Audit, Compliance and Risk Blog

The Federal Trade Commission (FTC) administers longstanding protections against advertising that uses “false” or “misleading” advertising to induce consumers to buy products that do not perform as advertised, or that produce consequences different from those advertised. FTC’s rules include its “Guides for the use of environmental marketing claims” – generally called “Green Guides” (16 CFR part 260). FTC first issued the Green Guides thirty years ago in 1992 and revised them in 1996, 1998, and 2012. (I most recently discussed the Guides, and the FTC Act of 1914, HERE ). On December 14, 2022, FTC voted to seek public comment on the content and interpretation of meaning of the existing Guides, and the sorts of changes and updates that would enhance their ongoing value to consumers. The remainder of this note summarizes the existing Green Guides, and FTC’s questions for public comment.

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On November 22, the US Environmental Protection Agency (EPA) announced the success of its ongoing National Compliance Initiative for “Reducing Significant Non-Compliance (SNC) with NPDES Permits,” addressing high levels of non-compliance with individual permits to discharge water pollutants under the Clean Water Act’s (CWA’s) National Pollutant Discharge Elimination system (NPDES). EPA started the Initiative in fiscal year (FY) 2018, in cooperation with delegated state water quality agencies, after compiling and evaluating permit holders’ data showing significant non-compliance by over 20% of the 46,000 permitted facilities around the country. The Initiative’s goal has been to cut non-compliance in half by the end of FY 2022. EPA’s November 22 report claims that this goal has been exceeded, with significant non-compliance rates down to 9%.

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The federal Occupational Safety and Health Administration (OSHA) provides additional non-regulatory guidance for the evaluation and reduction of workplace hazards that aren’t directly regulated by its standards. For example, OSHA provides a resource webpage on Seasonal Flu, which it recently updated with provide additional guidance and links to other health agencies’ resource pages.

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On November 10, the Biden Administration announced a proposal to amend the Federal Acquisition Regulation (FAR) to require “major federal suppliers” and “significant federal suppliers” to disclose their greenhouse gas (GHG) emissions and assessments of climate-related risks, and to set targets for GHG emission reductions. The rest of this note summarizes this proposal.

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The federal Occupational Safety and Health Administration (OSHA) is best known for its regulatory standards, but also provides additional non-regulatory guidance for the evaluation and reduction of workplace hazards that aren’t directly regulated. As an example, OSHA provides a resource webpage on Workplace Stress, which it has recently emphasized in its outreach efforts.The rest of this note summarizes OSHA’s information.

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For over a decade, the US Environmental Protection Agency (EPA) has required thousands of facilities and organizations to report annual emissions of greenhouse gases (GHGs) (40 CFR part 98). The most recent reports were due in April 2022, covering 2021 emissions from more than 8,000 entities (I summarized these requirements HERE https://blog.stpub.com/mandatory-ghg-epa-reports-due-april-1-2022). EPA has now published summary compilations of these data, showing an overall 4% increase in emissions compared with 2020. EPA attributes the increases to economic expansion coming out of the COVID-induced downturn, and reminds readers that reported emissions are generally lower than in those first reported for 2010-2011.

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After an employer discharges an employee, the (ex) employee may be able to sue claiming that the discharge was unjustified or“wrongful,” depending on the terms of any applicable employment contract andthe circumstances of the discharge. One complicated set of circumstances involve discharges that are “constructive” rather than explicit/actual. Whereas an employer may commit an actual breach by dismissing an employee without cause and without sufficient advance notice or severance pay, a constructive breach occurs when an employer forces the employee to accept a fundamental (or in some formulations, “substantial”) change in the employment relationship or quit.

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The Occupational Safety and Health Administration (OSHA) requires most employers with 10 or more employees at any “establishment” to prepare and maintain records of occupational injuries and illnesses (I&I) as they occur (I&I Logs). OSHA also requires employers to post an annual I&I Summary in each workplace “establishment” by February 1, summarizing I&Is in that workplace during the previous calendar year. OSHA also requires some employers to submit some of their I&I information electronically to the agency for review and compilation. (I wrote about revisions proposed in March 2022 HERE). In October, OSHA revised electronic procedures for its Injury Tracking Application (API), which subject employers must be ready to use for electronic reporting of 2022 information no later than March 2, 2023.

