The Federal Highway Administration (FHWA) recently released a prepublication version of its final rule establishing a greenhouse gas (GHG) emissions measure. The final rule establishes a method for measurement of GHG emissions associated with transportation and requires state departments of transportation (State DOTs) and metropolitan planning organizations (MPOs) that have National Highway System (NHS) routes within their jurisdiction to establish targets for reducing GHG emissions from on-road sources and to report on their efforts to meet those targets. The rule will take effect thirty days after the date of its publication in the Federal Register. State DOTs are required to establish targets and report those targets by February 1, 2024. Subsequent targets would be established and reported by no later than October 1, 2026.
FDA Delays Enforcement of MOCRA Deadlines for Facility Registration and Product Listing to July 1, 2024
On November 9, 2023, the FDA published notice of final guidance that delays FDA’s enforcement of some facilities’ registration and product listing compliance requirements under MOCRA to July 1, 2024. This enforcement delay applies to facilities that “engaged in manufacturing or processing of a cosmetic product” or products as of MOCRA’s enactment date (December 29, 2022). Additionally, on November 1, 2023 the FDA issued an announcement delaying the implementation date for its new online submission portal called “Cosmetics Direct” for facility registrations and product listings. For more details on the key changes and issues, see our detailed post on this issue here.
Revamping Cosmetics Safety and Regulation: Updates from FDA on Regulatory Changes under MOCRA
In August 2023, the FDA released draft guidance on upcoming regulatory changes pursuant to MOCRA, including guidance on cosmetic product facility registrations and product listings. MOCRA applies to any establishment that manufactures or processes cosmetics products. According to the draft guidance, the FDA is in the process of creating a new online portal for facility registrations and product listings and has created a draft list of categories and codes for cosmetic products for facilities to use when registering a facility or listing a cosmetic product. For more details on the key changes and issues, see our detailed post on this issue here.
Windsor Framework: Deadline for Businesses to Register for New Northern Ireland Retail Movement Scheme Approaches
From October 2023, a broad range of products moving from Great Britain (GB) to Northern Ireland (NI) (and that are intended for “final consumption” in NI) will be processed through a “green lane” and be subject to fewer checks and controls. While this will ultimately facilitate movements of various products, there are implications for businesses in the short term.
Agreement on the Windsor Framework was reached by the UK and the EU on 27 February 2023 as a way to address some of the issues presented by the Northern Ireland Protocol. The UK government has now unveiled the Northern Ireland Retail Movement Scheme (NIRMS), which will allow UK public health and consumer protection standards to apply for all retail food and drink moving to NI through the scheme, while recognising that goods that are potentially not compliant with EU requirements should not be able to pass into the EU through the NI and Republic of Ireland border without checks.
From 1 September 2023, all businesses responsible for selling or facilitating the movement of food for final consumption in NI will be able to register for NIRMS.
Please click here for a link to our article setting out the background to the Windsor Framework, the scope of the new Northern Ireland Retail Movement Scheme (which will commence on 1 October 2023) and required arrangements for registration, a General Certificate declaration by traders and labelling of products and/ or boxes/ crates.
White House Finalizes Long-awaited Build America, Buy America (BABA) Guidance
The White House has announced long-awaited final guidance to federal agencies to implement domestic content and manufacturing requirements in federally funded infrastructure projects. The Biden administration guidance applies broadly to the use of iron, steel, and other common construction materials and products and, as a result, is expected to have broad implications for awardees of federal funding, prospective applicants, contractors, and suppliers.
Reforming Cost-Benefit Calculations under Circular A-4: Implications for Environmental Rulemaking
Would you rather pay your bills tomorrow or next year? What about your paycheck? Intuitively, most people want delayed costs and immediate benefits, and so want checks now and liability later. This poses a challenge for policymakers when weighing the costs and benefits of a new policy: is reasonable to pay 90 cents today for a dollar tomorrow—and what if tomorrow’s dollar is a benefit other than money? When federal agencies undergo notice-and-comment rulemaking, they have to make these calculations. Immediate costs and benefits must be considered, while future factors are discounted to their present value to account for the intervening time. Selecting the discount rate can have material implications for any economic analysis, and especially for environmental rules which tend to involve front-loaded compliance costs and primarily future benefits.
Environmental Law Institute webinar: TSCA Reform – Seven Years Later
The Environmental Law Institute will host its seventh annual Toxic Substances Control Act (TSCA) Reform conference on Thursday, June 29, 2023 from 8:00 a.m. – 5:30 p.m. ET.
In this webinar, panelists will discuss challenges and accomplishments since the implementation of the 2016 Lautenberg Amendments and where the TSCA stands today. Topics will include risk evaluation, risk management, new chemical review, PFAS and more.
