[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
   REGULATION OF NEW CHEMICALS, PROTECTION OF CONFIDENTIAL BUSINESS 

                      INFORMATION, AND INNOVATION
=======================================================================



                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 11, 2013

                               __________

                           Serial No. 113-68


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
              Subcommittee on Environment and the Economy

                         JOHN SHIMKUS, Illinois
                                 Chairman
PHIL GINGREY, Georgia                PAUL TONKO, New York
  Vice Chairman                        Ranking Member
RALPH M. HALL, Texas                 FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               GENE GREEN, Texas
JOSEPH R. PITTS, Pennsylvania        DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
ROBERT E. LATTA, Ohio                JERRY McNERNEY, California
GREGG HARPER, Mississippi            JOHN D. DINGELL, Michigan
BILL CASSIDY, Louisiana              JANICE D. SCHAKOWSKY, Illinois
DAVID B. McKINLEY, West Virginia     JOHN BARROW, Georgia
GUS M. BILIRAKIS, Florida            DORIS O. MATSUI, California
BILL JOHNSON, Missouri               HENRY A. WAXMAN, California, ex 
JOE BARTON, Texas                        officio
FRED UPTON, Michigan, ex officio


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     1
    Prepared statement...........................................     3
Hon. Paul Tonko, a Representative in Congress from the State of 
  New York, opening statement....................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   104
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................   105

                               Witnesses

Craig Morrison, CEO of Momentive Performance Materials Holding, 
  LLC, and Chairman of The Executive Committee, American 
  Chemistry Council..............................................     5
    Prepared statement...........................................     8
    Answers to submitted questions...............................   134
Len Sauers, Vice President, Global Sustainability, Procter and 
  Gamble.........................................................    24
    Prepared statement...........................................    26
    Answers to submitted questions...............................   154
David Isaacs, Vice President, Government Affairs, Semiconductor 
  Industry Association...........................................    36
    Prepared statement...........................................   162
    Answers to submitted questions...............................   166
Rainer Lohmann, Professor of Oceanography, University of Rhode 
  Island.........................................................    49
    Prepared statement...........................................    51
    Answers to submitted questions...............................   171
Heather White, Executive Director, Environmental Working Group...    65
    Prepared statement...........................................    67
    Answers to submitted questions...............................   175

                           Submitted Material

Letter of July 11, 2013, from The Center for International 
  Environmental Law to the subcommittee, submitted by Mr. Waxman.   107
Letter of July 9, 2013, from 3M to the subcommittee, submitted by 
  Mr. Gingrey....................................................   112
Letter of July 11, 2013, from the American Cleaning Institute to 
  the subcommittee, submitted by Mr. Gingrey.....................   116
Statement of CSPA, submitted by Mr. Gingrey......................   118
Letter of July 10, 2013, from the Department of Toxic Substances 
  Control to the subcommittee, submitted by Mr. Waxman...........   125
Executive summary entitled, ``Driving Innovation,'' submitted by 
  Mr. Waxman.....................................................   130


   REGULATION OF NEW CHEMICALS, PROTECTION OF CONFIDENTIAL BUSINESS 
                      INFORMATION, AND INNOVATION

                              ----------                              


                        THURSDAY, JULY 11, 2013

                  House of Representatives,
       Subcommittee on Environment and the Economy,
                           Committee on Energy and Commerce
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 9:43 a.m., in 
Room 2322 of the Rayburn House Office Building, Hon. Phil 
Gingrey [Vice Chairman of the Subcommittee] presiding.
    Members present: Representatives Gingrey, Murphy, Latta, 
Cassidy, Johnson, Tonko, Green, McNerney, Barrow, and Waxman 
(ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Press Secretary; Sean Bonyun, Communications Director; 
Jerry Couri, Senior Environmental Policy Advisor; David 
McCarthy, Chief Counsel, Environment and the Economy; Andrew 
Powaleny, Press Secretary; Jacqueline Cohen, Democratic Senior 
Counsel; Greg Dotson, Democratic Staff Director, Energy and 
Environment; and Caitlin Haberman, Democratic Policy Analyst.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Gingrey. The committee will come to order. The chair 
recognizes himself for 5 minutes for an opening statement.
    Last month, the subcommittee held a hearing on the history 
and the impact of Title 1 of the Toxic Substance Control Act, 
better known as TSCA. The June 13 hearing was a good start to 
understanding a law as complex as it is broad. Today, we take a 
deeper dive and focus on new chemical regulation protection of 
sensitive businesses' information, and their effect on 
innovation. I believe evaluating TSCA Sections 5, New 
Chemicals, and 14, Disclosure of Data, is fundamental to 
judging progress in new technologies and manufacturing 
frontiers in our country.
    Testimony in our June 13 hearing supports this notion. 
American companies are on the cutting edge of chemical 
innovation, and the new chemical structure in TSCA has allowed 
us to lead the world. For example, the European Union's new 
chemical requirements saw 3,000 new chemicals introduced, while 
the United States saw six times as many new chemicals 
introduced over that same period of time. One out of six of the 
chemicals currently used in commerce did not exist in 1979.
    TSCA Section 5 does not merely set out the notification 
requirements for these chemicals, it provides EPA an 
opportunity to review and evaluate information about a chemical 
to determine if its manufacture, if its processing, commercial 
use, or disposal should be limited, delayed, or prohibited. To 
do this job, pre-manufacturing notices, PMNs, submitted to EPA 
include information on chemical identity, description of 
byproducts, anticipated production volumes, molecular formula, 
intended categories of use, and other available information on 
the substance. EPA can employ predictive modeling technologies 
to help it decide if a new chemical raises concerns. EPA then 
may also extend the review period of a chemical or new use of a 
chemical if it needs more than 90 days to consider all of the 
facts before acting. EPA then decides whether entry into 
commerce is allowed, allowed with restrictions, allowed after 
submission of additional data, or allowed with certain 
regulatory or testing actions applied. As of May, 2013, I am 
told that 52 percent of chemicals for which EPA received a pre-
manufacturing notice, PMN, actually went to market. According 
to former EPA Chemicals Office Director Charlie Auer, who 
testified at our June hearing, 90 percent of new chemicals 
program decisions are made within 90 days, and over 15,000 new 
chemicals, or 30 percent, have received some kind of regulatory 
action under TSCA Section 5.
    We want EPA to have information to make good decisions 
about a chemical; however, we must be careful about disclosure 
of that detailed information, obviously. In a recent paper on 
trade secret privacy, William Fitzpatrick and two others 
suggested that approximately 70 percent of the market value of 
U.S. firms resides in their trade secrets and their 
intellectual properties. This is what drives innovation.
    TSCA Section 14 protects information submitted to the EPA 
as a privileged and confidential trade secret. Disclosure by 
EPA employees is not permitted, except to other federal 
employees, or when necessary to protect the health or the 
environment. Beth Bosley, who with six employees operates a 
specialty chemical maker in Pittsburgh, reinforced these points 
at our last meeting: one, disclosure of chemical identity may 
be all it takes to give a way a competitive advantage to an 
offshore manufacturer; and second, the majority of Freedom of 
Information, FOIA Act requests to EPA on new chemicals come 
from potential competitors, many of which are overseas, not 
curious members of our public.
    While we cannot have a system that prevents regulators from 
having access to information that allows them to make important 
judgments on risk, I think we should not be naive about the 
value of this information to non-regulatory interests, their 
cleverness in trying to obtain and exploit, and the real damage 
its leak could cause to American jobs and our prosperity.
    I want to thank our distinguished witnesses for joining us 
today to help us get a better handle on what the law is, how 
EPA has been implementing it, what it is like being regulated 
under it, and where witnesses think its successes and 
shortcomings lie. I urge members of the subcommittee to make 
every effort at this hearing to learn the fundamentals of these 
sections of this law, TSCA.
    [The prepared statement Dr. Gingrey follows:]

                Prepared statement of Hon. Phil Gingrey

    Last month, the subcommittee held a hearing on the history 
and impact of Title I of the Toxic Substances Control Act 
(TSCA). The June 13th hearing was a good start to understanding 
a law as complex as it is broad. Today, we take a deeper dive 
and focus on new chemical regulation, protection of sensitive 
business information, and their effect on innovation.
    I believe evaluating TSCA sections 5 (new chemicals) and 14 
(disclosure of data) is fundamental to judging progress in new 
technologies and manufacturing frontiers in our country. 
Testimony in our June 13th hearing supports this notion: 
American companies are on the cutting edge of chemical 
innovation, and the new chemical structure in TSCA has allowed 
us to lead the world. For example, the European Union's new 
chemical requirements saw 3,000 new chemicals introduced while 
the United States saw six times as many new chemicals 
introduced over the same period in time.
    One out of six of the chemicals currently used in commerce 
did not exist in 1979. TSCA Section 5 does not merely set out 
the notification requirements for these chemicals; it provides 
EPA an opportunity to review and evaluate information about a 
chemical to determine if its manufacture, processing, 
commercial use, or disposal should be limited, delayed, or 
prohibited.
    To do this job, Pre-Manufacturing Notices (PMNs) submitted 
to EPA include information on chemical identity, description of 
byproducts, anticipated production volumes, molecular formula, 
intended categories of use, and other available information on 
the substance. EPA can employ predictive modeling technologies 
to help it decide if a new chemical raises concern. EPA may 
also extend the review period of a chemical or new use of a 
chemical if it needs more than 90 days to consider all the 
facts before acting. EPA then decides whether entry into 
commerce is allowed, allowed with restrictions, allowed after 
submission of additional data, or allowed with certain 
regulatory or testing actions applied.
    As of May of 2013, I'm told that 52 percent of chemicals 
for which EPA received a Pre-Manufacturing Notice (PMN), 
actually went to market. According to former EPA chemicals 
program office director, Charlie Auer, who testified at our 
June hearing, 90 percent of new chemicals program decisions are 
made within 90 days and over 15,000 new chemicals--or 30 
percent--have received some kind of regulatory action under 
TSCA section 5.
    We want EPA to have information to make good decisions 
about a chemical. However, we must be careful about disclosure 
of that detailed information. In a recent paper on trade secret 
piracy, William Fitzpatrick and two others suggested that 
approximately 70 percent of the market value of U.S. firms 
resides in their trade secrets and intellectual properties. 
This drives innovation.
    TSCA section 14 protects information submitted to EPA as a 
privileged and confidential trade secret. Disclosure by EPA 
employees is not permitted, except to other federal employees, 
or when necessary to protect health or the environment.
    Beth Bosley, who--with six employees--operates a specialty 
chemical maker in Pittsburgh, reinforced these points at our 
last hearing:
    1. Disclosure of chemical identity may be all it takes to 
give away a competitive advantage to an offshore manufacturer, 
and
    2. The majority of Freedom of Information Act requests to 
EPA on new chemicals come from potential competitors, many of 
which are overseas, not curious members of the public.
    While we cannot have a system that prevents regulators from 
having access to information that allows them to make important 
judgments on risk, I think we should not be naive about the 
value of this information to non-regulatory interests, their 
cleverness in trying to obtain and exploit it, and the real 
damage its leak could cause to American jobs and prosperity.
    I thank our distinguished witnesses for joining us today to 
help us get a better handle on what the law is, how EPA has 
been implementing it, what it is like being regulated under it, 
and where witnesses think its successes and shortcomings lie.
    I urge members to make every effort at this hearing to 
learn the fundamentals of these sections of this law.###

    Mr. Gingrey. I now yield 5 minutes to the ranking member of 
our subcommittee, Mr. Tonko from New York.

   OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Tonko. Thank you, Mr. Chair. Good morning, and I am 
pleased to be here this morning for this second hearing on the 
Toxic Substances Control Act, better known as TSCA. And thank 
you, Chair Gingrey, Dr. Gingrey. I am sure you will do an 
excellent job of filling in for our colleague, Chairman 
Shimkus, who cannot be with us today. It is a pleasure to be 
with you at the hearing. And welcome to all of our 
distinguished guests as members of the panel.
    Our first hearing provided a very useful overview of the 
Toxic Substances Program administered by the Environmental 
Protection Agency. We have an opportunity today to hear from an 
excellent panel of witnesses on two particular aspects of this 
law, Section 5, the New Chemicals Review Program, and Section 
14, the provision that governs the handling of confidential 
business information.
    The New Chemicals provision was intended to provide an 
opportunity to screen new chemicals coming into commerce for 
possible safety problems. The process was also to provide 
sufficient information about the chemicals in commerce to 
enable EPA to make a credible evaluation of their safety.
    The law currently falls short of these goals. The 
information available on chemicals has failed to keep pace with 
the numbers of chemicals in commerce. We have developed 
incredible analytical, computational, and communications tools 
over the past few decades. We should be able to apply these 
tools more effectively to produce reliable information about 
the chemicals in commerce and make it available to the public, 
but this has not happened to the extent needed. An effective 
early evaluation process also provides benefits to industry. 
Prevention certainly is much less expensive than mitigation. 
The earlier a company detects a potential problem with their 
product, the easier and less expensive it is to engineer around 
that problem or to pursue a different design.
    We need chemicals. We use them every day in a wide range of 
products essential to the quality of our lives and to our 
modern society. But these products must be safe for people and 
must be safe for the environment. We need to find the proper 
balance. The program must enable manufacturers to bring new 
chemicals to the market while providing assurances to the 
public that these substances are indeed safe. EPA needs 
sufficient resources to evaluate chemicals in an expeditious 
and reliable manner, and the authority to remove problem 
substances from the market in a timely and orderly fashion. In 
a fast-paced, competitive global economy, protecting trade 
secrets is important and is challenging, but an overuse of 
confidential business information claims is unwarranted and 
serves only to bar the members of the public from information 
they need to make informed choices about the products they 
purchase and that they use.
    I expect we will hear a variety of views today on the type 
of extent of changes that are needed to improve this law. 
Working together, however, we can update and improve this law 
so that it works for everyone.
    I look forward to the testimony of all of our expert 
witnesses, and I thank you all for participating this morning 
and for sharing your views on what I believe is an incredibly 
important topic. Thank you.
    With that, Mr. Chairman, I yield back.
    Mr. Gingrey. I thank the gentleman from New York, and if 
there are any other members seeking time for an opening 
statement--seeing none, the chair wishes to recognize Mr. Latta 
for the purpose of introducing the first two of our witnesses. 
I yield to the gentleman from Ohio.
    Mr. Latta. Well I thank the chairman for yielding to me, 
and I appreciate it. I would just like to introduce our two 
first witnesses today, and both from Ohio. You know, in the 
Buckeye State, we like to stick together.
    Our first witness that will be testifying today is Mr. 
Craig Morrison, and Mr. Morrison is the President and Chief 
Executive Officer of Momentive Performance Materials Holding, 
and its operating subsidies--subsidiaries. It is based in 
Columbus, Ohio, and Momentive is a world leader in specialty 
chemicals and materials.
    Our next witness that will be testifying is from Procter 
and Gamble, and that is Mr. Len Sauers, who is Vice President 
for Global Sustainability, Product Safety, and Regulatory 
Affairs. Of course, Procter and Gamble is located in 
Cincinnati.
    I just want to thank you both for being here to testify, 
and with that, Mr. Chairman, I yield back.
    Mr. Gingrey. And I will now introduce our other three 
witnesses. Mr. David Isaacs is Vice President of Government 
Affairs for the Semiconductor Industry Association. Welcome, 
Mr. Isaacs. Dr. Rainer Lohmann. Dr. Lohmann is a professor of 
oceanography from the University of Rhode Island. Welcome, 
Professor. And last, but certainly not least, Ms. Heather 
White, Executive Director of the Environmental Working Group. 
So I welcome all of our witnesses, and our first witness, we 
will start with Mr. Morrison. You are recognized for 5 minutes.
    I want to tell the witnesses that I am going to have a soft 
gavel, so don't worry about--I am not going to let you go 10 
minutes, but I certainly could let you go 5 \1/2\ to 6, and 
anything that you want to say that you don't get time to say, I 
ask unanimous consent for that to be submitted for the record. 
Hearing none, so ordered, and we will start with Mr. Craig 
Morrison.

  STATEMENTS OF CRAIG MORRISON, CEO OF MOMENTIVE PERFORMANCE 
     MATERIALS HOLDING, LLC, AND CHAIRMAN OF THE EXECUTIVE 
    COMMITTEE, AMERICAN CHEMISTRY COUNCIL; LEN SAUERS, VICE 
  PRESIDENT, GLOBAL SUSTAINABILITY, PROCTER AND GAMBLE; DAVID 
   ISAACS, VICE PRESIDENT, GOVERNMENT AFFAIRS, SEMICONDUCTOR 
      INDUSTRY ASSOCIATION; RAINER LOHMANN, PROFESSOR OF 
 OCEANOGRAPHY, UNIVERSITY OF RHODE ISLAND; AND HEATHER WHITE, 
        EXECUTIVE DIRECTOR, ENVIRONMENTAL WORKING GROUP

                  STATEMENT OF CRAIG MORRISON

    Mr. Morrison. Thank you, Mr. Chairman. I am Craig Morrison, 
President and Chief Executive Officer, and Chairman of 
Momentive Performance Materials based in Columbus, Ohio. I am 
testifying today on behalf of the American Chemistry Council, 
the ACC, where I am currently chairman of the board of 
directors. On behalf of the ACC and our members, I would like 
to thank the chairman and the committee for holding today's 
hearings.
    Momentive is a world leader in the development and 
production of specialty chemicals and materials. Momentive 
chemistries are used in thousands of products that enhance the 
safety, convenience, and efficiency of modern life. Our 
products can be found in automotive, energy, construction, 
personal care, electronics, and many other segments. In fact, 
Momentive materials can be found in the semiconductors produced 
by some of the members of the Semiconductors Industry 
Association, represented here by my fellow panelist, Mr. 
Isaacs. Momentive has over $7 billion in sales and operates 90 
manufacturing facilities in 37 countries, including 35 
manufacturing facilities in 18 States in the U.S., which 
provides approximately 4,000 American women and men high paying 
manufacturing jobs.
    Innovation is critical to the survival and growth of our 
industry and the downstream industries that we supply. To 
remain a market leader, our process of research, development, 
product testing and introduction is nearly constant. That is 
why an efficient, effective process to evaluate and approve new 
chemical innovations is vitally important to the chemical 
industry and why I will be focusing my comments on Section 5 of 
the Toxic Substances Control Act, known as the New Chemicals 
Program.
    There is broad agreement among industry and other 
stakeholders that TSCA needs to be reformed in order to reflect 
modern understanding of chemicals and today's scientific 
knowledge. We have been encouraged by the recent introduction 
of the bipartisan Chemical Safety Improvement Act in the Senate 
and by this committee's interest in examining current law to 
gain a better understanding of needed reforms. But it is also 
widely understood that TSCA's New Chemicals Program works well, 
a fact that has been reinforced by senior officials from 
previous administrations of both political parties.
    New chemicals undergo a thorough but efficient multi-step 
regulatory review before being approved for manufacture and 
marketing. This well-functioning framework has three particular 
strengths. First, the program ensures a scientifically robust 
review of the potential hazards and exposures associated with a 
chemical substance. Second, it allows the EPA to tailor the 
process to fit the specific characteristics of an individual 
chemistry. And third, the process and timing of EPA's review 
generally meets demands of the marketplace.
    The program leverages significant data about chemicals 
already available to the EPA, and employs advanced modeling 
techniques to predict a new chemical's physical and chemical 
properties, health hazards, and potential environmental 
effects. Section 5 also gives the EPA, which it regularly 
exercises, to request more testing and data about a new 
chemical if the Agency feels it is necessary, and to manage 
potential risks appropriately. This sophisticated risk-based 
approach reduces the cost of innovation and time needed for 
review and approval of new chemical products. It has 
facilitated a dialog between manufacturers and regulators that 
has helped industry move away from potentially problematic 
chemistries and has enabled the introduction of even safer and 
more sustainable chemistries.
    Momentive submits, on average, 10 new chemistries for 
review each year, and has submitted approximately 120 new 
chemistries for review over the past 10 years. Thanks to the 
EPA's efficient and well-functioning process, 90 percent of 
these new products introduced in the last 5 years have been 
able to come to market without the need for new animal testing. 
The advantage created by TSCA Section 5 for American innovation 
and competitiveness is clear. For example, the chemical 
industry invests $11 billion on average each year in research 
and development. Roughly 20 percent of all U.S. patents are 
chemistry-related. Three times more chemical innovations are 
brought to the market in the U.S. than other major regions of 
the world, such as Europe and Japan. Taken together with 
abundant, affordable supplies of domestic natural gas, the 
current New Chemicals Program helps create a strong incentive 
for companies that rely on chemistry to invest in the U.S. In 
fact, as of June, 2013, more than 100 new plants, expansions, 
and restarts of previously shuttered sites have been announced, 
which is projected to create 310,000 new American jobs by 2020.
    TSCA Section 5 established a rigorous process to evaluate 
and approve new chemistries in a way that protects health and 
the environment, enables continuous innovation, and allows new 
transformative products to come to market. Ensuring that this 
remains the case as part of any new effort or reform to 
modernize TSCA should be a top priority.
    Thank you very much for allowing me to participate, and I 
am happy to answer any questions.
    [The prepared statement of Mr. Morrison follows:]

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    Mr. Gingrey. Mr. Morrison, thank you.
    We will now hear from Mr. Len Sauers, Vice President of 
Global Sustainability with Procter and Gamble. Mr. Sauers, 5 
minutes.

