Comments to the United States Environmental Protection Agency regarding

Executive Order 13563

- Improving Regulation and Regulatory Review

Introduction

Thank you for the opportunity t o offer comments to the Agency regarding President Obama’s January 18, 2011

, Executive Order (EO 13563), entitled “Improving Regulation and Regulatory Review.”

Walmart Stores, Inc., (Walmart) strives to be an environmental leader and believes

everyone benefits when we are able to work with our regulators to develop best practices that achieve environmentally protective results and make sound business sense. As the world’s largest corporation, Walmart recognizes that it is uniquely positioned to help pe ople around the world to live better. Toward that end, Walmart is committed to environmentally sustainable business practices and has been recognized as one of the world’s leading corporations in the sustainability arena.

Domestically, Walmart operates approximately 4,400 stores and other facilities, employs over 1.4 million associates, and serves over 120 million customers per week. Walmart is the largest retail business in the country, operating grocery and department stores, member clubs, and pharma cies. Our company understands it is privileged to do business in the United States and that compliance with our environmental laws is a pre

- requisite to business success. However, as President Obama recognized in the Executive Order, sometimes regulation s can hamper business in unintended ways. Walmart believes that the regulation of the retail sector pursuant to federal hazardous waste law is one such area.

RCRA, Consumer Products & the Retail World

The Resource Conservation and Recovery A ct (RCRA) and its attendant hazardous waste regulations undoubtedly serve an important environmental protection function when applied by EPA to the industries for which they were originally intended, namely the manufacturing, chemical and industrial sector s. However, the RCRA regulations place significant regulatory burdens on the consumer retail sector that

are unnecessary

– and sometimes counterproductive

-- from an environmental perspective. Rather than protecting human health and the environment, RCRA ’s misapplication to the retail sector has resulted in overly burdensome regulation and2

created uncertainty in the retail community. Retailers of all sizes and types struggle to understand how these complicated regulations apply to their businesses and th e products they sell. The retail sector of the American economy finds itself confounded when RCRA hazardous waste regulations, crafted with complex industrial plants in mind, are applied to neighborhood department stores, grocery stores, pharmacies, resta urants or convenience stores. Walmart has expended considerable effort to meet the requirements of RCRA and can attest that the intersection of consumer retail and RCRA is most aptly described as the proverbial “square peg in a round hole.” The significa nt burden placed on the retail sector by RCRA far outweighs the environmental benefits, and ultimately, results in increased prices for American consumers.

In particular, Walmart asks that EPA renew its effort to reconsider the impact of

RCRA on cons umer products. Consumer products are manufactured all over the globe, and many product’s ingredients and concentrations are trade secrets closely guarded by the manufacturer. There are millions of different consumer products that may become a solid wast e when they cannot be sold to customers, donated, liquidated, or returned to the manufacturer by a domestic retailer. It is an impossible burden for most domestic retailers, particularly small businesses, to follow RCRA’s fundamental requirement to make a “hazardous waste determination” on every consumer product it discards. How can a small business decide if a product that a customer returns is a RCRA characteristic waste? In most cases, Manufacturer Safety Data Sheets (MSDS) and product labels are inad equate to make the required

determinations. 1 EPA has taken the position that even Conditionally Exempt Small Quantity Generators (CESQG) must make hazardous waste determinations on all solid waste they generate in order to establish they qualify for CESQG status. Most retailers have no capacity to accurately make these determinations, so the reality is that many retail businesses are simply unable to comply with RCRA. This has led to the creation of unlevel “playing fields,” where some larger retailers a re held to the letter of the law by EPA and states while other retailers simply avoid the burden of compliance.

Walmart does not seek regulatory relief where the relaxing of a RCRA standard

would result in an increased risk of harm to the enviro nment or human health. Discarded consumer products at retail stores are identical to the products consumers take home every day and ultimately dispose. Walmart and other

1 EPA could work with OSHA to require manufactures to identify the RCRA and State regulatory status of their products if they are discarded. This would give retailers the ability to characterize their wastes based on the manufacturers’ knowledge of their p roducts without compromising their need to protect trade secrets.3

retailers can only legally sell consumer products that are compliant with all applic able consumer health and safety regulations and that are recognized as safe for public consumption. There are a myriad of federal and state regulations designed to ensure that consumer products are safe for their intended purpose. Therefore, there is lit tle logic to RCRA requiring that a consumer product

– one that is safe to be used and discarded by the consumer

– be managed as a hazardous waste. Acknowledging this, EPA has long recognized a “household hazardous waste” exemption to RCRA for the general public. However, current RCRA regulations force retailers to manage the exact same consumer products as hazardous waste. President Obama aptly captured the essence of this issue in his Op

- Ed piece in the Wall Street Journal when he stated:

“ For instanc e, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule

last month.” See Wall Street Journal, Jan. 18, 2011 at A17.

