Chemical Regulation: Actions are Needed to Improve the		 
Effectiveness of EPA's Chemical Review Program (02-AUG-06,	 
GAO-06-1032T).							 
                                                                 
Chemicals play an important role in everyday life, but some may  
be harmful to human health and the environment. Chemicals are	 
used to produce items widely used throughout society, such as	 
cleansers and plastics as well as industrial solvents and	 
additives. However, some chemicals, such as lead and mercury, are
highly toxic at certain doses and need to be regulated because of
health and safety concerns. In 1976, the Congress passed the	 
Toxic Substances Control Act (TSCA) to authorize the		 
Environmental Protection Agency (EPA) to control chemicals that  
pose an unreasonable risk to human health or the environment.	 
This testimony is based on GAO's June 2005 report, Chemical	 
Regulation: Options Exist to Improve EPA's Ability to Assess	 
Health Risks and Manage Its Chemical Review Program (GAO-05-458).
GAO's report describes EPA's efforts to (1) assess chemicals used
in commerce, (2) control the use of chemicals not yet in	 
commerce, and (3) publicly disclose information provided by	 
chemical companies under TSCA. GAO recommended that the Congress 
consider providing EPA additional authorities under TSCA to	 
improve EPA's ability to assess chemical risks, and that the EPA 
Administrator take several actions to improve EPA's management of
its chemical review program. EPA did not disagree with our	 
findings and is currently implementing some of our		 
recommendations.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-1032T					        
    ACCNO:   A57870						        
  TITLE:     Chemical Regulation: Actions are Needed to Improve the   
Effectiveness of EPA's Chemical Review Program			 
     DATE:   08/02/2006 
  SUBJECT:   Chemical regulation				 
	     Contingency plans					 
	     Environmental law					 
	     Environmental monitoring				 
	     Federal regulations				 
	     Health hazards					 
	     Product evaluation 				 
	     Public health					 
	     Toxic substances					 
	     Safety regulation					 
	     EPA High Production Volume Challenge		 
	     Program						 
                                                                 

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GAO-06-1032T

     

     * EPA Has Limited Information on the Health and Environmental
          * EPA Has Limited Toxicity and Exposure Data with Which to Rev
          * EPA Has Had Difficulty Proving That Chemicals Pose Unreasona
          * EPA Implemented a Voluntary Program to Collect More Industry
     * EPA Lacks Sufficient Data to Ensure That the Potential Healt
          * EPA Has Limited Information on New Chemicals and Relies on M
          * Estimates of Exposures and Other Information Provided in Pre
          * EPA Reviews of New Chemicals Have Resulted in Some Control A
     * EPA's Ability to Share Data Collected Under TSCA Is Limited
     * Concluding Observations
     * Contacts and Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony before the Committee on Environment and Public Works, U.S.
Senate

United States Government Accountability Office

GAO

For Release on Delivery Expected at 9:30 a.m. EDT

Wednesday, August 2, 2006

CHEMICAL REGULATION

Actions Are Needed to Improve the Effectiveness of EPA's Chemical Review
Program

Statement of John B. Stephenson, Director, Natural Resources and
Environment

GAO-06-1032T

Mr. Chairman and Members of the Committee:

I am pleased to appear today before the Senate Committee on Environment
and Public Works, to discuss our work on the Environmental Protection
Agency's (EPA) implementation of the Toxic Substances Control Act (TSCA).
Tens of thousands of chemicals are currently in commercial use in the
United States and, on average, over 700 new chemicals are introduced into
commerce each year. Although these chemicals are an integral component in
the production of important goods and services, some may be toxic and may
adversely affect human health and/or the environment. It was in this
context, that the Congress passed TSCA in 1976, authorizing EPA to obtain
manufacturer information on the risks of chemicals and to control those
that EPA determines will pose an unreasonable risk.

TSCA addresses those chemicals manufactured, imported, processed,
distributed in commerce, used, or disposed of in the United States, but
excludes certain substances including pesticides regulated under the
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and food
additives, drugs, and cosmetics regulated under the Federal Food, Drug,
and Cosmetic Act (FFDCA). TSCA authorizes EPA to review those chemicals
already in commerce - what are referred to as existing chemicals - and to
assess chemicals before they enter commerce - so-called new chemicals. EPA
lists chemicals currently in commerce in the TSCA inventory. Of the over
82,000 chemicals currently in the TSCA inventory, about 62,000 were
already in commerce when EPA began reviewing chemicals in 1979. Since
then, approximately 20,000 new chemicals were added to the inventory and
are now in use as existing chemicals.