                    STATEMENT OF LEN SAUERS

    Mr. Sauers. Thank you, Mr. Chairman and Ranking Member 
Tonko, members of the committee. Thank you for inviting me here 
today. As has been said, my name is Len Sauers. I am the Vice 
President for Sustainability, Product Safety, and Regulatory 
Affairs at the Procter and Gamble Company.
    P&G is the largest consumer products company in the world. 
Our products are used by 4.6 billion people around the world 
every day. We have operations in nearly 80 countries, and 99 
percent of American households have at least one P&G product in 
their home. Since our founding over 175 years ago, innovation 
has been integral to everything we do, and has been critical to 
our success. To support our innovation efforts today, we have 
dedicated R&D facilities in five continents, and we employ over 
9,000 R&D employees.
    P&G supports comprehensive modernization of TSCA for two 
primary reasons. First, federal action is urgently needed to 
enhance consumer confidence in the safety of the ingredients 
that they use in their everyday household products; and 
secondly, reform will give States confidence in a strong 
federal chemical management system, and thereby avoid a 
patchwork of varying requirements across multiple States, which 
will slow innovation and increase complexity.
    I would like to turn now to the regulation of new 
chemicals. Over the past 30 years, P&G has either submitted or 
been the major contributor to over 175 pre-manufacture notices. 
From our experience, we believe that both the law and EPA's 
governance of the New Chemicals Program have provided for 
scientifically robust reviews of the potential hazards and 
exposures of new chemicals entering the U.S. market and ensured 
appropriate health and environmental protection.
    There are many strengths to EPA's New Chemicals Program. 
One is the ability to tailor customly the data submitted in a 
PMN to the specific new chemical, as opposed to requiring a 
minimum data set. This approach assures that the information 
which is necessary and relevant to evaluate the safety of the 
chemical is received. EPA also utilizes modern science, such as 
sophisticated predictive models and structure activity 
relationships to evaluate new chemicals. New safety data is 
only requested when necessary to make decisions, thereby 
avoiding unnecessary animal testing. EPA is very receptive to 
pre-submission consultations with companies to help them plan 
for and anticipate the needs that EPA will have during their 
review. And finally, when deemed necessary, EPA has a broad 
range of regulatory tools that they can use to limit exposure 
to a new chemical.
    New chemical review is a key element of TSCA. It is P&G's 
opinion that the new chemical provisions of TSCA function 
efficiently and effectively.
    Now I would like to turn to confidential business 
information. P&G invests over $2 billion annually in research 
and development. We have a significant interest in protecting 
our new to the world chemistries and confidential business 
information from public disclosure to our competitors. We rely 
heavily on the protection of confidential business information 
afforded by Section 14 of TSCA to remain competitive in the 
marketplace, and are very concerned with EPA's recent decision 
to reverse current practice and publically disclose the 
specific structure of chemicals for which companies currently 
consider confidential, when the health and safety studies of 
these chemicals are made public.
    P&G fully supports transparency when health and safety 
information in EPA's administration of TSCA Section 14 and we 
agree that all health and safety data should be made public, 
but the disclosure of specific, confidential chemical 
identities is not needed for one to understand the safety of a 
new chemical. Structurally descriptive, generic chemical names, 
like those P&G provides today on its Web site as part of our 
consumer information program are sufficient. For example, 
consider P&G's development and market introduction of Tide Cold 
Water laundry detergent. P&G's scientists discovered a new 
technology that enabled consumers to get the same cleaning 
performance in cold water as they expected in hot or warm. This 
innovation enabled them to save money on their energy bills and 
meaningfully decrease their greenhouse gas emissions by no 
longer having to heat water for laundry. P&G submitted two PMNs 
to EPA to create Tide Cold Water. Over 150 pounds of safety 
data were submitted with the PMN, and we requested that the 
specific chemical structure of our new technologies be kept 
confidential to prevent our competitors from piecing together 
the required chemistry needed to duplicate the formula. P&G's 
development costs of the two PMNs totaled about $150 million. 
EPA'S new interpretation of TSCA Section 14 would have meant 
disclosing to competitors those confidential chemical 
identities and allowing them to benefit from our work without 
an investment on their part.
    A modernized TSCA must continue to strike the right balance 
of protection of confidential business information with public 
access to health and safety information about chemicals in 
commerce.
    Mr. Chairman, Ranking Member Tonko, thank you again for the 
invitation to testify this morning. P&G values our partnership 
with you and this subcommittee, and we remain committed to 
working with you to develop a practical, scientifically sound, 
chemical management program that strengthens protection of 
human health and the environment, and ensures U.S. leadership 
of sustainable innovation in the global marketplace. Thank you.
    [The prepared statement of Mr. Sauers follows:]
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    Mr. Gingrey. Mr. Sauers, thank you.
    Next witness, Mr. David Isaacs, Vice President of 
Government Affairs, Semiconductor Industry Association. Mr. 
Isaacs, you are up for 5 minutes.

                   STATEMENT OF DAVID ISAACS

    Mr. Isaacs. Thank you, Mr. Chairman and Ranking Member 
Tonko, and members of the subcommittee. My name is David 
Isaacs, and I am testifying on behalf of the Semiconductor 
Industry Association.
    SIA is the trade association of U.S.-based semiconductor 
companies that design and manufacture semiconductors, and as 
many of you know, semiconductors are the integrated circuits or 
sometimes called computer chips that are the basic building 
block for all modern electronics. These innovations enable the 
revolution we have experienced in information technology, 
communications, transportation, medical devices, and national 
defense, so they are a fundamental part of our economy and 
American economic leadership.
    Our industry employs directly a quarter of a million people 
in the United States, and supports over a million indirect 
jobs. We are consistently among the top export industries in 
the United States, and a key part of America's advanced 
manufacturing infrastructure.
    So before I speak to our views on the current TSCA system, 
I wanted to provide some context on our industry's use of 
chemicals. Our industry relies, in our manufacturing processes, 
on the--on specific chemicals that have particular chemical and 
physical properties and unique functional attributes that 
enable us to produce, you know, up to a billion transistors on 
a chip the size of your fingernail. We integrate these 
chemicals in advanced manufacturing equipment with high levels 
of precision, very rigorous controls, and enclosed processes, 
high levels of automation, and that results in a very precise 
process and also an exemplary environmental and safety record. 
And that background informs our views on the New Chemical 
Program. We believe that the existing program generally strikes 
the right balance between environmental protection and the 
approval of new chemicals that help drive our innovation. It is 
important to note that semiconductor companies do not 
traditionally submit PMNs for approval by the EPA, and we rely 
on our chemical suppliers for that function, but we have a 
strong interest in ensuring our access to new chemicals that 
can help drive our advances.
    The key attributes of the current system are the risk-based 
approach, and as others have mentioned, the tailored and 
customized evaluation of chemical uses. In our industry, the 
unique attributes of our manufacturing processes result in very 
low levels of risk and exposure, and we believe that that very 
much needs to be kept into account in any reform efforts going 
forward.
    My testimony outlines other attributes of the system that 
we think are very important, such as an expedited timeframe 
that allows speed to market, and critical exemptions for 
activities like research and development. And then, of course, 
the protection of confidential business information is critical 
to our industry as well. Our industry is very much driven by 
intellectual property. We invest, on average, 18 percent of 
revenue into R&D. Last year, that amounted to $32 billion in 
R&D investments. We are a leader in patents and many of our 
processes are protected as trade secrets. So the protection of 
CBI under the TSCA is very, very important to us, and we think 
it generally works well and strikes the right balance between 
the need for the public to have available information on health 
and safety data while at the same time protecting confidential 
business information.
    So going forward, we look forward to working with the 
Congress and this subcommittee on efforts to modernize TSCA and 
we would like to play a constructive role in that effort. So 
thank you very much for the opportunity to testify.
    [The prepared statement of Mr. Isaacs follows:]
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    Mr. Gingrey. Mr. Isaacs, thank you. Yielding back 13 
seconds.
    Next witness, Mr.--excuse me, Dr. Rainer Lohmann, Professor 
of Oceanography at the University of Rhode Island. Dr. Lohmann, 
5 minutes.

                  STATEMENT OF RAINER LOHMANN

    Mr. Lohmann. Good morning. Dear members of the House 
Committee on Environment and the Economy, I want to thank you 
for inviting me to testify today. I would also like to thank my 
wife for letting me go to D.C. on our wedding anniversary. My 
name is--I will be back tonight. My name is Rainer Lohmann. I 
am professor of oceanography at the University of Rhode Island. 
I have spent the last 15 years researching organic contaminants 
around the world. My written testimony contains several more 
recommendations on TSCA reform that I worked on with my 
colleagues, Dr. Heather Stapleton from Duke, and Dr. Ron Hites 
from Indiana. I will use excerpts here.
    First, open dialog, not CBI. Let me frame my testimony by 
quoting Andrew Liveris, CEO of Dow Chemical. ``Over the 
decades, the chemical industry has not done enough to operate 
with transparency and to lead on matters such as 
sustainability, spawning legacy issues that we are still 
resolving today. Further,'' he said, ``the chemical industry 
went from defiance, then denial towards debate, and finally has 
reached dialog.'' In this spirit, I submit that the current use 
of CBI is in strong conflict with dialog and transparency. TSCA 
does not limit the period in which a chemical can be considered 
proprietary or a trade secret. Even new pharmaceuticals, which 
are much more expensive, are only pertinent for up to 20 years, 
providing a drug company time to recoup its research investment 
and make a profit. Within TSCA, the chemical industry should 
have limited time during which the information submitted to the 
EPA will be considered proprietary. After this time, 
information should be publicly available, including site 
specific production volumes. The public has a right to know 
what is produced and where. This will foster dialog, build 
trust, and eventually lead to safer chemicals on the market.
    In addition, because research on many chemicals is hindered 
by a lack of authentic standards, samples of any chemical 
substance produced or imported into the U.S. should be archived 
in a national repository funded by the chemical industry. This 
will open dialog between industry academia and geos to identify 
worst compounds and assess safer alternatives.
    Second, spur innovation. We need safer, newer, and green 
chemicals as part of chemistry's contribution towards 
sustainability. How do we get there? First, we need to identify 
and replace the worst chemicals in commerce, those which are 
strongly bioaccumulative, persistent, and toxic. Priority 
should be given to reassessing the chemicals that were 
grandfathered in TSCA. This will spur industry to invent, 
establish, and market safer alternatives.
    How big is the problem? The TSCA inventory contains 
probably hundreds to thousands of chemicals that are 
persistent, bioaccumulative, and toxic at the same time. Many 
of these are found in the environment and in humans. Recent 
examples include perfluorinated compounds and brominated flame 
retardants, both of which are present in roughly 97 percent of 
the U.S. population, including children, and the environment.
    Our efforts to fully understand the presence and effects of 
persistent organic chemicals in the environment are hampered by 
a lack of basic information about the chemical identity, 
properties, toxicology, and production volumes. Some of that 
information is currently protected by CBI.
    Moving forward, TSCA reform should make use of EU's REACH 
Program. The information on chemicals that are submitted as 
part of REACH should be able to be used in the U.S. to move 
toward safer and greener chemicals at no additional cost, 
basically.
    Third, testing of new chemicals. Dr. Heather Stapleton 
discovered Firemaster 550 by accident while she was screening 
house dust samples for PBDEs, which are basically phased out in 
the U.S. Her research on dust and hand wipe measurements 
demonstrated that Firemaster 550 is a ubiquitous indoor 
contaminant, and exposure is highest for infants and toddlers, 
rather than adults. Last year, she already showed that 
Firemaster 550 is the second most common flame retardant in 
residential furniture today, and it might be number one as we 
speak. In their most recent work, Dr. Stapleton and colleagues 
demonstrated that prenatal exposure to Firemaster 550 in rats 
resulted in obesity, early puberty, insulin resistance, and 
disruptive thyroid hormone signaling.
    I would like to stress the effects of exposure to chemicals 
in our households with typical modern health problems, obesity, 
early puberty, diabetes. In 2005, EPA issued a consent order 
requesting that Chemtura, the manufacturer, conduct more 
testing on Firemaster 550's health effects. Of the four 
ingredients that the Firemaster has, two were grandfathered in 
TSCA, so EPA could only require testing on the two new 
brominated compounds, and not the entire mixture. This 
highlights the shortcomings of TSCA, and how it violates common 
sense. If you market a chemical mixture, you should perform 
toxicity tests on that whole mixture as it will be used and how 
people will be exposed to it in the environment and in their 
households.
    Professor Stapleton's research on Firemaster 550 is the 
only study to date to examine health effects from the mixture 
as it is used today. The data demonstrated that significant 
effects occur at much lower doses than what the chemical 
company declared to be safe.
    In closing, I would like to note that my research has been 
funded by the NSF, the U.S. EPA, and the Hudson River 
Foundation, and I thank you for your attention.
    [The prepared statement of Mr. Lohmann follows:]
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    Mr. Gingrey. Dr. Lohmann, thank you for your testimony.
    I will now turn to Ms. Heather White, Executive Director of 
the Environmental Working Group. Ms. White, 5 minutes.

