Cartel allegations in France regarding the concealed use of Bisphenol A in food packaging

Bisphenol A is a chemical product which is considered an endocrine disruptor and, for that reason, has been banned from the food industry since 2015 by the French Food Safety Agency (FSA).  Bisphenol A is, however, still legally used in other countries (including the UK and other EU Member States).

The French Competition Authority (FCA) has issued last week a Statement of Objections (SO, which is effectively a “charge sheet” against suspected cartel participants) to over a hundred companies and trade associations for alleged collusion regarding the unlawful and continued use of Bisphenol A in food packaging.  The FCA’s allegations are that these companies colluded in not informing their respective customers of the presence of this banned chemical in food packaging pre-2015.

This FCA’s announcement is of interest for the following reasons:

  • This appears to be one of (if not the) largest cartels ever suspected by the FCA – with potentially more than a hundred cartel participants. It is however somewhat surprising, for reasons of procedural efficiency, that the FCA is proposing to keep such a long list of SO addressees instead of focusing on the largest undertakings and ring leaders involved. In principle, if the FCA’s investigation is successful, it could lead to numerous follow-on claims for damages by private parties against the 100+ undertakings.
  • The FCA’s allegations relate to a new type of cartel, which raises the question of whether the FCA has the power to investigate an alleged (collective) breach of FSA regulations – even if the FCA’s investigation does not go further than establishing an infringement of Article 101 TFEU/L420-1 of the French Commercial Code (which prohibit anticompetitive agreements). At time of writing, it is unclear if other legal consequences are and/or will be faced by the 100+ addressees of the SO, and how any such other proceedings will articulate with the FCA’s without breaching the ne bis in idem principle (which restricts the possibility of a defendant being prosecuted more than once on the basis of the same facts).
  • The FCA’s investigation comes as a stark reminder that antitrust/competition rules forbid not only classic price-fixing agreements, but also all types of collusion between competitors as regards any parameters of competition (which can be environmental, health-related, etc.). Companies should therefore be well advised to consult with antitrust/competition lawyers to factor in the risk of antitrust investigations when agreeing to any standards, in particular in the context of trade associations (as seems to be the case in the Bisphenol A investigation).

Our Antitrust/Competition Team in Paris will keep abreast of this important development for the Food and Drink industry in France.  Please be in touch if you need any clarification and/or information as the FCA proceedings unfold.

Prop 65 Regulatory Update for the Food & Cannabis Industry: OEHHA Proposes Specialized Warnings for Exposures to Acrylamide from Food & Exposures to Smoke from Cannabis/THC Products

Food has become a bigger and bigger target for enforcement under Prop 65 over the last few years, and acrylamide in particular has been the subject of scrutiny by both the California Office of Environmental Health Hazard Assessment (OEHHA) and in pending litigation. You can find our prior post on this subject here.

Now, OEHHA has proposed a new tailored warning for exposures to acrylamide from food. The tailored warning would read:

This rulemaking proposes to add the following new subsection to Section 25607.2:

(b) A warning for food exposures to acrylamide meets the requirements of this subarticle if it is provided: (i) in accordance with subsection (a), or, (ii) via one or more of the methods specified in Section 25607.1 and includes both elements (1) and (2) below.

(1) The words “CALIFORNIA WARNING:” in all capital letters and bold print.

(2) The words, “Consuming this product can expose you to acrylamide, a probable human carcinogen formed in some foods during cooking or processing at high temperatures. Many factors affect your cancer risk, including the frequency and amount of the chemical consumed. For more information including ways to reduce your exposure, see www.P65Warnings.ca.gov/acrylamide.”

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Clearing the Air: US EPA Looks to Revamp Pyrolysis and Gasification Regulations

green fieldOne man’s trash is another man’s treasure.  In this case, one man’s solid waste, commercial and industrial waste, biomass, plastics, tires, and organic contaminants are another man’s energy, fuel, and commodity chemicals thanks to waste conversion technologies generally known as pyrolysis and gasification.  For years, these waste conversion technologies have been regulated under a patchwork of ill-fitting Clean Air Act (CAA) regulations and remain at relatively low levels of commercial adoption.  Now that may be changing.