Prior to the passage of TSCA, chemical substances generally entered the
marketplace without review or controls. Without government intervention,
and often with little or no knowledge of their potential adverse health
and environmental impacts, some of these chemicals were produced and used
in high volumes. Earlier legislation on clean water and air had primarily
addressed releases of chemicals into the environment. In contrast, TSCA
authorized EPA to control the entire life cycle of chemicals from their
production and distribution to their use and disposal-including options
for the outright banning of chemical substances to mandating requirements
for chemical testing or product labeling. Now, chemical companies are
required to submit to EPA, 90 days before beginning to manufacture a new
chemical, a premanufacture notice containing information including the
chemical's identity, categories of uses, estimated production volumes, and
any test data possessed by the chemical company.

My testimony today, which is based on our June 2005 report, Chemical
Regulation: Options Exist to Improve EPA's Ability to Assess Health Risks
and Manage Its Chemical Review Program,1 describes EPA's efforts to (1)
assess existing chemicals used in commerce, (2) control the risks of new
chemicals not yet in commerce, and (3) publicly disclose information
provided by chemical companies under TSCA.

In summary, EPA does not routinely assess the human health and
environmental risks of existing chemicals and faces challenges in
obtaining the information necessary to do so. TSCA's authorities for
collecting data on existing chemicals do not facilitate EPA's review
process because they generally place the costly and time-consuming burden
of obtaining data on EPA, rather than requiring chemical companies to
develop and submit such data to EPA. Consequently, EPA has used its
authorities to require testing for fewer than 200 of the 62,000 chemicals
in commerce when EPA began reviewing chemicals under TSCA in 1979.
Recognizing the need for additional information on existing chemicals, in
the late 1990s EPA implemented its High Production Volume (HPV) Challenge
Program, under which chemical companies have begun to voluntarily provide
test data on about 2,800 chemicals produced or imported in amounts of 1
million pounds or more a year. While the HPV Challenge Program is a
laudable effort to develop data on these chemicals, several problems
remain, including that the chemical industry has not agreed to provide
testing for over 200 chemicals originally identified in the HPV Challenge
Program and that even with the test data provided under the program, EPA
would need to demonstrate that the chemicals pose unreasonable risks in
order to control their production or use under TSCA. While TSCA does not
define what risk is unreasonable, according to EPA officials the standard
has been difficult to meet. In order to withstand judicial scrutiny, a
TSCA rule must be supported by substantial evidence in the rulemaking
record. In this regard, EPA officials say the act's legal standards are so
high that they have generally discouraged EPA from using its authorities
to ban or restrict the manufacture or use of chemicals. Since Congress
enacted TSCA in 1976, EPA has issued regulations under the act to ban or
limit the production of only five existing chemicals or groups of
chemicals.

1 GAO, Chemical Regulation: Options Exist to Improve EPA's Ability to
Assess Health Risks and Manage Its Chemical Review Program, GAO-05-458
(Washington, D.C.: June 13, 2005).

EPA's reviews of new chemicals can provide only limited assurance that
health and environmental risks are identified before the chemicals enter
commerce because TSCA does not require chemical companies to test new
chemicals before notifying EPA of their intent to manufacture a chemical.
Furthermore, chemical companies generally do not voluntarily perform such
testing. Because of a general lack of data, EPA has developed
sophisticated methods to predict the potential exposure and toxicity
levels of new chemicals by using scientific models to compare them with
chemicals with similar molecular structures for which toxicity information
is available. However, the use of these models can present weaknesses in
the assessment because the models are not always accurate in predicting
physical chemical properties and the evaluation of general health effects
is contingent on the availability of information on chemicals with similar
molecular structures. Additionally, chemical company estimates of a
chemical's production volume and anticipated uses provided in the
premanufacture notices that EPA uses to assess exposure, can change
substantially after EPA completes its review and manufacturing begins.
However, these estimates do not have to be amended by companies unless EPA
promulgates a rule determining that a use of a chemical constitutes a
significant new use, which EPA has done for only a small percentage of new
chemicals. Despite limitations in the information available on new
chemicals, EPA's reviews have resulted in some action being taken to
reduce the risks of over 3,600 new chemicals submitted for review.

