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Prepare Now for Major Regulatory Changes

With the defeat of President Donald J. Trump and the election of Joseph R. Biden as the 46th President of the United States, the chemical distribution industry can expect a much different approach to regulatory activity and enforcement as of Inauguration Day January 20, 2021.

 

Regulatory burden reduction has been one of President Trump’s top priorities. Upon taking office, he issued an executive order (EO) directing agencies to eliminate two regulations for every one new regulation. Since then, he has issued additional EOs on regulatory guidance, fair and transparent enforcement, and the termination of policymaking civil servants. Agencies such as the U.S. Environmental Protection Agency (EPA) and the Department of Transportation have adopted their own policies to carry out these EOs. In addition, federal agencies, particularly the EPA, have placed an increased emphasis on compliance assistance rather than implementation of a one-size-fits-all “find and fine” approach to enforcement.

 

The Biden administration is expected to reverse these measures by rescinding or ignoring the Trump EOs and by pursuing a more aggressive approach to enforcement. As part of this, there will be a renewed focus on Environmental Justice, especially in light of recent events. In his campaign, Joe Biden pledged to establish a dedicated Environment and Climate Justice Division within the U.S. Department of Justice and to increase enforcement. In addition, Biden plans to direct the EPA to require industries that produce hazardous and toxic chemicals to reach out to surrounding communities and ensure residents have real-time knowledge of and are engaged in remediation plans for any toxic release. This would involve a major expansion of the already-robust Emergency Planning and Community Right to Know Act.

 

President-elect Biden has begun to announce members of his Cabinet and senior staff, many of whom served in the Obama administration. Conventional wisdom is that he will nominate a mix of moderates and progressives. Of concern is that the individuals under top consideration for the EPA and Department of Labor are on the progressive side. The good news is that either a Republican-controlled or narrowest possible margin Democrat-controlled Senate must approve these nominees, which could prevent anyone too extreme from taking office.

 

Regardless, we can expect the new EPA and Occupational Safety and Health Administration (OSHA) leadership to be much more inclined to impose new regulatory requirements on the business community than to ease or eliminate the rules. For example, about a year ago, the Trump administration’s EPA issued a final rule to rescind several burdensome elements of a Risk Management Program rule the Obama administration issued in its final days. NACD opposed the Obama EPA’s changes and was pleased the Trump EPA reversed them. It is likely the Biden EPA will reverse course again and move to reinstate the requirements. In addition, while the Trump EPA has taken several actions on chemicals including Ethylene Oxide and PFAS that have received intense public attention, the Biden EPA is poised to take a much more intense approach to address concerns about these substances.

 

Also in the area of chemical regulation, the Trump EPA has made good progress carrying out the requirements of the 2016 Toxic Substances Control Act (TSCA) modernization law. The agency is currently in the risk evaluation and risk management stages for 30 chemicals. Under pressure from environmental organizations and as a consequence of court decisions, a Biden EPA may subject TSCA’s high priority chemicals to even more scrutiny by considering every possible condition of use for each substance. This would increase costs and slow down the process, making it a challenge for the agency to meet congressionally mandated TSCA deadlines.

 

International trade is one area where the industry may see some relief, although this will not happen immediately. If there is one issue on which both President Trump and President-elect Biden can agree, it is the desire to bring more manufacturing back to the United States. That being said, President-elect Biden is not a proponent of President Trump’s “America First” approach to international relations and will likely be much more strategic on trade issues. While it is doubtful the Section 301 China tariffs will be eliminated in the near future, the threat of additional new tariffs should diminish. In addition, a Biden administration will be more open to participating in multi-lateral trade agreements that could benefit U.S. companies.

 

Aside from new tariffs, the chemical distribution industry has enjoyed somewhat of a break on the regulatory front over the last four years. In a few short weeks, this will change. Now is the time to prepare your companies for increased regulatory scrutiny. NACD has many resources to help you. Please review our Regulatory Compliance Resource Guide for Chemical Distributors; register for our upcoming regulatory workshops and webinars; check out the regulatory courses on NACD U; read the NACD NewsBrief every Tuesday for the latest updates; and reach out to Allison Tuszynski, Erin Getz, or me with questions and concerns.

 

Just like preparing for a big storm, now is the time to batten down the hatches!

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