                   STATEMENT OF HEATHER WHITE

    Ms. White. Mr. Chairman and distinguished members of the 
subcommittee, I am Heather White, Executive Director of 
Environmental Working Group, a nonprofit research and advocacy 
organization based in Washington, Iowa, and California. Thank 
you for the opportunity to testify.
    EWG wants the United States to be the world leader in 
innovative chemical production. Some of the best and brightest 
scientists in the world are at the companies represented here 
today, but innovation is not just about lowering costs and 
boosting profits. Americans believe that innovation must also 
mean creating chemicals that are not just cheap, but safe. 
Strong chemical regulation promotes innovation. We cannot 
compete internationally on labor or production costs. We will 
not win that race to the bottom. But America ultimately will 
win on chemical quality and safety through toxics law reform.
    For 20 years, EWG has advocated greater protection of 
people and the environment from toxic chemicals. Our 
groundbreaking research detected nearly 300 toxic industrial 
chemicals in the umbilical cord blood of newborn babies. The 
reality is industrial chemical pollution begins in the womb. 
Yet a century into the chemical revolution, we still don't know 
what these low level exposures to substances, alone or in 
combination, do to our health, especially our children's 
health. No one has basic answers, not the government, academic 
researchers, or the chemical industry.
    In 2010, the President's Cancer Panel concluded that the 
number of cancers caused by toxic chemicals is grossly 
underestimated. Americans have lost faith in a chemical 
regulatory system that they suspect, with good reason, doesn't 
protect them and their children. Many of these chemicals have 
not been adequately tested for safety under the Toxic 
Substances Control Act. Its New Chemicals Program is woefully 
inadequate, and its secrecy provisions threaten human health.
    There are three major problems with the New Chemicals 
Program. First, most Americans assume that a chemical can't be 
sold until proven safe. Not so. A chemical company can get a 
new chemical on the market today without providing any 
information about the toxicity of that chemical. Companies do 
it every day. In fact, 85 percent of the pre-manufacture 
submissions have zero information about the toxicity of these 
new chemicals. Second, EPA faces a chemical Catch-22. The 
agency cannot demand more test data without solid evidence that 
the new chemical could be a reasonable risk, and it cannot come 
up with that evidence without the test data. The law places the 
burden on EPA, not the manufacturer, to determine whether a new 
chemical is unsafe before it goes into use. The trouble is that 
chemicals are entitled to a presumption of innocence. That 
works in criminal law, but that shouldn't exempt chemicals from 
investigation. Not surprisingly, EPA attempts to restrict less 
than 10 percent of new chemicals. Finally, chemical makers 
don't necessarily know how the chemical might be used when they 
make it. After a new chemical is approved, they do not have to 
tell EPA when the planned use changes.
    As for secrecy, the current law's Confidential Business 
Information scheme is a regulatory black hole where critical 
information goes in, and little comes out. Even the 
intelligence community declassifies highly sensitive 
information after a while, but TSCA confidentiality claims 
never expire.
    Companies have a legitimate interest in keeping some 
information confidential, but unwarranted claims directly 
threaten human health and the environment. TSCA permits a 
manufacturer to claim confidentiality without substantiation 
for virtually any information it submits to EPA. 
Confidentiality claims mask the identities of nearly \2/3\ of 
all new chemicals introduced since 1976, including substances 
used in consumer and children's products.
    Chemical makers assert that secrecy protects their 
competitive advantage, but they knew very well that competitors 
commonly reverse engineer their products. Everybody else is 
left in the dark: ordinary citizens, first responders, workers, 
medical personnel, independent researchers, State and local 
governments, and fence line communities that are often hotspots 
of chemical exposure.
    We deserve better. Congress can overhaul the broken toxics 
law to protect public health and the environment, and at the 
same time, spur development of better, safer, innovative 
chemicals.
    Thank you, and I welcome any questions you may have.
    [The prepared statement of Ms. White follows:]
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    Mr. Gingrey. Thank you, Ms. White.
    We will now turn to questions from the members of the 
subcommittee, and each will have 5 minutes. I will say to the 
members, if you decide to speak for 4 \1/2\ minutes and give a 
speech, and then ask a question in the last 30 seconds, I will 
let the witness respond to the question.
    I will begin yielding to myself for the first 5 minutes, 
and my first question is going to be to Monsieurs Morrison, 
Sauers, and Isaacs, the first three witnesses. How do TSCA 
regulations for new chemicals and new uses and TSCA provisions 
on the production of Confidential Business Information affect 
your ability to innovate? Mr. Morrison first, then Mr. Sauers, 
then Mr. Isaacs.
    Mr. Morrison. Thank you, Mr. Chairman. For us, innovation 
is our lifeblood and what allows us to succeed and our economy 
to succeed is delivering performance capability to our 
customers, such as the two gentlemen to our left, with unique 
products, and our chemical formulations are at the heart of 
those products. What TSCA has allowed us to do is drive that 
innovation and also ensure that it is safe from a health and 
environmental standpoint, but protect the necessary information 
so that it is not disseminated to foreign governments, et 
cetera.
    If you look at our company alone, we have had multiple 
cyber attacks by foreign governments that we were unaware of 
that the Federal Government made us aware of and notified us 
that our IP and other trade secrets had been penetrated and was 
being downloaded. That is exactly the information we are 
discussing today and that we need to protect, and that we are 
talking about if we change TSCA where we voluntarily disclose 
that information, we lose the very competitive advantage that 
we deliver to our company, to our customers, and to the U.S. 
economy.
    Mr. Gingrey. Mr. Sauers?
    Mr. Sauers. Thank you, and maybe I will just add to what 
Mr. Morrison has said. Innovation is quite important to Procter 
and Gamble, you know, as a company of $90 billion in sales, 
9,000 R&D employees. It is something that is very important to 
us, and what we have appreciated most about TSCA has been our 
ability to get our chemicals into commerce in a very reasonable 
timeframe and work with an agency that is highly competent in 
the evaluation of the safety of these materials. We have 
appreciated very much the opportunity to sit down with EPA 
scientists prior to the submission of a PMN to talk about our 
chemical, talk about the safety needs that TSCA will have, the 
EPA will have, to make sure that what we bring forward to them 
is complete. We have appreciated the risk-based approach that 
the agency has used. We have also appreciated their sensitivity 
to animal testing. The Procter and Gamble Company has spent 
about $300 million over the years developing methods to prevent 
the needless killing of animals for safety testing through the 
development of predictive methods, structure activity 
relationships, modeling, and things like that, and we 
appreciated the EPA incorporating those technologies.
    Mr. Gingrey. Mr. Isaacs?
    Mr. Isaacs. Mr. Chairman, as I outlined in my comments and 
in my testimony, we very much rely on the continued access to 
new chemicals as part of our ability to advance in 
semiconductor manufacturing. We believe that our processes are 
fundamentally based on automated systems and enclosed processes 
that result in minimal exposure, very limited releases to the 
environment, and therefore, we think our responsible use of 
chemicals, along with other environmental laws, protects human 
health and the environment in an appropriate manner.
    Mr. Gingrey. Thank you. In my time remaining, I am going 
to--probably I will only time for one more question and I will 
direct it to Mr. Morrison. How does TSCA's New Chemicals 
Program work in practice? Could you walk me through 
manufacture, pre-manufacturing notice submission, that EPA 90-
day review, and notice of commencement?
    Mr. Morrison. Yes, sir. Well essentially we start off by 
conducting our own tests on the chemicals, and then we put 
together a pre-manufacturing notice, which is the PMN submitted 
to the EPA. They scrutinize the data. They apply that to 
predictive models and analogous materials. They then go ahead 
and assess the various chemical properties. They look at the 
exposure potentials and risks, and ultimately come out with a 
ruling that could be a pass, a limited use, a restricted, or in 
fact, stop the PMN from going forward and require more testing.
    If it is approved, either under restricted or fully 
approved to go ahead, then we are given permission and we issue 
a notice of commencement of the manufacturing process at that 
point. Essentially, this usually takes approximately a 90-day 
period, which is key because it allows us to turn our 
innovation in a timely manner, and in many industries, like 
semiconductor and others, that is absolutely critical for their 
success.
    Mr. Gingrey. You heard the testimony from Dr. Lohmann and 
from Mrs. White--Ms. White, and their concerns. Are there any 
exemptions, exclusions from the new chemicals provisions of 
TSCA?
    Mr. Morrison. There are some, such as certain sets of 
polymers and other materials, that the EPA has very extensive 
experience with that they know don't pose any hazard or risk, 
and therefore, they are exempted from the process because it 
makes the EPA and it makes the chemical companies much more 
efficient, rather than just submitting everything where there 
is no added benefit to submission.
    Mr. Gingrey. I thank all three of you and I have gone 
almost a minute over. At this point, I will yield 5 minutes to 
the ranking member of the subcommittee, the gentleman from New 
York, Mr. Tonko.
    Mr. Tonko. Mr. Chair, the ranker of the Energy and Commerce 
Committee has a conflict with scheduling, so I would ask if you 
call upon your----
    Mr. Gingrey. Absolutely. I will be glad to yield to the 
ranking member of the overall Committee of Energy and Commerce, 
the distinguished gentleman from California, Mr. Waxman, for 5 
minutes.
    Mr. Waxman. Thank you, Mr. Chairman, thank you, Mr. Tonko.
    Four years ago, this committee spent a considerable time 
examining the Toxic Substances Control Act, and worked to craft 
policy solutions for its failures. It was a challenging 
endeavor, because we found that even as some in industry claim 
to want to make our regulatory system safer, we found strong 
resistance to actual reform. Mr. Morrison, you testified that 
Section 5 is ``one of the major successes of TSCA, and that we 
should be careful to preserve its essential elements.'' I would 
like to take a moment to examine one chemical that has gone 
through Section 5 review, Firemaster 550. It is a flame 
retardant that as Dr. Lohmann has stated is gaining significant 
market share in the United States.
    The maker of this flame retardant, Chemtura, markets this 
chemical as a safer alternative, saying that it has ``an 
improved environmental profile'' compared to its predecessors. 
In promotional materials, Chemtura touts EPA's review of 
Firemaster 550 under Section 5 as ``extensive'' and states that 
``consumer exposure is extremely low.''
    But as Dr. Lohmann reports, scientists have shown that 
consumers are being exposed to this product at significant and 
dangerous levels.
    Dr. Lohmann, can you elaborate briefly on some of the 
exposure and hazard data that has been produced on Firemaster 
550?
    Mr. Lohmann. Thank you for the question. I should point out 
that is Dr. Stapleton's work from Duke University. What she has 
shown builds on a legacy--well, it is almost an endless story. 
It starts off with flame retardants, PBB, polybrominated 
biphenyls, that were discovered by accident because they 
contaminated cows in Michigan. They were withdrawn from the 
market and replaced by polybrominated diphenyl ethers, which 
were found to accumulate in blood in the U.S. adult population 
10 times higher than Europe, so it was finally withdrawn from 
the market to be replaced by Firemaster 550, which could only 
be partially evaluated because it was a mix of grandfathered in 
chemicals and new chemicals. And as all other flame retardants, 
they are not physically bound or chemically bound to the 
product, so they escape over time and mostly the exposure for 
all of us is in our houses through dust.
    Mr. Waxman. Ms. White, you mentioned in your testimony that 
EPA didn't have access to all of the information it needed to 
thoroughly evaluate Firemaster 550 before it went on the 
market. Can you elaborate briefly on that?
    Ms. White. Absolutely. Because of the draconian measures of 
Confidential Business Information in TSCA, EPA's own scientists 
weren't actually able to look at the full health and safety 
profile, so the leading expert actually has said on the record 
that if she had known about the issues of Firemaster 550, then 
the chemical would not have been approved and there certainly 
would have been a request for more chemicals.
    Mr. Waxman. EPA developed a work plan to conduct a risk 
assessment of numerous chemicals identified as potentially 
hazardous, including a chemical that is the active ingredient 
in Firemaster 550 known as TBB. EPA gave the active ingredient 
in Firemaster 550 the worst score possible for exposure risks 
and plans to assess it this year. Yet the promotional materials 
for the product still say that it has been approved by EPA and 
that consumer exposure is low.
    Mr. Morrison, do you believe that Section 5 has worked in 
the case of Firemaster 550?
    Mr. Morrison. I think Section 5 in general works very 
effectively. I haven't studied that in great detail from a 
scientific standpoint or understand the full history of it. I 
would be the first to admit that at times, more information 
comes out and we have an obligation as an industry when we 
identify a substantial risk, we have to notify the EPA if we 
have additional data. Additionally, if the EPA determines there 
is an unreasonable risk, they have every right to go back in 
and revisit the chemical itself.
    Mr. Waxman. So you would go back and revisit it, but Ms. 
White, what do you think? Do you think that Section 5 worked in 
the case of Firemaster 550?
    Ms. White. Absolutely not. I think that that really is a 
great example of how everything is turned upside down when it 
comes to the New Chemicals Program, because we have the burden 
of proof being on the EPA to raise this situation and raise 
concerns about chemical safety, as opposed to the chemical 
manufacturer fully disclosing and testing in advance and being 
required to test the chemicals before they go on the market.
    Mr. Waxman. Thank you. Firemaster 550 is already on the 
market, in furniture, in baby products and other consumer 
goods, and there are now serious questions about its safety. I 
guess the question I think that raises is would the public have 
been better served understanding these risks before it was 
brought into widespread use?
    I would like to introduce, Mr. Chairman, into the record a 
letter from the Center for International Environmental Law 
dated July 11, 2013. This letter summarizes work CIEL has done 
to examine trends in chemicals regulation and patent filings to 
evaluate the impacts of stronger rules for hazardous chemicals 
on the innovation of new chemical products. They find that 
stricter regulation of hazardous chemicals drives innovation 
and creates a safer marketplace. They explained that 
implementation of Section 5 has resulted in one dangerous 
chemical being substituted for another dangerous chemical. They 
point out that when a different approach is taken, when 
dangerous chemicals are removed from the market, it accelerates 
the invention of alternative chemical products. It makes a lot 
of sense to me and I hope we can focus on getting this policy 
as right as it can be.
    Mr. Gingrey. Without objection, the letter is accepted into 
the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Gingrey. We now turn to the subcommittee chairman on 
oversight, the gentleman from Pennsylvania, Mr. Murphy, for 5 
minutes.
