June 8, 2015

OSHA Allows Shipping Stocks Of Older Hazcom-Labeled Containers As New Regs Take Effect

OSHA has adopted a new enforcement policy to provide manufacturers and importers leeway to move any containers in existing stock that have already been labeled in compliance with the 1994 hazard communication rule and are prepared for shipment — a move timed just as a key deadline for following the agency’s 2012 update to labeling and data sheet requirements for hazardous chemicals took effect Monday.Federal enforcement officials, in a May 29 memorandum obtained by Inside OSHA Online, outlined the interim policy following industry concerns that manufacturers and distributors, due to delays in receiving data from upstream suppliers needed to comply with the rule, would inevitably be holding large inventories of containers already labeled to meet the previous hazcom regulations, but not the new ones.

The rule also poses an ongoing compliance problem, industry worries, because the shelf life of products is much longer than the six-month compliance period to update labels and data sheets based on new data from suppliers.

OSHA is now clarifying that the containers in stock labeled before June 1 and compliant with the earlier rule may be shipped without being re-labeled, but companies must still provide the labels and safety data sheets (SDS) for each container to meet the 2012 requirements. The June 1 compliance date still applies to newly labeled containers, subject to an enforcement policy issued several months ago that allows “good faith” employers some short-term latitude in meeting the labeling requirements for chemical mixtures by the deadline.

Manufacturers or importers of hazardous chemicals, including businesses that repackage, “that have existing stock packaged (e.g., boxed, palletized, shrink-wrapped, etc.) for shipment prior to June 1, 2015, that are HCS 1994-compliant labeled, may continue to ship those containers downstream,” the memo states. “In such instances, there is no requirement to re-label packaged for shipment containers with HCS 2012-compliant labels.”

OSHA also states that plans for a revised hazcom directive have suffered a “minor delay in completing review and clearance” due to the agency’s efforts to ensure that additional clarification is included. That directive, now expected shortly after the June 1 deadline, will cancel the interim enforcement memo.

Business advocates earlier sought formal clarification from OSHA that already-packaged shipping containers of hazardous chemicals will be considered legally compliant, as long as they meet the older standard, for the life of the chemical product. A large manufacturer of products subject to the new hazcom (HCS) requirements, through industry legal counsel, asked OSHA in March to provide “confirmation” to expand on earlier guidance that OSHA plans to adopt a so-called “released for shipment” approach to container labeling.

The letter to OSHA built on subject matter that partly arose in a Feb. 9 enforcement guidance from OSHA on compliance requirements. Industry wanted it confirmed that if a shipped container holding a hazardous chemical was filled and labeled in compliance with the then-applicable hazcom requirements, that labeling “would be deemed compliant for the life of the product in that container.”

OSHA, even as compliance concerns arise on the standard issued in 2012, has already begun exploring another new rule to keep the U.S. system aligned with the evolving United Nations-devised Globally Harmonized System (GHS) of classifying and labeling chemicals.

The manufacturing employer wished to ensure a compliant transition from the 1994 to 2012 hazcom standards “and that compliance is not either unreasonably burdensome or infeasible, and does not impose a greater hazard on employees than extended adherence to HCS 1994,” according to attorney Lawrence Halprin, a Washington partner in Keller and Heckman.

“Our client’s primary concern is avoiding a situation where either our client formulator, or a distributor of our client’s products, is holding inventory of our client’s product with HCS 1994-compliant labeling after June 1, 2015 or December 1, 2015, respectively, and OSHA takes the position that the product may not be shipped by our client or the distributor unless the container is re-labeled with HCS 2012-compliant labeling,” Halprin told OSHA chief David Michaels. He adds that the Feb. 9 enforcement guidance “does not appear to address this issue.”

“Discussions with OSHA personnel and the fact that OSHA has not yet responded to the request for interpretation on this or a related issue filed by Council of Producers & Distributors of Agrotechnology (CPDA) confirm that understanding,” Halprin says.

