U.S. Federal Deregulation: Beware of Assumptions

October 19, 2017

When the Trump administration took office on January 20, 2017, many companies assumed, rightly so, that an era of deregulation would begin at the U.S. federal level, since Republicans would be in control of both the White House and Congress, and they are less friendly to regulations. EHS managers and practitioners expected to see less federal regulations, and therefore less regulatory complexity.

As expected, the pace of new U.S. federal regulations has indeed drastically slowed down, and many federal regulations have been reversed, delayed or placed on hold. If you’re an EHS manager, this means that your expectation of less federal regulations was valid…but beware of assuming that there is less regulatory complexity.

Now that nine months have passed since January 20, 2017, we have a better idea and we can argue that regulatory complexity has not eased. In this post we provide four reasons why EHS managers should remain highly vigilant regarding regulatory compliance, despite deregulation at the U.S. federal level.

Amendments and Delays

Some regulations have indeed been completely revoked, such as the Executive Order that required federal contractors to . But many regulations are either being amended or delayed, not fully repealed. For example, EPA postponed certain compliance dates of the final rule on , and FDA is proposing to delay its final rules on changes to . In addition, OSHA removed some requirements of its final rule on , but kept the new, stricter exposure limits.

Of course rules that are delayed could be eventually reversed, but it’s not certain. Regulatory complexity remains because EHS managers must still keep track of delayed or modified rules and the requirements that they include, rather than ignoring them if they had been completely reversed.

Many Lawsuits Expected

The Trump administration’s reversal of some regulations has been challenged in court, and some lawsuits have been successful. To understand why lawsuits will take place, it’s important to understand the political system. Presidents can issue Executive Orders directing federal agencies to issue regulations, and agencies can issue rules under the authority of legislation passed by the U.S. Congress (e.g. Clear Air Act, Clean Water Act). Executive Orders can be reversed easily by a new, incoming president. But rules issued by agencies are more complex because of the goals outlined by legislation passed by Congress.

For example, if EPA under President Obama issued a regulation that was consistent with the goals and spirit of the Clear Air Act (CAA), and EPA under President Trump reverses the regulation, EPA can be sued for failing to enforce or follow the CAA. In such a situation, the most certain way to reverse a regulation is by legislation passed by Congress, which is much more difficult to achieve compared to Executive Orders or rulemaking by agencies. Therefore, EHS managers must be prepared to see long periods of litigation for some regulations, and should not assume that they will completely disappear any time soon.

State Regulations

Because deregulation is taking place at the federal level, some states are filling the void by issuing new regulations with regards to workplace safety, environmental protection, climate change, and consumer protection. States fully controlled by Democrats (e.g. California, Oregon, Connecticut), i.e. where the governor is a Democrat and the legislative branch is controlled by Democrats, are the most likely to issue new regulations. This is also true to some extent for states where the governor is a Democrat and legislative control is spilt (e.g. New York, Colorado, Washington).

Not all states have issued significant regulations, but California and New York have been particularly active, and together they encompass almost 20% of the entire U.S. population. Some recent examples include California’s law on and New York’s requirements to . Bottom line: With some states ramping up regulations, regulatory complexity is bound to increase, despite deregulation at the federal level.

Change is the Only Constant

Today, both the U.S. executive and legislative branches are controlled by Republicans. But it was the complete opposite in 2009-2010 when Democrats controlled both branches. In addition, elections take place in the U.S. every two years. In 2018, there will be elections for the entire House of Representatives, one third of the Senate, and for many governorships and state legislatures. It will be the same in 2020 when a presidential election will also take place. Political control at both the federal and state levels can change easily in the U.S., which means that regulatory priorities and trends can also change.

EHS managers and compliance managers must make sure that their EHS regulatory compliance program takes into account recent developments, but also that they are prepared to handle potential increases in regulatory complexity due to changes at the federal and state levels. Expect anything and don’t take anything for granted. For example, a federal regulation may be issued by one administration…then put on hold by another administration…and then resurrected by another administration or enacted by various states as state regulations.

In conclusion, despite deregulation at the U.S. federal level, you should stay vigilant. It is better to be safe than sorry, and accept that regulatory complexity will always be a challenge that EHS managers will have to face, which is why regulations and regulatory requirements must be diligently monitored. While regulatory complexity cannot be avoided, the regulatory burden can be greatly eased by selecting and implementing the right EHS management platform. A recent Verdantix report assesses the top 20 EHS software suppliers, and can help you identify the leading EHS software systems.

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Global Approach to Managing EHS Regulatory Compliance