W. Caffey Norman will serve as a panelist in the Risk Management session, from 11:00 a.m. – 12:30 p.m. In this program, panelists will address how EPA manages workplace risks, enforcement mechanisms for risk management restrictions, whether EPA’s risk management rulemakings are adequately addressing EJ concerns, potential legal challenges to final risk management rules and more.
UK Annual Environmental, Safety & Health Conference 2023 – Get to Know Our Speakers
After a few years off, we are delighted to bring back our Annual UK Environmental, Safety & Health Conference this June. The theme is Managing Developing ESH Risks in the UK and Internationally.
We are excited to have the following speakers join us for what will be an interesting discussion:
- Heather Beach – Heather is the Founder and Director of Healthy Work Company. She is a prominent figure in the health and safety sector, having founded “Women in Health and Safety”, and has been featured in numerous consumer publications and on TV. Heather has won Business Leader of the Year at UBM and Top Ten Most Influential in H&S in 2018, 2019, and 2020. She provides wellbeing strategy support such as ISO45003 and training in wellbeing related topics. Heather will present on “Creating Psychological Safety in your Workplace”.
- Dr. Rachel Ward – Rachel is a Risk Management Advisor and Technical Counsel with experience in the food sector. She works at Exponent, advising multinational manufacturers and retailers, University spin outs and SME start-ups. Rachel’s presentation, titled “Incorporating Intelligence to Keep Risk Management Models Relevant”, will explore supply chain and food system due diligence and horizon scanning.
- Dr. Ben Selwyn – Ben has been a Professor of International Relations and International Development at the University of Sussex since 2009. He conducts research, writes and teaches about global development in general, focusing on global supply chains, food systems, green transitions, and the socio-economic dynamics of poverty and inequality. His presentation will focus on “How the World Economy Impacts Sustainability Objectives and Implementation” from a systemic perspective on some of the most topical global supply chain issues.
- Mathew Hussey – Mathew is an Environmental Director at Gallagher who specialises in environmental insurance projects, including brownfield sites, operational environmental business risks, renewable energy projects through to waste/recycling and more. His presentation, titled “Environmental Insurance – How Insurance Adapts to Emerging Risks”, will explore the developments he is witnessing around climate change, biodiversity, carbon credits and D&O claims.
- Tomas Sys and Eleanor Hinde – Tomas is a Principal and UK ESG and M&A Advisory Lead at Ramboll. He helps financial sector and corporate clients navigate and identify ESG risks and opportunities during the due diligence process and assess means of incorporating ESG aspects into value creation plans. Eleanor is a Senior ESG Consultant at Ramboll and an ESG due diligence professional with experience across a variety of sectors and with buy- and sell-side analysis. Eleanor also supports investors and corporates with ESG benchmarking, reporting and strategy. Tomas and Eleanor will both present on “ESG Trends on Requirements for Due Diligence on Supply Chains and Reporting”. Their talk will focus on triggers that have caused business impacts, why data management with ESG is a challenge and commercial benefits of ESG.
- Chris Occleshaw – Chris is an International Recall Consultant at Sedgwick Brand Protection. During his tenure with Sedgwick brand protection, Chris has helped clients expertly navigate some of the most sensitive and complex recall events across multiple jurisdictions for products in all industries, from medical and pharma to consumer goods, automotive and food products. Chris’ presentation will cover the “Impact of Supply Chain Challenges on Product Safety Risks and Corrective Action”.
- Nicola Smith – Nicola is a Partner at Squire Patton Boggs specialising in regulatory compliance. Her expertise is broad ranging and covers alcohol and entertainment licensing, food and feed law, and general product compliance, safety and recall (including general consumer products, cosmetic products, medical devices and food contact materials). Nicola will present on “Navigating Potential Regulatory Divergence in the UK and Europe”.
- Anita Lloyd – Anita is EMEA lead of the Chemicals Group at Squire Patton Boggs and a Director at the firm. She specialises in environmental and sustainability matters, including waste, environmental permits, producer responsibility, product compliance and labelling, chemical regulation, asbestos and contaminated land, and climate change law. Anita’s topic, “Risks Associated With Communication of “Green” Credentials”, will cover the treatment of environmental claims made about products and services.
This conference will provide a fantastic opportunity to discuss with experts any specific issues and queries that delegates may have and allow them to share their experiences in person with other businesses from across the UK.
We look forward to seeing guests on 27 June 2023 from 9 a.m. to 4:30 p.m. at Squire Patton Boggs, 60 London Wall, London, EC2M 5TQ. There is still time to register for the event.
