Regulating Genetically Engineered Microbial Products Under the Toxic Substances Control Act

William G. Schiffbauer

Editors' Summary: Biotechnology has moved out of the labs and scientific journals and into the chemical plants of large chemical companies and small innovators and the popular press. Those in the federal government responsible for protecting the public from threats to its health and environment are struggling to find a coherent framework for regulating biotechnology. But like some other environmental problems of recent discovery — groundwater pollution, for example — no single statute clearly controls. Statutes as diverse as FIFRA, the Food, Drug, and Cosmetic Act and the OSH Act have been called up. But potentially the most important statutory authority, because it is not limited to a single category of use like the other statutes, is TSCA. The author takes a critical look at EPA's proposal to use TSCA to regulate biotechnology and, with reference to the legislative history and language of the Act as well as relevant case law, concludes that TSCA can be used effectively to regulate several important aspects of biotechnology development.

Mr. Schiffbauer is former Counsel and Legislative Assistant to U.S. Senator J. James Exon (D-Nebr.) and is now associated with the Washington, D.C. law firm of Groom & Nordberg. He is currently pursuing post-J.D. studies at the George Washington University National Law Center leading to an LL.M. in Environmental Law.

[15 ELR 10279]

Encouraged by the U.S. Supreme Court's decision in Diamond v. Chakrabarty (1980)¹ which declared that new, genetically engineered living organisms can be "manufactured" and are patentable, the biotechnology industry has made substantial progress over the last five years towards developing a wide spectrum of commercially feasible genetically engineered products.² Potential new products range from disease resistant plants to microbes that detoxify hazardous wastes.³

The novelty of genetically engineered organisms and the lack of experience with them has made it difficult to predict their impact on human health and the environment.⁴ Biotechnology offers the potential of producing many new organisms which have not previously existed. Corporate giants and hundreds of small firms are working towards accelerated large-scale development and manufacturing of these new microbial products.⁵ The advance of this new industry has outpaced society's ability to monitor its development and assess the inherent risks of the products.

The Regulatory Proposal

Due to growing concerns that no single governmental entity has the expertise or authority to supervise the development of the biotechnology industry, the White House Office of Science and Technology Policy formed a working group of various federal agencies in April 1984 to chart the future course of regulating this new industry.⁶ On December 31, 1984, this working group published a Notice of Proposed Regulation (Notice) addressing possible federal oversight by the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the U.S. Department of Agriculture.⁷

The Notice observed that the United States is now the world leader in biotechnology.⁸ The federal government must ensure that the regulatory process adequately considers health and environmental safety standards as biotechnology moves from the research lab to the marketplace, and the manner of regulation implemented [15 ELR 10280] will have a direct impact on the potential contribution to the nation's economy and the competitiveness of U.S. producers in both domestic and world markets.⁹

EPA announced in the Notice the agency's proposal to utilize the authority of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Toxic Substances Control Act (TSCA) to regulate aspects of biotechnology.¹⁰ This article will review portions of the EPAposition specifically with regard to TSCA's jurisdiction over biotechnology and microbial products.

Biotechnology Overview

Biotechnology employs "genetically engineered" living organisms to make or modify certain products, most recently through the application of recombinant-DNA technology.¹¹ Traditionally, biotechnology has used less sophisticated techniques, such as ulraviolet irradiation, to produce in organisms genetic mutations that would occur only very rarely in nature.¹² Recombinant-DNA technology, however, employs the splicing or recombining of two different DNA molecules to create a recombinant-DNA (rDNA) molecule. The subsequent in-sertion of this new "genetically engineered" recombinant molecule into a living microorganism creates a new microorganism.¹³ In addition to rDNA, other technologies which manipulate genes and create new molecules used to produce new microorganisms include cell fusion and recombinant-RNA.

The commercial and industrial manufacturing use of recombinant-DNA technology generally requires an additional two-step procedure, once the rDNA molecule is created, in order to produce a product or improve a chemical process.¹⁴ First, the recombined gene must be inserted in its bacterial host and the host reproduced. Second, it must be "expressed"; that is, the protein based on the recombined gene must be produced. These proteins are themselves either the marketable product (for example, enzymes) or are used to produce an improved chemical process (for example, pollutant degradation).

For purposes of this article, "microbial products" refers to the living microorganism that either contains the rDNA molecule or was created as a result of techniques such as cell fusion and rRNA. These "products" are to be distinguished from the "genetically engineered" molecule itself which is inserted into the microorganism in the manufacture of the microbial product. However, to avoid duplicate jurisdiction under TSCA and FIFRA, EPA has limited the jurisdiction of TSCA over microbial products in the pesticides area to the genetically engineered organisms that are used to produce pesticides, excluding the pesticides themselves. In addition, EPA cedes jurisdiction over applications in the area of tobacco, tobacco products, nuclear materials, foods, food additives, drugs and cosmetics to other agencies.¹⁵

Overview of the Toxic Substances Control Act

Enacted in 1976, TSCA¹⁶ was passed by Congress in reaction to reports of human cancer related diseases associated with chemical substances such as PCB's, vinyl chloride, mercury and other heavy metals, arsenic, and asbestos. Although authority for premarket review existed for pesticide uses under FIFRA, and the use of drugs, foods, and cosmetics under the Federal Food, Drug and Cosmetic Act, Congress noted that existing federal law simply did not provide the means by which adverse effects on human health and the environment could be ascertained and appropriate action taken before chemical substances were first manufactured and introduced into the marketplace.¹⁷ The only remedy, prior to enactment of TSCA, was to impose restrictions on toxic substances after they entered into use in the workplace, under the Occupational Safety and Health Act, or to regulate discharges and emissions under the Clean Air Act and Federal Water Pollution Control Act, or to set product standards under the Consumer Product Safety Act.

