1 C.F.R. s 305.93-5

Recommendation 93-5 Procedures for Regulation of Pesticides.

The Environmental Protection Agency cannot accomplish its substantive mission in regulating pesticides without change and improvement in the Agency's regulatory procedures. The Conference recommends the adoption of a more coordinated and strategic procedural framework for the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"). EPA needs procedures that create multiple and reinforcing incentives for regulatory compliance by registrants, for timely and accurate decisionmaking by EPA, and for effective public participation.

The Reregistration Process

The reregistration of existing pesticides under contemporary risk assessment standards, and the removal of unacceptable pesticides from the marketplace, are examples where procedures can hinder the agency's prospects for success in its substantive mission. Reregistration of existing pesticides, which Congress originally directed to be completed by 1976, became sufficiently delayed so that Congress in 1988 amended FIFRA specifically to force the completion of reregistration by 1998. Yet subsequent delays in the reregistration process may cause EPA to miss this congressional deadline. To some extent, the delay may reflect the underlying difficulty and resource-intensiveness of the risk assessment enterprise with which EPA has been charged. There are some 50,000 pesticide products that are separately formulated from 642 identified active ingredients. Although EPA has tried to expedite its task by focusing reregistration on some 402 "cases" (composed of single or related active ingredients), each case can require evaluation of 100-150 separate studies, every one of which may pose further questions of scientific protocol and interpretation. It may be that EPA's Office of Pesticide Programs needs more personnel to match its regulatory task.

Whatever the case for additional resources (a question not addressed by the Conference), there is a more basic need for timely and adequate data from registrants--all else in the reregistration process depends on this. Yet the reregistration process does not now provide sufficient procedural incentives to encourage submission of timely and adequate data. In general, because registrants continue to market their products during reregistration, they have little to lose by regulatory decisions that are reached later rather than sooner. Although the 1988 FIFRA Amendments require registrants to identify data gaps, and commit to fill them, the 1988 Amendments do not provide the agency with sufficient tools to police tardy or inadequate data submissions.

As to tardiness, the 1988 Amendments authorized the agency to suspend registrations of those registrants that fail to submit data. But EPA must first provide nonsubmitters with 30-days' notice in response to which registrants can demand a limited hearing (which must be held within 75 days); the 1988 Amendments further provide that registrants suspended for not submitting data can have their registrations "reinstated" upon submission of the data. Some registrants, ironically, have used these suspension procedures as a means of obtaining penalty-free and self-awarded extensions of time. In the 7 months between August 1991 and February 1992, for example, EPA found it necessary to issue 70 Notices of Intent to Suspend for nonsubmittal of data, yet in the majority of these instances (53) the registrants merely submitted their data prior to exhausting their procedural rights and were no worse off for having missed their deadlines. To create an additional disincentive for untimely data submissions it is necessary to make lateness costly to the registrant. To this end, the Conference recommends that Congress authorize EPA to impose civil money penalties for untimely data.

As to the adequacy of data, EPA may now have the theoretical (but untested in court) capacity to suspend or cancel the registration of those pesticides for which inadequate data have been submitted. However, the more common response to inadequate data is a "data call-in," through which the agency demands that studies be redone--a source of additional delay that the agency has identified as significant. Even with respect to its highest priority pesticides, EPA has in the recent past found 50 percent of studies to be either inadequate, "upgradable" or otherwise requiring supplementation. Although the cost of redoing studies should provide some incentive for registrants to ensure that their studies meet EPA's quality criteria, it does not seem to provide a sufficient incentive. In fairness to some registrants, there is evidence that EPA itself may be partially to blame for the high rates of data rejection. In 1992, an internal agency review found that misinterpretation of data requirements and poor guidance from EPA case managers were in part responsible for the inadequacy of data submissions. The Conference therefore recommends that EPA promulgate and communicate clear data standards and guidance on the data expected from registrants. To help prevent the submission of inadequate data even after sufficiently clear agency guidance has been given, the Conference recommends that Congress authorize EPA to levy administrative civil money penalties upon registrants submitting data that fail to meet previously announced standards. This will not only create incentives for registrants to take the extra steps necessary to ensure the adequacy of their submittals, but it will also create incentives for the agency to make clear its expectations.