    Mr. Murphy. I thank the panel for being here.
    I want to start off, because it is always important for me 
to hear from some of you your corporate philosophy, and I want 
to ask you this, Mr. Sauers. Your corporate philosophy with 
regard to dealing with the health and safety of your customers 
and your employees when it comes to developing chemicals, could 
you just describe to me what that is?
    Mr. Sauers. Sure. Thank you, Congressman. I mean, I can't 
think of anything more important to Procter and Gamble than the 
safety of our customers and employees. Four point six billion 
people use our products every day, so it is imperative that we 
ensure that the products we put on the market are safe for them 
and safe for the environment. I think to illustrate that best, 
my department at Procter and Gamble has 700 employees in it, 
200 of whom have PhDs in sciences related to human and 
environmental safety. So everything we evaluate for the--to go 
on the market has a thorough and comprehensive risk assessment 
prepared for it to ensure that it is safe.
    Mr. Murphy. Mr. Isaacs, do you have a comment on that?
    Mr. Isaacs. Well as an industry, I think we have a similar 
dedication to the protection of the environment and our 
workers. My written testimony highlights some of the successes 
we have had in substituting or phasing out materials of concern 
in our processes and reducing emissions, and that remains a 
very high priority for the industry globally.
    Mr. Murphy. And again, Mr. Sauers, in the developing of 
chemicals in your company, do you--and following what you said 
as far as your mission of corporate responsibility, do you 
review chemicals and make decisions that some of them should 
not be brought to the market because in your determination, 
they are not passing muster for health and safety?
    Mr. Sauers. Yes, sir. We go through a complete evaluation 
from the beginning of first proposal by our technologists. 
Evaluating in the beginning, if we show that materials will be 
problematic as they are marketed, for example, show 
unreasonable sensitization, toxicities associated with various 
organs or things like that, if we think those issues will be a 
problem considering the exposure that individuals will get to 
them, we will stop them. We have done that in many instances. 
As a company, we chose not to market nonylphenol ethoxylates, 
which were a major surfactant because of environmental quality 
and their inability to be completely biodegraded. So those 
decisions are made every day by our toxicologists.
    Mr. Murphy. Thank you. Now for Mr. Morrison, Sauers, and 
Isaacs, a question. As Congress is probably going to be dealing 
with the TTIP, that is, dealing with the Transatlantic Trade--
Pretrade agreement coming up, one of the questions that is 
going to come up is with regard to regulations between the 
United States and European nations, and particularly, I am sure 
that the question of sharing of CBI with State and foreign 
governments, the TSCA permits, et cetera. I wanted to ask you 
if any of you are anticipating any concerns in terms of should 
States and foreign governments be permitted access to CBI, or 
if you have begun to put any thoughts into how this would be 
handled? Mr. Morrison?
    Mr. Morrison. Yes, at this time we do not, as the ACC or I 
as the CEO of a company, support sharing CBI with foreign 
governments. We don't feel we have the ability to control and 
protect that information. We do take a different stance on 
sharing information with States where they demonstrate an 
ability to protect the information, as well as an applicable 
use around safety or environmental purposes. But we do not feel 
secure in today's environment passing out CBI information 
internationally, so we would not support that.
    Mr. Murphy. Let me expand this, and the three of you, as it 
goes through, because it is something we are going to have to 
deal with, and there are regulatory issues how the United 
States and the EU will deal with these issues to make sure that 
any products that are sold across the Atlantic from either side 
dealing with their environmental concerns and our environmental 
concerns with health and safety of customers. So how do each of 
you--what are your thoughts on does the EPA protect trade 
secrets while still providing a mechanism for evaluation of 
safety and health review? I will start with Mr. Morrison and go 
across.
    Mr. Morrison. Yes, I think there is very much a capability 
to share the pertinent information without giving chemical 
identity and other things that we currently protect. So the 
important aspect around safety, environmental and et cetera, we 
feel we are very capable of sharing that. What we don't agree 
with is sharing the proprietary information such as chemical 
identity.
    Mr. Murphy. Do you feel that they protect that information, 
or does it get out?
    Mr. Morrison. Well, we have ability to protect that with 
generic names that we talked about before, but we are afraid if 
you gave out chemical identity, once it goes to other 
governments you lose control of the ability to protect chemical 
identity.
    Mr. Murphy. A few more seconds. Mr. Sauers, with regard to 
the EPA protecting that proprietary data while it is still 
providing information to help them evaluate health and safety, 
do you feel confident that they protect that top proprietary 
information?
    Mr. Sauers. Yes, I do, and I think there is a balance that 
needs to be weighed here. There no CBI with the EPA itself. I 
mean, they get full access to all the information and the 
specific chemical names. I mean, they have full access so they 
are able to make their evaluation. And then a generic, less 
descriptive chemical name is given and that is what is made 
public, which allows the public to be able to draw their own 
conclusions about the material. And as a toxicologist, that 
information that is provided is sufficient for individuals to 
make evaluation and draw to corollary materials, for which 
there is available information.
    Mr. Murphy. Thank you. Mr. Chairman, I see my time expired 
but I would hope that that question could also be forwarded to 
the other panel members and ask for their response as well. 
Thank you.
    Mr. Gingrey. Thank you, Mr. Murphy. We now turn to the 
ranking member from New York, Mr. Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. Reviews by the Government 
Accountability Office and testimony that we had heard at our 
last hearing indicated shortcomings with respect to Section 5 
of TSCA. Last year, EPA announced a work plan to conduct the 
risk assessment of numerous chemicals identified as potentially 
harming children's health, causing cancer or posing other 
health concerns. Several of these chemicals were reviewed under 
TSCA's Section 5 New Chemicals Program, but made it on the 
market anyway.
    So to Dr. Lohmann, my question is if we suspect a chemical 
harms children's health or has another serious effect, 
shouldn't we try to understand that before it goes on to the 
market rather than after?
    Mr. Lohmann. I would fully concur. You would expect these 
days that we would first make sure a chemical is safe before we 
produce it. Unfortunately, that is not the way it works in this 
country right now.
    Mr. Tonko. Well how could a stronger Section 5 provide 
proactive protection for the American public?
    Mr. Lohmann. What you see happening in Europe under the 
REACH Program is that the manufacturers have to take 
responsibility for their product and have to convince the 
regulatory agency, in this case, the European Chemicals Agency, 
to show that their product is safe in its different uses. So 
the manufacturer has to go all the way through from cradle to 
grave what I am producing is safe and where it is going to be 
used. And that kind of approach really means the responsibility 
is with the person or the company who makes it, and they have 
to show it is safe. And that, I think, is a much more forward 
looking approach than just having here is a new chemical, EPA, 
just evaluate it quickly and we will market it anyhow.
    Mr. Tonko. Thank you. Ms. White, you testified that the 
current structure of Section 5 leaves EPA without the data it 
needs to effectively evaluate chemicals and that the structure 
creates a disincentive to producing that post data. Could you 
please elaborate on that?
    Ms. White. Absolutely. So EPA right now is not able to 
require testing before a chemical goes on the market. If the 
industry has tests, it is supposed to disclose them. But in 
order to request more information, it has to find two things. 
That one, there is an unreasonable risk of injury, or two, that 
the chemical is going to be manufactured in such a high volume 
that there would be a significant human exposure. So what 
happens is, there is this chemical Catch-22, which EPA has to 
try to figure out that there may be a risk, but it can't 
require testing until it has evaluated testing. So it is this 
really difficult cycle. It is like grading students without 
actually asking them to take a test. So for example, I will 
just give you an A because I know that maybe your son was a 
really good student and maybe you are a neighbor of so-and-so, 
but I am not actually requiring you to take any tests. So it is 
a very difficult situation that EPA is in.
    Mr. Tonko. EPA can't thoroughly review new chemicals for 
potential health effects if it doesn't have adequate data to do 
so. One policy that has been discussed over the years is the 
concept of requiring a certain minimum amount, minimal amount 
of data prior to a new chemical being brought onto the market. 
What do you think of this approach? Does it have merit?
    Ms. White. It absolutely has merit, and frankly, I think 
most Americans assume that that is already in place. They are 
very surprised to find out that EPA doesn't require a series of 
tests before chemicals go on the market, so that is absolutely 
where we should be heading, and that is where we should be 
targeting reform for Section 5.
    Mr. Tonko. And Dr. Lohmann, your thinking on the data 
requirement?
    Mr. Lohmann. I certainly agree, and that is--most global 
players who deliver to the European market have to provide this 
kind of data now to get onto the European market, get 
reevaluated, or reassessed, reauthorized for their chemicals. 
So the best thing the U.S. should do is find an agreement with 
the European program to use the dossiers that are provided 
anyhow, and they will all have to provide data. If you have no 
data on your chemicals, there is no market in the EU. It seems 
a very logical approach.
    Mr. Tonko. Mr. Morrison, it seems to me that building 
safety into the developmental process earlier is likely to be a 
better approach to product development. This is the idea, I 
believe, behind the green chemistry movement. Would you agree 
with that in concept?
    Mr. Morrison. Well, I think there is a basic underlying 
assumption in your comment, which is we don't build safety, and 
I think we do extensive testing. We have the greatest to lose 
if we put products on the market that are hazardous, that hurt 
health, that hurt environmental, et cetera, so we do extensive 
testing when we develop new products. All of that information 
is turned over to the EPA. They have very extensive databases 
that they run and they run on analogous materials. And so I 
think the underlying assumption that if the EPA doesn't force 
the test it isn't done, they don't have to force the test in 
many cases because it is already being done by us.
    As far as green, we fully support green where appropriate. 
Our company and many in the industry aggressively push it, but 
it is one form of innovation. It is not the only form of 
innovation.
    Mr. Tonko. Is there any chance for added safety by 
requiring the submission of a basic safety data set as part of 
the initial pre-market review process?
    Mr. Morrison. I actually think it would have an adverse 
effect, because what you have to take into account is the 
workload you would put on companies and EPA, you would take the 
higher hazardous and now be swamped with all chemicals there 
when there are much more effective and efficient ways to deal 
with the vast majority. And so you are creating an unneeded 
workload, which I believe would add very little or no benefit 
and would, in fact, just swamp the EPA and they wouldn't be 
able to prioritize their resources. It would also kill 
innovation. The reason we produce three times more chemical 
innovation than Europe, Japan, and others is because I think 
our process works very effectively.
    Mr. Tonko. I guess I am also hearing that they might 
require more resources for EPA also to develop that plan, but I 
believe I have extended my amount of time, so--exhausted my 
amount of time, so I will yield back.
    Mr. Gingrey. Thank the gentleman, and we now turn to the 
gentleman from West Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Ms. White, I want to see whether I heard it 
properly. Did I hear you say that often products going to the 
market are not confirmed prior to going to market for toxicity?
    Ms. White. That is correct. According to EPA, 85 percent of 
the pre-manufacture notice, this approval process for 
chemicals, do not have toxicity data. They have not submitted 
that to EPA.
    Mr. McKinley. Are you contending, then, that--are you 
suggesting that they are trying to circumvent something by 
doing that?
    Ms. White. I am suggesting that the system is broken. There 
actually isn't incentive for testing. There is an incentive not 
to test because if you don't----
    Mr. McKinley. You think that they are testing themselves?
    Ms. White. If they are, they are required to give that to 
EPA.
    Mr. McKinley. OK, thank you.
    Ms. White. But in 85 percent of instances, they don't.
    Mr. McKinley. The other three panelists, can you respond to 
that? I thought that was an interesting comment. I guess I did 
hear that properly. Do you want to respond back to the going to 
market without testing for toxicity?
    Mr. Morrison. You know, where appropriate and data is 
required, we of course test for toxicity and the idea that we 
would put out products where we thought there was a risk simply 
for economic reasons, first of all, it doesn't make any 
economic sense because the risks would overwhelm any sales 
potential. B, we apply the tests that are appropriate but we 
don't blindly apply all tests to everything. It is not 
economically viable, either. So I think the underlying 
assumption is one I don't agree with.
    Mr. McKinley. Mr. Sauers?
    Mr. Sauers. And I think we have to distinguish between the 
EPA's ability to do an evaluation of a chemical, and then the 
toxicity data that is being mentioned here. You can evaluate 
the safety of a material without having animal toxicity data. 
There are other avenues available to you. The EPA has it its 
disposal, you know, a vast database of animal data on 
historical chemicals and they are experts in applying structure 
activity to the relationships and productive modeling type 
systems to evaluate the safety of materials. So just because 
they don't get new animal testing data on a chemical that is 
coming in does not mean that they don't have an ability to 
evaluate that chemical for safety.
    Mr. McKinley. Thank you. Mr. Isaacs?
    Mr. Isaacs. Yes, sir. We actually think there would be a 
benefit to improved tools and better predictive modeling at the 
agency, and we also think that increased access and 
transparency to existing data that is out there would benefit 
the system as a whole. I understand that EPA is making some 
efforts in that direction and we look forward to seeing the 
results of that.
    Mr. McKinley. Thank you for your responses back on that. I 
am just curious, the fact that apple juice has arsenic traces, 
arsenic in it. Should we be banning the drinking of apple juice 
in America because there is a trace level of toxicity in that 
material? Ms. White?
    Ms. White. We would not say we need to ban apple juice, but 
certainly a cause for concern when we have all these situations 
where these low doses of chemicals--and arsenic is a different 
situation--but when we are talking about chemicals that are 
manufactured and not required to be tested before they go on 
the market, that is shocking for most Americans.
    Mr. McKinley. Ms. White, I just think I am with you more 
than you realize, but I am also wondering how often we get to 
maybe hysteria levels on some things. When we are burning coal, 
we have the issue of toxicity that people use exaggerated 
numbers and fears that are unwarranted and it puts the fear in 
the minds of people, and the same thing. So I really do 
appreciate the responses that we have had here today. If people 
are going to market without checking for toxicity, whether it 
