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American Coatings Association and California Paint Council Oppose California SB 193

Critics argue against components of the proposed bill that would require local manufacturers to supply regulators with proprietary information pertaining to their customer lists and purchasing history.

On April 16, the American Coatings Association, or ACA, and its California Paint Council, CPC, sent a letter to California State Sen. William Monning, opposing a bill he sponsored, SB 193, "Hazard Evaluation System and Information Service," which, as drafted, has raised implementation questions and concerns for industry.

California law requires the state Department of Industrial Relations (DIR), with the Department of Public Health (DPH), to establish a repository of current data on toxic materials and harmful physical agents in use (or potentially in use) in workplaces in the state. That law requires the repository, among other things, to provide information and collect and evaluate data relating to possible hazards to employees resulting from exposure to toxic materials or harmful physical agents. That law expressly does not require employers to report any information not otherwise required by law.

SB 193 was introduced by Sen. Monning on Feb. 7. The bill would require, with some exceptions, for every product the final destination of which may be a place of employment within the state of California, that chemical manufacturers, formulators, suppliers, distributors, importers, and their agents provide to the repository the names and addresses of their customers who have purchased specified chemicals (or commercial products containing those chemicals), and certain other information related to those shipments, upon written request from the repository. While the bill would deem the names and addresses of customers to be confidential, it would also provide that DPH be entitled to reimbursement of attorney's fees and costs incurred in seeking an injunction to enforce this requirement.

In its letter, ACA noted that California employers are required to comply with a variety of state and federal laws to protect employees who come into contact with chemicals in the workplace. In fact, on March 26, 2013, the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) issued the final rule to the §1910.1200 Hazard Communication standard, aimed at improving the quality and consistency of information provided to employers and employees regarding chemical hazards in the workplace and associated protective measures. This new standard also requires manufacturers and importers to evaluate the downstream uses of their products, and to disseminate the potential hazards to their users.

ACA underscored that these revisions will presumably reduce confusion about chemical hazards in the workplace, facilitate safety training, and improve the understanding of those hazards. OSHA's standard classifies chemicals according to their health and physical hazards (as well as other revised criteria for classification), and establishes consistent labels and safety data sheets for all chemicals manufactured and shipped domestically and imported into the United States. The provisions to the new rules are currently under voluntary compliance and will be fully implemented by 2016. California OSHA is also in the process of aligning its hazard communication program to communicate potential hazards in the workplace in a manner similar to these federal regulations.

However, presuming SB 193's enactment, DIR could theoretically issue requests on Jan. 1, 2014, to thousands of businesses, requesting customer information on thousands of chemicals, without any clear indication as to how this information would be used and to what extent the information will help address a potential public health threat in the workplace. The bill also specifies that DIR can request other "information related to those shipments" of commercial products, yet provides no definition indicating the type of information that could be requested.

ACA and CPC argued that depending upon the products in question and industries targeted, SB 193 could result in an enormous cascade of information and data that could easily overwhelm DIR, raising the question of how DIR could put this information to meaningful use in actually enhancing workplace safety.

Instead, ACA and CPC offered recommendations to focus the scope of the measure in a way that would ensure DIR is concentrating on substances they believe may pose a risk in the workplace, and for which current workplace hazard communication may be inadequate. Suggestions included:
 

  • Notifying regulated businesses in a written request that DIR is seeking information on a specific chemical, the specific reason(s) why this chemical has been identified, information on the specific public health concern that DIR seeks to evaluate, an explanation as to how obtaining customer list information will help address the potential health concern, and how the issue cannot be addressed through existing health and safety regulations.
  • Making reasonable attempts to consult with manufacturers, formulators, suppliers, distributors, importers, and respective trade associations so that DIR can obtain relevant information held by these entities that may not be publicly available, but that could be potentially helpful in addressing DIR questions or concerns.
  • Should DIR believe it is necessary to provide information about this identified chemical to affected businesses and employees, it should first make a request for manufacturers, formulators, suppliers, distributors, and importers to distribute DIR materials to its customers within 30 days.
  • If, after 30 days, DIR makes a determination that it is unsatisfied with the distribution of information, it should only then request access to customer lists.

As the bill correctly notes, customer information is often of great competitive significance and must be held as highly confidential. A list of current and past customers is an extremely sensitive piece of information for businesses. ACA and CPC maintain that though the bill contains provisions to protect information from being publically disclosed, the open-ended authority that DIR is granted, coupled with a lack of language governing when and how DIR will request information, would result in uneasiness in the regulated community. Further, the bill provides no indication of how other state agencies would be allowed to access this information, and therefore no assurances that it will be accessed for purposes consistent with the intent under which the authority is being granted. A department overwhelmed with information submittals might have more difficulty protecting this sensitive information. To further ensure the protection of sensitive information, ACA and CPC recommended that DIR should only be granted access to customer lists through a clearly defined process and under very specific circumstances.

ACA and its CPC were joined in their opposition by the American Chemistry Council, California Chamber of Commerce, California League of Food Processors, California Manufacturers and Technology Association, Chemical Industry Council of California, and Consumer Specialty Products Association.

An April 23 hearing is scheduled for SB 193 before the California Senate Committee on the Judiciary.

Source: American Coatings Association


 

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