The International Regulation of POPS and PBTS

Martijn Wilder
Partner, Baker & McKenzie
Sydney

Introduction
In late May 2001, over 100 governments met in Stockholm to adopt and sign a Convention to ban an entire range of chemicals - persistent organic pollutants (POPs) - because of their direct effects on human health and the environment. The Convention is the latest in a series of global, regional and domestic actions to control POPs, which are part of the broader class of persistent bioaccumulative toxins (PBTs). Thousands of chemicals are potential targets for future regulation. Such regulations have the potential to affect businesses in every sector of the economy.

PBTs include inorganic substances, such as lead, mercury, arsenic and zinc, as well as organic substances, such as POPs. POPs are currently the focus of substantial international regulation. They are a group of semi-volatile and highly mobile organic compounds that do not break down readily in the environment, and whose chemical characteristics cause them to accumulate in the fatty tissues of animals, often with harmful effects. To date, international attention has focused specifically on 12 chemicals, commonly known as the "dirty dozen" - aldrin, dieldrin, endrin, chlordane, DDT, PCBs, toxaphene, heptachlor, hexachlorobenzene, mirex, dioxins and furans. Domestic efforts at regulation have gone well beyond this list and the emerging international measures reveal a similar expansion.

The PBT candidates for regulation include dozens of pesticides, thousands of industrial chemicals - especially organochlorines which are used in manufacturing processes worldwide, as well as numerous by-products of industrial processes. Regulation has the potential to affect not only the raw materials used by industry, but also the processes and products, and the trade in those products.

Regulation
The POPs Protocol to LoRTAP

The 1998 Protocol to the 1979 Convention on Long Range Transboundary Air Pollution (LoRTAP) was the first major multinational agreement addressing POPs. Thirty-six parties have signed the Protocol, including the United States and the European Union. The Protocol needs sixteen ratifications to come into force. To date, nine countries have ratified. The Protocol aims to "control, reduce or eliminate" discharges of POPs by party states by establishing different levels of control for each category of chemicals (greater levels of control for those chemicals that pose the greatest risk), separated into annexes in the Protocol. The Protocol currently has three annexes.

Annex I bans the production and use of the listed chemicals (including the "dirty dozen"), subject to three general exceptions for listed substances that occur as contaminants in: products or in articles manufactured before the Protocol enters into force and as "site-limited chemical intermediates" that are chemically transformed during the manufacture of unlisted substances. All Annex I substances are subject to trade restrictions under the Basel Convention on Transboundary Movements of Hazardous Wastes and Their Disposal. Annex II imposes use restrictions on DDT, HCH and PCBs.

Annex III requires parties to reduce their total annual emissions of four by-product POPs: dioxin, furan, PAHs and hexachlorobenzene. Parties must apply best available techniques to major new stationary sources of these pollutants within two years of the Protocol's entry into force and to existing stationary sources within eight years. The Protocol also sets emission targets for automobiles and other mobile sources of Annex III pollutants.

The United Nations Economic Commission for Europe, which oversees LoRTAP, has adopted criteria for adding new substances to the Annexes. A party may propose a substance for listing if the substance has the potential for long-range transport, has the potential to adversely affect human health and/or the environment, is persistent, or is bioaccumulative. Any proposal for a new listing must address the economic, social and environmental consequences of adopting alternative substances or imposing emission controls. If a submitted chemical satisfies the criteria, the Protocol parties may require that a technical review of the chemical be carried out. On the basis of the submission and the technical review, the Protocol parties will decide whether listing is appropriate.

The POPs Convention

Under the auspices of the United Nations Environment Program, over 100 countries have been involved in negotiating the Stockholm Convention on Persistent Organic Pollutants (POPs Convention). This is the first global agreement to seek to ban an entire class of chemicals because of their direct effects on human health. The POPs Convention calls for the elimination - immediately or as a long-term goal - of some of the world's most dangerous chemicals. These include highly toxic dioxins, as well as PCBs and pesticides such as DDT. The POPs Convention aims "to protect human health and the environment from persistent organic pollutants." This will be done by:

• Eliminating production and use of eight POPs pesticides - aldrin, endrin, dieldrin, chlordane, heptachlor, hexachlorobenzene, mirex, toxaphene - immediately, subject to some registered country exceptions. The bans will take effect as soon as the POPs Convention enters into force, which is expected in three to four years.
• Prohibiting production of PCBs immediately and phasing out their remaining uses over time. Countries must make "determined efforts" to remove from use all electrical transformers and other equipment containing PCBs, starting with high-volume equipment, by 2025.
• Limiting DDT use to disease vector control, where effective, affordable alternatives are not available, while setting a long-term goal for its elimination.
• Promoting strong action to minimize the release of industrial by-product POPs like dioxins. The POPs Convention states that the aim of these actions is the ultimate elimination of by-product POPs where feasible.
• Employing a precautionary approach to identify and take action against additional POPs. The treaty establishes a scientific POPs Review Committee to evaluate additional chemicals - based on the criteria of toxicity, persistence, bioaccumulation and long-range transport - for inclusion in the POPs Convention. Acknowledging the need for precaution, it states that "lack of full scientific certainty shall not prevent" a POP from being included.
• Building the capacity of all countries to eliminate POPs. The POPs Convention will channel funds and technical assistance from developed countries to their less developed partners, thus enabling these countries to take effective action under the POPs Convention.
• Emphasizing preventive measures to address POPs at their source. The treaty encourages national regulations to prevent the development of new chemicals with POPs characteristics, and promotes changes in industrial materials, processes and products that can create POPs.
• Requiring states to report on progress made in implementing POPs Convention obligations, and on the level of production, import and export of the eight banned POPs and DDT.

