What you need to know about California's new consumer products law

Last week, California approved its Safer Consumer Product Regulations, which become effective Oct. 1. The first set of chemicals compliance obligations are upon us, and all companies selling products into California need to get ready. Here’s what you need to be prepared for in the first 60 days.

Who needs to get ready?

The applicability of the new regulations is potentially very broad, so the simpler question might be who doesn’t need to be prepared? According to the California Health and Safety Code 25251, a consumer product is any “product or part of the product that is used, bought, or leased for use by a person for any purpose,” meaning a huge universe of products will be potentially affected.

When combined with the list of an estimated 1,200-plus candidate chemicals, the number of potential product-chemical combinations becomes exponentially larger. When you consider hundreds of thousands of different products are sold, rented or leased in California every year, the number of product-chemical combinations could reach hundreds of millions depending on the candidate chemicals listed by the agency.

A preliminary target list of about 230 chemicals is expected to be issued in mid-September. This list will give some insight into the breadth of products that will be effected. All companies selling products in California will need to be aware of whether their products contain one of these chemicals, and know who in their supply chain (manufacturer, importer, assembler or retailer) will be responsible for responding to requests from the state’s Department of Toxic Substances Control (DTSC) and filing required notices regarding their presence.

It is expected that requests for toxicity data on this first set of chemicals should be arriving in product seller and manufacturer’s mailboxes shortly after Oct. 1.

As implementation of the regulatory program progresses, the demands for information on product sellers and manufacturers will increase. By next spring, DTSC will publish an initial list of product-chemical combinations. The key question on the minds of industry, manufacturers and retailers is: Who will be selected in the first round? This is akin to a lottery, albeit one with negative consequences. DTSC has promised to select only five product-chemical combinations (such as phthalates in nail polish, adhesives in carpet or flame retardants in foam furniture) in the first round.

An additional question is whether activists will petition DTSC to add more or will seek an executive order or find impatient legislators to seek more. If this is the case, the list of five could quickly grow.

There are four stages of significant compliance obligations for the responsible entities: threshold decision in first 60 days; stage 1 alternatives analysis (AA) in the next 180 days; stage 2 AA in the following 24 months; and regulatory response stage. In this brief article, only the obligations of the first 60 days are discussed.

A flurry of notification requirements

The first 60 days of compliance could present incredible — and for many, insurmountable — challenges to compliance, if proper planning is not done well in advance of the agency’s selecting your product.

Every business involved in the sale of the selected product in California potentially could have a compliance obligation, if prior contractual arrangements have not been made. Each business will have to supply a document termed the “Priority Product Notification” 69503.7, which must include:

• Name and contact information.
• Statement that business is product manufacturer, importer, assembler or retailer.
• Type, brand name(s) and product name(s) sold.
• If a component, a description of all known product in which the component is used.

If the business has made prior contractual arrangements, it can merely submit the name and contact information of the other business in the supply chain that will be managing compliance for them. Alternatively and concurrently with the “Priority Product Notification,” the business can submit a set of two notices, the first of which indicates removal of the product from sale (termed “Product Removal Intent Notification”), removal of the chemical from the product (termed “Chemical Removal Intent Notification”), or replacement of the chemical in the product (termed “Product-Chemical Replacement Intent Notification”).

After the first notice is submitted and the business has followed through with their notified intent, the business is also required to submit a second notice that it has done so (termed the “Confirmation Notification”), or it must proceed to compliance with the rest of the regulations 69605.2.

Another potential avenue of compliance in the first 60 days is for a business to submit a notification that its product contains less than the threshold amount of the chemical of concern, termed the “Alternatives Analysis Threshold Notification,” concurrent with the Priority Product Notification 69505.3. The AA Threshold Notification must include:

•  The name and contact information of the person submitting the notification.
•  The name and contact information for all manufacturers, importers, assemblers and retailers.
•  Certification that the chemical is present in the product only as a contaminant and the concentration does not exceed the PQL threshold l, and the method used to determine the PQL.
•  The source of the chemical in the product.
•  All brand name(s) and labeling information for products, and if a component, the names of all known product(s) in which the component is used.
•  Laboratory methodologies, location, and QA/QC protocols used to measure the chemical Certification that controls will assure the threshold will not be exceeded.

Thus, depending on the course of action, a business may have between one and three notifications it must submit in the first 60 days. Failure to supply the requisite notifications or their information content is a violation, subject to severe fines and penalties. The agency has currently created no means of electronic submission, so one can imagine that they will be swimming in paper notifications, given how many businesses may be engaged in the sale in each product category.

Many businesses will have no knowledge whatsoever of what chemicals are contained in their product, or the capability of conducting the analytical testing in the short time frame. Yet, if their product is selected, they must obtain this information. Even larger businesses with the means and capability of doing so will face tremendous technical and feasibility challenges since the regulations do not contain a specified level to design to, search for, request supplier testing of, or develop analytical chemistry methods for. In many cases, reliable test methods may not even exist to test for the chemical in question in the product being questioned by the agency.

Before the clock begins ticking on your 60 days, it is critical to know all the chemistries in your product. We are not talking about knowing that it is made of X plastic or Y metal. You need to know the paints, colorants, antioxidants, residual monomers, metal contaminants, down to part-per-million levels.

This may seem like a daunting task and it is, but that is why you need to start now. By putting in place a system to begin the process, you will learn quickly and become more efficient. You will also learn which of your suppliers are willing to work with you and which you cannot. By prioritizing you efforts to those products you cannot change or pull from the California market, you will soon understand the position you are in should a letter arrive from DTSC letting you know “you won the lottery.”

Once you have identified the chemistries in your products, scientific consulting firms like Cardno ChemRisk can help you sort through potential alternatives. (Disclaimer: This story is co-written by Cardno ChemRisk’s VP of sustainability.) The key will be to avoid those likely to be on DSTC list of chemicals of concern in the future, so you don’t have to go through this again.

Another challenge likely to come up as you work with your supply chain to identify all the components in your products, is “proprietary information.” If your supplier will not tell you all the chemistries, then you have four basic choices:

1. Find a new supplier who will tell you all the chemistries.
2. Find a third party, such as Chemical Compliance Systems, which can verify the chemistries for you but keep any proprietary chemistries confidential.
3. You can test for all 1,200 chemicals (not recommended as this is extremely expensive).
4. As stated above, you can enter into to a contractual agreement making your supplier the legal entity agreeing to respond to the “Priority Product Notification.”

As attractive as Option 4 may sound, companies need to think about the potential reputational hit if your supplier does not manage this process well.

Given the gross uncertainties about what may be considered compliant, some businesses in the supply chain may submit “Product Removal Intent Notifications” even if another entity is willing to comply, for fear of liability if they fail. Stoppage of sales along the supply chain from poor planning and communication may be a greater risk than the notification requirements themselves. Therefore, it is recommended that business establish clear rules, contractual arrangements, and protocols with their suppliers and retailers as soon as possible to ensure that the proper notifications are filed by the proper entity in the supply chain in the first 60 days.

If you think what is laid out above in confusing and onerous, just wait until you see what is involved in the alternatives analysis process, which we will explain in our next article. Each phase of compliance increases the demands on product sellers, most of which is beyond existing capabilities.

Photocollage by GreenBiz Group