SOR/2017-11: Regulations Amending the Export of Substances on the Export Control List Regulations
REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE
February 3, 2017
REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues Mercury is a naturally occurring chemical element that is persistent, bioaccumulative and toxic, even at very low levels, to human health and in aquatic and terrestrial ecosystems. Mercury is released into the environment from natural processes and human activities, and when released into the atmosphere, ... (Click for more)
Published on February 10, 2017
SOR/2017-11: Regulations Amending the Export of Substances on the Export Control List Regulations
REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues Mercury is a naturally occurring chemical element that is persistent, bioaccumulative and toxic, even at very low levels, to human health and in aquatic and terrestrial ecosystems. Mercury is released into the environment from natural processes and human activities, and when released into the atmosphere, it undergoes long-range atmospheric transport and accumulates in northern regions, including Canada and, in particular, the Canadian Arctic. In 2003, the Governing Council of the United Nations Environmental Programme found sufficient evidence of significant global adverse impacts from mercury and its compounds to warrant further international action to reduce the risks to human health and the environment. This finding led to negotiation, from 2010 to 2013, of the Minamata Convention on Mercury (Minamata Convention), a global, legally binding treaty that addresses all aspects of the mercury life cycle, including atmospheric emissions and trade. Parties to the Convention are required to maintain comprehensive restrictions on the export of elemental mercury that is at a concentration of 95% or more by weight. Currently, there are no measures in Canada controlling or prohibiting the export of elemental mercury, except when it is, or is contained in, hazardous waste or hazardous recyclable material regulated under the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations (EIHWHRMR). To be in a position to ratify the Minamata Convention, which Canada signed on October 10, 2013, Canada must implement controls on the export of elemental mercury. Background Mercury is found in three general forms: (1) pure mercury (a heavy metal), also known as “elemental mercury” or “metallic mercury;” (2) inorganic mercury compounds; and (3) organic mercury compounds. Natural processes, such as volcanic activity and erosion, release mercury into the environment. Mercury is also released as a result of human activities such as metal mining, base metal smelting, the combustion of coal, cement production, product use and disposal, and incineration of waste containing mercury. Mercury has been used in a variety of commercial and consumer products due to its unique characteristics. These products include, among others, fluorescent lamps, thermometers and thermostats, batteries, dental amalgam, medical/measuring devices and switches and relays. Exposure to mercury is known to have toxic effects on humans, ecosystems and wildlife. Mercury is a potent neurotoxin that is particularly damaging to the development of human fetuses, infants and young children. The primary route of human exposure to mercury is consumption of fish or of piscivorous (fish-eating) mammals with heightened levels of mercury. Therefore, there is particular concern for those eating large amounts of these foods, such as First Nations and Arctic Aboriginal peoples, who rely on these traditional foods for sustenance. A 2011 study conducted in Nunavik showed that 72% of women of childbearing age had levels of mercury in their blood above safe thresholds. (see footnote 2) Given these risks of toxic effects on humans, ecosystems and wildlife, Canada has put in place various measures to reduce and mitigate the potential risk of exposure to domestic mercury emissions and releases. These measures have reduced Canadian mercury emissions by over 90% since the 1970s. Mercury and its compounds are listed on Schedule 1 (List of Toxic Substances) of the Canadian Environmental Protection Act, 1999 (CEPA), enabling the introduction of regulatory and non-regulatory risk management measures. Canada-wide Standards for Mercury Emissions (Incineration and Base Metal Smelting) and Canada-wide Standards for Mercury Emissions from Coal-fired Electric Power Generation Plants were established in 2000 and 2006, respectively. These measures, along with the closure of mercury cell chlor-alkali facilities, and process changes by a smelting company in Flin Flon, Manitoba, drove the reductions in mercury emissions in Canada. More recently, the Products Containing Mercury Regulations, which, with some exemptions, prohibit the import and manufacture of products containing mercury, came into force on November 8, 2015, and are anticipated to prevent over 4 100 kg of mercury from being released into the air. Despite these domestic efforts to reduce mercury air emissions and releases into the environment, Canada remains a net recipient of mercury through air emissions at the global level. More than 95% of mercury resulting from human activities that is deposited in Canada comes from other countries. Mercury travels