Disclosure of Secrets:

REACH and TSCA Seth Goldberg

Darren Abrahams

Giorgio Rizzello

Rachel Tennis

www.steptoe.com

17 July 2012

© Copyright 2012 Steptoe & Johnson LLP

Presenter: Seth Goldberg

Partner in Steptoe’s Washington office

More than 30 years of experience in a broad range

of issues centered on chemical regulation

In the US, practice focuses on FIFRA and TSCA; in

Europe, on biocides, pesticides, and REACH

Devotes substantial time to direct advocacy before

regulatory agencies

Heavily involved in organization and management

of data generation consortia, data compensation,

and advocacy on scientific issues

Clients often call on him to represent them in

complex matters before administrative agencies

and judicial challenges to agency decisions

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Presenter: Darren Abrahams

Barrister and Partner in Steptoe’s Brussels office

Focuses on EU regulatory requirements and related

commercial issues in the environment, chemicals,

and life sciences area

Advocacy and representation before the Court of

Justice of the European Union, EU Institutions and

Agencies, and before the national authorities of EU

Member States

Pre-market authorizations for biocides, PPPs,

GMOs, and REACH substances

Due Diligence aspects of international transactions

and the structuring compliance programs

Consistently recommended by Legal 500 EMEA,

Chambers & Partners Europe, and PLC Which

Lawyer? Yearbook

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Presenter: Giorgio Rizzello

Associate in Steptoe's Brussels office

Italian qualified lawyer (Avvocato)

Focuses on EU regulatory and related commercial

issues in the areas of environment, chemicals, and

life sciences

Assists multinational companies and trade

associations in developing effective and cost efficient

compliance strategies to meet the strict requirements

of EU and national legal regimes

Represents clients in litigation before the EU courts

Spent six months working in the legal unit of the

European Commission’s DG Environment, dealing

with infringement proceedings for non-compliance by

Member States with EU environmental law

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Presenter: Rachel Tennis

Associate in Steptoe’s Washington office

Focuses on environmental regulation and

commercial litigation

Prior to joining Steptoe, Ms. Tennis worked as a

legal intern in the US Attorney’s Office, District of

Connecticut

She also served as a law clerk in the US

Department of Justice, Environment and Natural

Resources Division, Environmental Crimes Section

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Introduction

Disclosure of secrets in the EU and US under chemicals law:

1. REACH dissemination policy

2. EU Access to Documents regime & REACH

3. US EPA’s declassification of CBI

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1. REACH Dissemination Policy

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Dissemination and Access to Documents

Overview

Different regimes with separate procedures and thresholds

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Dissemination Access To Documents

Purpose General publication on ECHA’s website of

information that ECHA holds on registered

substances

Disclosure to an applicant(s) in response to a

request, of (i) information contained in

documents and (ii) environmental information

held by ECHA

Legal basis • Art. 119 REACH

• Art. 10(a)(xi)

• Art. 118 REACH

• ATD Reg. (EC) No 1049/2001

• Aarhus Implementing Reg. (EC)

1367/2006)

Exception

Art. 119(2) REACH

Confidentiality accepted as valid only if

can demonstrate that “potentially harmful

to the commercial interest of the registrant

or another party concerned”

Art. 4 ATD Reg. exceptions, including where

“would undermine the protection of

commercial interests of a natural or legal

person including IP”

Art. 118(2) list of what is normally deemed to

“undermine the protection of commercial

interests of the concerned person”

Dissemination Under REACH

Art. 119(1): Information that must be disseminated (no exception)

– This information has already been disseminated

Art. 119(2): Information ultimately disseminated unless confidentiality

claim is submitted and accepted as valid (Article 10(a)(xi))

– Disseminated if no conf. claim or not accepted

– A rolling program of dissemination (SDS information is the latest)

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Dissemination: What Has Been Done and Will Be

Done

Information that has already

been disseminated

Art. 119(1)

Information disseminated

except where valid conf. claim

Art. 119(2)

SDS Information will be

ultimately disseminated except

where valid conf. claim

Art. 119(2)(d)

Substance name

(in IUPAC and EINECS) Substance trade name Registration number

C&L Identity of hazardous impurities Registrant name

Result of toxicological and

ecotoxicological studies Total tonnage band (June 2012)

Life cycle description (formerly

“uses”) and uses advised against

Physiochemical data concerning

pathways and environmental fate

Study summaries or robust study

summaries of physchem. and tox.

and ecotox. data

Exposure scenario elements

after 2013 registr. deadline

DNEL and PNEC Name in IUPAC for non-phase in

substances (for six years)