EPA's ability to provide the public with information on chemical
production and risk has also been hindered by strict confidential business
information provisions of TSCA. TSCA generally prohibits the disclosure of
confidential business information and, according to EPA officials, about
95 percent of the premanufacture notices for new chemicals contain some
information that is claimed as confidential. While EPA has the authority
to evaluate the appropriateness of confidentiality claims, these efforts
are time and resource-intensive, and the agency does not have the
resources to challenge a significant number of claims. State environmental
agencies and others have expressed interest in obtaining information
claimed as confidential business information for use in various
activities, such as developing contingency plans to alert emergency
response personnel to the presence of highly toxic substances at
manufacturing facilities. Chemical companies recently have expressed
interest in working with EPA to identify ways to enable other
organizations to use the information given the adoption of appropriate
safeguards.

In our June 2005 report, we recommended that the Congress consider
providing EPA additional authorities under TSCA to improve its ability to
assess chemical risks, such as providing the EPA Administrator the
authority to require chemical companies develop test data when production
volumes reach certain levels. We also recommended that the EPA
Administrator take several actions to improve EPA's management of its
chemical program, including revising its regulations to require that
companies reassert confidentiality claims under TSCA within a certain time
period after the information is initially claimed as confidential. EPA did
not disagree with the report's findings and is in the process of
implementing several of our recommendations. For example, EPA is currently
launching a pilot project to review claims of confidentiality for data on
certain older chemicals.

 EPA Has Limited Information on the Health and Environmental Risks of Existing
      Chemicals and Has Issued Few Regulations Controlling Such Chemicals

Because chemical companies are generally not required to develop and
submit toxicity information to EPA, when the agency decides to review
existing chemicals, it generally has only limited information on the risks
that the chemicals pose to human health and the environment. Furthermore,
EPA's authority under TSCA to require industry testing that would provide
the information to review the chemicals is difficult to use, according to
EPA officials. EPA has used its authority to require testing for fewer
than 200 of the 62,000 chemicals in commerce when EPA began reviewing
chemicals under TSCA in 1979. Furthermore, EPA has rarely banned, limited
the production, or restricted the use of existing chemicals. Since 1998,
EPA has focused its efforts on obtaining information on existing chemicals
through voluntary programs, such as the HPV Challenge Program. This
program is intended to provide basic data on the characteristics of about
2,800 chemicals produced in excess of 1 million pounds a year.

EPA Has Limited Toxicity and Exposure Data with Which to Review Existing
Chemicals

EPA's toxicity and exposure data on existing chemicals is often incomplete
and TSCA's authority to require testing in support of the agency's review
process is difficult to use. While TSCA authorizes the review of existing
chemicals, it generally provides no specific requirement, time frame, or
methodology for doing so. Chemical companies are not required to develop
and submit toxicity information to EPA unless the agency promulgates a
testing rule, thus placing the burden for obtaining data on EPA. In
addition, if chemical company testing shows that a chemical is not toxic,
there is generally no standing requirement that the chemical companies
submit this data to EPA. Consequently, when EPA decides to review existing
chemicals, it generally has only limited information on the risks of
injury the chemicals pose to human health and the environment.

EPA officials told us that in cases where chemical companies do not
voluntarily provide test data and health and safety studies in a complete
and timely manner, requiring the testing of existing chemicals of
concern-those chemicals for which some suspicion of harm exists-is the
only practical way to ensure that the agency obtains the needed
information. For example, there are currently over 200
high-production-volume chemicals for which chemical companies have not
agreed to provide the minimal test data that EPA believes are needed to
initially assess their risks. Furthermore, many additional chemicals are
likely to be added to become high production chemicals because the
specific chemicals used in commerce are constantly changing, as are their
production volumes. Chemical industry representatives told us that TSCA
provides EPA with adequate authority to issue rules requiring companies to
provide EPA with any test and exposure data possessed by the companies,
and that EPA could use such authority to obtain company information on
existing chemicals of concern. EPA could then use that information to
determine whether additional rules should be issued to require companies
to perform additional testing of the chemicals.

