BEVERIDGE6

&DIAONDp¿y

Karen M. Hansen

1350 I Street, NW.

Suite 700

Washington, D.C. 20005-3311

Direct: (202) 789-6056

Fax: (202) 789-6190

khanseni:bdlaw.com

March 31, 2009

Via Electronic and Registered Mail

Philip J. Ross, Esq.

Pesticides & Toxic Law Substances

Office of General Counsel

U.S. Environmental Protection Agency

Ariel Rios Building (North)

1200 Pennsylvania Avenue, N.W.

Mail Code: 2333A

Washington, DC 20460

Ms. Joan Harigan-Farelly

Director, Antimicrobials Division

Office of Pesticide Programs

U.S. Environmental Protection Agency

Ariel Rios Building

1200 Pennsylvania Avenue, N.W.

Mail Code: 7510P

Washington, DC 20460

Brenda F. Mosley, Ph.D.

U.S. Environmental Protection Agency

Office of Enforcement and Compliance Assurance

Ariel Rios Building

1200 Pennsylvana Avenue, N.W.

Mail Code: 2240A

Washington, DC 20460

Re: Nalco Sales of Unregistered Industrial Biocides

Dear Mr. Ross, Ms. Harigan-Farrelly, and Dr. Mosley:

Hercules Incorporated, now a wholly owned subsidiar of Ashland Inc. and hereinafter

referred to as "Ashland," has requested that EPA's Antimicrobials Divisions promptly review the

ongoing sale by Nalco Company oftwo unegistered biocide products used in pulp and paper

mils to control microbial growth in water. Because neither product is registered under FIFRA,

EP A has not reviewed any of their safety or environmental risks. These products involve in-situ

chemical reactions to which people working at pulp and paper mils are being exposed without

any prior regulatory review by EPA. On Ashland's behalf, I am writing to you together in order

to emphasize the urgency with which we request the Agency complete its review and

determinations regarding these specific issues.

Washington, D.C. Maryland New York Massachusetts New Jersey Texas California
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Letter to EP A

Via Electronic and Registered Mail

Page 2

In paricular, Ashland requests that EPA promptly:

(1) Require Nalco to register its amonium- and urea-based pulp and paper mil

biocide products under the Federal Insecticide, Fungicide and Rodenticide Act

(FIFRA) as mandated by law;

(2) Issue an order to Nalco to halt immediately its ongoing sales of these

unegistered pesticides; and

(3) Pursue appropriate enforcement action against Nalco, due to the seriousness of

these FIFRA violations, the associated health and environmental risks, and the

significant economic benefit Nalco is receiving from sellng its products without

required FIFRA registrations.

This letter sumarizes Ashland's understanding of the background and issues. We

acknowledge our understanding that EPA's Offices of Pesticide Programs and Water may be

engaged in an internal discussion about FIFRA applicability to ammonium-based disinfectants

used in drinking water. However, the issues Ashland is raising with EPA are distinct and

separate from those being discussed with the Office of Water and involve a specific industrial

application of biocides for which FIFRA registration is required. Ashland does not believe that

EPA needs to connect these separate issues or decide any broader questions to address the clear

noncompliance that we describe below, and we specifically request that EPA promptly address

the matters raised by Ashland as a distinct matter.

A. Summar of Ashland/EPA Communications

Ashland first alerted EP A to the safety, environmental and regulatory issues associated

with the sale ofNalco's unegistered amonium-based pesticide product in May 2008. At that

time, EPA informed Ashland it had already been alerted to the Nalco situation by another

registered pulp and paper biocide company, Buckman Laboratories. EPA also informed Ashland

that the Agency had discussed Nalco's product with the company and had issued a letter

indicating that Nalco could sell its amonium-based products as long as it did not claim a

pesticidal purose for the product.