Whatever the additional tactical advantages that the agency may gain by improving its own ability to enforce data timeliness and adequacy, the sheer number of studies and the innumerable decisions requiring agency discretion suggest that more global incentives are needed to ensure that registrants themselves have a stake in timely and adequate data. The danger is that the reregistration process now has become, even with the best of intentions, an analytical treadmill powered by the rhythms of data call-ins, subsequent requests for data waivers and time extensions, submission of data that do not always meet EPA's standards for adequacy, and further data call-ins that restart the sequence. The Conference believes that the unique demands of the reregistration process justify congressional consideration of a "hammer" provision that would legislatively impose an automatic suspension of all "List A" pesticides (those high-priority pesticides to which there is greatest human exposure) for which there are still significant data gaps within the registrant's control, and of which the registrant is aware--subject to a provision for a registrant to petition for reinstatement. Such a provision would not only provide an overarching incentive for registrants to favor the completion rather than postponement of their data obligations, but it would also better align the reregistration process with FIFRA's central procedural presumption--that, in the face of uncertainty, applicants (especially those seeking to reregister pesticides with extensive human exposure) should bear the burden of proof in establishing that their pesticides do not pose unreasonable risks.

Suspension and Cancellation Hearings

Apart from improvements in the reregistration process, the Conference urges Congress to substitute a relatively informal decisionmaking process for the formal adjudicatory hearings that registrants can now demand in cancellation and suspension matters. In the past, formal hearings under FIFRA have averaged 1,000 days to complete. These hearings can directly impose on EPA significant resource costs and can also indirectly discourage the agency from aggressive prehearing negotiations with registrants (lest the registrant "take EPA to hearing"). It is not surprising that EPA has long sought alternatives to cancellation hearings. For years, it sought to identify problem pesticides for heightened regulatory attention in a "Special Review" process. There is little need for procedural formality in these types of decisions. At issue in most cancellation and suspension proceedings are scientific data concerning risks and benefits, disputes over which can generally be well-ventilated when EPA gives registrants detailed reasons for the agency's actions and then provides registrants with sufficient time to file responsive written comments and supporting documentation. For those cases where oral testimony or cross- examination is justified, the benefits of more formal procedures can be preserved by providing registrants an opportunity to show cause why such procedures are warranted. Accordingly, the Conference recommends that Congress pattern cancellation and suspension proceedings on a basic notice-and-comment model, with more formal procedures available only if a party will be demonstrably prejudiced by the informal procedure.

Labeling and Phase-down Procedures

Although the reregistration process and adjudicatory hearings are the most visible aspects of pesticide regulation in need of procedural improvement, they are not the only places where procedural reform is important. Since the late 1980's, EPA has in fact sought to reduce the risks of pesticides through private negotiations with registrants over label changes that impose restrictions on use. Such regulatory action has the potential to attain interim risk-reduction quickly when warranted by available data, without going through the cumbersome Special Review and cancellation procedures, even when complete reregistration may still be years away. But there are also disadvantages to relying so heavily on private negotiations with registrants-- chief among them the lack of participation among the various interested publics in crafting label changes. In the early 1980's, similar concern about privately negotiated Special Review and pre-Special-Review decisions seriously undermined the agency's credibility and slowed regulatory progress. In 1985, EPA adopted procedures to open the door for information from, and participation by, the public in those processes. [FN1] The Conference recommends that EPA adopt analogous procedures to regularize and open the agency's negotiated label program. In addition, because label changes are effective in reducing risk only if they are actually implemented in the field, the Conference recommends procedures to facilitate feedback from registrants, pesticide users, and all other interested persons on the effectiveness or ineffectiveness of the interim risk-reduction measures EPA has adopted. Moreover, the Conference recommends that EPA's Office Of Pesticide Programs (OPP) establish regular channels of communication with EPA's Office of Enforcement and Compliance Assurance to inform that office of all label changes and of any material information received by OPP on noncompliance with such changes.

FN1 40 CFR Part 154, Subpart B.