On September 8, the US EPA announced an advanced notice of proposed rulemaking (ANPRM) to “assist in the potential development of regulations for pyrolysis and gasification units,” which, many hope, represents the first step in standardizing and clarifying regulations for these technologies.  In addition, last August EPA issued a proposed rule for Other Solid Waste Incineration (OSWI) plants which would simplify pyrolysis regulations by removing the reference to pyrolysis from the definition of “municipal waste combustion unit.”  In the ANPRM, EPA states that it would issue the final OSWI Rule by October 31. Continue Reading

Record £90 Million Fine for a “Flagrant Disregard” of UK Environmental Law Calls for Boards of Directors to Take Note

JusticeOn 19 August, the sentencing remarks of Mr Justice Johnson were published in relation to the recent £90 million fine issued to Southern Water for sewage pollution.  The remarks provide a full breakdown and description of how this record fine was calculated, and provide comments and conclusions on a number of issues that are likely to be of relevance in other cases.

In his introductory remarks, Mr Justice Johnson provides initial indications on a number of points that are reflected in the sentencing principles, namely that the company had been fined for what were considered to be substantial amounts for similar offences between 2013 and 2016, but that there was “no evidence that the Defendant took any notice of the penalty imposed or the court’s remarks. Its offending simply continued”, and “history shows that fines of hundreds of thousands or low millions of pounds have not had any effect on the Defendant’s offending behaviour.” Accordingly, the Judge felt “It is necessary to set a fine which will bring home to the management of this and other companies the need to comply with laws that are designed to protect the environment.”, while expressing some sympathy for shareholders who  “have no direct responsibility for the offending”. The Judge felt that if a substantial fine “results in large institutional investors taking a more active role in ensuring that the companies that they invest in comply with the law, then that is not inconsistent with the purposes of sentencing, which include the reduction of crime.”

Against that backdrop, Mr. Justice Johnson applied sentencing principles based on the Environmental Offences Definitive Guideline (rejecting the Environment Agency’s submission that the guideline was not applicable because of the scale and nature of these offences).  The guideline process assesses the seriousness of the offence, first, based on the culpability of the Defendant and the level of harm (or risk of harm) caused, followed by consideration of the company turnover and then additional factors that increase or decrease the seriousness of the offending.

Below is a break down of the application by Mr Justice Johnson of the sentencing principles to the facts of this case:

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European Commission Proposes a Carbon Border Adjustment Mechanism (CBAM) for Iron, Steel, Cement, Fertilisers, Aluminium and Electricity (4 in 4-Part Series)

Another much-anticipated and likely controversial proposed regulation would establish a CBAM for certain imports. The Commission presented it as a measure to ensure that ambitious climate action in Europe does not lead to “carbon leakage” by pushing carbon-intensive production out of the single European market but contribute to a global emissions decline by encouraging the international partners of the EU and their industries to take steps in the same direction.

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European Commission Proposes a Revision of the Renewable Energy Directive (3 in 4-Part Series)

Icons energy sources for renewableAs another key component of the Fit for 55 package, the Commission made a proposal to amend Directive 2018/2001 on the promotion of the use of energy from renewable sources (RED II) and related legal acts.

The revision would increase the overall binding target for renewable energy in the EU energy mix from the current 32% to 40%, complemented by indicative national contributions of Member States to reach the collective EU target. The Commission proposes specific targets for renewable energy use in certain sectors by 2030: 

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European Commission Proposes “Most Crucial Change to the EU Emission Trading System So Far” (2 in 4-Part Series)

Power StationAs part of the Fit for 55 package, the Commission presented a proposal to revise Directive 2003/87 establishing a system for GHG emission allowance trading within the EU, as well as related legal acts.

According to the Commission’s Explanatory Memorandum, ensuring continued effective protection for the sectors exposed to a significant risk of carbon leakage while incentivising the uptake of low-carbon technologies will remain a specific objective of the EU ETS. Other objectives included addressing the distributional and social effects of this transition, by reviewing the use of auctioning revenues and the size and functioning of the low-carbon funding mechanisms.

