FIFRA Amendments: Getting the Pesticide Program Moving

Because of criticism of the Environmental Protection Agency's implementation of its pesticide registration program, Congress is now considering amendments to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)¹ which are intended to streamline the regulatory process. The amendments pertain primarily to the use and disclosure of test data, compensation for data use, and generic and conditional registrations. Although the proposals will expedite the registration process, they fail to deal with verification of data or with the chaotic state of EPA's internal operations in the area of pesticide regulation. Both houses of Congress are expected to move on the proposed amendments, which were submitted to Congress following hearings on FIFRA,² before the end of this session.

Background

FIFRA was enacted in 1947 to protect the public health and the environment by providing for efficient and effective regulation of pesticide manufacture, formulation, and application.³ Originally, all pesticides were registered with the Department of Agriculture. By the late 1960's, however, it was clear that this process was not meeting Congress' expectations.⁴ In 1970, the Environmental Protection Agency (EPA) was given the responsibility for pesticide regulation and in 1972 FIFRA was amended to make the registration process more trenchant and to require registration of new pesticides with EPA before they could be handled or sold.⁵ In addition, to assure that each product on the market met current safety standards, all pesticides previously registered had to be reviewed and reregistered. Applicants for registration or reregistration were directed to submit extensive test data concerning the efficacy of their product, general and environmental chemistry, and product hazards. The Administrator was charged with analyzing this data, determining the risks and benefits of the pesticide under consideration, and granting or denying a registration for the product.⁶ The pesticide industry produces 1.4 billion pounds of pesticides each year, involving some 1400 active ingredients and 40,000 end-use products.⁷ Thus, the 1972 amendments created an enormous task for EPA.

In light of the extensive use of pesticides in the United States and the potentially grave dangers inherent in that use, the Subcommittee on Administrative Practice and Procedure of the Senate Judiciary Committee in December 1976 issued a study of EPA's administration of FIFRA which concluded that EPA's pesticide regulation program was fundamentally deficient.⁸ First, the report charged EPA with dragging its feet in planning and in drafting regulations and guidelines. The reregistration program, for example, did not become operational until the fall of 1975, three years after the enactment of the amendments, and is still not fully implemented.⁹ A second fault noted by the subcommittee was that EPA had granted pesticide registrations on the basis of incomplete, erroneous, or superficially evaluated test data. EPA's analysis consisted of little more than searching for data; the substantive content of the data was rarely scrutinized. Moreover, many of EPA's data-review positions were held by persons lacking sufficient expertise to evaluate scientific test results adequately. The report also complained that EPA had taken risky shortcuts, had misplaced data, and had carelessly advised applicants of registration data requirements. Finally, the subcommittee felt that EPA had misled Congress and the public regarding its pesticide program by fostering the impression that it was thoroughly reviewing all pesticide test data to determine safety.¹⁰ As a result, pesticides had been registered indiscriminately, time and money had been wasted, and the congressional plan to protect the public health and environment had become stalemated.

The subcommittee recommended that EPA monitor the testing procedures used by the pesticide manufacturers to ensure accurate and fair data, fill data-review positions with appropriate experts, thoroughly review test data for completeness and accuracy, and reorganize its files and registration process. The report also strongly advised EPA to make data available for public scrutiny to assure outside comment and criticism.¹¹

Soon after the subcommittee's report was published, Congress conducted hearings on EPA's administration of the pesticide registration program.¹² The currently proposed amendments grew out of the report and the hearings and are aimed at remedying some of EPA's difficulties.¹³

"Me Too" Registration

All pesticide products must be registered under FIFRA [7 ELR 10142] before they can be sold or used. Applicants for registration must submit to EPA full safety data or refer to existing data if it is available for such use.¹⁴ Large pesticide manufacturing firms have the necessary resources to conduct the extensive scientific tests required by the Act. Newly developed products and the data generated by their development and registration are initially protected by patent. Once the patent expires, however, the original manufacturer faces competition from new producers of the product. Less affluent entrants will seek to obtain "me too" registration of their pesticide by using the original manufacturer's registration data. Originally, FIFRA allowed the Administrator to refer to any data in his possession in issuing "me too" registrations. However, the current Act limits EPA's ability to do this. Section 10(b) of the Act allows a manufacturer to designate data as "trade secret" at his discretion.¹⁵ The Administrator may not refer to such data when considering the registration application of "me too" producers under § 3(c)(1)(D) and must refrain from publicly disclosing trade secrets pursuant to § 3(c)(2). The former provision was recently affirmed by a federal district court in Michigan in Dow Chemical Co. v. Train.¹⁶ The court enjoined EPA from considering trade secret data without the permission of the data-collector.