Congressional sponsors, noting that "chemicals, not people, must be put to the test,"¹⁸ enacted TSCA to correct deficiencies in the existing law by providing the EPA Administrator with authority to require essential and critically needed premarket testing of the human health and environmental effects of chemical substances, and, where necessary, to regulate chemical substances found to present an unreasonable risk to human health or the environment. Strong premarket screening was central to the legislative scheme of the act.¹⁹ To balance industry concerns, premarket review through premanufacturing notices would reduce the likelihood of overly burdensome regulation after manufacturing had begun and business had invested vast resources in production and marketing.²⁰ In addition, EPA must weigh the benefits of the chemical against the costs of reducing the risk and the severity of the risk.²¹

TSCA required EPA to compile an inventory of those chemical substances subject to the Act which were manufactured or processed in the United States from 1975 through 1977.²² The chemicals included in this inventory were then classified as existing chemicals. Chemicals not on this inventory are considered to be "new" chemicals, which must be reviewed by EPA prior to their manufacture.²³ [15 ELR 10281] TSCA regulatory authorities differ for new chemicals and for existing chemicals and their significant new uses. For new chemicals, manufacturers must give EPA Premanufacture Notification and EPA is authorized to impose controls on the manufacture and use of the chemical pending a determination of the risks. With existing chemicals, however, EPA must obtain data determining that the chemical presents an unreasonable risk before it can impose controls on the manufacture and use of the chemical. Once EPA permits manufacture of a new chemical, it is reclassified as an existing chemical and placed on the inventory.

EPA's Assertion of TSCA Jurisdiction

The first and most important issue in determining TSCA jurisdiction over biotechnology is whether biological microorganisms which are the products of this new industry should be considered "chemical substances" under TSCA. The Act defines "chemical substances" to mean "any organic or inorganic substances of a particular molecular identity including (i) any combination of such substances occurring in whole or in part as a result of a chemical reaction or occurring in nature, and (ii) any element or uncombined radical."²⁴

In the December 31, 1984 Notice, EPA proposed that microbial products of biotechnology be considered "chemical substances" for purposes of TSCA jurisdiction.²⁵ EPA believes that novel microbial products producted by recombinant-DNA, cell fusion, or other genetic engineering techniques are "new chemical substances" subject to the Premanufacture Notification requirements of the Act unless they are drugs or presticides that are excluded from TSCA regulation.²⁶

Specifically, EPA asserts its authority to review living organisms under TSCA based upon the agency's interpretation of the Act's definition of "chemical substance."²⁷ EPA considers a living organism "a combination of . . . substances occurring in whole or in part as a result of a chemical reaction or occurring in nature . . . ."²⁸ In addition, EPA asserts that any DNA molecule, or other nucleic acid, or other constituent of a cell, however created, is "an organic substance of a particular molecular identity."²⁹

The EPA asserts that its interpretation of microbial products is consistent with the legislative history of TSCA.³⁰ Specifically, EPA asserts that the definition of "chemical substance" is to be interpreted broadly.³¹ Citing the House Committee report EPA notes that "the Committee recognizes that basically everything in our environment is composed of chemical substances and therefore the definition of chemical substance is necessarily somewhat broad."³²

Secondly, EPA asserts that 'the Congress intended this Act to provide authority over substances not covered by other health and environmental laws."³³ Since the use of genetically engineered microbes in manufacturing processes does not fall under existing authorities, with some exceptions, EPA asserts that TSCA's "gap filling" authority extends jurisdiction to microbial products employed in industrial and commercial applications.

Legislative History of TSCA

Examining "Chemical Substances" Under Section 3

The initial inquiry presented by EPA's proposal is whether the agency's interpretation of "chemical substance" is based upon a reasonable construction of the statute. Federal courts will generally defer to an administrative agency's interpretation "unless the legislative history or purpose and structure of the statute clearly reveal a contrary intent on the part of the Congress."³⁴

A close examination of the Senate and House reports and floor debate surrounding passage of TSCA is inconclusive as to whether or not the Congress intended "chemical substances" to be interpreted so broadly as to include genetically engineered microbial products. The legislative history suggests that TSCA was designed to address the problems associated primarily with chemical compounds.

The Senate report provides a discussion of the background and need for TSCA.³⁵ the report notes the "ever-accelerating growth of the chemical industry" and references an estimated two million recognized "chemical compounds" in existence with nearly 250,000 "new compounds" produced each year.³⁶ The report cites examples of the chemicals posing significant health and environmental dangers such as kepone, vinyl chloride, arsenic, asbestos, mercury, lead, other heavy metals, PCB's, and fluorocarbons.³⁷

The Senate report also references a statement of Dr. David Rall, Director of the National Institute of Environmental Health Sciences of the National Institute of Health, which offers additional evidence on this matter. Dr. Rall states:

[15 ELR 10282]

Recent experience with vinyl chloride, bischloromethyl ether, methylbutyl ketone, and sulphuric acid mist indicate that these compounds are not theoretical threats but known causes of illness and death. Many of these compounds are toxic to man in relatively low concentrations. Man is assaulted by these compounds alone and in combination from multiple sources. This problem constitutes possibly the major health hazard of this decade.³⁸

The House report noted that the "production and use of chemicals have surged in the recent past" and that "for example, in the past ten years, the production of synthetic organic chemicals has expanded by 233 percent, and over 9,000 synthetic chemical compounds are each now in commercial use annually in amounts in excess of 1,000 pounds each."³⁹ The report specifically singles out vinyl chloride, asbestos, and polychlorinated biphenyls as examples of where "it is often many years after exposure to harmful chemicals before the effects of its harm become visible."⁴⁰

The Congress appears to have been initially concerned with chemical compounds. The examples of the types of substances which commanded the attention of the Congress in 1976 did not include genetically engineered microbial products.

Nevertheless, Congress did write into TSCA a definition of "chemical substance" that is much broader than the conventional scientific definition of "chemical compound." Chemical compounds are "substances" which are composed of two or more "elements".⁴¹ The "elements" are classified in the Periodic Table and consist of both metals and nonmetals with about 75 percent of the elements being metals. A few of the elements are found in nature in a free, uncombined state, but most are found combined with others in the form of compounds. These elements and compounds form the raw materials of the chemical industry which uses these substances to manufacture commercial products. TSCA's definition of "chemical substance" has a wider range. It includes but is not limited to "elements" or "uncombined radicals," and encompasses "any organic or inorganic substance of a particular molecular identity, including a combination of such substances occurring in whole or in part as a result of a chemical reaction or in nature."⁴² The statutory language employed by the definition goes beyond those "compounds" which captured the attention of the Congress in 1976.