However, EPA officials told us that it is time-consuming, costly, and
inefficient for the agency to use a two-step process of (1) issuing rules
under TSCA (which can take months or years to develop) to obtain exposure
data or available test data that the chemical industry does not
voluntarily provide to EPA and then (2) issuing additional rules requiring
companies to perform specific tests necessary to ensure the safety of the
chemicals tested. Officials also said that EPA's authority under TSCA to
issue rules requiring chemical companies to conduct tests on existing
chemicals has been difficult to use because the agency must first make
certain findings before it can require testing. Specifically, TSCA
requires EPA to find that current data is insufficient; testing is
necessary; and that either (1) the chemical may present an unreasonable
risk or (2) that the chemical is or will be produced in substantial
quantities and that there is or may be substantial human or environmental
exposure to the chemical.

Once EPA has made the required findings, the agency can issue a proposed
rule for public comment, consider the comments it receives, and promulgate
a final rule ordering chemical testing. EPA officials told us that
finalizing rules can take from 2 to 10 years and require the expenditure
of substantial resources. Given the time and resources required, the
agency has issued rules requiring testing for fewer than 200 chemicals.
Because EPA has used authority to issue rules to require testing so
sparingly, it has not continued to maintain information on the cost of
implementing these rules. However, in our October 1994 report on TSCA,2 we
noted that EPA officials told us that issuing such a rule can cost
hundreds of thousands of dollars.

Given the difficulties involved in requiring testing, EPA officials do not
believe that TSCA provides an effective means for testing a large number
of existing chemicals. They believe that EPA could review substantially
more chemicals in less time if they had the authority to require chemical
companies to conduct testing and provide test data on chemicals once they
reach a substantial production volume, assuming EPA had first determined
that these data cannot be obtained without testing. We have long held a
similar view based on our reviews involving TSCA, and in our in June 2005
report, we recommended that the Congress consider giving EPA the authority
to require chemical manufacturers and processors to develop test data
based on substantial production volume and the necessity for testing.

EPA Has Had Difficulty Proving That Chemicals Pose Unreasonable Risks and Has
Regulated Few Existing Chemicals under TSCA

Even when EPA has toxicity and exposure information on existing chemicals,
the agency stated that it has had difficulty demonstrating that harmful
chemicals pose an unreasonable risk and that they should be banned or have
limits placed on their production or use. Indeed, EPA has rarely banned,
limited the production, or restricted the use of existing chemicals. Since
the Congress enacted TSCA in 1976, EPA has issued regulations under the
act to ban or limit the production or restrict the use of only five
existing chemicals or chemical classes. For an additional 173 existing
chemicals, EPA has required chemical companies to submit notices of any
significant new uses of the chemical, providing EPA the opportunity to
review the risks posed by the new use.

2 GAO, Toxic Substances Control Act: Legislative Changes Could Make the
Act More Effective, GAO/RCED-94-103 (Washington, D.C.: September 26,
1994).

EPA Implemented a Voluntary Program to Collect More Industry Data on Existing
Chemicals

Facing difficulties obtaining information on existing chemicals, EPA took
steps to address this shortcoming with the implementation of the HPV
Challenge Program in 1998. According to EPA, the lack of information on
existing chemicals and the relative difficulty of requiring testing under
TSCA on the scale that would be necessary for the thousands of chemicals
produced at high volumes, has led EPA, in cooperation with chemical
companies, environmental groups, and other interested parties, to
implement a voluntary program to obtain test data on
high-production-volume chemicals from chemical companies. The HPV
Challenge Program focuses on obtaining chemical company "sponsors" to
voluntarily provide data on the approximately 2,800 chemicals that
chemical companies reported in 1990, that they produced at a high
volume-generally over 1 million pounds.

Through this program, sponsors develop a minimum set of data on the
chemicals, either by gathering available information, using models to
predict the chemicals' properties, or conducting testing of the chemicals.
EPA plans to use the data collected under the program to prioritize
high-production chemicals for further assessment, but it has not yet
adopted a methodology for prioritizing the chemicals or for determining
those that require additional information. In our June 2005 report, we
recommended that EPA develop and implement such a methodology for using
information collected through the HVP Challenge Program to prioritize
chemicals for further review and to identify and obtain additional
information needed to assess their risks. At EPA's request, a federal
advisory group has proposed a methodology for prioritizing the HPV
Challenge Program chemicals, and EPA anticipates that the agency will
implement the proposal during 2006.

