July 2018 Update: Key Developments in UK and EU Environment, Safety and Health Law, Procedure and Policy

Electronic NewsWe are pleased to share with you the latest edition of “frESH Law Horizons: Key Developments in UK & EU Environment, Safety and Health Law, Procedure and Policy”. In our July edition, we look at 37 new developments that may be relevant to anyone with an interest in the environmental, safety and health sector. Some of the top stories this month include:

  • A look at the government white paper on the UK/UK relationship post Brexit
  • A multi-agency initiative to detect waste crime and non-compliance with waste legislation
  • A reminder to company directors that there are potentially severe liabilities for regulatory offences
  • A nation-wide recall of frozen vegetables from supermarkets following a listeria risk
  • How the Automated and Electric Vehicles Act 2018 is making provisions in relation to transport technology
  • Dangerous gas installations see a utilities company fined £466,000

For more detailed information on these developments, as well as access to the remaining summaries, make sure you download a copy from our website. You can also subscribe to ensure you receive our most recent edition every month.

Warning: One Month Left Before New California Prop 65 Regulations Become Operative on August 30, 2018

We are now in the final month before the newly-amended Clear and Reasonable Warning regulations in California’s Proposition 65 (Prop 65) take effect on August 30, 2018. Businesses have had since August 30, 2016 to prepare and comply with the newly-amended regulations, and we have been posting regular reminders (1-year reminder and 6-month reminder), which contain more detail about the history of Prop 65, the new requirements in the regulations, and the potential increase in enforcement litigation resulting from alleged noncompliance with the safe harbor warning requirements. Continue Reading

Food Labeling Issues and Trends: Lessons from Recent Allergen Recalls

I was pleased to have an article published in a recent ABA Natural Resource and Environment publication. The article covered “Food Labeling Issues and Trends in Europe: Lessons for US and Product RecallEuropean Practitioners from Recent Allergen Recalls”, and is now available for download here.

Since writing the article, there have been a number of further examples of recalls due to safety or allergen issues.  Only this week, the Food Standards Agency (FSA) issued a notification in relation to a peanut-flavoured snack product, which contains peanuts and may contain traces of other nuts and gluten, which are not stated in English on the label. Last week, both a noodle product was recalled for undeclared milk, another product was recalled because milk was not highlighted in bold on the label and a number of products were recalled for undeclared sesame. Most were reported on the Rapid Alert System for Food and Feed (RASFF).

In July, a listeria risk in frozen vegetables prompted recalls from supermarkets (press reports provided a full list of products recalled), with the FSA advising consumers not to eat affected products and to return them to the store for a full refund. The notification was published on RASFF, which indicates that it was notified as a result of the company’s own checks; and the product has been distributed to other member countries.

The continuing trend of recalls for allergens and other reasons are a reminder to operators which distribute foods or other products across jurisdictions, that it is worth ensuring that recall protocols and procedures cover global supplies properly, as potential issues will likely be notified rapidly in other countries (via RASFF for the EU and INFOSAN more widely and equivalent information networks for non-food products).

US Agencies Propose Sweeping Changes to Endangered Species Act Implementing Regulations

The US Fish and Wildlife Service (FWS) and the National Oceanic Atmospheric Administration (NOAA) Fisheries, two federal agencies charged with administering the Endangered Species Act (ESA or Act), recently announced major revisions to the regulations implementing the Act. The proposed rules were published in the Federal Register on July 25, 2018 and have already garnered significant attention, including strong criticism from environmental groups.

The agencies propose revisions to the regulations implementing the three different sections of ESA, Section 4, Section 4(d), and Section 7. Continue Reading

US Federal Energy Regulatory Commission Moves to Limit Downstream Analysis of Pipeline GHG Emissions

The Federal Energy Regulatory Commission (FERC) issued a statement on May 18, 2018 clarifying that the Agency will only analyze both upstream and downstream environmental effects of pipeline Greenhouse Gas (GHG) emissions when those effects are “sufficiently causally connected to and are reasonably foreseeable effects of the proposed actions.”  The policy statement was part of an order denying a request for rehearing of the certificate FERC granted to the Dominion Energy Transmission’s pipeline project.  The policy statement represents an attempt by FERC to narrow the D.C. Circuit Court of Appeal’s decision in the August 2017 case Sierra Club v. FERC.  The Agency explained that, “[f]or a short time, the Commission went beyond that which is required by NEPA” when it “provided the public with information regarding the potential impacts associated with unconventional natural gas production and downstream combustion of natural gas” for certain projects. On July 16, 2018, pipeline opponents requested the D.C. Circuit review FERC’s decision on the project on the basis that FERC should have analyzed the downstream GHG impacts.