Subsequent to the passage of TSCA, in late 1977, the Senate Commerce Committee's Subcommittee on Science, Technology, and Space held oversight hearings on recombinant DNA research and its applications.⁴³ In response to the Subcommittee Chairman's inquiry, then-EPA-Administrator Douglas Costle stated:

Although there is a general consensus that recombinant DNA molecules are "chemical substances" within the meaning of section 3 of TSCA, it is not all clear whether a host organism containing recombined DNA molecules fits — or was intended to fit — that definition . . . . If such organisms are subject to TSCA on the grounds that they are a "combination of substances occurring in whole or in part as a result of a chemical reaction," the Agency might logically have to include all living things in the definition of "chemical substance" — an interpretation which I am confident the Congress neither contemplated nor intended.⁴⁴

The resulting report by the Subcommittee concluded that TSCA"may be capable of embracing organisms containing recombined DNA by virtue of the coverage by that act of DNA molecules."⁴⁵ The Committee concluded further that "it is clear that DNA molecules or segments of DNA molecules are fully subject to the provisions of TSCA" as "any organic or inorganic substance of a particular molecular identity."⁴⁶ The report concluded "that TSCA is not meant to control organisms directly" and "would not impose restriction on organisms, only on molecules that might be inserted into them."⁴⁷

Of additional interest is the EPA's response to comments in the 1977 Federal Register Notice of the Inventory Reporting Requirements. It was asserted by a commenter that "commercial biological preparations such as yeasts, bacteria, and fungi should not be considered 'chemical substances' under TSCA." The EPA replied that the Act's definition "does not exclude life forms which may be manufactured for commercial purposes and nothing in the legislative history would suggest otherwise."⁴⁸

Examining the "Gap Filling" Purposes of the Act

The EPA relies secondarily upon what the agency asserts to be a "gap filling" purpose of the Act.⁴⁹ Specifically, EPA contends that TSCA was intended to provide authority over substances not covered by other health and environmental laws and that TSCA's "gap filling" authority thereby extends jurisdiction of the Act to microbial products of biotechnology as a statute of last resort.⁵⁰

A review of the legislative history and the debate surrounding the enactment of TSCA suggests that EPA's interpretation of the Act's "gap filling" purpose in this instance may be overly broad. Senate debate outlined the "gap" stating:

existing federal legislation simply does not provide the means by which adverse effects on human health and the environment can be ascertained and appropriate action taken before chemical substances are first manufactured and introduced into the marketplace. At present, the only remedy available under such Federal statutes . . . is to impose restrictions on toxic substances after they have been first manufactured. The shortcomings in the present system have long been evident; corrective action, as evidenced by the Toxic Substances Control Act is long overdue.⁵¹

[15 ELR 10283]

The House report on the Act more specifically describes the "gap" that the law is designed to fill. In discussing existing law prior to TSCA, the report states that:

conspicuous gaps exist in the protections provided by such laws. Most significant among the deficiencies are the following: (1) In general, such laws provide regulatory authority which is not set in motion until after human or environmental exposure to a harmful chemical has occurred. (2) The authorities provided to reduce or eliminate the harmful exposure to a chemical may not be adequate or may be cumbersome or inefficient. (3) No authority exists for collection of data to determine the totality of human and environmental exposure to chemicals.⁵²

The Senate report also sheds light on the "gap filling" purpose of the Act. The report states that the Act

would close a number of major regulatory gaps, for while certain statutes . . . may be used to protect health and the environment from chemical substances, none of these statutes provide the means for discovering adverse effects on health and environment before manufacture of new chemical substances. Under these other statutes, the Government regulator's only response to chemical dangers is to impose restrictions after manufacture begins.⁵³

The EPA more broadly interprets the "gap filling" purpose of TSCA as a "catchall" to cover substances untouched by other statutes. As the Notice states, "EPA believes that TSCA authority extends over . . . biotechnology products . . . because Congress intended this Act to provide authority over substances not covered by other health and environmental laws."⁵⁴ EPA seems to argue that even if the law is unclear as to whether microbial products are covered by TSCA, Congress intended that the law cover all potentially toxic substances not covered by any other laws. But the legislative history of this "gap filling" purpose appears not so much to provide a blanket authority over chemical substances not otherwise covered under any law, but rather to provide preventive authority to address the gap in the law which allowed harmful chemicals to reach the market without prior regulatory review. TSCA's authority to require premarket testing was the key "gap filler" where prior law only imposed restrictions after the manufacture of harmful substances.

Judicial Guidance in Determining TSCA Jurisdiction

Crucial to the success of EPA's proposed regulation of genetically engineered microbial products is the role of the courts in reviewing the agency's interpretation of its statutory responsibilities under TSCA. No court has yet decided the issue. Nevertheless, decisions in other areas give an indication of how courts would approach it. A reasonable agency interpretation of its mandate must be accepted where there is no expressed legislative intent. Further, an act providing broad authority may be held to encompass products of new technology never envisioned by the act's authors.

The U.S. Supreme Courts's decision in Diamond v. Chakrabarty⁵⁵ is instructive in this instance. In Chakrabarty the Office of Patents and Trademarks had rejected a patent application for a new "oil eating" bacteria on the basis that living things are not patentable. The Court concluded, however, that since the new bacterium possessed, due to human intervention, markedly different characteristics from any found in nature, it was patentable. The Court rejected the argument that microorganisms cannot qualify as patentable subject matter until the Congress expressly authorized such protection because "genetic technology was unforeseen when Congress enacted" the patent law.⁵⁶ The Court concluded in that case that "broad general language is not necessarily ambiguous when congressional objectives require broad terms."⁵⁷ Continuing, the Court reasoned that "a rule that unanticipated inventions are without protection would conflict with the core concept of the patent law" and that the "Congress employed broad general language . . . precisely because such inventions are often unforeseeable."⁵⁸

Analogous reasoning might be applied to TSCA. The legislative history of TSCA must be read in light of the broad purposes expressed in the statute. The Act states as policy that "adequate authority should exist to regulate chemical substances which present an unreasonable risk of injury to health or the environment" and "to assure that such innovation and commerce in such chemical substances and mixtures do not present an unreasonable risk of injury to health or the environment."⁵⁹ A rule that unanticipated innovations in "chemical substance" manufacture are without regulation would conflict with the core concept of TSCA.