is internal or through the agency, I think we need to determine 
that but it sure sounds like the companies are doing the job 
themselves, it appears, and I would hope that we wouldn't be 
putting out false concerns to the public if they are out there 
on that.
    So with that, thank you and I yield back the balance of my 
time.
    Mr. Gingrey. Thank the gentleman, and I turn to the 
gentleman from California, Mr. McNerney, for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. I thank the 
witnesses this morning.
    I think it is pretty clear there is a conflict between the 
industry's legitimate wish to keep trade secrets confidential, 
and on the other hand, the risk of releasing chemicals whose 
long-term and low exposure health impacts may not be very well 
understood, especially when they are put in an environment 
where they are going to be mixed with other very complex 
chemicals. So everyone understands that it is in the industry's 
interest to have consumer safety and consumer confidence. There 
is no problem there. It is our duty, it is our job as a 
committee, as a subcommittee, to try and resolve that conflict. 
We are going to do the best we can and I appreciate your 
participating this morning.
    Mr. Sauers, I think I heard you say that an update of TSCA 
is urgently needed. One of the reasons is to give consumers 
confidence in the process, and I think that is pretty well 
agreed to. But then you said later that the EPA's recent 
decision to disclose specific confidential information is 
hurtful. So I see that that is a little bit of a conflict in my 
mind between wanting to improve consumer confidence and yet 
thinking the EPA's decisions are problematic.
    Mr. Sauers. Sure, and maybe just to clarify, we just had a 
discussion about questions being raised about trace levels of 
arsenic, for example, in apple juice. That does raise concern 
to consumers' minds about the safety of products that are in 
the marketplace. Many times a company like Procter and Gamble 
doesn't have all the credibility as it communicates to 
consumers about safety. The EPA does, so having and EPA with a 
very robust system in place that is recognized will give a 
credibility when they say that materials are safe, and we would 
support that very much. We think that they do have the tools 
today to do that with the information that is provided as part 
of the PMN process.
    Mr. McNerney. Well I will just suggest that, you know, 
implying that EPA's new rules to release the information might 
actually help in terms of the company's long-term credibility, 
so that is my two bits on that.
    Mr. Lohmann, you mentioned that one of the things we should 
do is ID and replace the most dangerous chemicals, including 
grandfathered chemicals. How big of a job would that be?
    Mr. Lohmann. It would certainly be a major undertaking, but 
luckily, the Europeans are doing that now anyhow, so they are 
taking care of that and most global companies, like Procter and 
Gamble, have filed all their dossiers so information on most of 
those chemicals will be available. As I will also point out, it 
will actually spur innovation towards safer chemicals so I 
think it is a worthwhile endeavor.
    Mr. McNerney. So it might spur innovation and profitability 
then?
    Mr. Lohmann. Because some of the comments we have already 
brought, most right now in the environment were grandfathered 
in. They had no testing. Some of the new ones we also worry 
about, but certainly the grandfathered in are--should be 
reassessed.
    Mr. McNerney. Well one of the most striking things you said 
was that there is a strong correlation between chemicals in 
households and health problems that we are experiencing in our 
country. Did you want to expand on that a little bit?
    Mr. Lohmann. Certainly. I guess we can never know for sure 
because etymology is very difficult to do, but it is striking 
that a lot of the results that we see from either controlled 
tests or even in the field of animals to low doses are exactly 
the health problems that we see in modern society. So I am not 
saying that chemicals are the sole cause of all the problems, 
but there is probably a correlation, and that should worry us.
    Mr. McNerney. Mr. Lohmann and Ms. White, have you heard of 
the term chemical trespass, and if so, would you describe what 
you think that term means?
    Ms. White. Yes, chemical trespass means there is unwanted 
chemicals that are in your body and rather than trespassing on 
someone's land, in fact, a chemical has trespassed into your 
body. It is a developing concept in tort law, and there is 
certainly a lot of concern. Our studies have shown that, in 
fact, these chemicals that we find in consumer products like 
lotions and stain removers and laundry detergents and nail 
polish are actually building up in people's bodies, and as I 
said in my testimony, also in newborn babies.
    Mr. McNerney. Would you, Ms. White, offer some specific 
suggestions on how to improve the TSCA process?
    Ms. White. Absolutely. With respect to the new chemicals 
provision, we really need to make sure that the burden of proof 
shifts from EPA to the manufacturers to show that their 
products are safe before they go on the market. We also do need 
a minimum data set so we know what the rule are, and so 
consumers, we hear a lot about confidence. Consumers want to 
know that when they have a nap mat, you know, where our 
colleagues at the Center for Environmental Health released a 
really great study that nap mats have flame retardants it is 
really concerning. Parents want to know when their kids are 
taking a nap at preschool that they aren't going to have a 
chemical in their body, and that certainty would be really key.
    Mr. McNerney. Mr. Lohmann, would you agree with that 
response?
    Mr. Lohmann. I would agree.
    Mr. McNerney. I am sorry, I said Mr. Lohmann and I was 
looking at Mr. Morrison. Mr. Morrison?
    Mr. Morrison. Which element of a response, just to make 
sure that----
    Mr. McNerney. Well, if the--I will let my time expire on 
that.
    Mr. Johnson [presiding]. I thank the gentleman for 
yielding, and Dr. Gingrey went to the floor, so I am going to 
sit in for him. I am Congressman Bill Johnson from Ohio, and I 
will take my 5 minutes now. I would like to thank the panel 
for--you want me to go ahead? I was next until Dr. Cassidy 
walked in.
    OK, restart the clock. I would like to thank the panel for 
being here. Thank you so much.
    Mr. Sauers, since testing is not required when you first 
file a Section 5 pre-manufacturing notice, does that mean you 
have not tested that chemical?
    Mr. Sauers. I think I will maybe answer by saying that 
evaluations are made of the material and there are many ways of 
making an evaluation of a chemical for safety. One way is to do 
safety testing, you know, rodent test like an oral toxicity 
test in rodents. There are also other ways to evaluate the 
safety of a material, using tissue culture, using structure 
activity relationships, predictive modeling, and things like 
that. So materials are always evaluated. How they are evaluated 
can be different, depending on the circumstance.
    Mr. Johnson. Well, if you do testing before submitting a 
PMN, do you assess a broad range of possible hazards?
    Mr. Sauers. Yes, and it really would depend on the exposure 
that one expects the material to have. So if it broad scale 
exposure, you will find testing and evaluation across a variety 
of toxicity end points. If it is specific for inhalation, it 
will be different. If it is going to be a large volume exposure 
versus a very small exposure, the degree of testing could be 
different.
    Mr. Johnson. OK. How standard is this practice within the 
industry?
    Mr. Sauers. I would say that most companies approach it the 
same way, a risk-based approach of assessing exposure and 
hazard. Most companies have toxicologists, like Procter and 
Gamble, that will approach it this way.
    Mr. Johnson. OK. Do you do additional tests on your own 
after the PMN has been submitted?
    Mr. Sauers. Generally by the time we have submitted the 
PMN, the bulk of our testing is done because we are commencing 
to manufacture and put the material in the marketplace, so we 
want to have a full assurance of safety prior to that 
happening. If in the course of marketing something comes 
through our 800 line or through consumer comments that could 
cause a question to be raised, we would go back and evaluate 
it.
    Mr. Johnson. OK. Mr. Morrison, do you agree with these 
responses, consistent your----
    Mr. Morrison. Yes, absolutely. You know, as an industry, 
the chemical industry, we have a responsible care management 
system that we share across all chemical companies that are 
part of it, and that is the vast majority, and common best 
practices are shared and employed, and I think we are very 
consistent with Mr. Sauers' answers.
    Mr. Johnson. OK. Do other forms of intellectual properties, 
such as patents, provide adequate protection to confidential 
chemical identities, in your view?
    Mr. Sauers. Yes, they do provide some protection, but it is 
not complete. There are very strict----
    Mr. Johnson. Operative word was adequate, so do you 
consider them to be adequate?
    Mr. Sauers. Patents--for the purpose of patents and what 
they cover, they are adequate.
    Mr. Johnson. OK, Mr. Morrison?
    Mr. Morrison. There is much confidential information that 
is not covered by patents, and so while patents are effective 
for the, you know, actual material that is under a patent, that 
is fine, but there are many others that come under trade 
secrets that are just as critical to our business and we don't 
patent for very specific reasons.
    Mr. Johnson. OK. Mr. Isaacs, Ms. White and Dr. Lohmann have 
suggested that TSCA chemical review operate like reviews for 
drugs by the Food and Drug Administration. What do you think 
could be a reasonable reaction from your members if this were 
to occur?
    Mr. Isaacs. Well, of course I am not an expert in the drug 
review process, but I think that would not be the right 
approach. I think that would be--impose a time delay that would 
impede the time to market that we require, but at the same 
time, the key point that we would like to emphasize in all this 
is the need for chemical assessments to be tailored to the 
risks and exposure to the use in question. And we are confident 
that in our industry, with the high degree of controls that we 
impose on our processes, that the exposure and releases are 
very, very low and the chemicals that we use are done safely 
and responsibly.
    Mr. Johnson. OK. Mr. Sauers, back to you. Doesn't Europe 
require manufacturers to submit a minimum information set on 
new chemicals?
    Mr. Sauers. Yes, as part of REACH.
    Mr. Johnson. OK, so if you are doing it in Europe, why not 
do the same thing here in the United States?
    Mr. Sauers. I think this is what we appreciate most about 
TSCA is that the amount of data that is submitted is tailored 
to the chemical and the exposure that individuals can expect 
from it and its toxicity. You know, like Procter and Gamble, a 
new chemical that is going into a laundry detergent, for 
example, there will be vast exposure to that so that is 
something you want to have a full, complete toxicity data set 
on. And you can contrast that all the way back to maybe an 
intermediate in manufacturing for which there is no exposure. 
So really the amount of data needed for something like that is 
minimal. So this ability to tailor the amount of information to 
the need of the chemical to assure safety is really the best 
approach.
    Mr. Johnson. OK, thank you. Thank you all for your answers. 
At this time, we will go to Mr. Barrow from Georgia.
    Mr. Barrow. Thank you, Mr. Chairman. Something we have 
talked a lot about is the over-classification of Confidential 
Business Information problem here. We haven't talked much about 
efforts to declassify stuff that is no longer necessary. Mr. 
Morrison, in your written testimony, I think you talk about a 
voluntary effort that is underway between the EPA and the 
industry to try and declassify stuff that is no longer nor 
needs to be confidential. Can you share--tell the committee 
what that effort looks like?
    Mr. Morrison. Yes, it is essentially with the EPA there is 
an effort to identify what you might consider obsolete and 
information that doesn't have to be classified anymore, and 
actually working through a backlog of that and declassifying, 
and it is one of the areas of opportunity that we think as the 
new bill comes out hopefully that we can be more progressive 
about and more effective with, both in classifying originally 
on a CBI basis, but also declassifying.
    Mr. Barrow. Building on that, and talking about conflicting 
demands between the right to know between claims that everybody 
has a right to know everything about this, and there is a 
legitimate interest in keeping things confidential. I want to 
shift just a little bit from competing demands about the right 
to know, to a more pragmatic understanding about what we can do 
to share information to folks who have need to know. For 
example, Ms. White, in your testimony you talk about the needs 
that some folks have, the legitimate needs of first responders 
in emergency situations, and Mr. Morrison, you talk about 
efforts to declassify stuff that no longer needs to be kept 
confidential. Is there any kind of process that you all can 
agree on that would sort of if not address completely to 
everyone's satisfaction the issue of one's right to know would 
still result in a practical dissemination of stuff to folks who 
have a need to know? Is there some kind of process that we can 
agree on that would move us forward in that direction? Mr. 
Morrison, then you, Ms. White.
    Mr. Morrison. There is actually a process in place now that 
when an emergency situation happens, a spill, other type of 
emergency situations for emergency responders, there is 
information that is mandated, including material safety data 
sheets, et cetera, which are very explicit and the up-front 
section is all about emergency response to that particular 
material.
    So when you are in an emergency situation, either health or 
environmental, the rules change automatically and we 
disseminate information on it on an as-needed basis. So that is 
already addressed, but we certainly look forward in the new 
TSCA bill to see if there are any gaps that we can be more 
effective.
    Mr. Barrow. Ms. White, how would you address that subject?
    Ms. White. I would say that we all basically want the same 
thing. We want to make sure that chemicals are proved by a 
trusted regulator and that the chemical industry is vibrant. I 
think there is a lot of opportunity here for us to come up with 
sunset provisions, for example, for Confidential Business 
Information, also to make sure there is resubstantiation within 
a certain amount of time. I think that there is an important 
carve-out for medical personnel and emergency responders, and 
there is a real opportunity for us to work together.
    Mr. Barrow. Thanks. Mr. Sauers, it would be a poor dog who 
won't wag his own tail, and since you won't do it, I will do it 
for you. I have enjoyed my visit to P&G's facility in Augusta 
back in 2010 and look forward to my next visit coming up in the 
fall. Can you share with us anything about--you talk about the 
importance of not creating disincentives for innovation in this 
area. I know there are conflicting views about whether or not 
total dissemination of everything is going to actually promote 
innovation or not. What are the disincentives you would want to 
avoid in a kind of revamp of TSCA?
    Mr. Sauers. I would say that anything that would lead to a 
loss of competitiveness, and I think this is where the CBI 
comes in. I think that there is a balance that can be brought 
between ensuring that everyone has the health and safety 
information that they need to be able to make a conclusion on a 
material, and the ability to protect competitiveness for 
companies like Procter and Gamble. I think the process today 
where the EPA is given full disclosure of all information, even 
that which is confidential, enables them to make an assessment, 
and then the public release of the health and safety 
information with the generic descriptive form of the chemical 
enables individuals to get an understanding and draw parallels 
to other materials that are in the marketplace to ensure health 
and safety. So I think there can be a balance that can be 
brought there.
    Mr. Barrow. I hope you all understand with votes pending on 
the floor, no time left on the floor, I am going to yield the 
rest of my time. Thank you so much. Thank you, Mr. Chairman.
    Mr. Johnson. I thank the gentleman for yielding back. We 
