Audit, Compliance and Risk Blog

The US Occupational Safety and Health Administration (OSHA) regulates thousands of chemicals, through a variety of regulatory standards.  At the broadest level, employers must evaluate basic information about every potentially hazardous chemical, and provide information to employees in compliance with OSHA's Hazard Communication Standard.  OSHA also provides somewhat-more-tailored requirements for classes of chemicals (such as flammables), and for types of activities that pose chemical hazards (such as welding).  For a small number of especially hazardous chemicals, OSHA provides a detailed standard applicable to a single chemical—examples include asbestos, benzene, and lead.  On September 12, 2013, OSHA published a proposal to establish just such a single chemical standard, for crystalline silica (29 CFR section 1910.1053).

On September 20, the US Environmental Protection Agency (EPA) re-proposed regulations to regulate carbon dioxide (CO₂) emissions from electricity generating units fueled by coal and natural gas.  This proposal marks the latest of many ongoing steps by the Obama Administration to limit emissions of greenhouse gases (GHGs) even though Congressional deadlock means there will be no legislative initiatives until after the 2014 elections at the earliest.  This proposal applies—critics say stretches—EPA's Clean Air Act (CAA) authority.

On September 18 the Securities and Exchange Commission (SEC) proposed to require public companies to calculate and disclose the pay ratio between their principal executive officer (PEO) and other employees:

Do you know what's in the chemical products you buy and use, and whether they're "safe?"  Effective October 1, 2013, California regulations provide criteria and procedures for state-level identification and listing of likely-hazardous chemicals of concern.  Manufacturers and importers will be required to evaluate chemicals of concern in consumer products, their potential alternatives, and how best to limit exposure or reduce hazards.  Assemblers and retailers will have related responsibilities.  Although these requirements apply directly only within California, any reviews and reformulations are likely to affect global production and distribution decisions.

Directors and officers owe formal duties to their corporations and shareholders, commonly called “fiduciary duties” from the Latin root words for “trust.”  These duties developed over centuries of common law, and now appear in state corporation codes.  Most interpretations of these duties and how to meet them actually appear in court decisions, arising in cases where aggrieved shareholders sue claiming that a company’s directors and/or officers have breached one or more of these duties.

Last week the Federal Motor Carrier Safety Administration (FMCSA) published major changes in the registration requirements it imposes on “motor carriers” that use roads and highways to transport materials—including hazardous materials.  Over the next two years, these changes will consolidate four separate registration systems into a new web-based Unified Registration System (URS), designed to cover every domestic entity subject to FMCSA authority.  Most elements of the new regulations will take effect on October 23, 2015, to allow FMCSA to develop additional URS features and to conduct several related rulemakings, and to allow regulated entities to prepare for the changes in compliance requirements.

One small but critically important sub-category of chemical incidents consists of those that can produce mass casualties, usually when a cloud of toxic or superheated gases are spewed out by a fire or explosion.  Given America’s fragmented approach to hazardous materials regulation, it’s no surprise that separate regulatory programs have grown up to address these concerns—leading inevitably to overlaps and gaps in coverage.

All hazardous wastes are not created equal.  The basic model is that:

If government provided a unified approach to chemical regulation, then each chemical might be subject to a single set of requirements, which ideally would be tailored to reflect chemical-specific hazards throughout its life cycle.  Instead, each chemical is subject to its own loosely connected (some would say haphazard) collection of environmental, health and safety (EH&S) requirements.  Some are federal, some are state (or provincial if you’re in Canada), and others are regional and even local.  You may need to refer to agencies at all three levels (federal, state and local) to identify your regulators and their requirements – although many organizations only deal with the agency responsible for permitting and inspecting day-to-day activities.

The Securities and Exchange Commission (SEC) was created 80 years ago to protect investors, while also nurturing the growth of efficient and transparent markets for securities.  Over the intervening years, the balance between protection and growth has shifted many times, leading to many sets of requirements with conditions and exemptions to parse in order to determine entrepreneurs’ notice and filing requirements, and the range of investor opportunities and protections.