Unlike a factory or chemical plant, retailers do not deal with chemicals that are in a substantially different and more dangerous form than the products that reach the

g eneral public. Discarded consumer products at a retail store are exactly the same products that the consumer disposes. Additionally, the actual amount of consumer products discarded by the retailer versus the amount discarded by the general public

is min iscule. Walmart sells billions of individual consumer products to the general public every year, only a fraction of which are managed by Walmart as RCRA

hazardous waste. 2 This disparity shows that the vast majority of consumer products are ultimately dis posed of by the public as solid waste. There is no tangible environmental benefit to regulating, at great cost, a tiny subset of the consumer product universe as hazardous waste when the vast majority is simply regulated as

solid waste. To illustrate thi s point, if a local municipal landfill is safely managing the disposal of tens of thousands of consumer goods from households and CESQG businesses every day, there is little environmental benefit to strictly managing ten identical consumer products generat ed at a local retail store as federal hazardous waste and sending those ten products to a Subtitle C landfill.

2 A large percentage of the products that become hazardous waste are actually customer returns. Walmart has an open return policy. If Walmart refused to accept returns of RCRA regulated

pr oducts, these items would be discarded by customers in their homes as solid waste. Again, there is little logic to treating identical consumer products differently under RCRA based on whether a

customer discards them at home or returns them to a retailer.4

Under the current RCRA regulatory regime, even the basic RCRA question of when a consumer product becomes a solid waste is fraught with ambiguity. This is particularly true in regard to retail “reverse distribution” processes whereby retailers send consumer products that they are unable to sell in their stores back to a central processing location where they are audited and financial cred it for the items is granted by the manufacturer. At the central processing location, the products are analyzed and a decision is made as to their final disposition. A decision might be made to resell or liquidate them, return them to the manufacturer, do nate them, or to recycle or discard them. 3 This decision making process if often dynamic in nature, with the decisions being impacted by season, weather, geographic location and

other business variables. If the decision is made to discard the item at the central processing location, several ques tions arise: is the central location the RCRA generator, or does a “waste” decision made there signify that the product should have been managed as a waste at the originating retail store? This is currently a grey area under RCRA. All major retailers hav e slightly different methods and processes for reverse distribution. Determining whether products must be managed as waste at the store or whether they can be shipped for a final determination to be made at a central processing area is a particularly daun ting proposition, with major

risks for the retailer. Retailers have recently faced significant RCRA enforcement cases in this area. Unfortunately, EPA has historically offered confusing guidance to the retail world regarding reverse distribution and the states have also taken a wide range of positions. 4

Another open RCRA question regards products that customers return to a retail store. Is a returned product a waste at the point the customer decided not to use it for its intended purpose

- usually at their home? Does the condition of the product or whether the customer received his money back impact that analysis? Currently, at least with respect to electronics, California has indicated that the act of a customer relinquishing ownership of a product to a retailer to be the equivalent of discarding the product. Conversely, EPA has indicated that a consumer returning a

3 The decision not to sell a product may be made for a variety of reasons

– poor sales, restocking of a newer model, end of season, customer returns, damaged packaging, or damaged in transit. Often credit or other financial compensation is recei ved by retailers from manufactures at the central location for any goods not sold by the retailer.

4 Oddly, EPA’s guidance regarding reverse distribution seems to vary depending on the type of product in question. For example, EPA has issued specific gu idance for pharmaceutical products and electronics that discuss reverse distribution but has not adopted the same principles for other kinds of products.5

product from their home to a retailer is not an act of discard and that the household waste exemption of RCRA is therefore not applicab le.