In addition, EPA's construction of TSCA must be accorded deference. The Supreme Court has stated that "if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute."⁶⁰ The Court in Chevron v. NRDC noted that "the power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress."⁶¹ Where the legislative delegation is implicit the court "may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.⁶²

More recently, in Chemical Manufacturers Ass'n v. NRDC⁶³ the Court reiterated this policy stating that the "view of the agency charged with administering the statute [15 ELR 10284] is entitled to considerable deference; and to sustain it, we need not find that it is the only permissible construction that EPA might have adopted but only that EPA's understanding of this very 'complex statute' is a sufficiently rational one to preclude a court from substituting its judgment for that of the EPA." The Court further noted that "if Congress has clearly expressed an intent contrary to that of the agency, our duty is to enforce the will of Congress."⁶⁴

As recent exemplars of the high court's thinking on continued deference to agency interpretation of a substantive mandate, these cases reinforce EPA's proposed position regarding TSCA regulation of certain genetically engineered microbial products. The Court has deferred to EPA's interpretation where the Congress did not articulate a legislative intention. Reviewing courts are limited to examining whether the agency's interpretation is a "permissible construction."

Viewed in its entirety, neither the language nor the legislative history and purpose of the Act demonstrates a clear congressional intent which would forbid EPA's assertion of jurisdiction over microbial products under TSCA. Although Congress did not directly address the precise issue, EPA's construction of the breadth of "chemical substance" under the Act is not inconsistent with the language, goals or operation of the Act, nor does it undermine the will of Congress. An indication that Congress did not intend to forbid the regulation of microbial products is its silence on the issue.

EPA's strongest argument for TSCA jurisdiction reaches not so much to the organism itself but rather to the nucleic acid constituents of that organism. The broad language defining "chemical substance" fairly embraces DNA molecules, other nucleic acids, or other constitutents of a cell as "an organic substance of a particular molecular identify." As previously discussed, the Senate Commerce Committee concluded after oversight hearings conducted in 1977 that the authority contained in TSCA enables the Administrator of EPA to extend controls to any "commercial use" of DNA molecules including their use in organisms.⁶⁵ EPA could regulate the "commercial use" of a recombined DNA molecule in an organism that would present an unreasonable risk to health or the environment.

The Statutory Scheme

Risk Assessment in General Under the Act

TSCA authorizes the EPA to regulate any chemical in commerce that is determined to present an unreasonable risk to health or the environment. TSCA does not specify what constitutes unreasonable risk, so the determination is left to the agency's judgment. The level of proof for establishing the degree of risk varies under the different sections of the Act. For example, to require testing under section 4, the EPA must find that the chemical "may present" an unreasonable risk; however, to take regulatory action under section 6, EPA must find that the chemical "will present" an unreasonable risk.⁶⁶

There are problems with assessing the risks associated with microbial products. The standard approaches to reviewing conventional chemical substances would appear to be inapplicable. In the December 1984 Notice, EPA admits to "the absence of generally accepted principles of risk assessment of genetically engineered microorganisms."⁶⁷

EPA's ability to assess risks associated with chemicals relies heavily upon the ability of the agency to relate the structure of a new chemical to that of known chemicals.⁶⁸ This is referred to as "structural analysis."⁶⁹ The opportunity to assess the risks of new chemicals is thus dependent on the existence of structurally similar chemicals whose risk of harm to health and the environment has been demonstrated through prior testing and available data. The pool of knowledge gained from experience with introduced exotic organisms would provide a base for crude inference drawing about introduced genetically engineered organisms. But that base, while somewhat analogous to the information base used in structural analysis, is less useful both because it is smaller and because it would be used to draw inferences about the behavior in living environments of living, fecund organisms. EPA's inferences regarding the risks associated with new microbial products of biotechnology would be uncertain at best. The agency will be required to review each new microbial product on a case-by-case basis. Assessing the risks of these new organisms will demand that the agency develop standards to identify possible hazards and the opportunity and extent of exposure by people and the environment. In developing standards the agency would be required under the Act to balance the competing goals of encouraging research and commercialization with minimal interference while adequately addressing the environmental and public health concerns.

Section 4 — Testing of Chemical Substances and Mixtures

Under section 4 of the Act, if EPA determines that the information available is insufficient to make a reasoned evaluation of the health and environmental effects of any existing or new chemical substance, the agency can require testing if testing is necessary to develop such information.⁷⁰ [15 ELR 10285] The agency must determine that the chemical "may present" an unreasonable risk of injury to health or the environment, or that the substance is or will be produced in substantial quantities that "may result" in significant human or environmental exposure. Testing under section 4 is performed not by the EPA but by the manufacturer or processor.⁷¹ Under section 4, the EPA Administrator could require research into the hazards of "new chemicals" containing recombinant-DNA molecules. Collection of the test data could then provide the basis for further action under other TSCA provisions such as sections 5, 6, or 7.⁷²

Though section 4 contains exemptions to these testing rules, it is unlikely that they would be available for microbial products containing recombinant-DNA molecules.⁷³ Manufacturers or processors who establish that the required data has been submitted or is being developed on an equivalent chemical substance or mixture can be exempt from the rule. Also, if an exemption applicant can show that any data compiled on the chemical substance would be duplicative of data already being developed or submitted, he can be exempt from the rule. If the EPA approves the exemption, the applicant must pay the original testor fair compensation. Exemptions from a testing rule based upon the provision that test results already exist or are being developed and that additional testing would be duplicative would appear to be unavailable to a manufacturer of genetically engineered microbial products in light of the novelty of the microorganisms.

EPA's testing requirement, however, is conditioned on the agency's ability to make the required findings as to the need for testing. Absent those findings, testing would not be required under section 4 of the Act. TSCA establishes a priority-setting mechanism to systematically identify and evaluate chemicals for testing decisions. The Act sets up an Interagency Testing Committee (ITC) composed of representatives from eight federal agencies concerned with health and the environment to recommend priority testing under section 4.⁷⁴ The Act specifies the factors to be considered by the committee, and limits the total number of chemicals on the list to 50 at any one time.⁷⁵ The EPA, however, is not bound by the ITC's recommendations and the final decision to initiate a test remains with the agency.⁷⁶

Problem areas which may trigger challenges from manufacturers or processors of microbial products under section 4 might focus upon the agency's initial determination of the "unreasonableness" of the risk which triggers a section 4 testing rule, and also the agency's establishment of standards for developing test data. Issuing a testing requirement rule under section 4 would be difficult for the agency since the rule must identify the chemical substance to be tested and include standards for the development of the test data. Absent an historical and scientific data base concerning the behaviorial characteristics of genetically engineered organisms and a standard ecological methodology for predicting the outcome of the test, developing testing procedures and standards would be difficult at best.EPA would be required to rely upon data available from laboratory research on genetically engineered organisms.