Unfortunately, neither Congress nor the courts have defined the scope of the term "trade secret"; consequently, the provisions have been abused. Because many companies designate all their test data as trade secrets, they effectively keep their less resourceful competitors out of the pesticide market, prevent public review of the data, and saddle EPA with a greater data processing load.¹⁷ The Dow court recognized these problems but preferred to leave their resolution to Congress.

The proposed amendments to FIFRA seek to eliminate this loophole by deleting the trade secret exception to § 3(c)(1)(D),¹⁸ thereby allowing the Administrator to refer to any data in ruling on a registration regardless of the original data-collector's allegations of trade secrecy. This deletion would facilitate the Administrator's data-review task by reducing the volume of data which he must consider in the registration process. The pesticide industry, understandably, opposes this change. It contends that because of impurities in most pesticides, each applicant for registration should produce its own test data and should not be allowed to refer to existing data on the same chemical unless it can show that the products are substantially the same. Furthermore, the big pesticide manufacturers insist that each registrant should be entitled to the exclusive use of the chemical and the accompanying data for ten years after registration.¹⁹ Thus, data could not be used to support new registrations during this proprietorial period unless the applicant successfully carried the heavy burden of proof that the products were identical. The industry's proposal would add to EPA's load by increasing the amount of data to be considered, would require duplication of effort, and would adversely affect competition. The Justice Department has stated that the existing trade secrecy provisions have an adverse market impact and characterized the industry arguments as unconvincing.²⁰ Not only was no data protected from use by subsequent registrants prior to 1972, but, Justice argued, to allow exclusive use, which would operate essentially as a patent extension, would be inconsistent with patent law and the competitive system.

Public Disclosure

The second contested use of trade secrets involves disclosure of test data to the public. Section 3(c)(2) of FIFRA provides that the Administrator must publish any data used in a registration decision unless it has been designated a trade secret.²¹ The major pesticide manufacturers have used the trade secrecy provision to prevent access to their pesticide data.²² The amendments seek to increase public participation in the registration process by more carefully defining the scope of "trade secret" in § 10(b) and thus limiting its use in § 3(c)(2). Under the proposed definition, information concerning the objectives, methodology, results, significance, or environmental effects of a chemical would be routinely disclosed to the public. On the other hand, manufacturing or quality control processes, testing methods, or specific formulae would remain confidential unless disclosure is necessary for the protection of the public interest in the course of a public proceeding to determine the health and environmental effects of a pesticide.²³ Unfortunately, the amendments fail to set any standards for this exception. The provision will probably become a focal point for litigation, creating uncertainty as to whether legitimate trade secrets will actually remain confidential.

The pesticide industry opposes public disclosure of any data — even that relating to adverse environmental or health effects.²⁴ The data-producing firms believe that a broad definition of trade secrecy is necessary to protect their commitment of resources and competitive market position. The industry proposes that applicants for registration compile summaries of their data for disclosure to the public. Also, it would allow only [7 ELR 10143] technically qualified persons to inspect but not copy the original data. Such a procedure, while allowing some public participation, would burden EPA with evaluating the summaries and with screening those who wished to inspect the original data.

In its 1976 report, the Senate subcommittee stressed the need for public participation in the pesticide regulation program.²⁵ If given access to the manufacturer's data, interested members of the public can review and criticize the Administrator's decisions to grant or deny registration and help assure that potentially harmful pesticides have been adequately screened and evaluated. Moreover, if test data is readily available, public awareness of the dangers to public health and the environment from misuse or overuse of the chemicals will be increased. The proposed amendments would assure this valuable public exchange while continuing to protect in industry's legitimate trade secrets.²⁶ The manufacturers' plan, on the other hand, would cause additional work for the already overburdened EPA and would hinder public participation in the process. Thus, both changes the amendments make in the current trade-secret exceptions further the original intent of Congress in enacting FIFRA by facilitating EPA's job and by assuring reasonable access to data without sacrificing the manufacturers' need for legitimate confidentiality of information.

