Nano disclosures: too small to matter or too big to ignore?


Determining whether the presence of nanoscale materials in chemical substances, mixtures, and articles triggers a disclosure obligation is complicated. The decision turns on a calculus that includes what law applies, what is known about the presence of nanoscale components, what knowledge standard applies, whether and how a nanoscale material is defined, and an entity’s interpretation of disclosure obligations. This article outlines the state of domestic environmental and securities law and regulatory policy regarding disclosure obligations pertinent to nanoscale materials. The article concludes that there are a growing number of potential disclosure obligations of which commercial entities should be aware, but that the nature of these requirements continues to be fluid and ill-defined.

By now, most lawyers and environmental professionals have a general understanding of what nanotechnology is. According to the U.S. Environmental Protection Agency (EPA), nanotechnology is “the understanding and control of matter at dimensions of roughly one to 100 nanometers, where unique phenomena enable novel applications.” The tiny engines driving nanotechnology are nanoscale materials, defined generally by EPA as materials having structures with dimensions in the nanoscale and that may have properties different than the same chemical substances with structures at a larger scale.

An important caveat is there is no one definition embraced by EPA or the federal government at large. The definitional void has frustrated nanomaterial stakeholders as the lack of definitional clarity invites commercial, legal, and compliance uncertainties. Similarly, the lack of a regulatory definition has created uncertainty and possibly complexities for regulators as well.

The commercial promise that nanotechnologies generally elicit is matched by the palpable apprehension of many, based on the relative paucity of available information regarding the health and environmental implications of exposure to or release of nanoscale materials. We have all heard or read the views that the novel properties that make nanoscale materials commercially valuable are also potentially capable of posing hazards and risks to human health and the environment.

For example, nanoscale zero-valent iron (nZVI), when used as a contamination clean-up technology, has been demonstrated to be less costly and potentially more effective than macroscale ZVI. EPA has noted, however, that there are many .“unanswered questions regarding nanotechnology” and that research is needed to understand if nanoscale materials have “toxicological effects on various biological systems.”

The current state of play creates opportunities for increased legal and governance disarray regarding whether enforceable obligations to disclose the presence of nanoscale materials exist and under what circumstances. This discussion focuses on obligations to disclose the presence of nanoscale materials in several settings under U.S. environmental laws and securities law.

EPA has focused its attention on deploying its authority to regulate nanoscale materials under the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). These statutes are substanceor product-oriented rather than facility-oriented.

EPA Disclosure Requirements under TSCA

After several years of public debate, in October 2008 EPA issued its TSCA Inventory Status of Nanoscale Substances— General Approach. The document describes how EPA determines whether a nanoscale substance is “new” for purposes of the TSCA Inventory and clarifies whether a disclosure obligation exists under TSCA. The TSCA Inventory consists of substances that are defined under TSCA as “existing” in U.S. commerce and thus need not be the subject of a Premanufacture Notice (PMN). For substances considered new, a PMN must be submitted to EPA and, once reviewed and upon receipt of a Notice of Commencement of Manufacture or Import, a chemical substance is added to the Inventory and becomes an “existing” chemical substance subject to any controls imposed by EPA. Entities proposing to manufacture/ import a new chemical, including new chemical nanoscale materials, must submit the information required by PMN reporting regulations. The reporting standard includes information in the possession of the submitter, parent company, or affiliates, and a description of existing data “known to or reasonably ascertainable” by the submitter. Submitters are also required to meet any regulatory requirements imposed by EPA in its review of the new chemical nanoscale materials; these typically consist of controls on exposures and releases, use limitations, and requirements to conduct and submit test data.

Under TSCA, a chemical substance is defined to mean “any organic or inorganic substance of a particular molecular identity. . . .” TSCA § 3(2), 15 U.S.C. § 2602(2). To classify a chemical substance as new or existing, EPA determines whether the chemical substance has the same molecular identity as a substance already listed on the Inventory. In other words, a chemical substance that has the same molecular identity as a substance listed on the TSCA Inventory is considered existing.