Result of PBT and vPvB

assessment

Guidance on safe use

Name in IUPAC for substances with

certain hazard classes used only as

intermediate in scientific R&D

and/or PPORD

Indication of whether a CSA was

performed

Analytic Method IF requested for

detection

Additional field in IUCLID 5.4:

identity of competent person

responsible for SDS

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Example of Information Disseminated on ECHA’s

Portal

ECHA’s dissemination portal:

– http://echa.europa.eu/information-on-chemicals/registered-substances

Substance search: “Ethylene” (total tonnage band may be confidential)

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Information Disseminated on ECHA’s Portal Per

Substance

Substance search: “Ethylene oxide” then “View”

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Recent Dissemination of Total Tonnage Band

Aggregated tonnage data disseminated from June 2012:

– Nothing: If valid conf. claim in all registration dossiers and less than four full registrations

– Lower value: If valid conf. claim in some registration dossiers and less than four full registrations

– Upper and Lower value: In all cases where there are four or more registrants and no conf. claims in full

registrations

See ECHA News Alert of April 18, 2012

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Dissemination of Additional Information

Active Lead Registrant (LR) names

– This information is not part of REACH dissemination policy (Art. 119(1) and 119(2))

– Communicated to ECHA on a voluntary basis via ECHA’s LR Notification Form

– Notification deprives LR from possibility of claiming its identity as a “registrant” confidential

ECHA’s table of active LR

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What is SDS Information?

Art. 119(2)(d): “Information, other than that listed in [Article 119(1)],

contained in the safety data sheet.” ECHA does not hold the SDS

ECHA has determined which information, contained in a registration

dossier, is also typically contained in an SDS. This is SDS information:

– Registration number

– Registrant name

– Life cycle description and uses advised against

– Result of PBT and vPvB assessment (new field in IUCLID 5.4)

– Exposure scenario elements (new field in IUCLID 5.4)

– Indication of whether a CSA was performed

SDS information will be disseminated even for substances not requiring

an SDS (unless conf. claim submitted and accepted)

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Dissemination of SDS Information

SDS information will be disseminated after October 31, 2012

Registrants can review registration dossiers already submitted and claim

confidentiality of SDS information before October 31, 2012 even where

they did not claim confidentiality previously (“re-submission”)

New IUCLID 5.4 and REACH-IT (released on July 11, 2012) can process

SDS information and include new confidentiality claims and flags

Updated dossiers for resubmission must be in new IUCLID 5.4 format

which includes a requirement for new information (also subject to

dissemination). Timing of legal requirement to compete new fields (TCC

in 2014)?

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Confidentiality Claim

Foreseen by Art. 10(a)(xi) REACH

It consists of a:

– Request not publish information on the Internet

– Justification as to why publication could be “potentially harmful” for the

commercial interest

Each confidentiality claim for substances requiring an SDS:

– Must be justified (why are you different)

– Will be invoiced

– Will be assessed (i.e., whether the claim is “valid” or not)

Payment is not required if an SDS is not mandatory. ECHA guidance

only commits itself to assessment when payment is required: “Claims

not invoiced because a substance does not require an SDS are not

assessed.” Back door veto for non-SDS substance registrants?

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Confidentiality Claim Justifications

Justification must explain why dissemination may be “potentially harmful

for the commercial interest of the registrant or any other party

concerned”

Guidance on ECHA’s website is outdated and will be updated very

shortly:

– Data Submission Manual 16 on Confidentiality Claims (including a “likely

rationale” to justify a claim)

– Annex I: Instructions for the Confidentiality Claims Justification Template

– Confidentiality Claim Template

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How to Properly Formulate a Confidentiality Claim

Each claim should be properly justified or it will be rejected. IUCLID 5.4

includes a template and a box for justifying the claim

In particular justification must contain:

1. Declaration that the information is not in the public domain

2. Demonstration of the existence of a commercial interest that needs to be

protected

3. Causal link between dissemination and harm to commercial interest

Arguments supporting a confidentiality claim may be:

– Small number of competitors

– Small markets

– Links between registrants and distributors/downstream users

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Fees for Confidentiality Claims

Each conf. claim for substances requiring an SDS will be invoiced

– Fees calculated based on Commission Fee Regulation No 340/2008

IUCLID fees calculation plug-in helps calculates fees per claim

Standard (single) fee for SDS information is € 3,000. Reduced fees for

medium enterprises, SMEs, and micro enterprises

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Fee Regulation

Confidentiality Claims: Assessment and Review

Decision to partially or fully reject a confidentiality claim can be

challenged through a review procedure by filling a form on ECHA’s

website—within two months from the date of receipt of ECHA’s decision

Request for review has suspensive effect (information will not be

disseminated)

ECHA has two months to respond to the request for review

ECHA’s response can be challenged (with suspensive effect) before

– General Court (asking the annulment of ECHA’s decision)

– European Ombudsman (maladministration by ECHA)