Compensation for Data Use

In addition to its trade-secret limitation, § 3(c)(1)(D) of FIFRA prohibits the Administrator from referring to existing data in considering new registrations unless the new applicant has offered to pay reasonable compensation to the data-producing firm.²⁷ EPA procedures for implementing this requirement have been unsatisfactory to all parties. Data producers have received little or no actual compensation, subsequent registrants fear over-payment, and EPA is unsure of its ability to judge reasonable compensation.²⁸ The pesticide industry would prefer to substitute its ten-year exclusive-use plan for the compensation scheme.²⁹ At a recent markup, a Senate subcommittee favored a compromise which would continue the compensation provision for five years. The proposal would require the parties to submit to private binding arbitration if they cannot agree on the amount of compensation and provides for penalties for failure to show good faith in the bargaining process.³⁰ With no definition of "good faith," however, the proposal is as ambiguous as the current provision. The House bill sets a ten-year limit on compensation but has no penalty or arbitration provisions.³¹

While fairness requires that the data-producing pesticide manufacturers be compensated for their expense in conducting the required FIFRA tests, they should not be allowed to use this provision to foreclose competitors or to overburden EPA. The Senate subcommittee's compromise recognizes both problems. The arbitration provision should serve to relieve EPA of its current mediator responsibility and, with a five-year period for compensation and the monopoly profits which most data-producers can collect during their patent periods, the big companies should receive a fair share of compensation.³² The House amendments do not address EPA's complaints.

Conditional Registration

In order to streamline its pesticide program, EPA has proposed a generic registration process. Presently, each pesticide product must be evaluated and registered independently, even if data has already been submitted for a similar or identical product. A generic process would allow EPA to register only the technical materials and to avoid individual registration of each of the 40,000 end-use products containing those chemicals. The generic program cannot begin, however, until EPA has all the required test data. To deny registration to new entrants to the pesticide market until the generic process is underway would greatly favor existing producers.The amendments seek to solve this dilemma by permitting EPA to grant conditional registrations until the generic process is established.³³

The proposed amendments create three classes of applicants for conditional registration: "me too" manufacturers, who wish to register a pesticide identical or substantially the same as a currently-registered pesticide, "old pesticide, new use" applicants, who seek to register a new use for a previously-registered pesticide, and those attempting to register a totally new pesticide. The Administrator would be authorized to grant registration to the "me too" applicants if he found that such approval would not significantly increase the risk of adverse environmental effects. The applicant would have to submit the required additional data on health risks and environmental impacts by the time EPA began its generic registration process or the conditional registration would be cancelled. Similarly, EPA would be able to conditionally register a new use of an old chemical if the applicant submitted data on the proposed new use. Finally, the Administrator proposes to allow conditional registration of a previously unregistered pesticide where some, but not all, required data has been submitted if the Administrator determines that use of the pesticide during the period would not cause any unreasonable adverse effects on the environment and that the use of the pesticide would be in the public interest.

While conditional registration could facilitate the data-review task, it appears to be aimed at protecting the small pesticide manufacturers rather than safeguarding the public health and the environment. The difficulty with conditional registration of new pesticides is that it contravenes one of the primary purposes of FIFRA — to assure that all new active ingredients are tested for safety [7 ELR 10144] prior to registration. Conditional registration permits public exposure to a new pesticide before its safety is established.³⁴ The policy would also allow continued use of a previously-registered product even if the chemical is suspected of causing adverse effects.³⁵ EPA justifies conditional registration as necessary to cover emergency situations and assures that the provision would rarely be used.³⁶ Emergency uses of pesticides, however, are already authorized by § 18 of FIFRA,³⁷ and, thus, the proposed conditional registration provision is unnecessary to achieve its alleged purpose. Instead, the proposal creates another loophole in the law. Moreover, once the pesticide in marketed, money is spent, and users have become dependent on the product, the industry's equitable argument for continuing the registration and use of the pesticide is greatly strengthened.³⁸