In August 2017, the D.C. Circuit Court of Appeals in Sierra Club v. FERC ruled FERC provided an insufficient analysis of downstream GHG emissions, vacated the Southeast Market Pipelines Project’s certificates, and directed the Agency to issue a supplemental environmental impact statement (SEIS).  Specifically, the court determined the Agency should have considered the “amount of power-plant carbon emissions that the pipelines will make possible” or explained why it could not do so.  The basis for this conclusion was that agencies undertaking National Environmental Policy Act (NEPA) reviews should consider indirect environmental effects that are reasonably foreseeable in addition to direct effects.

On February 5, 2018, FERC issued an SEIS as directed, and on March 14, 2018, a divided FERC finally re-issued the certificates for the project based on the revised analysis.  However, the order for re-authorization, and underlying SEIS, still maintained the position that “there is no widely accepted standard to ascribe significance to a given rate or volume of GHG emissions.”  The Agency and industry representatives have sought extensions in order to file petitions for writ of certiorari to the US Supreme Court.

Mountain Valley Pipeline Denial Rehearing

FERC is proceeding with approvals of pipeline projects under this narrower analysis and is in the process of revising its decades old pipeline analysis policy. In line with its May 2018 statement, FERC recently denied a request for rehearing on June 15, 2018 on its certificate granted to the Mountain Valley Pipeline. Multiple parties had requested a rehearing in November 2017, including individuals, environmental groups, and counties.  Relying on the decision in Sierra Club v. FERC, parties argued that FERC failed to adequately analyze and quantify the climate change impacts of the downstream use of natural gas being transported by the project.  While FERC did not deny the effects of climate change in the final environmental impact statement (EIS), the Agency countered that it did “not believe GHG Emissions from the downstream use of natural gas transported by the project fall within the definition of indirect impacts or cumulative impacts.” Specifically, the project in question differed from the one in Sierra Club v. FERC, the Agency explained in a footnote, because the end source of the gas was the market instead of an identifiable gas-fired electric generating plant. Furthermore, FERC pointed out that it did address downstream consumption emissions in its Final Environmental Statement.

FERC Seeking Input on Pipeline Policy 

It remains to be seen if FERC will continue this limitation on GHG emissions analysis when it issues its revised pipeline policy.  On April 19, 2018, FERC announced it was seeking input on its policies on interstate natural gas transportation facilities, and the public comment period ended on July 25, 2018.  One of the four general areas FERC highlighted included “the Commission’s evaluation of alternatives and environmental effects under NEPA and the NGA [Natural Gas Act].”  The current policy statement sources from 1999 and is entitled “Certification of New Interstate Natural Gas Pipeline Facilities – Statement of Policy” (Docket No. PL99-3-000).” The US EPA submitted a comment recommending use of its tools by FERC when the Agency does proceed with GHG emissions analyses, but the agency recently clarified its comment was not meant to address the question of whether FERC should proceed with such analysis.

In spite of the D.C. Circuit’s decision in Sierra Club v. FERC, the Agency is attempting to narrow the scope of pipeline projects in which it has to provide a full analysis of upstream and downstream GHG emissions.  Recent orders have been split along party lines among the five commissioners.  While such a policy position may be favorable to pipeline projects seeking certificates from FERC, it also presents the risk of further legal challenges by environmental groups as to the sufficiency of FERC’s review of GHG emissions under NEPA and the Natural Gas Act.  Such a risk can have tangible impacts on a project, such as when the pipeline under consideration in the Sierra Club v. FERC case faced the risk of shutdown in spring 2018.

 

Brexit: will there be a potential supply chain disruption for the chemicals sector?