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Confidentiality Claims: Statistics

ECHA does not have a deadline to assess conf. claim (not part of

compliance check)

Priority is given to certain claims (e.g., IUPAC names), not to

chronological order

By the end of 2011 ECHA had received 1,693 confidentiality claims. Of

these, only 38% had been assessed

Most of the claims assessed were “out of scope”

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See ECHA General Report 2011

Points to Consider

Each registrant (including ORs) has an opportunity to review/amend its

registration dossier between July and October 2012

Registrants may want to avoid the dissemination of certain SDS

information, e.g.:

– Registration number: It may reveal who is the manufacturer of a substance

– Registrant name: It may link the registrant to a tonnage band

Registrants may want to avoid the dissemination of information included

in earlier registration dossiers, which was not claimed confidential, e.g.:

– ORs may have not claimed their identity confidential and may have included

their list of suppliers (i.e., customers) in the registration dossier: This list may

be disseminated (and OR will be requested to provide the supplier’s agreement

for dissemination)

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ECHA’s Response to Valid Claims

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2. Access to Documents Regime

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ATD Requests

Dissemination is only one half of the attack on your secrets.

Competitors and Campaigners also use the ATD Regulation (EC)

1049/2001:

– Documents held by ECHA must generally be disclosed following a request

submitted (documents received from third parties and drawn up by ECHA) BUT

conditions under which must only grant (ii) partial disclosure or must (iii) refuse

disclosure

– Document definition open-ended: “Any content whatever its medium (written on

paper or stored in electronic form or as a sound, visual or audiovisual

recording) concerning a matter relating to the policies, activities and decisions”

– No requirement to generate documents in order to respond to ATD requests

(just “raw form”)

– Not designed for fishing exercises: No general requirement on Agency to

extract individual pieces of information from documents and/or to assemble

them in a new document, summarising information from various sources or

explaining it

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ATD Requests

Special rules for “Environmental Information” (from Aarhus Implementing

Regulation (EC) 1367/2006) where extraction is required but not

analysis or explanation. Definition captures:

– Condition of the environment

– Introduction of elements affecting or likely to affect its condition including on

human health

– Action taken in relation to it

No immediacy test. No requirement to explain or extrapolate

“Emissions to the environment”: Emissions to the environment are

information on the release as such

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ATD Requests

Information

Environmental Info.

Emissions to the Environment

Document1 Document

2

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Presumptions of Non-Disclosure

Art. 118(2) REACH creates a strong legislative presumption of non-disclosure

for certain categories of information in documents (see table below):

– Details of the full composition of a mixture

– Precise use

– Function or application of a substance or mixture including information about its

precise use as an intermediate

– Precise tonnage of the substance or mixture manufactured or placed on the market

– Links between a manufacturer or importer and his distributors or downstream users

Presumptions relieve obligation of ECHA to make a “concrete, individual

examination of those documents” to justify non-disclosure. BUT applicants

can still demonstrate a higher public interest justifying disclosure (rebuttable

presumptions)

ECJ has upheld strong legislative presumptions as a basis for non-disclosure (in

State Aid and Merger Control contexts). Pending Case T-245/11 ClientEarth and

International Chemical Secretariat v. ECHA

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*1 Case 64/59 Sweden v. Commission. # Reg. 1367/2006 defines “environmental information” as “any information in written, visual, aural, electronic or any other material form on:

(i) the state of the elements of the environment, such as air and atmosphere, water, soil, land, landscape and natural sites including wetlands, coastal and marine areas,

biological diversity and its components, including genetically modified organisms, and the interaction among these elements;

(ii) factors, such as substances, energy, noise, radiation or waste, including radioactive waste, emissions, discharges and other releases into the environment, affecting or likely to

affect the elements of the environment referred to in point (i)…”

4(1)

Would undetermined the protection of:

4(2) 4(3)

(a) (b)

Public interest Privacy & personal data

Security Defence

&

military

International

relations

Financial,

monetary

policy of EU

or Member

State

Would undetermined the protection of: Would seriously undetermined institution’s decision making process:

*Commercial

interest of a natural

or legal person

including

Intellectual Property

Court

proceedings

and legal

advice

*Purpose of

inspections,

investigations &

audits

Relating to matter where

decision not yet taken by

the institution

Received by

an institution

Drawn up by

an institution

for internal use

Unless overriding public interest

(Deemed to exist for * when info “relates to emissions to the

environment”# under Reg. 1367/2006)

4(4)

If a 3rd party document

institution must consult 3rd party unless clear to disclose or not

Opinions for

internal use as part

of deliberations and

preliminary

consultations within

the institution

After

decision

taken

4(5)

Documents originating from a Member State not disclosed if MS requests and gives reasons

falling under Arts. 4(1) to 4(3) *1

Exceptions to Disclosure in ATD Reg.