The amendments propose that conditional registration would be cancelled automatically at the end of the designated period if the required data had not been submitted. Although the affected manufacturer would be entitled to a hearing, the only matter which could be resolved would be whether or not satisfactory data had been tendered.³⁹ The pesticide industry argues that cancellation should not occur without the full hearing and opportunity for judicial review afforded to regular registrants.⁴⁰ Essentially, the industry would require that EPA prove that the pesticide is a threat to human health or the environment before its conditional registration could be cancelled. This would, in effect, convert a conditional registration into a normal registration, a result which would allow circumvention of the carefully constructed full registration process.

Other Issues

The proposed amendments to FIFRA contain several provisions which are less controversial. First, the manufacturers who buy technical materials and formulate them into end-use products would be allowed to obtain registration by submitting data pertaining only to their formulated product and not to the already-registered component ingredients.⁴¹ This provision would enable EPA to avoid duplicative data review. Second, EPA would be permitted to waive data requirements pertaining to efficacy.⁴² EPA maintains that pesticide manufacturers and users are in the best position to determine the effectiveness of their pesticide product and that, therefore, the agency should be free to spend more time considering other data. Third, pesticides would be classified as either restricted or for general use prior to reregistration.⁴³ This provision would facilitate the agency's applicator certification program. Fourth, the amendments clarify FIFRA's prohibition on misuse of pesticides by defining certain labeling provisions, thus requiring that the pesticide lebel state the acceptable uses of the product rather than the many unacceptable uses.⁴⁴ Finally, the proposed amendments would include Indian tribes in the training program for pesticide applicators.⁴⁵ These various provisions, designed to make EPA's registration more efficient, are supported by all interested groups.

The Department of Agriculture has proposed a section concerning minor uses of pesticides.⁴⁶ The Administrator would be required to develop different data requirements for minor-use products than for major-use products. Such standards would be in proportion to the severity of the health and environmental consequences of the pesticide and commensurate with the extent and pattern of its use. The proposed section does not define "minor use," however, creating the possibility that some major-use products could be approved on insufficient data. Nevertheless, once EPA could establish the lesser-data standards, such a provision would abbreviate EPA's data review process.

Conclusion

While most of the proposed amendments to FIFRA appear sound, they fail to deal will all of the concerns raised by the Senate subcommittee report. The amendments do not establish any procedures for monitoring laboratories and testing processes to assure accurate data. They are silent with respect to data-review team expertise, and they do not provide for streamlining the actual registration process. More importantly, the amendments do nothing to solve the most serious problem — foot dragging and disorganization within EPA itself. No matter how strongly FIFRA speaks for environmental protection and administrative efficiency, the pesticide registration program will remain in chaos until EPA solves these internal problems. The proposed amendments will help somewhat, as they promise to simplify the Administrator's initial registration task and to allow EPA to proceed with the reregistration process. To get the pesticide program really moving, however, Congress must explicitly address the remaining problems and ensure that EPA has both the resources and the regulatory tools to fulfill FIFRA's mandate.

1. 7 U.S.C. §§ 121-136y, ELR 41301.

2. S. 1678, 95th Cong., 1st Sess. (1977); H.R. 6598, 95th Cong., 1st Sess. (1977); see H.R. Rep. No. 95-343, 95th Cong., 1st Sess. (1977).

3. Act of June 25, 1947, ch. 125, § 2, 61 Stat. 163.

4. STAFF OF SUBCOMM. ON ADMINISTRATIVE PRACTICE & PROCEDURE OF THE SENATE COMM. ON THE JUDICIARY, 94TH CONG., 2D SESS., REPORT ON THE ENVIRONMENTAL PROTECTION AGENCY AND THE REGULATION OF PESTICIDES 4 (Dec. 1976).

5. 7 U.S.C. §§ 136-136y, ELR 41306.

6. 7 U.S.C. § 136a, ELR 41306. See also EPA's regulations for the enforcement of FIFRA, 40 C.F.R. § 162, ELR 47101.