Section 5 — Manufacturing and Processing Notices

Under section 5 of the Act any person who intends to manufacture or import a new chemical substance for commercial purposes in the United States must submit a Premanufacture Notification (PMN) to the EPA at least 90 days before beginning manufacture.⁷⁷ EPA generally has 90 days to make its review.⁷⁸ The agency may, for "good cause," extend the review for an additional 90 days.⁷⁹ The PMN is considered a major and very important feature of the Act since it directs EPA to review and evaluate the "potential risks" of new substances and to control "unreasonable risks" before they can cause significant harm to human health or the environment.

A chemical substance which is not included on the inventory list of existing chemicals and which is not "naturally occurring" is considered a "new" chemical subject to section 5.⁸⁰ Since microbial products are not included on the inventory and either are man-made or are naturally occurring substances which have been deliberately changed by man, they are "new."⁸¹ Microbial products are considered "new" under the EPA's proposed PMN rules where the technique used to produce the organism involves human intervention creating genetic material de novo.⁸² A substance will be exempt from the PMN if it is "naturally occurring." This determination of what is "new" is based upon EPA's prior "process-based" distinctions for conventional substances when the Inventory was initially compiled.⁸³ An additional question concerns the treatment of chemical substances already on the TSCA inventory but which may be manufactured by a new process involving genetically engineered microorganisms. EPA has noted that PMN review of the genetically engineered microorganism used to produce an improved chemical substance already on the inventory would adequately address potential risks.⁸⁴

The Act specifies that the notification include information on substance identity, uses, and exposure.⁸⁵ This could include data prepared pursuant to section 4's testing rule. However, test data and other data related to the effects on health and the environment as a result of the manufacture, processing distribution in commerce, use, or disposal of the new chemical substance must be submitted only to the extent that they are in the possession or control of the submitter.⁸⁶ Other health and environmental effects data that are known to, or are reasonably ascertainable by, the submitter must be described in the notification.⁸⁷ Due to [15 ELR 10286] the absence of data regarding genetically engineered microorganisms, the EPA has stated that it will approach the required PMN information on a case-by-case basis using a "reasoned evaluation" of the data.⁸⁸ Organisms intended for use in the open environment, for example, will require data different from those used in a contained environment as the risks will be different.⁸⁹

Under section 5(e) of the Act EPA can impose controls on the proposed manufacture or use of a new chemical if available data is insufficient to determine the chemical's effect on health and the environment and EPA believes that an unreasonable risk may be present.⁹⁰ Before taking such action EPA must determine that the available data is insufficient to permit a reasoned evaluation of the new chemical's effect and that (1) the new chemical may present an unreasonable risk to health or the environment, or (2) exposure to the chemical is likely to be significant.⁹¹

EPA can take two types of actions under section 5(e) of the Act.⁹² First, EPA can issue so-called "unilateral 5(e) orders." These unilateral orders are used when EPA decides to ban the manufacture of a new chemical pending the development of data necessary to determine the chemical's health and environmental effects. Second, EPA can issue so-called "consent 5(e) orders." These orders are consent agreements negotiated between EPA and the initial manufacturer only where the manufacturer agrees to comply with EPA-imposed controls in exchange for the manufacture of the chemical until sufficient data is developed. However, EPA cannot require that a firm actually develop the data. EPA will reassess the need for controls if and when the data is developed.

Under section 5(f), EPA can regulate a new chemical when it has sufficient data to determine the chemical's effect on health and the environment and the agency concludes that the proposed manufacture or use will present an unreasonable risk.⁹³ EPA can impose controls — to reduce exposure, restrict production or use, or prohibit manufacture or import — to prevent the unreasonable risks from the initial manufacture or use of the new chemical as it is described in the PMN.

The EPA's PMN review of new chemicals addresses a very narrow segment of the risks that a new chemical may pose to health and the environment. According to EPA, the PMN only focuses on the intended method of manufacture, production volume, and uses described in the PMN notice.⁹⁴ After a new chemical has cleared the PMN review and is placed on the inventory, unrestricted commercialization, including significant increases in production volume and development of new uses, is possible without further review.

In this regard, another important section 5 authority allows EPA to anticipate so-called "significant new uses."⁹⁵ Under section 5(a) EPA can issue a Significant New Use Rule (SNUR), which requires that a new PMN be submitted for each potential new use, other than those proposed in the PMN. The agency must, however, anticipate the manner and methods of manufacture and use in the SNUR.⁹⁶ Such "soothsaying" may be difficult regarding microbial products. EPA thus can impose section 5(e) controls on the subsequent manufacture and use of a chemical. Congress envisioned this authority to apply where there is anticipated "a significant increase in the projected volume of manufacture or processing for a substance, a significant change in the type or form of human or environmental exposure, or a significant increase in the magnitude or duration of human or environmental exposure.⁹⁷ The SNUR authority is important to those "new" microbial products which are approved by the EPA and placed on the existing chemicals inventory.It is even more significant to "naturally occurring" microorganisms which are already being used commercially.⁹⁸

Finally, section 5(h) of the Act exempts certain manufacturing and use of chemicals from the PMN review.⁹⁹ The first exemption applies to test marketing purposes where a firm applies to EPA demonstrating that the manufacture, processing, distribution in commerce, use, and disposal will not present any unreasonable risk of injury to health and environment. The second exemption applies to small quantities for scientific experimentation or analysis, or chemical research, including research for the development of a product. The main difference between the two exemptions is that a company must apply for the test marketing exemption whereas the research and development exemption does not require an application. The test marketing exemption also requires a firm to submit sufficient information to allow EPA to determine whether the chemical might pose an unreasonable risk during the test marketing. EPA could then impose restrictions on the test marketing of the substance.