Nonetheless, other problems exist in the HPV Challenge Program. Chemical
companies have not volunteered to provide data on all the chemicals
currently in the HPV Program. In addition, despite the fact that companies
may begin raising the production volumes of other chemicals, EPA has no
mechanism for placing these chemicals on the HPV Challenge Program list
once they are produced in greater volume. We believe that action to
implement our previously mentioned recommendation that the Congress
consider giving EPA additional authority to require chemical testing could
ameliorate such problems.

EPA Lacks Sufficient Data to Ensure That the Potential Health and Environmental
                     Risks of New Chemicals Are Identified

EPA's review of new chemicals provides only limited assurance that health
and environmental risks are identified because the agency has limited
information with which to review them. In the absence of chemical test
data, EPA largely relies on scientific models that do not always
accurately determine chemicals' properties or the full extent of their
adverse effects. Further, information that companies provide in the
premanufacture notices that EPA uses to assess potential exposures to new
chemicals are estimates that can change substantially once manufacturing
begins. Despite limitations in the information available on new chemicals,
EPA's reviews have resulted in some action being taken to reduce the risks
of over 3,600 new chemicals submitted for review.

EPA Has Limited Information on New Chemicals and Relies on Modeling Tools to
Assess the Health and Environmental Risks of New Chemicals

TSCA generally requires chemical companies to notify EPA of their intent
to manufacture or import new chemicals and to provide any available test
data. Yet EPA estimates that most premanufacture notices do not include
test data of any type, and only about 15 percent include health or safety
test data. Chemical companies do not have an incentive to conduct these
tests because they may take over a year to complete, and some tests may
cost hundreds of thousands of dollars. During a review of a new chemical,
EPA evaluates risks by conducting a chemical analysis, searching the
scientific literature, reviewing agency files (including files of related
chemicals that have already been assessed by EPA), analyzing toxicity data
on structurally similar chemicals, calculating potential releases of and
exposures to the chemical, and identifying the chemical's potential uses.
On the basis of this review, EPA makes a decision to (1) take no action;
(2) require controls on the use, manufacture, processing, distribution in
commerce, or disposal of the chemical pending development of test data; or
(3) ban or otherwise regulate the chemical pending the receipt and
evaluation of test studies performed by the chemical's manufacturer.
Because EPA generally does not have sufficient data on a chemical's
properties and effects when reviewing a new chemical, EPA uses a method
known as structure activity relationships analysis to screen and evaluate
a chemical's toxicity. This method, also referred to as the nearest
analogue approach, involves using models to compare new chemicals with
chemicals with similar molecular structures for which test data on health
and environmental effects are available.

EPA officials told us that, while the overall accuracy of the models has
not been validated for regulatory purposes, they are effective as
screening tools that allow EPA to focus its attention on the chemicals of
greatest concern-chemicals about which little is known other than that
they are structurally related to known harmful chemicals. By applying
approaches that make conservative predictions, EPA believes that it is
more likely to identify a false positive (where a chemical is determined
to be of concern, but on further analysis is found to be of low concern)
than a false negative (where a chemical is initially viewed as a low
concern though on further analysis is actually of higher concern).
According to EPA, only about 20 percent of the premanufacture notices
received annually go through the agency's more detailed full-review
process after they have been initially screened. That is, according to EPA
officials, the majority of new chemicals submitted for review can be
screened out as not requiring further review because (1) EPA determines on
the basis of its screening models that a chemical has low potential to
harm human health or the environment or (2) on the basis of other
information, such as the anticipated uses, exposures, and releases of the
chemicals, only limited potential risks to people and the environment are
expected. In addition, using these models, EPA identifies for possible
regulatory action, those chemicals belonging to certain chemical
categories that based on its prior experience in reviewing new chemicals
are likely to pose potential risks such that testing or controls are
needed. In our June 2005 report, we recommended that the EPA Administrator
develop a strategy for improving and validating, for regulatory purposes,
the models that EPA uses to assess and predict the risks of chemicals and
to inform regulatory decisions on the production, use, and disposal of the
chemicals.

