Dodd-Frank Regs Issued, EPA Air Transport Rule Struck Down, Auditor Reports Foxconn Progress, Australia & U.S. Courts Diverge on Tobacco Labeling (by Bob Percival)

On Wednesday August 22 the U.S. Securities and Exchange Commission (SEC) approved regulations to implement the conflict minerals provisions of § 1502 and the payment to foreign government provisions of § 1504 of the Dodd-Frank Wall Street FInancial Reform Act. The conflict minerals regulations, which were adopted by a 3-2 vote, require companies using certain minerals that have helped fund rebel groups in the Congo to describe the “due diligence” they undertook to determine the actual source of such minerals. They provide companies with a two-year grace period during which they may report that they use minerals that are “conflict undeterminable”. By requiring greater focus on where commodities used by major companies come from, these rules eventually could spur corporations to devote more attention to greening their supply chains.

The § 1504 rules require oil, gas and mining companies to disclose payments made to foreign governments. The extractive industries lobbied hard to forestall the regulations, but the SEC commissioners ultimately approved them on a 2-1 vote with two commissioners recusing themselves. The companies actually proposed what opponents dubbed the “dictator’s veto” that would have exempted reporting if the government that received the payments objected. The SEC did not adopt this proposal. Noting that reporting of payments to foreign governments has been rare, Transparency International hailed the new regulations. The European Union is considering adopting similar regulations. A vote is likely to be held in the European Parliament next month. For a powerful op-ed supporting disclosure by the former head of Libya’s national oil company, see Najwa al-Beshti, “A Libyan’s Plea to the S.E.C. on Oil Industry Transparency,” New York Times, Aug. 17, 2012, online at: http://www.nytimes.com/2012/08/18/opinion/a-libyans-plea-to-the-sec-on-oil-industry-rules.html

By a 2-1 vote the U.S. Court of Appeals for the D.C. Circuit again struck down EPA’s long-running efforts to regulate transboundary air pollution. The decision in EME Homer City Generation, L.P. v. EPA struck down the Cross-State Air Pollution Rule (CSAR) that EPA promulgated in August 2011 to replace the Clean Air Interstate Rule (CAIR) that previously had been struck down by the Court. The CSAR, referred to by the court as the Transport Rule, would have restricted emissions of sulfur dioxide and nitrogen oxides primarily from coal-fired power plants in 28 states, preventing as many as 34,000 deaths. Because the decision means that many coal-fired power plants that were slated to close in the near future may have their lives prolonged it sparked a rally in the stock market in companies that produce coal. The court majority faulted EPA for not calculating more precisely exactly how much each upwind state contributes to non-attainment in downwind states. EPA instead had calculated emissions floors that would avoid transboundary interference, but the court majority feared this could lead to some states having to control pollution more than absolutely necessary.

The Fair Labor Association, which has conducted an independent audit of Apple’s supply chain, reported last week that Apple and its largest supplier Foxconn have improved working conditions in its Chinese plants. Working hours have been reduced from 80 hours per week to between 48 and 60 hours per week and the companies generally are carrying out commitments made in response to an earlier audit.

Less than two weeks after Australia’s high court upheld Australia’s regulations requiring graphic warning labels on tobacco products, a U.S. court has invalidated similar regulations issued by the U.S. Food and Drug Administration (FDA). On August 24, the U.S. Court of Appeals for the D.C. Circuit ruled in R.J. Reynolds Tobacco Co. v. FDA that the FDA regulations, which were mandated by Congress in the Family Smoking Prevention and Tobacco Control Act, violated the companies’ First Amerndment free speech rights.

On Friday August 24 Maryland’s Environmental Law Program made its annual summer outing to Camden Yards. Environmental Clinic Director Prof. Jane Barrett, Prof. Mike Pappas and his wife Tanya, Program Managing Director Bill Piermattei, clinic fellows, and summer research assistants attended the game between the Orioles and the Toronto BLue Jays. Oriole designated hitter Chris Davis homered in each of his first three at bats, powering the Os to a 6-4 victory.

Photos of my recent trip to China with students from my class in Comparative China/U.S. Environmental Law have been posted in a new “Photo Albums” section of my parallel website at: globalenvironmentallaw.com. Simply click on the “Photo Albums” link at the top of the page on the website. On Tuesday August 21 Aspen Publishers released my 2012-13 Environmental Law: Statutory and Case Supplement. It contains not only an updated version of all the major federal environmental statutes, but also key recent environmental decisions by the U.S. Supreme Court and the D.C. Circuit’s June 26 decision upholding EPA’s regulation of greenhouse gas emissions.