US Supreme Court Narrows the Definition of “Waters of the United States” with Respect to Wetlands for Purposes of Federal Jurisdiction under the Clean Water Act
On May 25, 2023, the US Supreme Court, in Sackett v. Environmental Protection Agency, ___ US_ (2023) (“Sackett”) held that “waters of the United States” for purposes of federal jurisdiction under the Clean Water Act (“CWA”) refer “only to geographical features that are described in ordinary parlance as “streams, oceans, rivers and lakes’ and to adjacent wetlands that are ‘indistinguishable’ from those bodies of water due to a ‘continuous surface connection’” a test first articulated in the plurality opinion in Rapanos v. United States, 547 US 715 (2006).
From Farm to Table: How the Supreme Court’s Pork Ruling Impacts States’ Rights and Doing Business in California
In a heavily fractured decision last month, the U.S. Supreme Court held in National Pork Producers Council, et al v. Ross, et al, that a California law (Cal. Health & Safety Code 25991, known as Proposition 12), which forbids the in-state sale of whole pork meat that comes from breeding pigs “confined in a cruel manner,” did not violate the Dormant Commerce Clause impermissibly burdening interstate commerce. While the decision deeply impacts the pork industry, it may also have broader impacts on states’ rights and ultimately impact all types of companies doing business in California.
The Commerce Clause gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” The Dormant Commerce Clause doctrine, which began to emerge early in our nation’s jurisprudence, is the inverse of the Commerce Clause. It prohibits a state from passing a law that discriminates or excessively burdens interstate commerce. Many early cases applying the Dormant Commerce Clause involved states passing protectionist laws that favored in-state businesses over out-of-state.
In last month’s ruling, the Court rejected the pork producers’ Dormant Commerce Clause arguments that Prop 12 has a “practical effect of controlling commerce outside” of California “even when those laws do not purposely discriminate against out-of-state interests.” They also rejected what they determined would be an expansion of the Dormant Commerce Clause, where pork producers argued that Prop 12 violates an “almost per se” rule “because the law will impose substantial new costs on out-of-state pork producers who wish to sell their products in California.”
While the Court’s more specific reasons for rejecting the above arguments and application of the Dormant Commerce Clause varied (certain justices limited their support to only certain sections of the Opinion), in general, the Court reasoned that the Dormant Commerce Clause only prohibits “discrimination in favor of in-state businesses or against out-of-state competitors.” The Court claimed they “say nothing new here” in the face of prior Dormant Commerce Clause precedent and made clear that individual states have the right to set animal welfare standards within their borders as they see fit.
The wrinkle to this case is that California produces little pork of its own. Therefore, Prop 12 would largely impact out-of-state businesses. Pork producers argued that there are practical reasons for their cage designs, and compliance with the Prop 12 standards would likely mean increasing the size of their facilities, leading to an increase in the price of pork which may impact communities who rely on pork as a less costly protein.
How pork producers proceed with the Ross holding remains uncertain. That said, while the Ross case greatly impacts the pork industry, the decision may have even broader impacts on states’ rights, particularly for companies that have nationwide businesses in all industries. California has the largest domestic economy in the United States and a population of over 40 million people. (Compare that to the second largest population in Texas which is 30 million or the third and fourth states – New York and Florida – combined.)
With California’s huge consumer market, the Ross case seems to set a precedent that California (or another state with a large consumer market) can dictate how industry outside of California operates. Here on our blog, we regularly cover California’s Proposition 65, a consumer product law which requires companies doing business in California label products that can expose consumers to certain chemicals listed (by a California agency) that may cause cancer or reproductive harm.
Since a major set of amendments became effective in 2018, we have discussed how Prop 65 has completely changed the way companies who want to do business in California operate. In many instances, because California products cannot be isolated and labeled in compliance with Prop 65, it is not uncommon for companies to simply label all their products, whether they end up in California or not. Therefore, the laws in one state can theoretically dictate how products are received in another state or the entire US market.
While Prop 65 has not been challenged at the Supreme Court, this month’s Ross ruling on Prop 12 may lend judicial support to the broad reach of California’s Prop 65 along with other recent or forthcoming regulations in California, including AB45’s regulation of cannabis (which regulates both in-state and out-of-state industrial hemp manufacturers), the California Air Resources Board’s regulation of auto emissions, climate change, and more. Therefore, it will be important now more than ever for domestic and international companies doing business in the U.S. to be informed of the scope and reach of California’s laws and regulations.
Squire Patton Boggs regularly provides counsel on and monitors California environmental, health and safety regulations for a variety of industries. Our team at SPB will continue to provide updates on these developments in the future.