By way of background, and as Ashland has explained to EPA, Ashland distributes a fully

registered amonium-based biocide to pulp and paper mils, and Buckman markets a registered

amonium-based biocide to mils for the same purpose. Nalco markets its ammonium-based

and urea-based products to these same mils, for the same purposes, though its products are not

registered under FIFRA. All three companies' products are purchased by pulp and paper mills

for biocidal puroses; there is no other reason to buy these products. The Ameribrom product

that Ashland distributes underwent a four-plus year FIFRA registration process; Buckman's

product also went through a lengthy registration process under FIFRA. Thus, there is an obvious

level-playing field issue involved here, along with the integrity of EPA's pesticide registration
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Letter to EP A

Via Electronic and Registered Mail

Page 3

program. But there is more than that: because each of these three companies sells numerous

products at pulp and paper mils, mil employees -- as well as Ashland, Buckman and Nalco

employees -- are potentially at risk if they are working in mils where Nalco's unregistered

products are being used in unegulated in-situ chemical reactions.

Ashland submitted a letter to EPA detailing safety, environmental and regulatory

concerns pertaining to Nalco's ammonium-based product in June 2008. After several attempts to

follow-up with EPA, Ashland and EPA met on October 2, 2008 to discuss these issues in detaiL.

At that time, Ashland also informed EPA that Nalco was now marketing a second unegistered

biocide, this one urea-based, purportedly on the basis of EPA's original letter to Nalco. On the

basis of the October 2, 2008 meeting, Ashland understood that EPA now believed it did not have

full information from Nalco about its amonium-based product when the Agency issued the

referenced letter to Nalco. EPA also indicated it was previously unaware ofNalco's new ureabased product.

At the October 2 meeting, EPA also requested some follow-up information from

Ashland, which Ashland promptly provided. In addition, as requested by the Agency, Ashland

has continued to provide follow-up correspondence, including additional safety information

about the in-situ chemical reactions. Ashland also responded to EPA's request for representative

Nalco marketing materials, which demonstrate that Nalco is sellng these products for biocidal

purposes, namely, to control the growth of micro-organisms in water used in the papermaking

process. By way of only one example, previously provided by Ashland to EPA, a June 2008

Paperchem trade industry report describes the intended use ofNalco's technology is to prevent

"deposit formation by curbing microbial growth," and claims the system's relative safety and

environmental impacts. This clearly indicates a pesticidal purpose for which FIFRA registration

is required. Moreover, Nalco's claims of safety and environmental impact have not been tested

by EPA pursuant to FIFRA's rigorous pesticide registration process.

Out of concern that Ashland has received virtually no response regarding these important

issues from EPA to date, Ashland has now submitted a complete set of Ashland's

correspondence with EPA on this matter to the Antimicrobials Division, the Office of General

Counsel and the Office of Enforcement and Compliance Assurance.

B. EP A's Letter to N alco

Pursuant to a request to EPA under the Freedom of Information Act (FOIA), Ashland

recently received a copy ofthe letter EPA sent to Nalco, as referenced above. This letter, dated

Februar 7,2008 (a copy of which is enclosed for your convenience) was sent by Fran Sanders,

then-Director of the Antimicrobials Division, to counsel for Nalco. EPA's letter was in apparent

response to a December 4, 2007 e-mail communication from Nalco's counsel requesting

reconsideration of the "registration for two amonia products used in connection with chlorine

to treat water." We have requested a copy of this e-mail from EPA but have not yet received it.
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Letter to EPA

Via Electronic and Registered Mail

Page 4

EPA's February 7, 2008 letter to Nalco is very troubling. As EPA has already

acknowledged, this letter appears to have been based on information provided to EP A by N alco

which led to the Agency's incomplete understanding ofNalco's products. However, the letter

also contains a gross misstatement of EPA's well-established requirements for registration of

pesticides. We do not understand at all the basis for this aspect of EPA's letter, but it appears to

have been interpreted by Nalco as a "green light" to market its industrial biocides products as

non-pesticides as long as it does explicitly claim a pesticidal purpose. This is contrary to

FIFRA's requirements and EP A's regulations interpreting that statute.