Points to Consider

There is a sustained period of ATD requests and related legal

challenges. “Private communications” era is a thing of the past

ATD provides a right to request access without a requirement to provide

a justification or explanation for why the documents are requested

coupled with a right of action to challenge decisions before the Court of

Justice of the EU and/or the Ombudsman. A recipe for litigation

Potential chilling effect on engagement with ECHA—companies going

beyond what is necessary. Consider this at each stage

Think about what might now be in the public domain and is useful to you

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3. EPA’s Declassification of CBI

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US Data Collection Toxic Substances Control Act

Toxic Substances Control Act (TSCA), 1976

– First generation chemical control

• “Unreasonable risk” standard

• Burden on agency

• Problem of application to new technologies

– EPA now trying to use TSCA to require more information

• Declassification of CBI claims

• Chemical Data Reporting Rule

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US Data Collection TSCA—Reporting

Requirements

EPA can require submission of information under §8(a) of TSCA

– Chemical or mixture identity

– Categories of use

– Quantity manufactured or processed

– Byproduct description

– Health and environmental effects information

– Number of individuals exposed

– Methods of disposal

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US Data Collection TSCA—CBI Claims

Data submitters can designate information submitted under TSCA as

confidential business information (CBI)

Baseline requirements—EPA regulations and policy statement

– Must assert confidentiality at time of submission, 40 C.F.R. § 2.203

– Otherwise confidentiality is waived, 43 Fed. Reg. 11113 (Mar. 16, 1976)

– CBI must be clearly marked, 40 C.F.R. § 2.203

– Each page containing confidential information must be stamped with a label

such as confidential, proprietary, or trade secret, 43 Fed. Reg. 11113 (Mar. 16

1976)

– Must submit two versions, 43 Fed. Reg. 11113 (Mar. 16 1976)

• One complete (“sanitized”) copy with confidential information marked as described

above

• One copy with confidential information removed or obscured

– See http://www.epa.gov/oppt/tsca8e/pubs/confidentialbusinessinformation.html

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US Data Collection EPA Declassification of CBI

2009 EPA began actively reviewing old claims

2010 voluntary declassification request

Now posting declassified information online

– To view the declassified health and safety studies, visit the Chemical

Data Access Tool

– http://java.epa.gov/oppt_chemical_search

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http://www.epa.gov/oppt/existingchemicals/pubs/transparency-charts.html

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US Data Collection Chemical Data Reporting Rule

Final rule August 2, 2011 promulgated under §8(a) authority

Amended prior Inventory Update Reporting Rule

Broad application

– Lower reporting thresholds

Increases type and amount of information that must be reported to EPA

– Data must be submitted for each year in reporting period

– “Known or reasonably ascertainable” standard

Up-front substantiation of CBI

– Chemical identity

– Site identity

– Processing and use information

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US Data Collection Chemical Data Reporting Rule

Up-front substantiation entails written answers to questions promulgated

at 40 C.F.R. 711.30, including (among others):

Chemical identity

– Extent of competitive harm to self or supplier

– Whether fact of manufacture or import is publicly known

– Measures taken to prevent disclosure

– Purpose of manufacture

Site Identity

– Whether site has been linked with chemical identity in another reporting

scheme

– Extent of competitive harm

Process and use

– Extent to which information about the chemical is publicly available

– Extent of competitive harm to self or customers

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US Data Collection Chemical Data Reporting Rule

Industry generally supportive of CDR

Many of the comments submitted in response to the proposed rule were

taken into account in the final version

– Phase-in of reporting thresholds

– 2,500 pound de minimis level

– Phase-in of historical data requirements

New reporting standard opposed as potentially confusing

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US Data Collection TSCA Reform

Not the end of the story

Similar House and Senate bills introduced in 2010

Safe Chemicals Act Senate bill re-introduced in 2011 (S. 847)

Very conservative bills favored by NGO’s

Unlikely that a new law will be enacted before the election in November

of 2012

Unclear what an eventual law will contain

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Points to Consider

EPA is now more likely to deny CBI claims

Up-front substantiation is essential

Existing claims are also subject to review and may be triggered by CDR

filings that fail to claim confidentiality

TSCA reform is likely to continue this trend toward broader disclosure

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Thank You for Joining Us

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Seth Goldberg

Partner

Steptoe, Washington

(202) 429-6213

sgoldberg@steptoe.com

Darren Abrahams

Partner

Steptoe, Brussels

+32 2 626 0500

dabrahams@steptoe.com

Giorgio Rizzello

Associate

Steptoe, Brussels

+32 2 626 0563

grizzello@steptoe.com

Rachel Tennis

Associate

Steptoe, Washington

(202) 429-1371

rtennis@steptoe.com