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.1

 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 

 

1 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.
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.