EPA states in its policy statement that because it generally has “not considered units of matter beyond molecules, such as physical aggregates, to be reportable to the TSCA Inventory, EPA has not used particle size” to distinguish two substances that are known to have the same molecular identity. EPA, TSCA Inventory Status of Nanoscale Substances—General Approach (Jan. 23, 2008) at 4, available at pdf. In short, particle size is immaterial for TSCA Inventory purposes. Molecular identity is the single most significant factor in determining whether a chemical substance is new, and therefore subject to PMN requirements.

In its policy statement, EPA clarified that it generally considers carbon nanotubes (CNTs), a particular category of nanoscale materials, to be chemical substances distinct from other substances included on the Inventory and that as such manufacturers or importers of CNTs are required to submit a PMN prior to engaging in commercial activities. After a short grace period ended, EPA stated that it would initiate enforcement efforts to ensure compliance with TSCA.

In its policy statement, EPA clarified that it generally considers carbon nanotubes (CNTs), a particular category of nanoscale materials, to be chemical substances distinct from other substances included on the Inventory and that as such manufacturers or importers of CNTs are required to submit a PMN prior to engaging in commercial activities. After a short grace period ended, EPA stated that it would initiate enforcement efforts to ensure compliance with TSCA.

Perhaps this is why pending legislative measures to amend TSCA focus both on molecular identity and substance characteristics. Under S. 3209, the Safe Chemicals Act of 2010 introduced on April 15, 2010, by Senator Lautenberg, EPA would be authorized to decide when a substance is new based on molecular identity and the presence of “special substance characteristics.” S. 3209 at section 6. The bill defines special substance characteristics as “such physical, chemical, or biological characteristics, other than molecular identity” that “may significantly affect the risks posed by substances exhibiting those characteristics.” S. 3209 at section 4. Under S. 3209, EPA may consider such characteristics as size or size distribution, shape and surface structure, reactivity, and other properties that may significantly affect the risks posed. A similar provision is included in a House bill, the Toxic Chemicals Safety Act of 2010, H.R. 5820, introduced by Reps. Waxman and Rush on July 22, 2010, which focuses on “different forms” of a chemical substance with a particular molecular identity, and states that such different forms may be different chemical substances based on “variations in the substance characteristics.” H.R. 5280 at section 3.

An often overlooked TSCA statutory provision that bears directly on the subject of disclosure is TSCA section 8(e). Manufacturers, processors, and distributors of chemical substances must immediately inform EPA if they obtain information that supports the conclusion that a chemical substance, including nanoscale substances, presents a substantial risk of injury to health or the environment.

Other TSCA disclosure provisions that apply to nanoscale materials include section 8(c) allegations of significant adverse reactions to health or the environment. Section 13 also requires disclosure regarding import certifications, particularly with regard to imported mixtures (e.g., fluids that contain nanoscale materials) and manufactured articles (where the nanoscale material is intended for release). If new chemical nanoscale materials are involved, such importation will also trigger notification requirements under TSCA section 5.

EPA recently announced plans to develop testing and disclosure requirements concerning nanoscale materials. These include a section 4 test rule to obtain health and  environmental data, a categorical Significant New Use Rule under TSCA section 5(a)(2) requiring notification to EPA concerning existing chemical nanoscale materials, and an information gathering rule under TSCA section 8(a).

Several disclosure requirements under TSCA are thus clear. First, EPA believes that chemical substances consisting of “new” nanoscale materials must be submitted to EPA for premanufacture review if they are not otherwise exempt under TSCA. Chemicals manufactured at the nanoscale that are considered existing are not required to be disclosed to EPA unless new “substantial risk” information on the substance causes them to be reportable under TSCA section 8(e) or are required to be reported to EPA under TSCA sections 8(c) or 13. What constitutes an existing chemical substance is based on the molecular identity of the substance and, while distinguishing an existing chemical may not always be clear, EPA has stated CNTs are per se new chemical substances. Finally, pending TSCA reauthorization legislation would, if enacted, potentially treat all nanoscale chemical substances as “new” chemicals and require that they be submitted to EPA for review based on any “special substance characteristics” that EPA determines may significantly affect the material’s risk/toxicological profile.

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