The Conference also urges Congress to consider providing EPA with a new procedural device designed to accommodate a safer pesticides policy: The ability by informal procedures to order the phase-down of existing pesticides when there are available for use safer, effective pest management products or practices. [FN2] Empowering the agency to develop an informal phase-down mechanism would have several procedural advantages. First, ordering the phase down of an existing pesticide on relative risk grounds will cause less stigmatization of an existing product than would a cancellation proceeding based on the traditional, more absolutist "unreasonable risk" judgment. Second, phase-down procedures provide for an incremental style of decisionmaking in which EPA's reasoned judgments about comparative risk can be tested and reevaluated without making irreversible decisions about existing pesticides in cancellation proceedings. Finally, phase-down procedures based on relative risk can reinforce and integrate EPA's pesticide programs under FIFRA with other federal environmental programs.

FN2 Without taking any position on the substantive questions involved in determining the relative safety and effectiveness of pest control measures, the Conference notes EPA's interest in both the present and prior presidential administrations in developing such a substantive capability.

Recommendation

I. Adequacy and Timeliness of Data

A. EPA should adopt, whenever possible, rules setting clear standards for pesticide reregistration data and should communicate those standards to registrants.

B. Congress should authorize EPA to impose administrative civil money penalties on registrants for the failure to submit data by any applicable deadline, or for submitting data (even if timely) that do not comply with the data standards adopted by EPA. [FN3]

FN3 Imposition of penalties should be through formal adjudication. See Conference Recommendation 93-1 "Use of APA Formal Procedures in Civil Money Penalty Proceedings," 58 FR 45409 (Aug. 30, 1993).

C. Congress should consider imposing an automatic suspension of "List A" (high priority) pesticides for which there still remain, by a date to be set by Congress, previously identified and significant gaps in data within the registrant's control, and of which the registrant is on notice. Once suspended, pesticides could be reinstated through a petition process.

II. Informal Procedures

A. Congress should eliminate the provisions in FIFRA allowing for formal adjudicatory hearings in proposed suspension or cancellation actions and should provide instead an informal procedure, including notice in the Federal Register, that informs registrants and others of the specific grounds on which EPA bases its proposed action and that provides a reasonable opportunity to file written comments and data. Only if a party will be demonstrably prejudiced by the written notice-and-comment process should the agency be required to grant the right to introduce oral testimony or to subpoena and cross-examine witnesses.

B. Congress should consider providing EPA the authority to order a phase down in the use of any registered pesticide through an informal notice-and-comment procedure in which EPA considers such factors as the relative risks and benefits of the pesticide at issue when compared with alternative pest management products and practices.

III. Public Participation

A. EPA should regularize and open for broader public participation its informal procedures for achieving interim risk reduction through pesticide label changes. EPA should inform the public, through a Federal Register notice, when it commences private label negotiations with registrants. EPA should simultaneously open a public "negotiation docket" into which interested persons may submit comments they believe might be relevant, for consideration by EPA and the registrants during their negotiations. If, after negotiations with registrants, EPA proposes a label change, it should publish a notice of the proposed change in the Federal Register and provide the public an opportunity to file written comments. The notice should include a concise, general statement of the proposed label's basis and purpose, including a summary of the material aspects of the agency's negotiations with registrants.

B. After requiring a label change, EPA should establish and publicize the availability of a "compliance docket," for any input about the effectiveness or ineffectiveness of interim risk-reduction measures. In addition, EPA's Office of Pesticide Programs (OPP) should communicate to EPA's Office of Enforcement and Compliance Assurance the adoption by OPP of label changes and any material information received by OPP in its compliance docket.

STATEMENT OF THE ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

The following formal statement was adopted by the Assembly of the Administrative Conference on December 9, 1993:

Statement No. 16 Right to Consult With Counsel in Agency Investigations

In recent years, Congress has attached sanctions to an increasingly wide range of regulatory violations, causing federal administrative agencies to become involved more routinely in investigations that lead to civil or criminal prosecution. The Administrative Conference has completed a study that explores the procedures that govern the relationship between the agency and a person compelled to appear before the agency in such investigations.