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On October 19, 2022 the US Environmental Protection Agency (EPA) and the United Parcel Service (UPS) settled a massive enforcement case covering violations of hazardous waste management requirements under the Resource Conservation and Recovery Act (RCRA) at 1,160 UPS facilities across forty-five (45) states and the territory of Puerto Rico. Most of the identified violations resulted from UPS’ misclassification of the quantities of hazardous waste generated at its facilities, and resulting failures to meet the additional requirements actually applicable at the mis-classified facilities. The national prosecution followed an investigation and subsequent Consent Agreement and Final Order (CAFO) in EPA’s Region 6 (Arkansas, Louisiana, New Mexico, Oklahoma, Texas and 66 Tribal Nations), which developed after enforcement at a single UPS site in Arkansas. The new nationwide settlement also appears in a CAFO, in which UPS agrees to pay more than $5 million in fines and to undertake enhanced compliance programs. The settlement is a good reminder to all organizations generating hazardous waste, that failures to meet RCRA-related administrative requirements can create enforcement liability even if wastes are managed responsibly.

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On September 17, 2022 the United States Senate voted 69-27 to ratify the 2016 Kigali Amendment to the United Nations-sponsored Montreal Protocol on Substances that Deplete the Ozone Layer (which I wrote about here), establishing international agreement to phase down production and consumption of specified hydrochlorofluorocarbons (HFCs). Aye votes vote included all the Democratic Senators present, and 29 Republicans. These HFCs are used in refrigeration and air conditioning and fire suppression, and as foam blowing agents and solvents. Although the US Environmental Protection Agency (EPA) already administers rules with the same requirements, the ratification will return the US to the international table.

The US had been a major player in the drafting and enactment of the Kigali Amendment (during President Obama’s administration), but then withdrew its support (during President Trump’s administration). However, the US enacted Kigali-like requirements in the December 2020 coronavirus relief bill (American Innovation and Manufacturing Act of 2020 (AIM Act)), among the many provisions buried within its 5,593 pages; EPA finalized its rules in September 2021 (I wrote about these rules here).

The remainder of this note summarizes the situation.

Why are HFCs being phased down, and how?

HFCs were developed primarily as substitutes for chlorofluorocarbons (CFCs), which are the principal ozone depleting substances (ODSs) targeted by the Montreal Protocol. HFCs have lower but non-zero ozone depleting potential, and are greenhouse gases that contribute to climate change. Accordingly, nearly 30 years after the initial 1987 approval of the Montreal Protocol roughly 200 national and international parties negotiated HFC phase-downs. As adopted in Kigali, Rwanda these amendments divide countries into three groups with different schedules and targets:

• developed nations including the United States – cut consumption to 90% of 2011-2013 baseline of most HFCs (plus 15% of those already covered by the Protocol) by 2019, declining to 15% by 2036
• most developing nations, including China and over 100 others - consumption to peak in 2024 at 100% of 2011-2013 baseline of most HFCs (plus 25% of those already covered by the Protocol), declining to 20% by 2045
• 10 hot-climate developing countries (where air conditioning is particularly important), including India, Pakistan and some Gulf states - consumption to peak in 2028 at 100% of 2011-2013 baseline of most HFCs (plus 25% of those already covered by the Protocol), declining to 15% by 2047

After the Trump administration replaced the Obama administration, the US took no action on this agreement. During this period, however, other countries have moved forward to ratify and work to meet their commitments.

What HFC-related provisions did the AIM Act enact?

The massive coronavirus relief bill includes Division S (“Innovation for the Environment”), with section 103 (“American Innovation and Manufacturing Act of 2020”). Without mentioning the Kigali Amendment, section 103 incorporates its requirements into US law:

• the legislation lists 18 specific HFCs, and authorizes EPA to designate additional formulations
• EPA was to calculate 2011-2013 production and consumption baselines for each, and to use these to calculate future phase-down levels ranging from 90% in 2020 to 15% in 2036 and thereafter
• EPA was to issue regulations with 270 days (by 9/23/21) to set phase-down requirements, with associated procedural requirements including allowances associated with each baseline amount, and reclamation and destruction methods

EPA’s rules are designed to meet these requirements. In addition, EPA has initiated or re-invigorated other programs to support the phase-down of HFCs and their replacement by refrigerants that are less harmful to global climate and the stratospheric ozone layer.

What now?

Ratification will become official once the US submits formal notification to the United Nations. The new rules took effect on November 4, 2021 and are progressing; EPA proposed 2024-reduction formulas on October 20, 2022.. While domestic requirements will not change from those enacted through the AIM Act, ratification returns the US to the center of international HFC-reduction efforts, and reinforces national commitments to the environment.

IImplementation Checklist

• Does the organization manufacture, import or use any ozone depleting substance (ODS) subject to the Montreal Protocol and/or CAA Title VI?
• If the phase-out date for any ODS has passed, do any of the organization’s activities qualify with applicable exceptions or essential uses?
• Does the organization manufacture, import or use any HFCs?
• Has the organization reviewed any such activity to identify alternatives for any HFC that is or may become subject to phase-down under US and international law?

Where do I go for more information?

Information available via the Internet includes:

● US legislation

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