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Volume 89 Issue 14 | pp. 24-26
Issue Date: April 4, 2011

Trade Secret Anxiety

Globalchem examines EPA move to make public more data that companies claim as confidential
Department: Government & Policy, Business
News Channels: Environmental SCENE
Keywords: TSCA, GlobalChem, confidential business information
GLOBALCHEM
Attendees heard from ACC’s Franz (from left), EPA’s Cunningham, and P&G’s Froelicher.
Credit: Alexander Morozov/ACC
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GLOBALCHEM
Attendees heard from ACC’s Franz (from left), EPA’s Cunningham, and P&G’s Froelicher.
Credit: Alexander Morozov/ACC

The chemical industry is on edge over the Environmental Protection Agency’s efforts to make public some of the information companies claim as proprietary in submissions on commercial chemicals to EPA.

That nervousness was a significant theme running through the industry’s annual global chemical regulation conference, which was held last month in Baltimore. Companies are anxious about the agency revealing to the public the identity of proprietary chemicals, components of secret formulations, or the name of the business that makes them. This confidential business information is included in submissions required by the Toxic Substances Control Act (TSCA).

The heightened concern about data claimed as proprietary may have started at the 2010 GlobalChem meeting. At last year’s conference, Stephen A. Owens, EPA assistant administrator for chemical safety and pollution prevention, threw down the gauntlet. He challenged manufacturers to voluntarily lift some of their confidentiality claims in health and safety studies previously sent to the agency. This effort is part of agency Administrator Lisa P. Jackson’s initiative to provide the public with more information about commercial chemicals (C&EN, April 19, 2010, page 28).

TSCA includes strict protections for proprietary information that companies share with EPA, thus keeping these data out of the hands of competitors. Agency employers and contractors face criminal sanctions if they release information that a company has claimed as confidential. These safeguards for trade secrets are intended to foster innovation in the chemical industry while providing the agency with essential data about commercial substances.

Yet industry and EPA agree that businesses have overused confidentiality claims in some cases. In thousands of health and safety data submissions required under TSCA, companies have asserted that their name, the chemical’s identity, or both are proprietary. EPA makes versions of these files public, with confidential business information redacted. Activists have complained for years that too many of the public health and safety reports describe substances in overly broad, generic terms such as “a substituted nitrogen-containing heterocycle,” rendering the data virtually meaningless.

Some 22,000 health and safety studies that industry has submitted to EPA under TSCA claim the identity of the chemical studied as confidential business information, according to Barbara Cunningham, deputy director of EPA’s Office of Pollution Prevention & Toxics. “It’s a rather astounding number,” she told GlobalChem attendees. Since reporting under TSCA began in 1977, EPA has received about 69,000 health and safety studies, according to the agency.

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EPA is beginning to challenge some of those claims. In February, the agency warned five companies that EPA would make public the data they claimed as proprietary in studies that showed a substantial risk to health or the environment—unless the firms challenged the agency’s move in court (C&EN, Feb. 21, page 26). None did so.

Meanwhile, Cunningham said, EPA has been working with 19 chemical makers that volunteered to review their health and safety filings. The companies agreed to withdraw TSCA confidentiality claims that are unwarranted, including older ones that are no longer essential for competitive reasons.

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On March 24, the day after GlobalChem ended, EPA posted on its website 42 health and safety studies for which companies had lifted their confidentiality claims for chemical identity. DuPont, one of the companies working voluntarily with the agency, accounted for 11 of the declassified documents. Also, the five chemical makers that got warnings from the agency in February agreed to EPA releasing information the producers previously claimed as proprietary, Cunningham said. They are Givaudan Fragrances, Japan Technical Information Center, JSR Micro, Nalco, and Promerus. In addition, some of the recently declassified studies name the chemical that was the subject of health and safety research while maintaining confidentiality claims for the company’s identity.

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Procter & Gamble is also working voluntarily with EPA on declassification of TSCA confidential business information, rescinding its assertions in three of the 42 reports EPA just released. Julie Froelicher, regulatory affairs manager at P&G, told GlobalChem attendees that the review of previously submitted health and safety studies has been resource-intensive. A number of complications have cropped up, she said.

For example, many of the files exist only on paper and are thus not searchable electronically, and they are scattered across various facilities. In some cases, acquisitions and divestitures have led to questions about which legal entity is responsible for the information claimed as proprietary in TSCA submissions, she continued. Licensing and sale of technologies can also complicate confidentiality assertion situations.

Plus, the components and percentage of ingredients in some mixtures are protected by confidential disclosure agreements, Froelicher said. In these cases, confidentiality claims have to be reviewed by attorneys before they can be lifted.

Looking broadly at this issue, the American Chemistry Council has formed an ad hoc work group on declassification of confidential business information, said Christina Franz, director of regulatory and technical affairs at the chemical industry group. ACC’s position is that companies should be required to justify trade secret claims when they submit information to the agency under TSCA—and that firms should have to reassert those declarations periodically, Franz said at GlobalChem.

Nonetheless, EPA needs to continue to protect data claimed as confidential because the information is essential to innovation in the chemical industry, Franz said. A provision in TSCA states that federal chemical regulatory authority “should be exercised in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation,” she pointed out.

She also took issue with EPA’s warnings that it would declassify chemical identity data claimed as a trade secret in health and safety studies if companies do not voluntarily revoke these assertions. Statutory language in TSCA suggests that the agency has the discretion to uphold a firm’s confidentiality assertions on a case-by-case basis, Franz contended.

This is in contrast to EPA’s current stance that the law does not provide protections to data in health and safety studies save for two exceptions spelled out in TSCA. One of those exclusions shields information that discloses processes used in manufacturing a substance. The second prevents disclosure of the proportion of each of the ingredients in a mixture.

These conflicting interpretations of TSCA’s protection for confidential business information may lead to a federal court case, Franz warned.

EPA needs to exercise caution in its health and safety data disclosure efforts, Franz continued. Chemical identities can have significant economic value, especially for commercial mixtures. In some cases, the use of a particular chemical in a formulation may be proprietary, she said.

Industry is suggesting a solution that would satisfy activists’ desire to understand health and safety data studies better while protecting trade secrets, Franz said. Instead of vague descriptions that could apply to thousands of chemicals, companies could include “sufficiently descriptive generic names” for EPA’s public TSCA files, she said. This would make it possible to link the substance in a report to similar compounds described in published studies, she said.

Meanwhile, EPA’s tighter policies on confidential business information may mean companies will file fewer notices indicating that health or safety studies show chemicals or mixtures pose a substantial risk, said Ernie Rosenberg, president and chief executive officer of the American Cleaning Institute, a trade group. If substances are undergoing research and development, a manufacturer may think twice about submitting a report to EPA that will make the identity of these chemicals or mixtures available to the public, Rosenberg said at GlobalChem.

Currently, EPA is planning more action on TSCA confidential business information. The agency intends to propose two new regulations later this year, Cunningham said. One would address the substantiation companies need to back up assertions that data they provide to the agency constitute trade secrets that need protection.

The other proposed rule would provide greater protection to proprietary information about new substances for which companies submit premanufacture notices to EPA, Cunningham said. This proposal might garner backing from the chemical makers, given their jitters about confidential business information.

 
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