At the Diplomatic Conference in Stockholm on May 22-23, 2001, 91 countries and the European Commission signed the POPS Convention. Another 60 have subsequently signed, bringing the total number of signatories to 151 as of May 26, 2002. Only nine countries have ratified the Convention (Canada, Fiji, Germany, Lesotho, Liberia, Nauru, Netherlands, Samoa and Sweden), which will not enter into force until 90 days after ratification by 50 states. This process is expected to take several years.

Regional and Domestic Initiatives

Canada and the United States have developed a Binational Toxics Strategy which commits the two countries to confirm by 2006 that the use and release of 6 "Level 1" substances (chlordane, aldrin/dieldrin, DDT, mirex, toxaphene and otachlorostyrene) has been eliminated from sources that might enter the Great Lakes. Canada, the United States and Mexico have also developed North American Regional Action Plans (NARAPs) for DDT, chlordane, mercury and PCBs as part of a regional Sound Management of Chemicals Project. The NARAPs set objectives for eliminating particular emission sources for target PBTs and include provisions for regional management of PBT wastes. Regional Action Plans are also being considered for lindane, dioxins, furans and HCBs.

The Australian and New Zealand Environment and Conservation Council (ANZECC) is planning to manage waste from the use of commercially produced PCBs, HCB and organochlorine pesticides. The Organisation for Economic Cooperation and Development (OECD) has since 1996 assisted countries with the implementation of national Pollutant Release and Transfer Registers. The OECD also assists countries with pesticide registration and has guidelines for screening potential endocrine disruptors. The EU Parliament has adopted a resolution calling for the phase out of all PBTs and the European Commission adopted a Communication on a Community Strategy for Dioxins, Furans and PCBs in October 2001.

Various actions have also taken place at the national level. The U.S. EPA has responded to PBTs via the voluntary RCRA Waste Minimization National Plan and the Endocrine Disruptor Screening Program. The EPA is also drafting National Action Plans for various PBTs as part of a new National PBT Strategy. In addition, the EPA currently requires the reporting of certain PBTs under the Toxics Release Inventory Program.

Japan has established Strategic Programs on Environmental Endocrine Disruptors and has expanded its Pollutant Release and Transfer Register System. It has also drafted Guidelines for measures to deal with dioxins. The United Kingdom is focussing on increased testing and monitoring of ""priority substances" with reported endocrine-disrupting characteristics, along with taking broader measures to reduce activities that create or release large amounts of PBTs.

In response to the obligations under the POPs Convention, Australia has ceased to produce, import or use nearly all of the commercially produced POPs. In addition, a national program to reduce dioxins and dioxin-like substances was initiated by the federal government in May 2001 and endorsed by all state and territory governments in June 2001. Canada manages POPs and PBTs through the federal Toxic Substances Management Policy and the Northern Contaminants Program. It has also launched a program to reduce organochloride emissions.

New Zealand has implemented programs to reduce organochloride emissions. It is also working towards the inclusion of national environmental standards to control emissions of dioxins and PCBs under the Resource Management Act. Russia has adopted a national strategy for reducing POPs.

Ramifications for Business: Risks and Recommended Action
A proliferation of regional and domestic programs already impose testing and reporting requirements for scores of chemicals, particularly in the United States and the European Union. Further, the LoRTAP Protocol and POPs Convention are likely to have a significant impact on business operations when they enter into force, as literally tens of thousands of chemicals are potential candidates for regulation. Finally, as the awareness of the dangers of PBTs develops, multinational corporations will be exposed to the risk of toxic tort suits or cleanup actions.

In conclusion, companies should determine and minimize risks relating to the regulation of PBTs by ascertaining the potential impact of forthcoming PBTs regulations and identifying chemicals used or created in company manufacturing processes. The costs of phase out versus the costs of future regulatory battles and civil liabilities should be considered. Companies should also acknowledge the possibility of future litigation, including transboundary litigation arising from manufacturing activities in developing nations (due to the mobility of PBTs). Lastly, all companies and other relevant groups or individuals need to be familiar with the scientific literature on the chemicals they use and/or produce, especially given the uncertainty surrounding the nature of many POPs. Greater understanding of the effects and risks of POPs will enable better management and regulation.