Estimates of Exposures and Other Information Provided in Premanufacturing
Notices Can Change after Manufacturing Begins

EPA bases its exposure estimates for new chemicals on information
contained in premanufacture notices. However, the anticipated production
volume, uses, exposure levels, and release estimates outlined in these
notices generally do not have to be amended once manufacturing begins.
That is, once EPA completes its review and production begins, chemical
companies are not required under TSCA to limit the production of a
chemical or its uses to those specified in the premanufacture notice or to
submit another premanufacture notice if changes occur. However, the
potential risk of injury to human health or the environment may increase
when chemical companies increase production levels or expand the uses of a
chemical. To address this potential, TSCA authorizes EPA to promulgate a
rule specifying that a particular use of a chemical would be a significant
new use. EPA has infrequently issued such rules, which require
manufacturers, importers, and processors of the chemical for the new use
to notify EPA at least 90 days before beginning manufacturing or
processing the chemical for that use.

EPA Reviews of New Chemicals Have Resulted in Some Control Actions

When EPA's assessment of a new chemical identifies health and safety
problems, EPA can issue a proposed rule to prevent chemical companies from
manufacturing or distributing the chemical in commerce, or to otherwise
restrict the chemical's production or use, if the agency believes the new
chemical may present an unreasonable risk before EPA can regulate the
chemical under the relevant provisions of TSCA. Despite limitations in the
information available on new chemicals, EPA's reviews have resulted in
some action being taken to reduce the risks of over 3,600 new chemicals
that chemical companies have submitted for review. These actions ranged
from chemical companies voluntarily withdrawing their notices of intent to
manufacture new chemicals, chemical companies entering into consent orders
with EPA to produce a chemical under specified conditions, and EPA
promulgating significant new use rules requiring chemical companies to
notify EPA of their intent to manufacture or process a chemical for new
uses.

For over 1,700 chemicals, companies withdrew their premanufacture notices,
sometimes after EPA indicated that the agency planned to initiate the
process for placing controls on the chemical, such as requiring testing or
prohibiting the production or certain uses of the chemical. EPA officials
told us that after EPA screens a chemical or performs a more detailed
analysis of it, chemical companies often drop their plans to market a new
chemical when the chemical's niche in the marketplace is uncertain and EPA
requests that the company develop and submit test data.

For over 1,300 chemicals, EPA has issued orders requiring chemical
companies to implement workplace controls or practices during
manufacturing (pending the development of information), and/or perform
toxicity testing when the chemical's production volumes reached certain
levels. EPA may issue these proposed orders to control the production,
distribution, use, or disposal of a new chemical when there is
insufficient information available to reasonably evaluate the human health
or environmental effects of a chemical and when the chemical (1) may
present an unreasonable risk to human health or the environment or (2) is
or will be produced in substantial quantities and (a) it either enters or
may reasonably be anticipated to enter the environment in substantial
quantities or (b) there is or may be significant or substantial human
exposure to the substance. While TSCA does not authorize EPA to require
that chemical companies develop this information, the act does allow EPA
to control the manufacturing and processing of the chemical until EPA has
sufficient data to determine if the chemical will pose a risk.

For over 570 new chemicals submitted for review, EPA required chemical
companies to submit premanufacture notices for any significant new uses of
the chemical, providing EPA the opportunity to review the risks of injury
to human health or the environment before new uses had begun.

          EPA's Ability to Share Data Collected Under TSCA Is Limited

EPA's ability to make publicly available the information that it collects
under TSCA is limited. Chemical companies may claim the information they
provide to EPA under TSCA as confidential business information. While EPA
believes that some claims of confidential business information may be
unwarranted, challenging the claims is resource-intensive.

When companies submit information to EPA through premanufacture notices,
many claim a large portion of the information as confidential. According
to EPA, about 95 percent of premanufacture notices contain some
information that chemical companies claim as confidential. Under EPA
regulations, information that is claimed as confidential shall generally
be treated as such if no statute specifically requires disclosure.
Exceptions include if the information is required to be released by some
other federal law or court order, if the company voluntarily withdraws its
confidential claim, or if the EPA Office of General Counsel makes a final
administrative determination that the information does not meet the
regulatory criteria substantiating a legal right to the claim. EPA has not
performed any recent studies of the appropriateness of confidentiality
claims, although a 1992 EPA study indicated that problems with
inappropriate claims were extensive. That study examined the extent to
which companies made confidential business information claims, the
validity of the claims, and the impact of inappropriate claims on the
usefulness of TSCA data to the public. While EPA may suspect that some
chemical companies' confidentiality claims are unwarranted, they have no
data on the number of inappropriate claims.