by air and is deposited in Canada’s soil, water and ice. At 42%, China is the largest foreign source of mercury deposition in Canada, followed by the United States, at approximately 17%. The sector for artisanal and small-scale gold mining using mercury, which does not occur in Canada, contributes 37% of global mercury emissions. (see footnote 3) Coal burning contributes 24% of global mercury emissions. (see footnote 4) This suggests that Canada would benefit from global efforts to reduce or eliminate impacts from mercury emissions worldwide. Canada is not a producer of high-purity mercury through primary mercury mining, nor do facilities exist in Canada to distill mercury wastes or by-products to a high purity for industrial use. Therefore, all mercury for industrial use must be imported. Statistics Canada data indicates that there are 88 companies in total that import mercury. Among them, 11 companies are known exporters of mercury waste, and another 4 were identified as exporters of mercury. The Department of the Environment (the Department) assumes these 4 companies are re-exporters since Canada does not produce mercury. The Minamata Convention The Minamata Convention is a global treaty to protect human health and the environment from the adverse effects of mercury. The major highlights of the Minamata Convention include a ban on new mercury mines, the phase-out of existing mines, control measures on air emissions, and international action on the sector of artisanal and small-scale gold mining using mercury. In order to ratify the Minamata Convention, Parties must also control exports of elemental mercury (see footnote 5) in which the concentration of elemental mercury is 95% or more by weight. The Convention was agreed upon at the fifth session of the Intergovernmental Negotiating Committee in Geneva, Switzerland, in January 2013, and it was opened for signature in Japan in October 2013. The Convention had been signed by 128 governments, including Canada, and the number of governments that have ratified the Convention (including the United States in 2013) continues to increase. Export Control List Canada has committed to shared responsibility and cooperative efforts to address the international trade in chemicals and pesticides. The Export Control List (ECL) in Schedule 3 to CEPA and the associated Export of Substances on the Export Control List Regulations (the Regulations) help Canada to meet its current international obligations. The ECL is a list of substances whose export is controlled because their use in Canada is prohibited or restricted, or because Canada has accepted to control their export under the terms of an international agreement. Section 100 of CEPA provides the Minister of the Environment and the Minister of Health with the authority to add or delete substances from the ECL by order. These amendments are published in the Canada Gazette. Permits are sometimes required for the export of a substance on the ECL. The conditions for determining when an export permit is required and for obtaining permits from the Minister are specified in the Regulations. Additionally, the Regulations establish conditions under which a person may export a substance listed on the ECL. The substances are grouped into three parts: Substances specified in Part 1 are subject to a prohibition on their use in Canada. They can be exported for the purpose of destruction or to comply with a direction issued by the Minister under subparagraph 99(b)(iii) of CEPA. Substances specified in Part 2 are subject to an international agreement whereby exports require the notification or consent of the importing country. Substances specified in Part 3 are subject to domestic controls that restrict their use in Canada. Export of Substances on the Export Control List Regulations These Regulations impose controls on the export of substances listed on the ECL. They describe the manner in which to notify the Minister of the Environment of proposed exports. The Regulations enable Canada to meet its obligations under the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention) as well as its export obligations under the Stockholm Convention on Persistent Organic Pollutants (Stockholm Convention) (see footnote 6). Specifically, the Regulations provide a permitting scheme for exports to Parties to the Rotterdam Convention and establish restrictions on the export of substances subject to the Stockholm Convention. Canada is a party to both of these Conventions. The Rotterdam Convention The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade establishes a list of substances (see footnote 7) that have been banned or severely restricted by some Parties to the Rotterdam Convention for health and/or environmental reasons. The Rotterdam Convention facilitates an information exchange between Parties, in which the “prior informed consent” of the importing Party is required prior to the export of substances. Substances must be listed in Part 1 or Part 2 of the ECL in order for Canada to respect the Prior Informed Consent (PIC) procedure. Presently, substances listed in Part 3 due to domestic controls are not subject to the PIC procedure. Objectives The primary objective of the Amendments is to position Canada to ratify the Minamata Convention. Ratification of the Convention by Canada would