There are many other specific technical RCRA issues that create unnecessary burdens and confusion for the retail sector. The details regarding these issues are beyond the scope of this initial document but some of them are worth briefly mentioning as illustrative of the burden and confusion caused by RCRA’s misapplication to retail consumer products.

Pharmaceutical Products

- Consumer Prescription Pharmaceuticals RCRA Listed as Acutely Toxic P Wastes: A retail pharmacy may needlessly become a h eavily regulated large quantity generator (LQG) of hazardous waste if it generates only 2.2 pounds of certain common medications such as warfarin blood thinners. Even more problematic are RCRA’s rules regarding “empty containers” and their confusing appli cation to bulk pill bottles from which pharmacies dispense pills. 5 If a pill is safe to be consumed by a person is it wise policy to regulate the empty plastic bottle that may contain minute amounts of invisible residue from the pill as an acutely toxic

h azardous waste? This issue is that has the potential to turn thousands of retail pharmacies into new LQGs for generating as few as 65 empty pill bottles.

Vitamins and other Dietary Supplements : Since they may fail the TCLP test for

selenium or chromiu m, Walmart currently manages certain multi

- vitamins as

hazardous waste when discarded because they contain FDA approved levels of these essential elements. Given that they are safe for daily human consumption, does this make any sense?

Electronics : T he proper recycling or refurbishing of consumer electronics is an obvious benefit to the environment. Yet many large retailers are reluctant to enter this arena because of the lack of clarity regarding the RCRA regulatory status of

electronics destined fo r reuse or recycling. EPA has already exempted CRTs and shredded circuit boards so long as they are properly managed. However, for all other consumer electronics, from TVs to cell phones, EPA and the states have provided ambiguous (or conflicting) guid ance regarding when these electronics become a waste. It is currently unclear which party is considered the “generator” if a retailer collects used consumer electronics and sends them to be evaluated by a

third

- party that possesses the expertise to determ ine whether they can be

5 While known as “bulk” dispensing bottles, these are small plastic bottles typically holding 100

- 500 pills.6

refurbished or recycled. If some of the electronics are recycled by the third

- party instead of refurbished, retailers may face an enforcement action for illegally transporting hazardous waste. This is a significant risk and a de terrent to the reuse and recycling of consumer electronics. 6

In light of President Obama’s Executive Order, Walmart respectfully suggests that EPA take this opportunity to address these concerns and make RCRA regulation

more effective and less burdensom e on retailers.

Potential Solutions

Consumer Products Exemptions 7

The most beneficial and perhaps simplest solution to these issues would be to exempt consumer products discarded by retailers from RCRA regulation as hazardous waste. One possible means to accomplish this goal would be to expand the “household” waste exemption to include waste consisting of consumer products generated by retailers. The benefit of this solution would be to “synchronize” the disposal regulations for identical household pro ducts being disposed of by consumers and by retailers. No longer would a minuscule subset of these materials be subject to strict RCRA regulation as hazardous waste, while the vast majority is safely disposed of according to solid waste rules.

Alternat ively, at least certain categories of consumer products could be exempted. Following President Obama’s logic, an initial focus could be on products that are clearly safe for consumers to eat, or drink, or use on their bodies. For example, cosmetics, perf umes, vitamins, and food supplements that are sold to consumers should be regulated under the same rules as similar household wastes. 8

6 In several conversations with Walmart, California has taken the position that if even one device out of an entire shipment sent by a retailer to a third

- party for refurbishment, is not refurbished and resold, then the shipment would be non

- compliant.

7 The term Consumer Products is meant to encompass products of the type, and packaged in a form, typically intended for public sale and distribution

. 8 Although medicines also fall in the category of “safe for human consumption,” it might make more sense from an environmental perspective to manage their disposal at retailers through reverse distribution systems as set forth in the proposed “ Guidance Document: Best Management Practices

for Unused Pharmaceuticals at Health Care Facilities ” or pursuant to the proposed Pharmaceutical Universal Waste Rule because, unlike other consumer products, local municipal disposal of medicines could impact water su pplies or be subject to theft.7

