February 17, 2010

SUBJECT:  Minutes from Meeting with the Society of Chemical Manufactures
and a Number of Their Member Companies Regarding the Definition of Solid
Waste Final Rule and the Current CERCLA 108(b) Rulemaking Effort

FROM:  Matt Straus, Advisor to Assistant Administrator of OSWER

TO:  DSW and CERCLA 108(b) Dockets

On February 12, staff from the Society of Chemical Manufacturers (SOCMA)
and representatives of a number of their member companies had a
conference call with Mathy Stanislaus, Assistant Administrator for the
Office of Solid Waste and Emergency Response (OSWER) and Barry Breen and
Lisa Feldt, Deputy Assistant Administrators to OSWER to discuss the
definition of solid waste (DSW) final rule (which was promulgated on
October 30, 2008) and the current rulemaking effort for determining
financial responsibility requirements under the section 108(b) of the
Comprehensive Emergency Response, Compensation, and Liability Act
(CERCLA).  Also on the call were representatives for the Office of
Resource Conservation and Recovery (ORCR) within OSWER, the Office of
General Counsel, and the Office of Enforcement and Compliance Assurance.
  This note briefly describes what was discussed during the conference
call.

	Initially, SOCMA described who they are and represent, and generally
how their member companies operate.  They noted that they have
approximately 300 member companies, of which about 70 percent are small
businesses, and thus, one of the themes of their discussions reflected
upon the impact of these rulemaking efforts on small businesses.

Definition of Solid Waste

SOCMA indicated that they have worked closely with staff in ORCR,
previously known as the Office of Solid Waste, since the early 1990s in
order that the DSW final rule would produce environmental benefits from
increased recycling, while at the same time save costs to small
businesses.  As part of those discussions, SOCMA stated that it was
their suggestion, in part, that tolling arrangements be considered
differently from third party transactions.

SOCMA stated that environmental justice was a major focus at the public
hearing that was held on June 30, 2009 on the definition of solid waste,
and indicated that while environmental justice “deserves it due,”
they also said that holding up this reform effort is a significant issue
for industry. 

At that point, Mathy Stanislaus indicated that while he is a strong
supporter of recycling and reuse, he also noted that the Agency needs to
take a hard look at environmental justice in this rule, to ensure that
no unintended consequences will occur.  He also asked SOCMA staff and
their member companies whether they had any comments on the U.S.
Environmental Protection Agency’s (EPA’s) recently released “Draft
Environmental Justice Methodology for the Definition of Solid Waste
Rule,” which is EPA’s draft plan for conducting a more robust
analysis on the environmental justice impacts to the final rule.

SOCMA and their members did not have any immediate reaction to the draft
environmental justice methodology, but did indicate that they would like
this analysis to be conducted/completed as quickly as possible, and that
the Agency reach resolution of Sierra Club’s administrative petition
to the DSW final rule in a relatively quick timeframe.  Specifically,
they indicated their view that as long as EPA was conducting this
analysis and considering Sierra Club’s administrative petition, the
states will likely not adopt the rule because of its uncertainty, and
instead will wait to see if EPA will be making any changes to the DSW
final rule.  (Note:  SOCMA stated that it recognizes that the DSW final
rule is in effect and that the states can adopt the rule now, but
expressed concern that as long as this additional analysis is underway,
that the States will be reluctant to adopt the rule.) 

One suggestion that SOCMA did make was for EPA to signal to the states
that the part of the rule that deals with “under the control of the
generator,” that the states could go ahead with authorization with
this portion of the final rule since there is less uncertainty with this
aspect of the final rule.  Specifically, it was noted in EPA’s May 27,
2009 Federal Register notice in which EPA announced the June 30, 2009
public meeting, that EPA is not likely to repeal the exclusion for
hazardous secondary materials reclaimed under the control of the
generator—see 74 FR 25202 where it states, “Because the final
revisions to the definition of solid waste are closely tied to EPA’s
interpretation of the concept of “discard,” EPA does not plan to
repeal the rule in whole or stay its implementation.  Such an action
could result in hazardous secondary materials that are not discarded
from being regulated as hazardous waste.  In particular, EPA does not
expect to repeal either the exclusion for hazardous secondary materials
reclaimed under the control of the generator or the non-waste
determination petition process.”

SOCMA stated that they believe this could be done without going through
any rulemaking process, but could be done through outreach to the states
to remind them that this portion of the final rule is unlikely to
change.

Finally, it was noted to SOCMA and its member companies that the
environmental justice analysis will be conducted for the entire rule,
including those hazardous secondary materials that are reclaimed under
the control of the generator.  Thus, it was suggested that SOCMA may
want to submit comments on the draft methodology, particularly if they
thought that the analysis should be different for those hazardous
secondary materials reclaimed under the control of the generator. SOCMA
indicated that they will look at this, and will get comments to the
Agency before the end of the comment deadline of March 15, 2010.  

CERCLA 108(b)

SOCMA first discussed the letter they co-signed with the American
Chemistry Council and other organizations, which was sent to EPA in the
fall of 2009 and before EPA published its Advance Notice of Proposed
Rulemaking regarding additional classes of facilities that the Agency
will evaluate regarding the development of financial responsibility
requirements under CERCLA 108(b).  

 Among other things, SOCMA stated that the letter indicated that CERCLA
108(b) looks at prospective risks and that past practices is not a
reliable indicator of what will happen in the future—they stated that
the world in the 1980’s and before is much different from the world in
the 1990’s and later and that needs to be considered in determining
whether financial responsibility requirements are appropriate.  SOCMA
also stated that since many of their members are small businesses, such
a rule could have a significant impact on SOCMA’s members.  (See
attached letter for additional arguments made in the letter.) 

Then one of SOCMA’s member companies—Rhodia, discussed their
experience with their facilities, many of which they said they acquired
through acquisition, in the State of New Jersey, that already has a rule
requiring financial responsibility.  They also stated that they used to
have five facilities in the State of New Jersey, but no longer have any
facilities. 

One of the primary arguments Rhodia made was that to be competitive in
the world today, they need to make quality products, and that
environmental costs come off the bottom line.  Thus, Rhodia said that if
all their facilities needed financial responsibility, it could make them
less competitive, particularly if in addition to putting aside funds for
financial responsibility, they also needed to pay fees that the states
may impose.

In response to an EPA question on the types of financial responsibility
mechanisms they used, Rhodia indicated that if corporate guarantee was
allowed, they thought that would be helpful, but they did indicate that
with the one facility in New Jersey that they discussed, the facility
did not qualify for a corporate guarantee, and thus, they needed to get
a letter of credit.   They also indicated that if the facility already
had financial responsibility requirements in place, that it would be
helpful if that could be used and not have the CERCLA 108(b) requirement
be in addition to those requirements already in place.  

At the end, Mathy Stanislaus indicated that he would like to set up a
face-to face discussion on CERCLA 108(b), at the appropriate
time—probably, after the close of the comment period to the ANPRM, so
that he can better understand the points raised by SOCMA and their
member companies, such as why they view past history as not being a good
indicator of future actions, and their views on the impact such a
requirement would have on small businesses. 

 EPA notes that while the FR notice cited by SOCMA says that EPA does
not expect to repeal the “generator-controlled exclusion,” this
should not be interpreted as saying that EPA will not make changes that
may impact this exclusion.  On the contrary, a number of the possible
changes discussed in the FR notice (e.g., definition of “contained,”
notification as a possible condition, and definition of “legitimacy”
would affect the “generator-controlled exclusion.”  See 74 FR
25202-25204.