demonstrate Canada’s commitment to protecting the environment and human health from mercury to domestic stakeholders and to Canada’s international negotiating partners. Canada’s ratification would encourage reductions in global mercury emissions, and would consequently reduce foreign mercury deposition in Canada, particularly in Canada’s Arctic. The Regulations Amending the Export of Substances on the Export Control List (the Amendments) allow Canada to remain compliant with the Rotterdam Convention when a new substance from Part 3 of the ECL becomes subject to that Convention, without amending the ECL. Currently, the ECL must be amended to move a Part 3 substance to either Part 1 or Part 2 when it becomes subject to the Rotterdam Convention to respect the Prior Informed Consent conditions of the Convention. The Amendments will enable compliance with the Rotterdam Convention automatically when Part 3 substances become subject to that Convention. In addition, the Amendments aim to provide additional flexibilities to exporters subject to the Regulations, to ensure that Canada can more readily remain compliant with obligations under the Rotterdam Convention, and to address administrative issues identified by the Standing Joint Committee on the Scrutiny of Regulations (SJCSR). Description The Amendments will make the following modifications to the Export of Substances on the Export Control List Regulations. Conditions relative to the Minamata Convention The Amendments will restrict the export of mixtures containing elemental mercury at a concentration of 95% or more by weight. In line with the Minamata Convention, the following types of export will be exempt: Mercury that is, or is contained in, a hazardous waste or hazardous recyclable material regulated by Canada’s Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations; Mercury-containing manufactured items; and Mercury to be used for laboratory-scale research and analysis or as a reference standard. A prior notification of export will be required for exporters of these substances for the exempted purposes as described above. Because the substance listed in the ECL is limited to mixtures that contain elemental mercury at a concentration of 95% or more by weight, the Amendments will not apply to naturally occurring trace quantities of mercury present in non-mercury metals, ores or mineral products, nor will the controls apply to unintentional trace quantities of mercury in chemical products. Prior notice of export The Amendments will reduce the 30-day prior notification of export for any substance listed on the ECL to 15 days. This change will reduce the compliance burden for exporters who may be holding an export in their inventory to allow the existing 30-day notification period to elapse. Additionally, exporters will not be required to forecast as far into the future. For exporters who hold a permit for substances that are regulated under the EIHWHRMR or the Ozone-depleting Substances and Halocarbon Alternatives Regulations, the prior notification period is reduced to 7 days for those exports. Amendments to conditions relative to the Rotterdam Convention The Amendments will ensure the application of the Prior Informed Consent procedure of the Rotterdam Convention, which requires that exports of substances listed under this Convention are prohibited where the importing Party has stated its refusal for such imports. Until now, when a substance was listed under the Rotterdam Convention and was already listed in Part 3 of the ECL, that substance had to be moved to Part 1 or Part 2 of the ECL to ensure the PIC procedure was followed. The change will allow Canada to remain compliant under the Rotterdam Convention when Parties to that treaty agree to list a substance that occurs in Part 3 of the ECL without the need to move it to either Part 1 or Part 2. The Amendments will enable the Minister to deny an export permit to an exporter where the PIC procedure is not respected for a substance listed under the Rotterdam Convention that occurs in either Part 1, Part 2 or Part 3 of the ECL. Labelling Certain exports that are subject to the conditions relative to the Rotterdam Convention in sections 7 to 22 of the Regulations require that a label be affixed to the container that includes information in either or both official languages and, as far as practicable, at least one of the official languages of the country of destination. The Amendments will require that this information be provided in both official languages and, as far as practicable, at least one of the official languages of the country of destination. This will ensure availability of the safety information in both languages for handlers while still respecting Canada’s obligations under the Rotterdam Convention. Administrative changes to address comments by the SJCSR The Amendments will also make housekeeping changes to address administrative issues that have been raised by the SJCSR (e.g. changes to better align the text in both official languages). Benefits and costs Below is a summary of the impacts on Canadians, industry, and the Government. Canadians The Amendments, with the Order adding mercury to the ECL published in the Canada Gazette, Part II, on January 11, 2017, will benefit Canadians by allowing Canada to be in a position to ratify the