Another initial focus area for possible exemption could be aerosol cans, a common product that makes up a large percen tage of a retailer’s hazardous waste stream. These aerosol cans are identical in nature to aerosol cans sold to, and discarded by, the general public. Most aerosol cans are regulated as hazardous waste solely because of the potential Ignitability (D001) of the propellant. Aside from certain pesticides, very few are hazardous because they contain a toxic material. The disposal cost for an aerosol can as hazardous waste is typically more than the product itself. It simply does not make sense to manage dis carded or empty

aerosols in the back of a retail store as hazardous waste when thousands of identical aerosol cans sit on the shelves awaiting sale and ultimate disposal by consumers. Another challenging aspect of managing waste aerosol cans has been

the uncertainty around their status as potentially characteristic Reactive waste (D003). EPA has determined that 50 caliber bullets are not reactive (RO 12339), but has equivocated regarding aerosol cans.

Expansion of Universal Waste Rules to Cover Consumer Products

Another potential solution could be to expand the definition of Universal Wastes to include all or some consumer products when discarded by retailers. This proposal would have many positive benefits to retailers while allowing EPA to retain a greater level of regulatory authority than an outright exemption. The Universal Waste rule recognizes that there are some materials that, while technically hazardous waste when discarded, warrant less strict management and disposal requirements

because of the limited risks associated with their disposal and the wide

- spread nature of their distribution. Consumer products fit well within the Universal Waste

framework

– there are clearly limited risks associated with their management and disposal since the g eneral public handles and disposes of millions of identical consumer products everyday.

Recognizing this as a sensible solution for consumer products, EPA previously began the process of analyzing whether to expand the definition of Universal Waste to include consumer products. In 2007, EPA concluded that adding consumer products in consumer product packaging was “appropriate because these wastes are produced by a various and vast community of generators and are often mismanaged due to . . . retail chain employees being unfamiliar with the Resource Conservation and Recovery Act regulations. This proposed action will streamline the current regulations governing these wastes, ensuring that . . . consumer product wastes are properly managed...” 72 Fed. Reg. 23281 (Apr. 30, 2007). Unfortunately, EPA’s analysis of this issue seems to have ended prematurely8

without any final decision making as the Agency evidently chose to focus on other

areas.

Adding consumer products as a category under the Universal Waste rules would clearly satisfy the six factors set out in 40 C.F.R. § 273.81 for treat ing a substance

as a Universal Waste:

1. Consumer products are not “exclusive to a specific industry or group of industries,” but rather are commonly generated by a wide variety of establishments (including, for example, households, retail and commercial businesses, small business, and government organizations.

2. Consumer products are generated by “more than 1,000” generators,” “and [are] frequently generated in relatively small quantities by each generator.” Thousands of

retailers and members of the general public dispose of waste from consumer products in consumer packaging. These products contain no larger quantities of hazardous waste than those discarded every day in households across the country. In addition, even a large retailer such as Walma rt handles only a small amount of waste from consumer products.

3) “Systems to be used for collecting the waste ... would ensure close stewardship of the waste.” Consumer products are well suited to track to ensure they return safely to the manufacturer o r redistribution center.

4) “The risk posed by the category of waste during accumulation and transport is relatively low compared to other hazardous wastes, and specific management standards . . . would be protective of human health and the environment du ring accumulation and transport.” The Department of Transportation’s (DOT) hazardous materials regulations address the issue of consumer goods by creating a “middle ground” category of transportation regulations known as Other Regulated Material

– Domesti c or ORM

- D. Under DOT rules, the strict shipping requirements for fully regulated hazardous materials are relaxed for the ORM

- D category of consumer goods. EPA should recognize DOT’s model as further evidence that consumer products could safely qualify a s Universal Waste under RCRA

5) “Regulation of the waste or category of waste under 40 C.F.R. part 273 will

increase the likelihood that the waste will be diverted from non

- hazardous waste management systems.” Under current rules, retailers have a str ong financial incentive to simply manage waste consumer products as municipal trash or to reject consumer returns of RCRA related products. Allowing disposal under the Universal9

Waste rules would encourage retailers to accept a broader array of customer r eturns by minimizing the costs associated with utilizing non

- hazardous waste management
systems.

