Highlights:
The U.S. Environmental Protection Agency (EPA) recently established a one-time per- and polyfluoroalkyl substances (PFAS) reporting rule pursuant to the federal Toxic Substances Control Act (TSCA). Most companies that manufactured or imported certain PFAS chemicals or PFAS-containing "articles" from 2011 through 2022 (even if only once) must submit detailed information about those PFAS subject to the rule, compound by compound, to EPA by May 8, 2025. Virtually every domestic manufacturer and importer of consumer or industrial materials is now subject to this new reporting requirement. The scope and definitions of key terms in the rule (e.g. manufacture) are nuanced and compliance obligations should be evaluated carefully. The below provides a high-level summary of Shipman's strategic approach for manufacturers/importers to comply with this new, significant rule and implications going forward. Further details on each step are provided on the following page.
Step 1 – Assemble the Right PFAS Team
- Assemble a team comprised of in-house personnel, legal counsel and an environmental expert/consultant with TSCA expertise
- Engage outside environmental expert/consultant through counsel to maximize attorney-client privilege benefits, where possible
- Develop a strategic approach to collect and report only relevant information required for compliance to minimize potential regulatory and third-party adverse actions and liabilities (e.g., consider developing a standard operating procedure)
Step 2 – Complete Relevant Due Diligence
- Understand where and how PFAS can be intentionally introduced into your products and/or operations (directly or indirectly)
- Evaluate where/how to collect "reasonable ascertainable" details sufficient to comply with the required reporting categories
- Request necessary clarifications on due diligence findings internally and from suppliers
Step 3 – Understand and Mitigate Potential Risks
- Consider how government agencies, plaintiff lawyers, customers and employees might use reported data to support future PFAS-related claims (Note: other public PFAS reports have led to litigation)
- Evaluate applicability of TSCA's confidential business information protections
- Address any potential compliance gaps revealed during the due diligence process
- Consider voluntary self-disclosures to relevant state/federal agencies, if applicable
Step 4 – Appropriately Document Findings
- Complete required draft reports/forms under privilege with sufficient time for the team to review and comment
- Consider preparing an internal memo, regardless of whether a company is required to report, that documents the evaluation performed, how results were addressed and why certain information was and was not disclosed (if any)
Step 5 – Report and Maintain Records
- Submit reports electronically through EPA's CDX platform by May 8, 2025 ("small" importers have until November 10, 2025)
- Associated records must be maintained for five years.
ADDITIONAL DETAILS:
Introduction:
The U.S. Environmental Protection Agency (EPA) recently established a one-time per- and polyfluoroalkyl substances (PFAS) reporting rule pursuant to the federal Toxic Substances Control Act (TSCA). Most companies that manufactured or imported certain PFAS or PFAS-containing "articles" from 2011 through 2022 (even if only once) must submit detailed information about those PFAS subject to the rule, compound by compound, to EPA by May 8, 2025. The reports require information on chemical identity, categories of use, volumes manufactured and processed, byproducts, environmental and health effects, worker exposures and disposal methods. The rule is broad by design and applies to virtually all manufacturers and importers, even those who may never have had any reporting obligations under TSCA.
With PFAS present in so many industrial and consumer products, most manufacturers and importers will have something to report. Domestic manufacturers and importers not typically subject to TSCA reporting regulations should undertake proper due diligence to determine their compliance obligations and implications going forward. The scope and definitions of key terms in the rule (e.g. manufacture) are nuanced and compliance obligations should be evaluated carefully.
STEP 1 – Assemble the Right PFAS Team
Every U.S. manufacturer and importer should assemble a
multidisciplinary team to develop a strategic approach for the
collection and reporting of required PFAS business information to
comply with the rule but also to minimize potential future
liability. This may include developing a comprehensive standard
operating procedure (SOP) detailing the methodologies for gathering
information and the results of the company's inquiries. For
example, consider including an environmental expert/consultant and
legal counsel with TSCA experience. Engaging an outside
environmental expert/consultant through legal counsel is typically
recommended as it can offer attorney-client privilege protections,
as discussed below.
Step 2 – Complete Relevant Due Diligence
It is important to note that "articles"
incorporating a PFAS-containing substance (e.g., items with defined
shapes as part of their end function, such as non-stick cookware;
clothing treated with a PFAS-based stain repellent; furniture
treated with a PFAS-containing coating to resist surface smudging)
are subject to the new TSCA reporting rule. Many manufacturers and
importers that have previously been exempt from TSCA reporting will
be subject to this PFAS-specific rule. The due diligence plan
should be scoped in a way that makes sense for each business and
may require a robust analysis of a business's entire supply
chain. The rule does not require entities to test for PFAS;
however, manufacturers and importers must report information that
is "known or reasonably ascertainable." The initial due
diligence step should confirm whether reporting is necessary and
whether additional information will be needed from suppliers and/or
internal personnel to address the required reporting categories in
EPA's reporting form.
Step 3 – Understand and Mitigate Potential
Risks
The internal due diligence effort may identify information
demonstrating potential compliance gaps when the reports are
submitted to EPA and become public records. Such information may
include, for example, the use of chemicals that should be (but are
not yet) registered on EPA's TSCA inventory, data inconsistent
with other governmental reports, missed filings required to be made
under other reporting requirements (e.g., Chemical Data Reporting,
Tier II, Toxics Release Inventory), occupational safety concerns,
incomplete safety data sheets or product liabilities (e.g., design
defects or false advertising). While TSCA allows certain
confidential business information (CBI) to be protected, the
definition of CBI is narrowly crafted and EPA's process to
claim CBI must be followed. In some cases, voluntary
self-disclosures to EPA (and state environmental agencies) may be
advisable.
Although not the intent of this reporting rule, government agencies, plaintiff lawyers, customers and even employees also might use reported data to support PFAS-related claims. In fact, the plaintiffs' bar can be expected to seek submitted information under federal and state Freedom of Information Acts to provide potential fodder for private party lawsuits. Notably, a large personal care products company was sued recently in a proposed class action in California based on required disclosures under Maine's reporting rule. Engaging experienced legal counsel early to help facilitate the team's work and potentially protect certain communications under attorney-client privilege can be vital to offset litigation risks.
Step 4 – Appropriately Document Findings
Manufacturers/importers with domestic facilities subject
to the new rule must report information for each facility
individually, broken down by year from 2011 through 2022. This
process should be handled methodically to avoid redundancies. We
recommend that companies consider the preparation of a final
internal memo that documents the process used for seeking the
relevant information, how results were addressed and why certain
information was and was not disclosed (e.g., some PFAS may be out
of scope, some PFAS may be used but not manufactured or imported by
the reporting company). Even if a company determines no report is
required pursuant to the new rule, documenting the results of the
due diligence effort can be critically important to addressing any
future EPA compliance inquiry or inspection.
Step 5 – Report and Maintain Records
Most companies must file their reports by May 8, 2025 on
the standard reporting form to be provided by EPA. Companies
reporting exclusively as "small" importers have until
November 10, 2025. Article importers (of any size) have the option
of using a more streamlined reporting form with fewer technical
categories than the standard form. All reports must be submitted
through EPA's online Central Data Exchange (CDX). Records of this
reporting event must be maintained for five years.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.