Following her appearance at the House of Lords EU and Environment Sub-Committee to give evidence about the Future of REACH regulations post Brexit, Squire Patton Boggs attorney Anita Lloyd provided further details for The UK in a Changing Europe about the potential effects of Brexit on chemical regulation.  Due to the way that REACH works on a whole supply-chain basis, when the UK leaves the EU, there could be significant disruption to cross-border supply chains and the many billions of pounds’ worth of trade in chemicals, unless measures can be agreed with the EU.  Read more here on the complexities surrounding the EU REACH Regulation and the legal challenges posed by Brexit, particularly in a no-deal scenario.

June 2018 Update: Key Developments in UK and EU Environment, Safety and Health Law, Procedure and Policy

Electronic NewsWe are pleased to share with you the latest edition of “frESH Law Horizons: Key Developments in UK & EU Environment, Safety and Health Law, Procedure and Policy”. This month we review 40 new developments that may be of interest to those in the environmental, safety and health sector, including:

  • BUPA was fined £3 million after pleading guilty to a breach at a care home.
  • The Sentencing Council consults on a general guideline for offences not covered by specific guidance.
  •  New laws to restrict drones flying above 400 feet and within 1 kilometre of airport boundaries.
  • Circular Economy Task Force presents a report that recycled plastic could supply nearly three-quarters of UK demand.
  • ECHA add eight new substances of very high concern (SVHC) to the Candidate Listfollowing the identification by the ECHA Member State Committee (MSC).

For more detailed information on these developments, as well as access to the remaining summaries, make sure you download a copy from our website. You can also subscribe to ensure you receive our most recent edition every month.

UK Parent Company Liability: The Duty of Care Tests

On 4 July 2018, the Court of Appeal in England and Wales handed down its judgment in AAA & Ors. v Unilever PLC and Unilever Tea Kenya Limited [2018] EWCA Civ 1532. The Court of Appeal determined that parent companies will only owe a duty of care in respect of its subsidiaries’ activities, where it has effectively taken over the management of the subsidiary, or has provided it with relevant advice.

The case surrounds claims brought by the victims of violence in Kenya, including employees and former employees of the defendants, following an economic and humanitarian crisis that erupted after the presidential election in December 2007. The victims claimed that UTKL and Unilever failed to discharge their duties of care.

The case centred upon parent company liability, and also considered the issue of jurisdiction. The victims brought an intended group action claim in the English courts against UTKL, which is domiciled in Kenya, and its English parent, Unilever, which is domiciled in England (and the Netherlands). In order to bring a claim in England and Wales, the claimants had to demonstrate that there was “a good arguable claim against Unilever, which can then be treated as the so-called anchor defendant.

The Court of Appeal stated that parent company liability is subject to the same 3 part test under Caparo v Dickman [1990] 2 AC 605, in relation to the need to find a proximity of relationship, foreseeability and damage (reiterating the Court’s previous decision in Chandler v Cape PLC [2012] 1 WLR 3111).

Following this, Lord Justice Sales stated that parent companies may then owe a duty of care in two scenarios:

  1. where the parent has substantively taken over the management of the relevant activity in the subsidiary; and/or
  2. the parent has given relevant advice to the subsidiary about how it should manage a particular risk.

In this case, the appellants had tried to argue the second limb, that UTKL had relied upon advice given by Unilever in relation to the management of risk in respect of political unrest and violence in Kenya. The Court did not accept this however, and stated that the appellants were “nowhere near being able to show that they have a good arguable claim against Unilever on this basis. The witness evidence and the documentary evidence… shows that UTKL did not receive relevant advice from Unilever in relation to such matters. The evidence also shows clearly that UTKL understood that it was responsible itself for devising its own risk management policy and for handling the severe crisis which arose in late 2007, and that it did so”.

As such, the Court of Appeal did not consider that either of the two categories applied in this case, and Unilever did not owe the victims a duty of care.   Therefore, without a claim against the parent company, the claim against UTKL could not be heard in the English courts.

Parent company liability is often an important factor when considering bringing a claim, particularly in relation to matters arising from incidents that occur abroad. Equally, it can be considered by regulators when deciding whether to take enforcement action, and against which parties. If you require further advice on parent company liability, or a copy of the Judgment, please contact a member of our UK ESH team.