Minamata Convention. The Minamata Convention, once in force, will obligate participating governments to take measures to control and, where possible, reduce mercury emissions and to take steps to enable the responsible trade of mercury. The Minamata Convention will come into force 90 days after 50 governments have ratified the treaty. Canada’s participation in the Minamata Convention allows it to contribute to global controls of mercury emissions. Hence this international, legally binding treaty will lead to the control and reduction of mercury emissions worldwide. Since most of the mercury deposited in Canada is from foreign sources, global action taken under the treaty will reduce Canadians’ exposure to mercury. A restriction on certain mercury exports (see footnote 8) is also consistent with the life-cycle approach adopted by Canada, which aims to prevent or minimize releases to the environment. This approach takes into account supply, trade, products, manufacturing processes, uses, atmospheric emissions, releases to land and water, environmentally sound interim storage and waste. The Minamata Convention’s ultimate objective “to protect human health and the environment from anthropogenic emissions and releases of mercury and mercury compounds” is in line with the life-cycle approach. By restricting mercury exports, Canada will no longer be contributing to the global use of mercury for artisanal and small-scale gold mining, which accounted for 37% of global mercury emissions in 2010. A reduction in global mercury emissions would reduce the impact on the environment and the health of Canadians, particularly in the Arctic. Since the Amendments will apply strictly to exports, there will be no direct costs passed on to Canadian consumers. Industry Canada is not a producer of high-purity mercury. Available information shows that exports of mercury from Canada take place by exporters who first import the mercury. However, due to the United States’ ban on mercury exports in 2013, the availability of mercury from domestic U.S. sources and a limited market for mercury in the United States, imports of mercury into the United States have decreased significantly. As a result, the impact of the Amendments on any Canadian exporters to the United States is expected to be low. The export of mercury waste for treatment or environmentally sound disposal is allowed under both the Minamata Convention and the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. Eleven Canadian companies are known to have exported mercury waste between 2010 and 2015. These companies will be allowed to continue this activity. The Amendments are not expected to result in any increased costs or lost revenue. If this waste contains mercury below 95%, it will not be within the scope of the Regulations, but may still be regulated under the EIHWHRMR. If the waste contains mercury above this level, the export will still be allowed, but a prior notification of export will be required in addition to any controls that may apply under the EIHWHRMR or other instruments. Companies that export mercury at a concentration of 95% or more by weight to countries other than the United States will be affected by the Amendments. Over the last five years, four companies exported mercury from Canada to countries other than the United States. This activity will be restricted under the amended Regulations. According to Statistics Canada, exports of elemental mercury to countries other than the United States have been inconsistent, and averaged approximately $800,000 per year between 2011 and 2014. There may be a forgone business opportunity as a result of this restriction. However, due to the irregularity of export data patterns, it is not possible to predict with confidence future exports of elemental mercury or to accurately determine the opportunity loss to businesses that may result from the Amendments. Companies exporting mixtures containing elemental mercury in a concentration of 95% or more by weight, for purposes that will still be allowed under the Amendments, will be required to provide prior notification of exports. The administrative costs associated with the notification requirements are assessed in the Regulatory Impact Analysis Statement for the Order Amending Schedule 3 to the Canadian Environmental Protection Act, which was published in the Canada Gazette, Part II, on January 11, 2017. The reduction of time required for prior notification will provide additional compliance flexibility for stakeholders, and may reduce costs for stakeholders who hold exports in inventory to allow the existing 30-day notification period to elapse. In terms of the new labelling requirements, the expected cost to exporters is negligible. These requirements will only apply to exports subject to the Rotterdam Convention provisions of the Regulations. Presently, two exporters will be impacted. Since exporters already have access to the prescribed information in both English and French and only have to transcribe this information to the package label, they are not expected to carry significant extra costs to comply with the Amendments. Competitiveness The Amendments are not expected to affect competitiveness for any regulatee or sector given that the expected cost for stakeholders is negligible. Government The costs of the Amendments