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Companies far removed from the chemicals industry may be subject to new reporting requirements under Section 71 of the Canadian Environmental Protection Act (CEPA), as the government requests information on 200 chemicals, their uses and the products that contain them.
The new mandate, launched by two notices in August, extends to various sectors that may not be familiar with chemicals regulation, according to Ryan McNamara, an associate at the Canadian law firm Blake, Cassels & Graydon.
"We expect that a variety of downstream importers, retailers, brand owners and manufacturers of finished goods may not recognise that they are potentially subject to these reporting requirements, as they tend to think of themselves as selling finished products rather than chemicals," McNamara told Chemical Watch News & Insight.
For example, a Canadian retailer importing finished goods could qualify as the importer for Section 71 purposes, he said, even if it is not the importer of record under customs law. Environment and Climate Change Canada (ECCC), one of the two regulatory bodies overseeing the data call-ins, has indicated that the importer for Section 71 purposes may be the company that "caused" the substance to enter the country.
McNamara said various sectors may be caught unaware, including manufacturers or importers of clothing, footwear and textiles; food and beverage companies that import packaging or food contact items; and the personal care and beauty industry.
"While companies in these industries are likely familiar with product labelling requirements and consumer protection laws, they may not be as aware of Canadian chemicals reporting obligations," he said.
How far companies must look
The Section 71 notices require that companies provide information they possess and information to which they "would reasonably be expected to have access".
Just how far a company must go to obtain that information "could differ, depending on each company’s situation", according to ECCC.
However, the department said all companies subject to the notices are "expected to make reasonable efforts to obtain information through their supply chain".
In McNamara’s understanding, that includes "information in the possession of an entity’s subsidiaries or international branches".
He therefore recommends that companies "request composition information from primary suppliers of materials or products that are known or suspected to contain a listed substance".
If suppliers do not respond, companies should send at least one follow-up request, making sure to document their efforts in case ECCC asks for proof of due diligence, McNamara said.
The government has published a template letter companies may use to request information from foreign suppliers.
Extensions
Companies may already be encountering difficulties compiling the information Canada has requested.
ECCC told Chemical Watch News & Insight that it has received two extension requests so far.
Extensions are considered on a case-by-case basis and should include justification, the department said. "This includes efforts taken to meet the reporting duties, for example, an update on what data has been compiled, timing, what outstanding data could be obtained and if known, [and] the list of substances (by Chemical Abstracts Service Registry Number (CAS RN)) expected to be included in the final submission," ECCC said.
The government said it divided the reporting mandate into two phases partly to reduce the burden on companies.
Phase one covers 184 substances for which information is needed most immediately, while 16 substances were placed in phase two because the reporting requirements are more onerous and the information is considered a lower priority, ECCC said.
According to McNamara, staggering the requirements should give companies more time to collect historical manufacturing, import and use information, while allowing them to reuse supplier contact and product screening processes developed during phase one.
But "the phased structure will not materially reduce the compliance burden", he said.
Data will inform risk assessments
Canada is "not simply taking a broad inventory of commercial activity" with its section 71 notices, McNamara said. Instead, the government appears to be gathering information about particular exposure scenarios that could ultimately inform risk management measures.
The notices’ use-specific reporting requirements give clues to the exposure scenarios Canada is considering.
For example, the mandate requests information about N-methyl-2-pyrrolidone (NMP)’s uses in glues and paints. According to McNamara, this appears to be connected to a recent government draft risk assessment that identified potential harms from those consumer uses.
If the assessment concludes that NMP meets CEPA’s criteria for a toxic substance, the federal government could proceed with risk management measures, potentially including restrictions on particular uses.
Similar use-specific reporting applies to tributoxyethyl phosphate (TBEP) and 1-bromopropane (1-BP), corresponding to exposure scenarios highlighted in recent risk assessments.
"While this doesn’t mean regulation of these uses is inevitable, it does suggest that the federal government is considering whether risk management is required," he said.
ECCC confirmed that the notices are designed to inform prioritisation, risk assessment and possible risk management.
Styrene and xylenes – two high-volume substances listed in the notices – are already priorities for assessment under Canada’s Plan of Priorities, and ECCC said information from the notices will inform those assessments.
Ethylene glycol and 1,4-butanediol, also listed, are at an earlier prioritisation stage, with the section 71 data expected to help the government determine whether they should proceed to assessment.
Canada’s priorities
The substances covered by the two notices are at different points in Canada’s chemicals management process.
ECCC said that about 100 of the 200 substances are listed for assessment under the government's Plan of Priorities. Around 50 were included to support risk management or performance measurement evaluation, while the remaining (approximately) 50 will provide data to help determine risk assessment priorities.
Some of the latter group have been identified through Canada's work to prioritise chemicals in plastics, the department said.