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European Commission Proposes a Landmark “Fit for 55” Package of Climate and Energy Legislation (1 in 4-Part Series)

renewable wind energyDelivering a key component of the European Green Deal umbrella policy that it adopted in December 2019, the European Commission issued 15 legislative proposals, accompanied by three non-legislative communications in July 2021. With the supporting documents, e.g. impact assessments, the package adds up to around 4,200 pages. It includes the following initiatives:

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July 2021 Update: frESH Law Horizons: Key Developments in UK and EU Environment, Safety and Health Law, Procedure and Policy

Our Environmental, Safety & Health team is pleased to share with you the latest edition of our monthly newsletter, frESH Law Horizons: Key Developments in UK & EU Environment, Safety and Health Law and Procedure; providing bite-size updates on EU and UK law, procedure and policy.

The updates covered in this month’s edition include (among others):

  • The government has published its COVID-19 summer 2021 road map for England, and updated step 4 working safely guidance.
  • Company is fined £910,000 after a self-employed lorry driver is killed while making a delivery.
  • Cinema chain is fined £750,000 after a man is killed by a reclining seat.
  • The UK and the EU have agreed to extend the Northern Ireland Protocol grace period for chilled meat products to 30 September 2021.
  • Court of Appeal held litigation privilege is still maintained even if a third party had misled as to the purpose of their information request.
  • Manufacturing company is fined (including under REACH) after workers are exposed to asbestos.
  • Waste and recycling sector commits to tackling modern slavery.
  • Health & Safety Executive announces an increase in worker deaths on the day the English football team competed in the semi-final of the Euros.
  • The Food Standards Agency publishes its revised Food Law Code of Practice.
  • DEFRA and Natural England launch the biodiversity metric.
  • Draft UK REACH amendment regulations have been issued and the HSE has also announced the opening of Lead Registrant functionality in UK REACH.
  • Amendments made to the UK law on waste shipments.
  • BEIS consults on strengthening the Energy Savings Opportunity Scheme.
  • Record £90 million fine for Southern Water following an EA prosecution.
  • Environment Agency Waste quality protocols review.
  • UK government publishes the Transport Decarbonisation Plan, consults on ending the sale of new non-zero emission HGVs, and issues a Green Paper on a new road vehicle CO2 emissions regulatory framework.
  • New guidance is issued on best available techniques for carbon capture.
  • Government consults on the technical details of plastic packaging tax.
  • DEFRA is consulting on the establishment of an “environmental review”.
  • Biffa Waste Services Ltd has been fined £1.5 million for illegal waste exports.
  • Royal Dutch Shell plc has confirmed that it will appeal the Dutch carbon emission ruling.
  • European Commission proposes a landmark “Fit for 55” package of climate and energy legislation.
  • European countries announce their intention to restrict PFAS.
  • New waste gas BREF for the chemical sector.
  • European Commission proposes a new General Product Safety Regulation.

For more detailed information on these developments, download a copy from our website.  You can also subscribe to ensure that you receive our most recent edition each month.

US EPA Takes AIM at HFCs

green fieldIt’s déjà vu all over again.  Over the course of more than thirty years, EPA and industry partners successfully wound down usage of ozone-depleting chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) under the Significant New Alternatives Policy (SNAP) in Title VI of the Clean Air Act, enacted following the 1987 Montreal Protocol.  Under SNAP, HCFCs and CFCs were largely replaced with hydrofluorocarbons (HFCs) in a wide variety of industrial and commercial uses.  But while HFCs are much less harmful to the ozone layer, modern science now recognizes HFCs as extremely potent greenhouse gases, and so it has become necessary to replace the replacements.  The international community began addressing HFC usage through the 2016 Kigali Amendment to the Montreal Protocol, and the United States followed suit with legislation at the end of last year.

The 2020 American Innovation and Manufacturing Act (AIM Act) authorizes EPA to promulgate rules to reduce HFC production and usage to 15% of baseline levels by 2036.  The Act comes amidst a flurry of activity related to HFCs, including widespread state regulation and legislation.  Recently, the EPA proposed a rule to enact the AIM Act’s provisions by establishing a production and consumption allowance system.  Meanwhile, a coalition of state and local governments recently petitioned for rulemaking seeking even more robust action against HFCs.  Assertive legislation and rulemaking now looks to force HFCs the way of CFCs.   Continue Reading

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