The law firm, which represented the American Petroleum Institute in its pre-enforcement challenge to HCS 2012, noted that industries had earlier “strongly advocated” that OSHA adopt the two-stage approach adopted by the European Union for the GHS transition from the old to new standards, which entailed applying the new rules to substances during the first stage and mixtures in a second stage.

Industry moreover argued that uncertainty about compliance validated earlier concerns about the structuring of deadlines in hazcom 2012. “During the rulemaking, we also pointed out that there are multiple tiers of formulators that would take even longer to complete the transition,” Halprin says. “We believe it is unfortunate that, in adopting a single effective date for both substances and mixtures for phasing in compliance with HCS 2012, OSHA did not look to the expertise of either the affected chemical industry sectors or the expertise of its government agency counterparts in the 28 member countries that form the EU.”

The law firm says many formulators have chosen, as they have for many years, to continue to rely on their suppliers’ classification determinations and safety data sheets (SDS), as provided for in the standard, and that the regulations provide an employer with three months to update the SDS for a product from the time it receives “significant new chemical hazard information” regarding that product, while another paragraph provides an employer with six months to update the label for a product from the time it receives such information regarding that product. However, many stakeholders also erroneously viewed the standard’s “effective date” and “compliance deadline” interchangeably, leading to further confusion, the letter says.

It “seemed clear” that the receipt of the first HCS 2012-compliant data sheets from a supplier should be viewed as the type of information covered by those two updating provisions, and under that interpretation, formulators would have been required to have a compliant SDS and label in place by June 1 only if the formulator had received all of the SDS for the ingredients from the suppliers by Dec. 1, 2014, Halprin argued.

Thus, he said, if any of the suppliers’ data sheets were received by the formulator on June 1, 2015, the formulator would have been required to provide data sheets complying with the new standard for its product by Sept. 1, and labeling by Dec. 1.

However, no chemical supplier was required to provide hazcom 2012-compliant SDS to its customers until June 1, 2015, and many chemical suppliers would not provide them by that date; thus, based on application of the six-month trigger, formulators relying on their suppliers’ information would not be required to provide the new data sheets or labeling by June 1, 2015 and “quite likely not until some time in 2016,” Halprin said.

Downstream formulators relying on suppliers’ SDS “lacked adequate knowledge and control of the overall situation to implement a timely suspension or reduction in production that would avoid having too much inventory with HCS 1994-compliant labeling,” he said. “To take such a step with that uncertainty would risk an unacceptable loss of sales and/or customers and potential plant shutdowns and temporary layoffs that would potentially adversely impact manufacturing operations all the way up and down the supply chain. Accordingly, it was inevitable that manufacturers, as well as their distributors, would have product with HCS 1994-compliant labeling on hand long after the effective date for the HCS 2012 classification, labeling and SDS requirements.”

That means, depending on how OSHA chose to enforce the new rule, “the transition situation raised issues of infeasibility, internally inconsistent requirements, unconstitutionally vague requirements, and requirements that would generate a large amount of hazardous and non-hazardous solid waste, and would pose a greater hazard to employees than continuing to allow compliance with HCS 1994,” the letter argued.

Further, there are multiple tiers of formulators, which means it will take a number of updating cycles to achieve “full compliance” with the new standard, according to to the law firm, which said “the obligation to update labeling based on new information will pose a serious ongoing HCS compliance problem for any manufacturer with covered chemicals that remain anywhere in the chain of distribution for more than six months.”

“Each time a supplier sends an updated SDS to a formulator with new information requiring a change to the formulator’s SDS and label, there is a risk that products that are anywhere in the chain of distribution for more than six months will have outdated and non-compliant labeling,” the firm said. “The upstream manufacturer faces the same compliance dilemma.”

OSHA “could not possibly have intended,” according to the letter, to constrain chemical manufacturing in the United States so that a manufacturer and its distributors must choose among: never having inventory at its sites or anywhere in the chain of distribution for more than six months; if feasible, re-labeling the product; filing for a variance; or shipping product with non-compliant labeling.

The agency in its May 29 clarification memo indicates that since the February memo OSHA received “an overwhelming number” of additional questions and requests for further clarification on behalf of manufacturers, importers and distributors. — Christopher Cole ()


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