We paricularly draw your attention to the last paragraph of EPA's February 7, 2008

letter, which states:

the Offce of Pesticide Programs would regard Nalco's sale and

distribution of amonia and amonia products for use in

connection with chlorine water to treat water to require registration

under FIFRA only ifNalco makes a pesticidal claim for such

products.

(emphasis added). This statement cannot be reconciled in any way with clear and wellestablished principles of FIFRA providing that:

( a) substance is considered to be intended for pesticidal purose,

and thus to be a pesticide requiring registration if . . . the person

who distributes or sells the substance has actual or constructive

knowledge that the substance wil be used, or is intended to be

used, for a pesticidal purpose.

40 C.F.R. § 152.15( c ) (emphasis added).

In direct contrast to the position expressed in EPA's letter that Nalco would have to

"make() a pesticidal claim" in order to trigger FIFRA registration requirements, this regulation

instead provides explicitly that actual or constructive knowledge of a substance's intended use

for a pesticidal purpose triggers FIFRA's registration requirements. Moreover, FIFRA's

requirements cannot be evaded by simply dropping or masking an express pesticidal claim. See,

e.g., N Jonas & Co. v. Us., 666 F.2d 829, 833 (3d Cir. 1981) ("Industry claims and general

public knowledge can make a product pesticidal notwithstanding the lack of express pesticidal

claims by the producer itself. Labeling, industry representatives, advertising materials,

effectiveness and the collectivity of all the circumstances are therefore relevant"); id at 832

("EPA takes the statute and regulations to mean that a product is a pesticide if a reasonable

consumer - given the label, accompanying circulars, advertising representations and the

collectivity of circumstances - would use it as a pesticide").
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Letter to EP A

Via Electronic and Registered Mail

Page 5

In light of EPA's clear regulatory position on this issue, we find the Agency's statement

in its letter to Nalco inexplicable. We also note that the quoted statement from EPA's letter

contains an important factual error: the amonium-based products are reacted in-situ with

sodium hypochlorite, not with "chlorine." In addition, EPA's letter states the Agency's

understanding that Nalco's product wil be used to "treat water" without identifying the

purose( s) of the product that may have been stated by N alco to EP A. As noted above, however,

there is no reason other than biocidal use in industrial water for pulp and paper mils to use the

Nalco products discussed in this letter.

In sum, while Nalco may be taking pains in its general marketing approach to not make

express claims about the pesticidal puroses of its products on the basis of EPA's incomplete

statement ofFIFRA's registration requirements, there is no question based on the information

Ashland has submitted to EPA that Nalco fully understands the true purpose and intended use of

its products as industrial biocides.

C. Conclusion

Nalco's sales of unregistered pesticides in the United States are direct violations of

FIFRA § 12(a)(1)(A), which prohibits the distribution or sale of "any pesticide that is not

registered" in accordance with the requirements of FIFRA. EPA must not ignore or endorse this

apparent noncompliance. In addition, there are potentially serious hazards posed to people

working at pulp and paper mils where Nalco's unegulated products are being used in in-situ

chemical reactions. Ashland believes EPA should act to protect public health and the

environment by immediately stopping the sale of these unregistered products and requiring

Nalco to comply with FIFRA.

There is also a serious level-playing field issue here that EPA is uniquely authorized to

redress through enforcement. Nalco should not be allowed to reap significant commercial

advantages and the economic windfall of avoiding FIFRA registration costs associated with its

failure to comply with FIFRA. If EPA's letter to Nalco was based on incomplete or inaccurate

information from Nalco -- and we emphasize here that we do not yet know what the full

communications were between EPA and N alco -- then prompt enforcement action is even further

waranted.

Thank you for your time and consideration of this important matter. We look forward to

your prompt response.

i:y'

Karen M. Hansen
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Letter to EP A

Via Electronic and Registered Mail

Page 6

cc: Kathryn E. Szmuszkovicz

Steven A. Herman

Kristina Woods

Max P. Taytelbaum, Ph.D.

Linda L. Chaney