to the Government are expected to be negligible, as there is an existing regulatory program in place to administer the Regulations. Specifically, compliance promotion costs are not expected, since the Department maintains and updates a list of compliance promotion materials on a regular basis. Therefore, the Government is not expected to face any additional compliance promotion obligations. The changes to the conditions relative to the Rotterdam Convention are expected to expedite the process to align the Regulations with the Rotterdam Convention. “One-for-One” Rule The “One-for-One” Rule does not apply to the Amendments, as administrative costs are accounted for in the Regulations. Therefore, the Amendments will not result in incremental administrative costs (“INs”) or savings (“OUTs”) to business. Small business lens The small business lens applies to proposals that impact small business and that have nationwide cost impacts greater than $1 million, or that have a disproportionate impact on small business. The Department has identified four businesses that have exported mercury to countries other than the United States in recent years, including three small businesses. These exports, valued at $800,000 per year on average, will be prohibited. To determine whether the impact of this prohibition would result in a disproportionate impact on small business, targeted efforts were made to contact these companies and to understand their concerns. No responses were received. The Department concludes that there is not expected to be a disproportionate impact, and the small business lens therefore does not apply. Consultation An initial 30-day online public consultation was held in September 2014 regarding possible export controls for elemental mercury. The Department informed known stakeholders of this opportunity to comment by email. Responses from industry were generally positive or neutral since the comprehensive restrictions that will be imposed on the export of mercury will continue to allow for the export of mercury that is, or is contained in, a hazardous waste or hazardous recyclable material already regulated by the EIHWHRMR. Responses from environmental non-governmental organizations were supportive of the restrictions on the export of mercury. A second 30-day online public consultation was held in May 2015 to detail the proposed Amendments and describe the proposed restrictions on the export of mercury. The Department informed known stakeholders of this additional opportunity to comment by email. Three current regulatees responded to indicate support for the proposed reduction of the prior notification of export period. The proposed Amendments were published in the Canada Gazette, Part I, followed by a 75-day public comment period. One comment was received from an environmental non-governmental organization that was supportive of the stricter controls proposed for export of elemental mercury and suggested similar controls be set for mercury compounds (e.g. mercury(I) chloride also known as calomel), as those compounds can be economically converted to elemental mercury. The Department considers that all mercury compounds are already listed on the Export Control List and export is controlled through the Regulations in order to meet Canada’s obligations under the Rotterdam Convention. Stricter export controls, similar to those now in place for elemental mercury were not included at this time, given that the Minamata Convention does not require export control of mercury compounds. Future conferences of the Parties will evaluate whether the trade in specific mercury compounds is problematic for meeting the objectives of the Minamata Convention and whether it should be subject to global export controls. For all three consultations, the Department sent emails directly to each of the four companies who had recently exported mercury regarding the opportunity to comment. However, no responses were received. Rationale Exposure to mercury is known to have toxic effects on humans, ecosystems and wildlife. When released into the environment, it undergoes long-range atmospheric transport and accumulates in northern regions, in particular the Canadian Arctic. Consumption of fish or piscivorous (fish-eating) mammals with high levels of mercury is the primary route of human exposure to mercury. There is particular concern for those consuming large amounts of these foods, such as First Nations and Arctic Aboriginal peoples. The Amendments will restrict certain exports of elemental mercury. This will be an effective means of ensuring Canada’s compliance with export obligations under the Minamata Convention. The Amendments will also reduce the 30-day prior notification of export for any substance listed on the ECL to 15 days, or 7 days for exporters who hold a permit for the export under other Regulations, which will provide more flexibility for stakeholders and will address administrative changes raised by the SJCSR. The Amendments, along with the addition of mercury to the ECL, will position Canada to ratify the Minamata Convention. Since most of the mercury deposited in Canada comes from foreign sources, Canada requires global action to reduce emissions of mercury to have a positive outcome for Canadians. Canada is not a producer of high-purity mercury. However, available