EPA is proposing that the "small quantity" research and development exemption be limited to exclude the "field testing" of genetically engineered microbial products.¹⁰⁰ The agency's concern focuses upon the unique properties of living organisms to reproduce and spread in an open environment. This proposal appears to be consistent with the purposes of TSCA to prevent injury to human health or the environment. The exemption could otherwise permit [15 ELR 10287] organisms to be released and cause injury before any review under the PMN process. A nagging problem, however, remains in the context of purely academic releases in the open environment.¹⁰¹ TSCA applies only to the use of chemical substances for "commercial purposes." Due to the nature of these microbial products, it may also be appropriate to limit the test marketing exemption to exclude genetically engineered microbial products until more data is collected.

Sections 6 and 7 — Regulating Hazardous Chemical Substances

In the event that the EPA finds that a commercial use of a new chemical substance "presents or will present" an unreasonable risk of injury to health or the environment, the agency can stop commercial development.¹⁰² Section 6 requires the EPA to take action when a reasonable basis exists to conclude that the manufacture, processing, distribution in commerce, use, or disposal of the chemical substance "presents or will present" an unreasonable risk or injury. The agency's options range from a complete ban to simple labeling requirements.

Regulation of genetically engineered microbial products under section 6 must be premised on the assumption that the data necessary to decide whether or not the product "will present" injury to health or the environment is available. In deciding the "unreasonableness of the risk" the agency must consider and publish a statement riviewing four findings:¹⁰³ the effects of the substance on health and the magnitude of the exposure oif human beings, the effects of the substance on the environment and the magnitude of the exposure, the benefits of the substance and the availability of substitutes, and the economic consequences of the rule.

Section 6 suggests a balancing of the costs and benefits with a wide range of discretion on the part of the agency. Essentially the agency's test is "whether a reasonable man, with knowledge of the risks, benefits and other consequences, would prescribe regulatory restrictios"¹⁰⁴ and, if so, what the "least burdensome"¹⁰⁵ protections would be to avoid the injury to health and the environment which the chemical substance "will present." Any challenge to the agency's action under section 6 would necessarily focus upon whether the EPA engaged in a "substantial inquiry" and "a thorough, probing, in-depth review" to justify the section 6 rulemaking.¹⁰⁶ Section 7 supplements section 6 by authorizing EPA to take action against an "imminently hazardous" chemical substance if it can be shown that the substance is likely to result in "serious or widespread" injury to health or the environment before a section 6 rule is final.¹⁰⁷ Relief under section 7 can include seizure and public notice of the hazards of the substance.¹⁰⁸

Section 8 — Reporting

Once EPA completes its review of a "new" chemical substance and decides that no control action will be needed, manufacture can begin after the 90-day notice period.¹⁰⁹ Section 8(b) then requires that the substance be added to the inventory of existing chemicals.¹¹⁰ Once put on the inventory, the substance can be manufactured by anyone, for any use, and in any quantity without notice to the EPA. For microbial products, this can represent a major loophole in the regulatory scheme. As noted earlier, the PMN review is very narrow and limited in scope. Since EPA does not have extensive experience and knowledge about the impact of microbial products it should probably monitor use and effects of microbial products after their introduction.

Under section 8(a) the EPA is authorized to require manufacturers to provide the agency with information that the agency considers necessary through the maintenance of records and through reports to the agency.¹¹¹ This authority could be used to monitor changes in the manufacture and use, and thus the possible exposure risks, of microbial products approved according to the narrow parameters of the PMN. Section 8 authority would permit the agency to monitor the "new" chemical substance beyond the PMN, and, unlike the SNUR authority, would not require EPA to predict specific uses which might raise concerns.¹¹² On the other hand, SNUR authority has the advantage of regulating a new use as a "new chemical" so that the agency can impose controls under section 5 while data is being developed. To regulate an existing chemical, absent a SNUR, the agency would be required under section 6 to demonstrate that any new use "will present" an unreasonable risk.¹¹³ EPA would be burdened to obtain the data to determine the risk.

Other Provisions of Note

In view of the intense competition among emerging biotechnology firms, it is important to note that section 14 of the Act generally provides for certain protections against public disclosure of trade secrets.¹¹⁴ The EPA is authorized, however, under certain circumstances, to disclose information "to protect health and the environment against unreasonable risk" or where "relevant in any proceeding" under the Act.¹¹⁵ In addition, section 16 of the Act provides civil penalties of up to $25,000 for each day a each violation.¹¹⁶ Violations include noncompliance with any rules or regulations and use of a chemical substance where the actor "knew or had reason to know" of prohibitions.¹¹⁷ Citizens suits are also allowed, under section 20 of the Act.¹¹⁸ This provision is important in view [15 ELR 10288] of the close scrutiny with which public interest groups have been observing the biotechnology industry.¹¹⁹

Conclusion

A careful reading of the legislative history reveals that Congress did not express an intention to exclude new microbial products of biotechnology from the definition of "chemical substances" for purposes of TSCA jurisdiction. By virtue of the fact that these products contain recombined DNA "molecules," which are not present on EPA's current Inventory of "existing chemicals," these recombined molecules and the microorganisms containing them would be regulated as "new chemical substances" subject to the PMN requirements of the Act. EPA's premarket assessment of the risks posed by these new substances, however, will be significantly hampered by the lack of available data and experience with genetically engineered microorganisms. To date, TSCA regulation of new chemical substances has relied upon a data base of substantially similar existing chemicals which assists the agency in establishing standards and in assessing the risks. Due to the nature to these new microbial products as living organisms, aspects of TSCA may inadequately protect human health and the environment. The EPA should consider the appropriateness of exemptions for all research and development activity which involve activities in the open environment. As living organisms, these new products of a brave new world harbor the potential for ecological disruption, toxicity to other organisms, and other unknown injuries. The Congress may well consider amendments to TSCA to clarify and tailor the Act's application to genetically engineered microorganisms. In view of the foregoing concerns regarding inadequacies in the reporting and SNUR authority, the Congress should consider authorizing a program of interim PMN approval once a microbial product has passed the narrow scope of the PMN process. TSCA, as currently written, offers an important interim regulatory authority in ensuring initial premarket review of the biotechnology industry's products. Howdever, adequate protection of human health and the environment will require fine-tuning and perhaps additional statutory authority tailored specifically to microbial products as this important new industry develops and matures.