US EPA Revises RCRA Definition of Solid Waste Rule to Comport with D.C. Circuit Rulings

On May 30, 2018, US EPA issued a final rule to revise the regulations associated with the 2015 Definition of Solid Waste (DSW) Rule.  US EPA performed this rulemaking to bring the regulations in line with the D.C. Circuit’s 2017 and 2018 rulings in American Petroleum Institute v. EPA (Case No. 09-1038), which vacated and amended certain portions of the 2015 DSW Rule.

The DSW Rule defines under RCRA what materials are subject to Subtitle C regulation as discarded solid waste materials, as opposed to those materials appropriate for beneficial reuse and recycling.  The regulations at issue have been the subject of several legal challenges by both industry and environmental groups and have undergone a number of administrative modifications since the 1980s.  In 2008, US EPA published a final rule revising the definition of solid waste to include two exclusions for hazardous secondary material recycled under the control of the generator (known as the “generator-controlled” exclusion), and for hazardous secondary material transferred to a third party for recycling (known as the “transfer-based” exclusion).  The 2008 rule also codified certain factors for determining when recycling is “legitimate.”

The 2015 version of the DSW Rule modified and restructured these exemptions by replacing the transfer-based exclusion with a “verified recycler” exclusion and by incorporating stronger provisions to ensure legitimate recycling (namely, by making mandatory one of the legitimacy factors that was previously only considered, defining containment of materials, and imposing emergency preparedness and response requirements).  However, a legal challenge resulted in portions of the 2015 Rule (including the verified recycler exclusion) being vacated by the U.S. Court of Appeals for the D.C. Circuit in 2017.  In March 2018, the Court further modified its decision upon a petition for reconsideration to clarify certain aspects, but left a number of aspects to be addressed by new rulemaking.  As a consequence, the 2015 Rule has been left somewhat battered by the removal, replacement and reinstatement of key provisions governing third-party recycling, with several aspects in need of further revision to address omissions or misplaced references.

The new rulemaking addresses these outstanding issues and brings the regulations in line with the Court’s 2017 decision and 2018 decision modification in a couple of key ways.  In particular, the final rule removes the verified recycler exclusion and reinstates the transfer-based exclusion, and also reverts the fourth legitimacy requirement to the 2008 revision. Continue Reading

Deadline Nears for US EPA TSCA Nanomaterials Reporting Requirement

The August 14, 2018 deadline for reporting under US EPA’s nanomaterials reporting rule is rapidly approaching.

US EPA promulgated the rule in January 2017 under Section 8(a) of the Toxic Substances Control Act (TSCA). 82 Fed. Reg. 3641 (Jan. 12, 2017). The rule requires any person that manufactured, imported or processed a covered nanomaterial substance during the three years prior to the rule’s effective date to report certain information to US EPA within one year of the effective date.

Although the rule initially was to be effective in May 2017, US EPA extended the effective date until August 14, 2017, making the reporting deadline August 14, 2018. 82 Fed. Reg. 22088 (May 12, 2017). The extension also adjusted the beginning and end dates of the three-year period for which reporting is required.

The rule does not contain a formal definition of nanomaterials. Instead, the rule requires reporting of chemical substances that are solids at 25° Celsius and standard atmospheric pressure; that are manufactured or processed in a form where any particles (including aggregates and agglomerates) are in the size range of 1–100 nanometers (nm) in at least one dimension; and that are manufactured or processed to exhibit one or more “unique and novel properties.”

“Unique and novel properties” are defined in the rule to mean “any size-dependent properties that vary from those associated with other forms or sizes of the same chemical substance, and such properties are a reason that the chemical substance is manufactured or processed in that form or size.” In the preamble to the rule, US EPA explained that a substance is not reportable simply because it contains particles in the size range of 1–100 nm. Instead, the substance “must also demonstrate a size-dependent property different from properties at sizes greater than 100 nm and is a reason the chemical is manufactured or processed in that form or size.” The rule also contains exemptions for certain substances, including substances manufactured, imported or processed for R&D purposes, as well as substances that contain less than 1% by weight of any particles, including aggregates and agglomerates, in the size range of 1–100 nm.  Additionally, the rule exempts small businesses with sales of less than $11 million per year from the reporting requirement.

Persons who manufactured, imported or processed nanomaterial substances covered by the rule during the three-year period prior to August 14, 2017 must report the following information to US EPA by August 14, 2018 for each such substance: Continue Reading

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