information shows that exports of mercury from Canada take place by exporters who first import the mercury. The addition of mercury to Part 2 of the ECL and the Amendments will restrict the import and subsequent re-export of mercury. The Amendments will create a consistent, effective, and efficient approach to export controls by using an existing instrument to limit high-purity mercury exports. The Amendments may potentially result in costs to industry. The export of mercury will be restricted under the Amendments, and these exporters may have an opportunity cost of a forgone business opportunity. However, the value of this is difficult to determine, and no concerns were raised by stakeholders during consultations. Consultations were conducted on the addition of mercury to Part 2 of the ECL and the Amendments. Responses from industry and environmental non-governmental organizations were generally positive or neutral. Strategic environmental assessment As required by The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary review was conducted which concluded that there are not expected to be important environmental effects, either positive or negative; accordingly, a strategic environmental assessment is not required. (see footnote 9) Implementation, enforcement and service standards Since the Amendments are made under CEPA, enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy for CEPA. The Policy also sets out the range of possible responses to alleged violations: warnings, directions, environmental protection compliance orders, ticketing, ministerial orders, injunctions, prosecution, and environmental protection alternative measures (which are alternatives to a court trial after the laying of charges for a CEPA violation). In addition, the Policy explains when the Department will resort to civil suits by the Crown for cost recovery. When, following an inspection or an investigation, an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the following factors: Nature of the alleged violation: This includes consideration of the damage to the environment, the intent of the alleged violator, whether it is a repeat violation, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of the Act. Effectiveness in achieving the desired result with the alleged violator: The desired result is compliance within the shortest possible time and with no further repetition of the violation. Factors to be considered include the violator’s history of compliance with the Act, willingness to cooperate with enforcement officers, and evidence of corrective action already taken. Consistency: Enforcement officers will consider how similar situations have been handled in determining the measures to be taken to enforce the Act. The Department has an existing compliance promotion program associated with the current Regulations. This program provides a guidance document for exporters that helps determine whether their export activity is subject to the Regulations and, if so, what their obligations will be. Forms for export notification and permit application are also provided, though exporters are able to use their own templates provided all of the required data is presented. Where the necessary conditions are met, an exporter should expect approval and issuance of an export permit under these Regulations within 10 working days of the receipt of the completed permit application. An exporter should expect acknowledgement of a prior notification of export within 10 working days of the receipt of the completed prior notification of export. Contacts Nathalie Morin Director Chemical Production Division Department of the Environment 351 Saint-Joseph Boulevard, 11th Floor Gatineau, Quebec K1A 0H3 Email: [email protected]anada.ca Yves Bourassa Director Regulatory Analysis and Valuation Division Department of the Environment 200 Sacré-Cœur Boulevard Gatineau, Quebec K1A 0H3 Email: [email protected] Footnote a S.C. 2004, c. 15, s. 31 Footnote b S.C. 1999, c. 33 Footnote c S.C. 1999, c. 33 Footnote 1 SOR/2013-88 Footnote 2 Nunavik Child Development Study (NCDS): Summary of Results. Nunavik Regional Board of Health and Social Services. 2011. Available online at http://www.nasivvik.ca/research/funded-research/nunavik-child-development/. Footnote 3 Global Mercury Assessment 2013. United Nations Environmental Programme. Available online at www.unep.org/PDF/PressReleases/GlobalMercuryAssessment2013.pdf. Footnote 4 Risk Management Strategy for Mercury, Environment Canada, 2010. Available online at http://www.ec.gc.ca/doc/mercure-mercury/1241/longdesc_eng.htm. Footnote 5 Chemical Abstracts Service (CAS) Registry Number 7439-97-6. Footnote 6 The Stockholm Convention is a global treaty restricting exports of chemicals that remain intact in the environment for long periods, become widely distributed geographically, accumulate in the fatty tissue of humans and wildlife, and have adverse effects on human health or the environment. Footnote 7 Listed in Annex III of the Convention. Footnote 8 These restrictions refer to mixtures containing elemental mercury at a concentration of 95% or more by weight. Footnote 9 The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals can be found at http://www.ceaa.gc.ca/default.asp?lang=En&n=b3186435-1.
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