EPA officials told us that the agency does not have the resources
necessary to investigate and, where appropriate, challenge claims that it
believes are inappropriate. Consequently, EPA focuses on investigating
primarily those claims that it believes may be both inappropriate and
among the most potentially important-that is, confidentiality claims
relating to health and safety studies performed by the chemical companies
involving chemicals currently in commerce. The EPA official responsible
for initiating challenges to confidentiality claims told us that EPA
challenges about 14 such claims each year, and that the chemical companies
withdraw nearly all of the claims when challenged.

Officials who have various responsibilities for protecting public health
and the environment from the dangers posed by chemicals believe that
having access to confidential TSCA information would allow them to examine
information on chemical properties and processes that they currently do
not possess and could enable them to better control the risks of
potentially harmful chemicals. For example, on the basis of a study
performed by the state of Illinois with the cooperation of chemical
companies and EPA, Illinois regulators found that toxicity information
submitted under TSCA was useful in identifying chemical substances that
should be included in contingency plans in order to alert emergency
response and planning personnel to the presence of highly toxic substances
at facilities. Additionally, the availability of this information could
assist the states with environmental monitoring and enforcement. For
instance, using TSCA data, Illinois regulators identified potential
violations of state environmental regulations, such as cases where
companies had submitted information to EPA under TSCA but failed to submit
such information to the states as required.

Likewise, the general public may also find information provided under TSCA
useful. Individual citizens or community groups may have a specific
interest in information on the risks of chemicals that are produced or
used in nearby facilities. For example, neighborhood organizations can use
such information to engage in dialogue with chemical companies about
reducing chemical risks, preventing accidents, and limiting chemical
exposures.

TSCA's provisions are in contrast to those of some foreign governments'
environmental laws, such as Canada, which authorizes its environmental
agency to share confidential business information with other governments
under agreements or arrangements where the government undertakes to keep
the information confidential. Chemical industry representatives told us
that the industry also sees benefits in allowing EPA to share information
with other countries in order to harmonize chemical assessments among
developed countries and improve chemical risk assessment methods by
allowing cooperation on improving models used to predict chemical
toxicity. The chemical industry is concerned, however, that confidential
information be protected from inappropriate disclosure. These chemical
industry representatives told us that some countries currently do not have
adequate procedures for protecting confidential business information.
However, they suggested that the policies and procedures EPA currently
uses to protect confidential information are appropriate. Accordingly,
they said that the chemical industry would not object to TSCA revisions
allowing EPA to share confidential information with foreign countries and
organizations, provided that such revisions contain specific reference to
safeguards that EPA would establish and enforce to ensure that those
receiving the information have stringent policies and procedures to
protect it.

Our June 2005 report included two recommendations for addressing the
problems we identified related to the confidential business information
provisions of TSCA. We recommended that EPA revise its regulations to
require companies to reassert claims of confidentiality within a certain
period after the information is initially claimed as confidential. We also
recommended that the Congress consider amending TSCA to authorize EPA to
share with the states and foreign governments the confidential business
information that chemical companies provide to EPA, subject to regulations
to be established by EPA in consultation with the chemical industry and
other interested parties that would set forth the procedures to be
followed by all recipients of the information in order to protect the
information from unauthorized disclosures. EPA did not disagree with the
report's findings and is in the process of implementing several of our
recommendations. For example, EPA is currently launching a pilot project
to review claims of confidentiality for data on certain older chemicals.

                            Concluding Observations

Mr. Chairman, EPA's efforts to encourage companies to voluntarily provide
data on existing chemicals is commendable. However, the fundamental and
historical problems the agency has experienced with utilizing its
authorities under TSCA continue to limit EPA's ability to manage its
chemical review program and assess chemical risks. In this respect, EPA
faces considerable difficulties using its authorities to require testing
of existing chemicals, which prevents the agency from reviewing
substantially more chemicals in less time than it could if it had the
authority to require chemical companies to provide test data on chemicals
once they have reached a substantial production volume. Moreover, EPA's
ability to provide the public with information on chemical production and
risks is hampered by the strict confidential business information
provisions of TSCA. While protecting such information is a legitimate
concern, TSCA currently prohibits EPA from disclosing much data for
important purposes such as assisting state agencies in carrying out their
environmental management responsibilities and foreign governments in
harmonizing international chemical assessment approaches-a goal generally
shared by these governments and the chemical industry. We believe the
actions that we have recommended to both the Congress and EPA would go a
long way in addressing the challenges EPA faces in exercising its
authorities under TSCA.

Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Committee may have.

                          Contacts and Acknowledgments

For further information about this testimony, please contact me Mr. John
B. Stephenson at (202) 512-3841. David Bennett, John Delicath, Tyra
DiPalma-Vigil, Richard Johnson, Valerie Kasindi, and Ed Kratzer made key
contributions to this statement.

(360744)

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www.gao.gov/cgi-bin/getrpt?GAO-06-1032T.

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Highlights of GAO-06-1032T, testimony before the Committee on Environment
and Public Works, U.S. Senate

August 2, 2006

CHEMICAL REGULATION

Actions Are Needed to Improve the Effectiveness of EPA's Chemical Review
Program

Chemicals play an important role in everyday life, but some may be harmful
to human health and the environment. Chemicals are used to produce items
widely used throughout society, such as cleansers and plastics as well as
industrial solvents and additives. However, some chemicals, such as lead
and mercury, are highly toxic at certain doses and need to be regulated
because of health and safety concerns. In 1976, the Congress passed the
Toxic Substances Control Act (TSCA) to authorize the Environmental
Protection Agency (EPA) to control chemicals that pose an unreasonable
risk to human health or the environment.

This testimony is based on GAO's June 2005 report, Chemical Regulation:
Options Exist to Improve EPA's Ability to Assess Health Risks and Manage
Its Chemical Review Program (GAO-05-458). GAO's report describes EPA's
efforts to (1) assess chemicals used in commerce, (2) control the use of
chemicals not yet in commerce, and (3) publicly disclose information
provided by chemical companies under TSCA. GAO recommended that the
Congress consider providing EPA additional authorities under TSCA to
improve EPA's ability to assess chemical risks, and that the EPA
Administrator take several actions to improve EPA's management of its
chemical review program. EPA did not disagree with our findings and is
currently implementing some of our recommendations.

EPA's authority under TSCA to obtain the data needed to assess existing
chemicals does not facilitate its review process because the costly and
time-consuming burden of obtaining the data is on EPA, rather than
chemical companies. Consequently, EPA has used its authorities to require
testing of fewer than 200 of the 62,000 chemicals in commerce when EPA
began reviewing chemicals under TSCA in 1979. To obtain more data on
existing chemicals, EPA implemented its High Production Volume Challenge
Program, under which chemical companies voluntarily provide test data on
about 2,800 chemicals produced or imported in amounts of 1 million pounds
or more a year. While the purpose of the program is laudable, several
problems remain, including that the chemical industry has not agreed to
provide test data for over 200 chemicals with high production volumes.
Moreover, after obtaining test data, EPA is required under TSCA's
provisions to determine that a chemical poses an unreasonable risk before
EPA can act to regulate its production or use. EPA officials say the act's
legal standards for demonstrating unreasonable risk are so high that they
have generally discouraged EPA from using its authorities to ban or
restrict the manufacture or use of existing chemicals. Since Congress
enacted TSCA in 1976, EPA has issued regulations to ban or limit the
production of only five existing chemicals or groups of chemicals.

EPA's reviews of new chemicals provide only limited assurance that health
and environmental risks are identified because TSCA does not require
companies to test chemicals before they notify EPA of their intent to
manufacture the chemicals. Because of a general lack of data on new
chemicals, EPA has developed methods to predict their potential exposure
and toxicity levels by using scientific models to compare the new
chemicals with chemicals that have similar molecular structures and for
which toxicity information is available. However, the use of these models
can be problematic because the models are not always accurate in
predicting chemical properties and EPA's evaluation of general health
effects of the chemicals is contingent upon the availability of
information on chemicals with similar molecular structures. Additionally,
the estimates of a chemical's production volume and anticipated uses,
which EPA uses to assess exposure, can change substantially after EPA
completes its review. Despite these limitations, EPA's reviews have
resulted in some action being taken to reduce the risks of over 3,600 new
chemicals.

EPA's ability to provide the public with information on chemical
production and risk is generally limited by the confidential business
information provisions of TSCA. As a result, state agencies and foreign
governments interested in obtaining this data for important purposes are
denied access to the information. Recently, chemical companies have
expressed interest in working with EPA to identify ways of enabling the
agency to share confidential information with other organizations,
provided that appropriate safeguards are adopted to prevent the
unauthorized use of the information.
*** End of document. ***