals economy that simply doesn’t work. The market is ill-informed because producers are not required to develop even basic safety data for their chemicals. And because government cannot effectively act to control toxic chemicals, companies, institutions and individuals making or selecting chemicals or chemical products are unable to distinguish a safer one from a less safe one.

“By failing to identify, let alone control, the long and growing list of chemicals in everyday products that we now know can harm people and the environment, TSCA has forced states, businesses, workers and consumers to try to act on their own to address what should be a national priority.”

Dr. Richard Denison, Senior Scientist, Environmental Defense Fund

These failures of TSCA place significant burdens on downstream users of toxic chemicals in products. They must:

Research for themselves what chemicals are in products and what hazards they could pose to human health and the environment.
Identify and test the safety of alternatives.
Continue to use chemicals of high concern because producers do not offer safer alternatives.
Make chemical and product selection decisions in the absence of adequate hazard information.
Constantly respond to emerging and shifting concerns from the public.
Face potential liability from the use of hazardous materials.
Steer through an unpredictable and constantly changing regulatory climate.

The business case for safer chemicals

Using safer chemicals makes sense for our economy, health, and environment. Designing new chemicals to be safer from the start reduces the costs of regulation, costs of hazardous waste storage and disposal, costs of providing worker protections, and potential liabilities.

The benefits of comprehensive TSCA reform to businesses include:

Levelling the playing field, by requiring existing chemicals to meet the same testing requirements as new chemicals.
Expanding markets for safer and greener products.
Creating a more predictable regulatory system.
Reducing the costs and risks, especially product liability (for example, asbestos), associated with managing toxic chemicals in products across supply chains.
Lowering expenses from chemically induced employee illness and enhancing productivity from improved employee health.
Identifying the presence of chemicals of high concern in products.
Increasing trust among consumers, employees, communities, and investors, leading to a more positive business environment.
Improving transparency and communication throughout the supply chain, leading to increased confidence for downstream users and reduced risks from supply chain interruptions.
Creating a more competitive, innovative, and economically sustainable chemical industry in the U.S. On the benefits to downstream users of chemicals policy reform, see: ChemSec, 2005, What we Need from REACH: Views on the Proposal for a New Chemical Legislation within the EU. www.chemsec.org. Accessed October 15, 2009.

In rebuilding and strengthening the economy of the U.S., we need a new chemicals policy that limits the use of toxic chemicals and prioritizes green chemicals and engineering. The pressure will continue to increase on chemical producers and product manufacturers to develop and market safer and more sustainable chemicals and products. Not only is the public increasingly sensitive to the human and environmental risks of conventional chemicals, national and international governments are increasing scrutiny and tightening regulations on many of the chemicals of highest concern. As both global and domestic markets respond, the competitiveness of U.S. companies will depend on their capacity to deliver products with lower toxic impacts.

What downstream users need from TSCA

Congress is writing a new proposal to reform TSCA. Using common sense principles and current science, downstream users should work with Congress to repair our broken chemical management system. Downstream users of chemicals need TSCA reform to:

1. Require chemical manufacturers to develop and submit hazard, use and exposure data on chemicals in commerce, and require the EPA to make such data readily available to the public.

Chemical manufacturers should be held responsible for the safety of their products and should be required to provide full information on the health and environmental hazards associated with their chemicals, how they are used, and the ways that the public or workers could be exposed. The public, workers, and businesses should have full access to information about the hazards of chemicals. Information on use and exposure should also be provided to the fullest extent possible.

Downstream users often confront the dilemma of seeking to move away from a chemical of high concern, only to find that little is known about the alternatives. Comprehensive information on all chemicals is essential to avoid the mistake of “regrettable substitutions” — switching from known problematic chemicals to chemicals that will be identified as problematic once all the data are available.

2. Take immediate action to reduce the use of persistent, bioaccumulative and toxic (PBT) chemicals and other chemicals of very high concern (such as formaldehyde).

Persistent, bioaccumulative and toxic (PBT) chemicals are uniquely hazardous. Any such chemical to which people could be exposed should be phased out of commerce. Exposure to other toxic chemicals, such as formaldehyde, which has already been extensively studied, should be reduced to the maximum extent feasible and substituted with safer alternatives.

Increasingly, downstream users incur reputational risks and a large financial burden for controlling and supervising the use of PBTs and other chemicals of high concern manufactured and used upstream in their supply chains. The most cost-effective method for controlling the use of these chemicals is to limit their use in the first place.

3. Clearly identify chemicals of high and low concern to human and environmental health, based on robust information.

We need a credible, transparent source of information that identifies chemicals of high as well as low concern and clearly communicates what we know and don’t know about chemicals on the market.

TSCA reform can enhance the ability of companies to build and maintain the value of their brands by avoiding chemicals of high concern. Such information will also provide a means for companies to make the transition toward safer substances.

“First and foremost we support updating TSCA because it is vital for protecting the health of people and the planet. We also believe it will have important benefits for us as a downstream user of chemicals through greater information and innovation, and as a consumer products company through the restoration of consumer trust in our industry.”

Jeffrey Hollender, Co-Founder, Seventh Generation

4. Require greater disclosure of chemicals of high concern in products.

Federal policy should require that companies using chemicals of concern in products disclose their presence to customers and the public as well as to government.

Such a requirement will directly address a significant barrier to implementing green chemistry at the user level: the lack of information on the chemical constituents in products.

5. Promote safer alternatives.

The EPA needs to expand and intensify its efforts to promote safer alternatives. Green chemistry research should be prioritized and policy incentives developed to promote and facilitate the use of safer chemicals over those with known health hazards.

All too often the movement away from chemicals of high concern is impeded by the lack of safer alternatives. By fostering the development of green chemicals we invest in sustainable businesses, safer jobs and healthier products for Americans.

Together, these elements of comprehensive TSCA reform will create an effective and trusted regulatory system that enhances the value of products across their supply chain.