1. 447 U.S. 303 (1980).

2. See generally, OFFICE OF TECHNOLOGY ASSESSMENT, UNITED STATES CONGRESS, COMMERCIAL BIOTECHNOLOGY: AN INTERNATIONAL ANALYSIS, OTA-BA-218 (1984) [hereinafter cited as OTA STUDY].

3. Id.

4. STAFF OF HOUSE SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT, COMMITTEE ON SCIENCE AND TECHNOLOGY, 98th Cong., 2d Sess., THE ENVIRONMENTAL IMPLICATIONS OF GENETIC ENGINEERING (1984) [hereinafter cited as STAFF REPORT].

5. OTA STUDY, supra note 2.

6. Proposal for a Coordinated Framework for Regulation of Biotechnology, 49 Fed. Reg. 50856 (Dec. 31, 1984).

7. Id.

8. Id.

9. Id. at 50857.

10. Id. at 50886.

11. OTA STUDY, supra note 2, at 33.

12. McGRAW-HILL ENCYCLOPEDIA OF SCIENCE AND TECHNOLOGY 146 (1982).

13. Id.

14. OTA STUDY, supra note 2, at 37.

15. 49 Fed. Reg. at 50887. See also note 24 and accompanying text. EPA does not specifically define "microbial products" except on a "process" basis. EPA notes generally that: "In the context of biotechnology, products potentially subject to review under TSCA include microorganisms in certain physically contained uses (such as the production of pesticides and other commercial chemicals and the conversion of biomass for energy) and in certain uses involving direct release to the environment (e.g. pollutant degradation, enhanced oil recovery, metal extraction and concentration, and certain non-food agricultural applications such as nitrogen fixation)." 49 Fed. Reg. at 50887.

16. 15 U.S.C. §§ 2601-2629, ELR STAT. 41335.

17. 122 CONG. REC. S8284 (daily ed. Mar. 26, 1976) (remarks of Senator Pearson).

18. Id.

19. Id.

20. 122 CONG. REC. S8282 (daily ed. Mar. 26, 1976) (remarks of Senator Tunney).

21. See 15 U.S.C. §§ 2601(c) and 2605(c)(D), ELR STAT. 41336, 41341.

22. See 15 U.S.C. § 2607(b), ELR STAT. 41344.

23. 15 U.S.C. § 2602(9), ELR STAT. 41336.

24. 15 U.S.C. § 2602(2)(A), ELR STAT. 41336. 15 U.S.C. § 2602(2)(B), ELR STAT. 41336 provides that such term does not include (i) any mixture, (ii) any pesticide (as defined in the Federal Insecticide, Fungicide, and Rodenticide Act) when manufactured, processed, or distributed in commerce for use as a pesticide, (iii) tobacco or any tobacco product, (iv) any source material, special nuclear material, or byproduct material (as such terms are defined in the Atomic Energy Act of 1954 and regulations issued under such Act), (v) any article the sale of which is subject to the tax imposed by section 4181 of Title 26 (determined without regard to any exemptions from such tax provided by section 4182 or 4221 or any other provision of Title 26), and (vi) any food, food additive, drug, cosmetic, or device (as such terms are defined in section 321 of Title 21) when manufactured, processed, or distributed in commerce for use as a food, food additive, drug, cosmetic, or device.

25. 49 Fed. Reg. at 50886-87.

26. Id. at 50887.

27. Id. at 50886.

28. Id.

29. Id.

30. Id. at 50887.

31. Id.

32. Id.

33. Id. Also, the Act provides that the EPA must refrain from addressing risks within the reach of other federal laws to minimize overlap and duplication. See 15 U.S.C. § 2608, ELR STAT. 41344.

34. Chemical Mfr's Ass'n v. Natural Resources Defense Council, __ U.S. __, 15 ELR 20230, 20233 (Feb. 27, 1985).

35. SENATE COMMITTEE ON COMMERCE, REPORT ON TOXIC SUBSTANCES CONTROL ACT, S. 3149, S. REP. NO. 698, 94th Cong., 2d Sess. 3 (1976) [Hereinafter cited as SENATE REPORT].

36. Id.

37. Id. at 4.

38. Id.

39. COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, REPORT ON TOXIC SUBSTANCES CONTROL ACT, H.R. 1432, H.R. REP. NO. 1341, 94th Cong., 2d Sess. 3 (1976) [hereinafter cited as HOUSE REPORT].

40. Id.

41. McGRAW-HILL ENCYCLOPEDIA, supra note 12, at 45.

42. 15 U.S.C. § 2602(2)(A), ELR STAT. 41336.

43. SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE, SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, OVERSIGHT REPORT: RECOMBINANT DNA RESEARCH AND ITS APPLICATIONS (August 1978).

44. Id. at 88.

45. Id. at 42.

46. Id.

47. Id.

48. 42 Fed. Reg. 64584 (December 23, 1977). The Inventory reporting instructions include guidance on the reporting of "naturally occurring" substances such as bacteria, yeast and fungi. Several classes of these biological materials are listed on the Inventory.

49. STAFF REPORT, note 4, at 33.

50. 49 Fed. Reg. at 50887.

51. Remarks of Senator Pearson, supra note 17.

52. HOUSE REPORT, supra note 39, at 6.

53. SENATE REPORT, supra note 35, at 5. The Senate Report references the Clean Air Act, the FWPCA, the OSH Act, and the CPSA, as statutes which respond to adverse effects on health and environment only after manufacture begins.

54. 49 Fed. Reg. at 50887.

55. 447 U.S. 303 (1980).

56. Id. at 314.

57. Id. at 315.

58. Id. at 316.

59. 15 U.S.C. § 2601(b)(2) and (3), ELR STAT. 41336.

60. Chevron USA, Inc. v. Natural Resources Defense Council, __ U.S. __, 14 ELR 20509 (June 25, 1984).

61. Id.

62. Id. In Chevron, EPA's interpretation of the meaning of "stationary source" to include a plantwide single "bubble" definition was challenged as inappropriate under the Clean Air Act's goal of improving air quality.In examining the legislative history of the Clean Air Act, the Court determined that the Congress did not articulate a distinction between permitting individual sources and a plant-wide permit.

