Comments to the United States Environmental Protection Agency regarding
Executive Order 13563 - Improving Regulation and Regulatory Review
Introduction
Thank you for the opportunity to 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 people 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 pharmacies. 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 regulations 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 Act (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 sectors. 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 and
created uncertainty in the retail community. Retailers of all sizes and types struggle
to understand how these complicated regulations apply to their businesses and the
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, restaurants 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 significant 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 consumer 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 waste 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 inadequate 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 are 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 environment 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
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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 products without compromising their need to
protect trade secrets.
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retailers can only legally sell consumer products that are compliant with all
applicable 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 little 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 instance, 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
general 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 miniscule. 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 disposed 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 this 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 generated 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
products, 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.
3
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 credit 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, donate 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 questions 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 have 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 daunting 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 received 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 guidance for pharmaceutical products and
electronics that discuss reverse distribution but has not adopted the same principles for other kinds of
products.
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product from their home to a retailer is not an act of discard and that the household
waste exemption of RCRA is therefore not applicable.
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 heavily
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
application 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
hazardous 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 chromium, 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: The 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 for 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) guidance 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 determine whether they can be
5
While known as “bulk” dispensing bottles, these are small plastic bottles typically holding 100-500
pills.
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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 deterrent 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 burdensome on retailers.
Potential Solutions
Consumer Products Exemptions7
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 products 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.
Alternatively, 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, perfumes, 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 supplies or be subject to theft.
6
Another initial focus area for possible exemption could be aerosol cans, a common
product that makes up a large percentage 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 discarded 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 general 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 prematurely
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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 treating 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 Walmart 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 or 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 during
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 –
Domestic 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 as 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 strong financial
incentive to simply manage waste consumer products as municipal trash or to reject
consumer returns of RCRA related products. Allowing disposal under the Universal
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Waste rules would encourage retailers to accept a broader array of customer returns
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 products 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 will 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 consumer 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 simply
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 waste 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 Pharmaceuticals
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 they 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 hazardous waste. This flawed incentive is easily fixed. As EPA noted in its
2008 Regulatory Agenda “the inclusion of hazardous pharmaceutical wastes in the
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universal waste rule will also encourage health care facilities to manage all their
pharmaceutical wastes 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 pharmaceutical 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).
Pharmaceutical 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 pharmaceutical 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 providing 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 collection 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
information 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.
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Please direct questions or comments to either:
Richard Leahy
Associate General Counsel –Environmental
702 Southwest 8th Street, M.S. #0505
Bentonville, AR 72716-0505
479-277-8262
[email protected]
Michael Stephenson
Senior Director - EH&S Compliance
508 SW 8th Street
Bentonville, AR 72716-0505
[email protected]
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