will go now to Dr. Cassidy from Louisiana.
    Mr. Cassidy. Let me stress there is no time left to 
increase my anxiety level. I apologize. I stepped out so if you 
all addressed some of this, I have a question that is kind of 
for across the board.
    Dr. Lohmann mentioned that REACH in Europe is requiring a 
lot of things that frankly I gather make some of your 
proprietary information held by a government agency regarding 
some of the testing, and I tried to Google it, and REACH is a 
long, long PDF. I think your point, Dr. Lohmann, was that, 
heck, this is already being required. It is just being required 
by the Europeans and not by us. That is kind of an interesting 
argument. What would you all say to that? Why don't we just do 
what the Europeans are doing, because frankly, if they are 
doing it, then your chain is only as strong as the weakest link 
and the Europeans are kind of the weak link, perhaps, in some 
of this, so to speak. Or maybe they are the strong link. But 
how would you all respond to that?
    Mr. Morrison. I mean, we operate under both REACH and the 
EPA current guidelines, and we find REACH to be excessively 
bureaucratic and we don't find it necessarily adds incremental 
benefit. We think that the databases that the EPA has, the 
analogous materials they work with, we can innovate faster 
under the EPA system than we can as required under REACH.
    Mr. Cassidy. Then let me ask, because each of you all is so 
big. I kind of knew that you would be in the European market as 
here, and that market is so large you can't ignore it. But do 
you have a different product line, whether it is a U.S. market 
versus a European market?
    Mr. Morrison. In many cases, our products are modified on a 
global basis by region, whether it is consumer or others, for a 
wide variety of reasons, so sometimes there are very 
significant differences.
    Mr. Cassidy. OK, now they just told me I got to hustle, or 
else there will be an attack out on me on my next campaign.
    So Dr. Lohmann, next question for you. I looked up some of 
your references. Now for example, eight weak estrogenic 
chemicals combined at concentration below--produce significant 
mixture effects. You mentioned this was in rats. What would be 
required to produce--put it this way. It is hard to show a 
negative. Now if we are going to establish safety and we had 
rat data in which eight chemicals were combined to have an 
effect, we don't know whether that would translate into humans, 
and indeed, some of those effects might not be seen for 
decades. So I guess my question would be the--at what point--
these guys could be tied up forever proving safety of 
something, but you can't ever prove quite that something bad is 
not going to happen. You see where I am going with this. What 
would be the standard by which you could accept that something 
was truly safe?
    Mr. Lohmann. That is a very good question. I am not sure we 
know the full answer right now, but I think being cautious is 
helpful. Mix toxicity is the biggest unknown that everybody is 
working on, because we know we are exposed to hundreds or 
thousands of chemicals at the same time at trace levels, of 
course.
    Mr. Cassidy. And we don't know if those trace levels are 
physiologically important, or pathophysiologically important. 
It may be, but we don't know that.
    Mr. Lohmann. That is correct, but we also know that 
toxicity has become much, much more concerned about trace 
levels over the time.
    Mr. Cassidy. I absolutely can agree with that. Of course, 
intuitively you know since EPA has been operating our 
environment has become cleaner, and so if you will, there 
should have been a higher toxicity exposure in times past than 
now, and not for everything, but for many things.
    Mr. Lohmann. That is correct. We certainly are cleaner with 
respect to PCPs, but we certainly have increased in 
perfluorinated compounds. We have more flame retardants, so it 
is a give and take.
    Mr. Cassidy. Yes.
    Mr. Lohmann. I am not sure if we are much healthier that 
way.
    Mr. Cassidy. Much less mercury and much less lead. So I 
guess--so I am not sure, it would always be a moving target. I 
am sure we have now decreased lead, we are still seeing 
something trace. How do we ever prove safety? If we are going 
to establish safety beyond a doubt, will we ever have anything 
established?
    Mr. Lohmann. Well, one way to do this is to just wait and 
see if the Europeans become healthier because of REACH and the 
U.S. does not.
    Mr. Cassidy. See, the problem is--and I read an article 
that kind of critiqued this--was that there are so many secular 
effects, and if you look at the effect of obesity, for example, 
and the effects of it on breast cancer, it so much outweighs 
the things that we know have an effect, alcohol, cigarettes, 
family history, obesity are so powerful that even if there is 
an effect of a trace element, then that effect might be drowned 
out by the secular.
    It is 33 seconds left. I am about to miss a vote. I have to 
leave it there. Thank you very much.
    Mr. Gingrey. Thank the gentleman, and we are going to 
actually take a little break. We are waiting for Congressman 
Green from Texas to return from that vote. He should be here 
momentarily. I want to ask that all members have 5 days--ask 
for unanimous consent, of course, that all members have 5 days 
to submit opening statements for the record, that letters to 
this subcommittee from 3M, the Cleaning Institute, and the 
Consumer Specialty Products Association be included in the 
record of this hearing, and that members have 10 days to submit 
questions to the chair that will be forwarded to our witnesses 
for their responses to be included in the record. Hearing no 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Gingrey. I now yield to the gentleman from Texas for 5 
minutes of questioning, Mr. Green.
    Mr. Green. Again, thank you, and I know this panel knows we 
have one vote on the House Floor and you will be seeing us come 
in and out, although hopefully that vote won't take an hour, 
only the typical 15 minutes. I appreciate the panel here. I 
want to thank the majority for calling a number of hearings on 
TSCA reform. I come from an area where TSCA reform is really 
important. I have--in fact, I think Procter and Gamble is 
probably the only company that doesn't have a plant in our 
district that relates to chemicals. But we know we need to 
reform and it needs to be done in a reasonable way, so that is 
what we are hopefully the Bitter-Lautenberg bill or the draft 
is something we can use on our side, on the House side, as a 
guide.
    Mr. Morrison, I am hoping you would share with our 
subcommittee some of the end products that are a result of 
chemicals manufactured by your company.
    Mr. Morrison. Some of the end products would be wind energy 
blades, solar panels--you are talking about end use markets?
    Mr. Green. Yes.
    Mr. Morrison. Medical applications in terms of devices we 
go down into, we have more than 50 applications in automotive, 
all wood products that you have touched probably use our 
chemicals. We are in aircraft. We are extremely broad. We are 
in electronics, so your cell phones, your iPads, we have 
components and chemicals that go into all of that.
    Mr. Green. One of the things we may need to look at as a 
committee, that certain chemicals--we may have a higher 
standard for baby bottles, for example, or for bottles of Diet 
Coke or water or anything else, than we would for windmill 
blades, or even automotive parts that we are not going to have 
contact in. So you know, that is one of the things we need to 
factor in on some of the issues.
    Do you believe that chemicals developed by Momentive could 
have developed under the regulatory regime of the European 
Union?
    Mr. Morrison. In some cases, yes, but in other cases, we 
believe that the speed is not there, that it is a much more 
bureaucratic system. It now requires a minimum data set. It 
doesn't react as quickly, and so in some cases, we would not be 
able to innovate at the same rate, and that is why the U.S. 
innovates at approximately three times the rate of the European 
Union on new chemicals.
    Mr. Green. Well as a side, since we are talking about North 
Atlantic Free Trade Agreement, you know, having common 
standards as something we may need to deal with on a separate 
venue and hopefully our committee will be able to deal with it 
instead of just adopting whatever the European community does. 
You have already given the answer about the regulatory regime 
provided by the advantages of our competitive system. In your 
testimony, you state that EPA and chemical manufacturers 
developed a dialog over the years that benefits both the EPA 
and the industry. Is that correct?
    Mr. Morrison. Yes.
    Mr. Green. Can you share how this dialog would help 
industry develop new chemicals, particularly as it relates to 
protecting human health and the environment?
    Mr. Morrison. Yes. A lot of times, when the EPA puts out 
guidelines, et cetera, dialogs back and forth, we self-regulate 
in many cases as was described earlier where we will start down 
a path developing something. If we find it has certain 
characteristics that may not pass EPA muster or our own muster, 
we will actually pull that product before it ever goes. Having 
an ability to communicate back and forth with the EPA allows us 
to proactively do that. It saves us the time from developing 
something that won't hit the market, and it also saves the EPA 
time. Conversely, I think because the process is quite 
effective and it does lend towards innovation, it also allows 
us to expedite things that will be successful and bring new 
innovation quicker to the market than places like Europe.
    Mr. Green. You noted in your testimony that EPA does not 
require CBI claims to be justified. Is that correct?
    Mr. Morrison. Yes.
    Mr. Green. Do you think you could--we could still have the 
innovation technology if EPA had the authority to say--of 
course, we also are very proprietary interest, but do you think 
if EPA had that authority you could still have the success you 
are having?
    Mr. Morrison. We like to believe that as far as 
justification of CBI and the new Bitter-Lautenberg bill it 
actually does change how CBI information is handled. That is 
one of the modifications that might be an improvement to the 
process today, and is something we could work with.
    Mr. Green. Mr. Sauers, can you share two or three reasons 
why you are opposed to requiring the industry provide a minimum 
safety data on all new chemicals?
    Mr. Sauers. It can be a waste of resources. As we approach 
a new chemical, we understand the exposure, we understand the 
safety testing or the safety evaluation that is needed. We can 
tailor the program specifically to the needs of that chemical. 
That is the approach that the EPA uses today as we go forward 
with them in the PMN process. So this ability to tailor the 
safety program to the specific needs of the chemical is very 
important. You don't have that with a minimal set database. 
Also, the decrease in animal testing that one gets with the 
current EPA approach is very important. If you look at the 
minimum data set, it is usually requiring tests like acute oral 
toxicity tests. I am not sure who runs those tests anymore. 
They are really not necessary to use animals to conduct such a 
toxicity evaluation today. There are many other ways of 
evaluating acute toxicity using structure activity 
relationships. So a lot of testing will be generated that is 
just not necessary as part of those minimum data sets.
    Mr. Green. And I know the EU chemical regimen in your 
testimony was lacking science-based chemical prioritization 
process. It seems today because of CBI and with the advances in 
reverse engineering is it is almost likely that there is no 
real secrets that we can deal with, and would you agree that 
having such a capacity that is readily available for chemicals 
that should make it ineligible for CBI protection for the 
industry?
    Mr. Sauers. I would disagree with that. CBI is very, very 
important for companies like Procter and Gamble to maintain 
competitiveness. Now with that said, that does not mean that 
information is held confidential to the point that it prevents 
an agency from evaluating the safety of a material. You know, 
there is no CBI for the EPA, for example. They get all the 
information and then there is a generic-type form of the 
chemical nomenclature that is released publicly with the health 
and safety information so the public can make their own 
evaluations.
    Mr. Green. Mr. Chairman, I know you have been great with 
the time. I have some other questions I will submit, but one of 
them to Ms. White. I represent a very urban district. We have a 
lot of chemical facilities, refineries in a very urban area. A 
lot of ours--and we probably have the most monitored air-
monitored district in the country, with lots of different 
levels from the State, our county, our city, and of course EPA 
has some monitoring there, too. I have some questions I would 
like to ask on how we can even do better. We want the jobs and 
the industry, but we also want it to be done as safely as we 
can.
    Ms. White. Absolutely. Thank you, sir.
    Mr. Green. Mr. Chairman, thank you for your courtesy.
    Mr. Gingrey. Absolutely. I thank the gentleman from Texas.
    The minority has asked unanimous consent to include a 
letter from the Department of Toxic Substances Control from the 
State of California to be included in the record, and without 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Gingrey. I want to thank all of our five witnesses. I 
think this has been an excellent hearing. I think all would 
agree. We apologize for the interruptions, but believe me, if 
you have been to other hearings you know that this is mild 
compared to some of the interruptions that we have. And we got 
through with everything we needed to cover, and I thank all of 
our witnesses and without objection, the subcommittee is now 
adjourned.
    [Whereupon, at 11:28 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    The Toxic Substances Control Act (TSCA) is one of the more 
important and complex bodies of law in the jurisdiction of our 
committee. It covers chemicals throughout their lifecycle, 
starting even before they are first introduced into commerce. 
TSCA deals with chemical testing, protection against imminent 
hazards, worker exposure, and a host of other specific issues.
    This subcommittee held a hearing last month to build a 
foundation for members to understand TSCA from the point of 
view of experts in the field, each of whom brought a unique 
perspective on the law. We had a thoughtful dialogue between 
members and witnesses--a valuable exchange that helped create a 
foundation to broaden our perspective moving forward.
    Today we follow up on that hearing by selecting two key 
areas of the law to explore: regulation of new chemicals and 
protection of proprietary business information. Both issues 
have a direct effect on American innovation, which is crucial 
to restoring our economy and creating job opportunities here at 
home.
    EPA cannot do the job we've given them to evaluate new 
chemicals for introduction into commerce, or to evaluate new 
uses of previously approved chemicals, unless chemical makers 
provide EPA some specific and sensitive information about how 
the chemical is made and how its developers expect to use it.
    At the same time, EPA must be careful to not disclose that 
information. Without information protection there is no 
incentive to innovate. Without innovation, the economy can't 
grow and we can't create new jobs.
    Beyond protecting information, there are other issues with 
new chemicals. For example, at our June hearing, one witness 
commented that new chemicals are often safer and ``greener'' 
than the ones they replace. We all benefit when good, new 
chemicals are cleared for market and ones that aren't ready are 
held back.
    Today we'll be asking our witnesses to help us better 
understand specific chemical regulations under TSCA as they 
tackle the following questions, among others:
     How do TSCA regulations for new chemicals and new 
uses and TSCA provisions on the protection of confidential 
business information affect your ability to innovate?
     Does EPA have the tools to make informed decisions 
about new chemicals?
     Is the protection provided to confidential 
business information under TSCA appropriate?
     Has TSCA implementation been consistent with the 
original statutory purpose?
     How do other countries treat new chemical 
production and information protection?
    Mr. Chairman, I welcome our witnesses and thank them for 
helping us to better understand the interplay between EPA and 
chemical developers.