Moreover, this solution would clarify the confusing questions surrounding the reverse distribution process. As EPA has already recognized, if consumer produc ts in consumer product packaging are classified as Universal Waste, “consumer product[s], regardless of the reason for their return or recall, will not be considered waste until deemed so by the redistribution center. Deferring the waste

determination wil l simplify the compliance requirements for retail stores and will ensure the proper management of these wastes by transferring the function to those who have the expertise in waste determination and management ...” 72 Fed. Reg. 23281 (Apr. 30, 2007). This clarity would vastly reduce the risk that hazardous waste will be improperly diverted to non

- hazardous waste management systems.

6) “Regulations of the waste or category of waste under 40 C.F.R. part 273 will improve implementation of the compliance with the hazardous waste regulatory program.” Regulating consumer products as Universal Waste would improve compliance by placing more realistic regulatory burdens on retailers. RCRA’s basic requirement to make a hazardous waste determination on every consume r product a retailer discards is such an onerous burden that noncompliance is commonplace. As discussed above, this fact has led to the creation of unlevel “playing fields”, where some larger retailers obey the letter of the law while other retailers simp ly avoid the burden of compliance. Adding consumer products to the Universal Waste Rule eliminates this improper incentive and encourage compliance. As the EPA concluded in 2007, “The incorporation of hazardous consumer product wastes into

the universal w aste rule will facilitate the recycling of these products and therefore, reduce their illegal disposal into municipal solid waste landfills and combustors.” 72 Fed. Reg. 23281 (Apr. 30, 2007).

Expansion of the Universal Waste Rules to Cover Pharmaceutica ls

As a positive first step toward improving regulation under RCRA, EPA should expeditiously move to finalize the pending Pharmaceutical Universal Waste Rule. Many retail pharmacies struggle to relate RCRA to their operations. Under current rules, if t hey have CESQG status

- for materials not otherwise sent through reverse

distribution

- they are actually incentivized to dispose of pharmaceuticals as solid waste in local landfills or down the drain, rather than absorb the costs of managing

them as hazar dous waste. This flawed incentive is easily fixed. As EPA noted in its 2008 Regulatory Agenda “the inclusion of hazardous pharmaceutical wastes in the10

universal waste rule will also encourage health care facilities to manage all their pharmaceutical waste s as universal wastes, particularly wastes that are not regulated as hazardous but which nonetheless pose hazards.” By encouraging the treatment of all pharmaceutical waste as Universal Waste, EPA may remedy the unequal incentives currently plaguing pharma ceutical retailers.

As with Consumer Products, EPA has already concluded that pharmaceuticals clearly satisfy the six factors laid out in 40 C.F.R. § 273.81 for inclusion under the

Universal Waste rule. See 73 Fed. Reg. 73528

- 73530 (Dec. 2, 2008).

Pharm aceutical waste is generated by thousands of retail pharmacies in packaging that often contains only trace amounts of dust. Adequate safeguards exist to label, transport, and dispose of this waste properly, and simplifying the regulations surrounding phar maceutical waste would improve compliance.

EPA stated in the 2008 Regulatory Agenda that “ . . . the expansion of the universal waste system to include hazardous pharmaceutical wastes will improve protection of public health and the environment by provi ding a more streamlined but effective waste management system.” Finally, EPA stated that adding pharmaceuticals to the Universal Waste category “would facilitate the implementation of pharmaceutical

take

- back programs by removing RCRA barriers in the coll ection of pharmaceutical wastes from health care and other such regulated facilities, as well as facilitate the collection of pharmaceutical wastes from households, including non

- hazardous pharmaceutical wastes.”

Conclusion

Walmart truly appreciates EPA granting it the opportunity to submit these comments. Moving forward, Walmart stands ready to work with EPA to follow up on any or all of the specific issues mentioned in this paper. Walmart is open to providing additional

i nformation or data to EPA and is available to answer any questions EPA might have regarding our experience with RCRA and retail operations. By working together in an open and cooperative manner, Walmart believes it is possible to design and implement RCRA regulations that are protective of human health and the

environment and make sound business sense.11

Please direct questions or comments to either:

Richard Leahy

Associate General Counsel

– Environmental

702 Southwest 8 th Street, M.S. #0505 Bentonville, AR 72716

- 0505

479

- 277

- 8262 richard.leahy@walmartlegal.com

Michael Stephenson

Senior Director

- EH&S Compliance

508 SW 8 th Street Bentonville, AR 72716

- 0505 michael.stephenson@wal

- mart.com