The Administrative Procedure Act at section 555(b) provides that "(a) person compelled to appear in person before an agency or representative thereof is entitled to be accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative. A party is entitled to appear in person or by or with counsel or other duly qualified representative in an agency proceeding." This brief reference to counsel in the APA leaves a number of questions open. The Act, for example, does not specify the types of actions attorneys may take in representing their clients during agency investigative proceedings. It also does not indicate precisely which persons coming in contact with an agency may invoke the right to counsel. [FN1]

FN1 The 1941 Attorney General's Report on Administrative Procedure in Government Agencies is strangely taciturn on the subject of legal representation. Sen. Doc. No. 8, 77th Cong., 1st Sess. (1941). The report throughout refers to the presentations and contentions of "parties," without any indication whether parties would or would not have the benefit of legal counsel. Statements in both House and Senate committee reports regarding this provision of the APA state simply that it is "designed to confirm and make effective" the "statutory and mandatory right" of interested persons to appear personally or with counsel before the agency. Sen. Doc. No. 248, 79th Cong., 2d Sess. 205, 263 (1946).

Because the roles of investigators in federal agencies, and the methods by which witnesses or parties appear before agencies vary considerably, the Administrative Conference does not believe it can develop a uniform set of recommendations concerning these procedures. However, the Conference believes it would be valuable to provide a statement on some of the issues raised in such investigations concerning the role of counsel so that those government officials involved can be made aware of the issues and seek additional guidance where warranted.

I. Agency Exclusion of Counsel

Although courts construing the APA's right-to-counsel provision have held that the right includes the power to retain counsel of one's own choosing, some federal agencies have, by rule or order, reserved the power to exclude counsel who represents a person compelled to appear before an agency representative during an investigation. They have done so out of a concern that the particular attorney may impair the effectiveness of the investigation, especially where the attorney represents either multiple witnesses, or a witness and his or her employer.

Agencies should consider whether, in most situations, a person compelled to appear in agency investigative proceedings ought to have the discretion to choose his or her own counsel, even where counsel represents multiple witnesses or parties in the matter. As courts have held, an agency must have "concrete evidence" that an investigation will be impaired before it may exclude counsel. [FN2] Thus, the mere fact of multiple representation, an employment relationship between the witness and some other party involved in the investigation, or past dealings between the agency and a particular attorney should not be considered, in and of themselves, a sufficient basis for excluding the counsel of a witness.

FN2 See SEC v. Csapo, 533 F.2d 7 (D.C. Cir. 1976); Professional Reactor Operator Society v. NRC, 939 F.2d 1047 (D.C. Cir. 1991).

Regardless of an agency's decision on the above matter, it has the power to exclude counsel for disruptive or obstructionist behavior during the proceedings, and to take action in situations where the attorney is suspected of personal involvement in the potential violations or matters under investigation.

II. Consultation With Auxiliary Experts

Because of the highly technical nature of many regulatory fields, attorneys who advise witnesses or parties in some agency investigations must consult with accountants, engineers, economists, or other experts in order to provide effective legal assistance. The prevailing practice among federal agencies is to allow such consultation with auxiliary personnel, either by allowing the expert to attend the proceedings or by allowing the attorney a reasonable opportunity during the proceeding to consult with the expert about the substance of the investigation. Agencies that do not currently provide this opportunity should consider whether to allow counsel representing a person compelled to appear before the agency reasonable access to auxiliary experts, regardless of whether the investigation involves civil or criminal sanctions.

III. Informing Persons of Their Right to Counsel

Agencies should be sensitive to the right to counsel that persons compelled to appear before it are granted under the APA and other statutes, and should consider when it is appropriate to advise such an individual of this right. Where necessary, agencies should consider providing training on this subject to field investigators. In the interest of maintaining an effective working relationship between federal regulatory agencies and regulated parties, agencies should consider whether it is appropriate to conduct a compelled investigative proceeding in the absence of legal counsel when it is apparent that a person is unaware of his or her right to counsel.

Authority: 5 U.S.C. 591-596.

SOURCE: 59 FR 4675, Feb. 1, 1994; 57 FR 61760, 61768, Dec. 29, 1992, unless otherwise noted.