63. __ U.S. __, 15 ELR 20230, 20233 (Feb. 27, 1985).

64. Id. In Chemical Mfr's Ass'n, EPA's interpretation of FDF variances under sections 301(c) and (g) of the Clean Water Act was challenged as being prohibited by section 301(1) of the act withdrawing authority to "modify" national pollution standards for toxic pollutants. The EPA characterized FDF variances as "a revision" rather than a modification. After examining the legislative history of the Clean Water Act, the Court determined that the Congress never demonstrated an intention to forbid FDF variances for toxic pollutants.

65. See supra notes 43-47 and accompanying text.

66. Generally, section 4 provides that if EPA determines that the information available is insufficient to make a reasoned evaluation of the health and environmental effects of any existing or new chemical substance, the agency can require testingif testing is necessary to develop such information; section 6 requires the EPA to take action when a reasonable basis exists to conclude that the manufacture, processing, distribution in commerce, use, or disposal of a chemical substance poses an unreasonable risk.

67. 49 Fed. Reg. at 50894.

68. U.S. GENERAL ACCOUNTING OFFICE, GAO/RCED 84-84, ASSESSMENT OF NEW CHEMICAL REGULATION UNDER THE TOXIC SUBSTANCES CONTROL ACT, 8 (1984) [hereinafter cited as GAO REPORT].

69. Id.

70. 15 U.S.C. § 2603(a), ELR STAT. 41336.

71. 15 U.S.C. § 2603(b)(3), ELR STAT. 41337.

72. See infra notes 81-109 and accompanying text.

73. 15 U.S.C. § 2603(c)(1), (2), ELR STAT. 41337.

74. 15 U.S.C. § 2603(e), ELR STAT. 41338.

75. 15 U.S.C. § 2603(e)(1)(A), ELR STAT. 41338.

76. 15 U.S.C. § 2603(e)(1)(B), ELR STAT. 41338.

77. 15 U.S.C. § 2604(a), (b), ELR STAT. 41338-39.

78. 15 U.S.C. § 2604(b)(1)(B), ELR STAT. 41339.

79. 15 U.S.C. § 2604(c), ELR STAT. 41339.

80. 15 U.S.C. § 2602(9), ELR STAT. 41336.

81. 49 Fed. Reg. at 50887.

82. Id. at 50888.

83. Id. at 50889.

84. Id. at 50890.

85. 15 U.S.C. § 2604(d), ELR STAT. 41339.

86. 15 U.S.C. § 2604(d)(1)(B), ELR STAT. 41339.

87. 15 U.S.C. § 2604(d)(1)(C), ELR STAT. 41339.

88. 49 Fed. Reg. at 50894.

89. Id.

90. 15 U.S.C. § 2604(e)(1)(A), ELR STAT. 41339.

91. 15 U.S.C. § 2604(e)(1)(A)(i), (ii)(I), (II), ELR STAT. 41339.

92. 15 U.S.C. § 2604(e), ELR STAT. 41339-340.

93. 15 U.S.C. § 2604(f)(1), ELR STAT. 41340.

94. GAO REPORT, supra note 65, at 15.

95. 15 U.S.C. § 2604(a)(1)(B), ELR STAT. 41338.

96. EPA issued a rule setting out general procedures for reporting on significant new uses in September 1984, 49 Fed. Reg. 35011 (Sept. 5, 1984). That rule imposes a duty on the manufacturer to notify customers of the SNUR restrictions. Id. at 35012, 35019 (to be codified at 40 C.F.R. 721.5(c)). The industry has challenged the rule, questioning the nature and extent of a manufacturer's obligation to monitor customers in compliance with the SNUR. Chemical Mfr's Ass'n v. Envtl. Protection Agency, No. 84-1569 (D.C. Cir. filed November 10, 1984). On March 12, 1985, the Court stayed the briefing schedule pending EPA's reproposal of the general SNUR, expected in October, 1985.

97. CONFERENCE REPORT, TOXIC SUBSTANCES CONTROL ACT, H.R. REP. NO. 1679, 94th Cong., 2d Sess. 66 (1976).

98. 49 Fed. Reg. at 50892.

99. 15 U.S.C. § 2604(h), ELR STAT. 41340-41.

100. 49 Fed Reg. at 50891. TSCA does not define "small quantity" but leaves the determination to the EPA administrator. EPA, at 40 CFR 720.3 (cc), qualifies "small quantities" as those "not greater than reasonably necessary" for research and development. EPA notes that, by rulemaking, the agency would define "small quantities" solely for research and development to exclude living microorganisms directly released to the environment because the quantities of organisms involved may not be small for purposes of TSCA.

101. 49 Fed. Reg. at 50891; note also that 15 U.S.C. § 2604(i), ELR STAT 41341 defines "manufacture" and "process" to mean manufacturing or processing for commercial purposes.

102. 15 U.S.C. § 2605(a), ELR STAT. 41341.

103. 15 U.S.C. § 2605(c)(1)(A), (B), (C), (D), ELR STAT. 41341-42.

104. W. RODGERS, ENVIRONMENTAL LAW 903 (1977).

105. 15 U.S.C. § 2605(a), ELR STAT. 41341.

106. RODGERS, supra note 100.

107. 15 U.S.C. § 2606(f), ELR STAT. 41343.

108. 15 U.S.C. § 2606(a)(1), ELR STAT. 41343.

109. 15 U.S.C. § 2604(a), ELR STAT. 41338.

110. 15 U.S.C. § 2607(b)(1), ELR STAT. 41344.

111. 15 U.S.C. § 2607(a)(1), (2), ELR STAT. 41343.

112. 15 U.S.C. § 2604(a)(2), ELR STAT. 41338-39.

113. 15 U.S.C. § 2605(a), ELR STAT. 41341.

114. 15 U.S.C. § 2613(a), ELR STAT. 41346.

115. 15 U.S.C. § 2613(a)(3), (4), ELR STAT. 41346.

116. 15 U.S.C. § 2615(a), ELR STAT. 41346-47.

117. 15 U.S.C. § 2614, ELR STAT. 41346.

118. 15 U.S.C. § 2619, ELR STAT. 41348.

119. See, e.g., Foundation on Economic Trends v. Heckler, 756 F.2d 143, 15 ELR 20248 (1985).