                                #  #  #

                              ----------                              


               Prepared statement of Hon. Henry A. Waxman

    Today the Committee continues to examine the Toxic 
Substances Control Act (TSCA). TSCA is an important law because 
of its role in protecting the American public from dangerous 
chemicals--and it is long overdue for strengthening.
    I understand that the Chairman intends to hold a series of 
hearings to examine each of TSCA's sections in turn.
    Today's hearing focuses on two sections of TSCA, section 5, 
which provides for EPA's new chemicals program, and section 14, 
which establishes protections for confidential business 
information.
    Both of these sections are in need of reform, and I welcome 
the panel and their testimony. Today, we will learn that 
section 5 has allowed chemicals onto the market that shouldn't 
have been. And, we'll learn that section 14 has provided a veil 
of secrecy for the chemical industry.
    In recent years, EPA has undertaken a serious effort to 
addresses the weaknesses in these and other sections. They have 
audited thousands of confidential business information claims, 
and have found that nearly 900 chemical identities that had 
been claimed as confidential business information should have 
been made publicly available. This information empowers 
families, researchers, and consumer advocates who wish to 
educate or understand the chemicals we are exposed to. But this 
audit is resource intensive and is unlikely to be replicated 
under today's funding levels.
    That's why, over the years, everyone from the EPA 
Administrator to the Society of Chemical Manufacturers and 
Affiliates have agreed that unjustified claims of confidential 
business information must be addressed.
    EPA has also developed action plans for some of the most 
dangerous and ubiquitous chemicals on the market. Some of these 
dangerous chemicals were initially brought into production 
under section 5 of TSCA. We now know that these chemicals pose 
serious risks, butthose risks were not uncovered by the new 
chemicals program. This is another area that is in vital need 
of reform.
    Four years ago, there was widespread agreement among 
industry, labor, and nongovernmental organizations that TSCA 
needs to be reformed. It's good that we are now turning back to 
this issue.
    Recently, there have been suggestions that a new 
legislative proposal in the Senate will be the vehicle for us 
to reform TSCA. But I have heard significant concerns about 
that proposal from a variety of stakeholders, including federal 
and state agencies, environmental and public health groups, and 
other stakeholders. That is why this hearing and the future 
ones to come are so important.
    I want to thank the witnesses for appearing today, and I 
look forward to hearing from them.
                              ----------                              

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