7. EPA, OFFICE OF PESTICIDE PROGRAMS, FIFRA: IMPACT ON THE INDUSTRY 1 (1977).

8. REPORT ON EPA, supra note 4.

9. Id. at 4, 6, 11-22. The deadline set by Congress for completion of the reregistration program is October 1977.

10. Id. at 6-8, 11-22, 24-34, 43-48.

11. Id. at 49-50.

12. H.R. Rep. No. 95-343, supra note 2.

13. The amendments embodied in S. 1678, supra note 2, are the same as those submitted by EPA. H.R. 6598 deals with the same topics but is phrased somewhat differently.

14. 7 U.S.C. § 136a(a), (c)(1)(D), ELR 41306.

15. Id., 7 U.S.C. § 136h, ELR 41306.

16. 423 F. Supp. 1359, 7 ELR 20262 (E.D. Mich. 1976).

17. FIFRA: IMPACT ON THE INDUSTRY, supra note 7, at 8.

18. S. 1678, supra note 2, § 2; H.R. 6598, supra note 2, § 3.

19. Amendments proposed by the National Agricultural Chemicals Association to the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry, and to the Subcomm. on Department Investigations, Oversight, and Research of the House of Representatives Comm. on Agriculture (June 8 & 9, 1977).

20. Letter from Patricia M. Wald, Assistant Attorney General, United States Department of Justice, to Patrick J. Leahy, Chairman, Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry (June 8, 1977).

21. 7 U.S.C. § 136a(c)(2), ELR 41306.

22. Statement of Douglas M. Costle, EPA Administrator, before the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry (June 9, 1977).

23. S. 1678, supra note 2, § 8; H.R. 6598, supra note 2, § 8.

24. Amendments proposed by NACA, supra note 19, at 4.

25. REPORT ON EPA, supra note 4, at 49-50.

26. The definition of trade secrets in the proposed FIFRA amendments follows that in the recently enacted Toxic Substances Control Act, 15 U.S.C. § 2613, ELR 41346.

27. 7 U.S.C. § 136a(c)(1)(D), ELR41306.

28. Statement of Douglas M. Costle, supra note 22, at 6.

29. Amendments proposed by NACA, supra note 19, at 4-5.

30. Amendment to § 3(c)(1)(D) offered by Sen. Leahy at markup of S. 1678 before the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry (June 22, 1977).

31. H.R. 6598, supra note 2, § 1.

32. Letter from Patricia M. Wald, supra note 20.

33. S. 1678, supra note 2, § 5; H.R. 6598, supra note 2, § 4.

34. Statement of Maureen K. Hinkle, Environmental Defense Fund, before the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry (June 9, 1977).

35. Letter from Sen. Edward M. Kennedy, Chairman, Subcomm. on Health and Scientific Research of the Senate Comm. on Human Resources, to Sen. Patrick J. Leahy, Chairman of the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry (June 20, 1977).

36. Statement of Douglas M. Costle, supra note 22, at 10.

37. The Administrator may exempt any federal or state agency from FIFRA if he determines that emergency conditions exist which require such exemption. 7 U.S.C. § 136p, ELR 41306.

38. See statement of Maureen K. Hinkle, supra note 34, at 9-10.

39. S. 1678, supra note 2, § 7; H.R. 6598, supra note 2, § 5.

40. Amendments proposed by NACA, supra note 19, at 10-12.

41. S. 1678, supra note 2, § 3; H.R. 6598, supra note 2, does not contain a similar provision.

42. S. 1678, supra note 2, § 4; H.R. 6598, supra note 2, § 6.

43. S. 1678, supra note 2, § 6; H.R. 6598, supra note 2, § 7.

44. S. 1678, supra note 2, § 1; H.R. 6598, supra note 2, § 9.

45. S. 1678, supra note 2, § 9; H.R. 6598, supra note 2, § 9.

46. Statement of Dr. James Nielson, United States Department of Agriculture, before the Subcomm. on Agricultural Research and General Legislation of the Senate Comm. on Agriculture, Nutrition and Forestry, and to the Subcomm. on Department Investigations, Oversight, and Research of the House of Representatives Comm. on Agriculture (June 9, 1977); see also H.R. 6598, supra note 2, § 2.