PFAS Liability Exposures Are Rising. What Manufacturing Entities Need to Know to Mitigate the Risk
Fifty years ago, a naturally occurring heat resistant mineral came under scrutiny for its cancer-causing fibers. That mineral? Asbestos.
At the time, the 1970s, the Consumer Product Safety Commission banned asbestos in some home building materials used in things like wallboards and fireplaces, and the Occupational Safety and Health Administration implemented regulations on asbestos use and exposure.
Today, society at large is well aware of the negative health impact asbestos can cause if used in building materials today.
So, what about PFAS?
“PFAS, also known as forever chemicals, are a group of widely used chemicals that serve as a coating to generally enhance or improve the durability of a product,” explained Brian Kramer, manufacturing practice lead at The Hartford. “These types of chemicals have been in use since about the 1930s, with the primary applications focusing on nonstick and waterproof coatings.”
PFAS, or per- and polyfluoroalkyl substances, were used to enhance products humans use every day — much like asbestos in its hey-day. But again, like asbestos, PFAS are facing scrutiny over health and safety risks.
“PFAS are dubbed ‘forever chemicals,’ because the chemical structures are believed to be very persistent in the environment and in the human body — meaning they don’t break down and they can accumulate over time,” said Rob Gaus, technical manager – Risk Engineering Team at The Hartford.
Many say PFAS are the “next asbestos,” but unlike its 1970s counterpart, PFAS are still manufactured in products overseas today, which can open companies up to liability and health-related claims.
Understanding PFAS and the Health Risk
A class of more than 9,000 chemical compounds, PFAS are prevalent in products that resist heat, oil, stains, grease and water.
“Their favorable properties made them ideal for many everyday products, such as cell phones, tablets and semi-conductors, and surgical gowns and drapes,” Gaus said.
Considering PFAS are prevalent in several household products, as well as utilized in foam spray used by fire departments to put out fires, these chemicals are getting into households, groundwater and even food.
The Environmental Protection Agency (EPA) has investigated the environmental impact of these chemicals, but recent studies on the adverse impact PFAS chemicals can have on humans is driving this issue to the forefront. What makes them so scary is the “forever chemical” label attached to PFAS. These products are not easily broken down in the environment and can accumulate inside a human’s bloodstream.
Current peer-reviewed scientific studies have found a link between higher levels of PFAS and increased high blood pressure in pregnant women; developmental delays in children, like low birth weight; increased risk of prostate, kidney and testicular cancers; increased risk of heightened cholesterol levels; and others, according to EPA reporting.
“While legacy PFAS-specific compounds are no longer manufactured in the U.S., PFAS are still manufactured globally,” said Gaus. “Hence, potential liabilities may also be ‘imported’ into the U.S.”
Impact on Manufacturing and Other Industries
Because PFAS are manufactured chemicals, those in the manufacturing space must review the liability risks associated with them.
“Manufacturers, importers, wholesalers and/or distributors that sell or have sold products with performance attributes, such as grease-, stain-, oil- or water-resistance and fire retardancy may contain PFAS, are most at risk,” said Gaus.
To break it down even more, it is manufacturers in the cosmetics, textiles, food packaging, furniture, nonstick cookware, carpet and firefighting foam industries that could see the brunt of scrutiny as the public becomes more and more aware of these forever chemicals.
“Businesses that are most at risk beyond chemical manufacturers and heavy industrial users are businesses that are either producing, importing, selling or have sold products that contain these chemicals,” Kramer said.
Lawsuits are already rolling in.
As an example, since 2005, chemical company E.I. du Pont de Nemours Inc. has been named a defendant on more than 6,100 PFAS-related lawsuits. 3M was hit with a $214 million liability price tag in 2019 after a court decided its history of manufacturing and disposing of PFAS chemicals was subpar. An example of the magnitude of the financial impact is the fact that 3M recorded $762 million in litigation-related charges in 2019 related to PFAS matters.
The majority of legal cases have focused on groundwater contamination, but it’s evident that consumer class actions related to alleged injury from products that contain PFAS are also on the rise.
Mitigating PFAS Risk
With so many products containing PFAS, it might be hard to determine where to start to mitigate liability exposure. But starting by acknowledging the chemicals’ impact can go a long way.
“Now is really the time to evaluate current and past usage of these products. Data can help engage and consult with legal, and staying in front of the changing regulatory landscape is important,” Kramer said.
Additionally, manufacturers and their risk teams are best served by reviewing PFAS risk of partners along the entire value stream. That includes importers, distributors, manufacturers and any other company that may have used PFAS in its manufacturing processes.
“Conduct a baseline self-audit for possible exposure to PFAS risk, both historic and current,” advised Gaus.
“Areas to consider may include investigating PFAS content in current and past company products, formulations and purchased goods, including oil-, stain- and water-repellent materials, lubricants, coatings; identifying past handling and use of fluorinated fire-fighting foams both in training and any emergency incidents; reviewing off-site disposal of PFAS-containing wastes; and evaluating possible liability protections under contracts with suppliers of PFAS-containing materials.”
It’s also key to partner with risk and insurance professionals proficient in both manufacturing and environmental risk so that PFAS liability can be addressed from both sides.
Further, risk professionals at companies facing PFAS risk should always have a clear understanding of the legal and regulatory developments surrounding PFAS.
“PFAS enforcement is increasing at the federal and state level,” Gaus said. “Risk managers will need to review recent EPA enforcement actions, which have included administrative orders, complete removal actions abating health or environmental threats, information requests, monitoring requirements, and increased inspections.” &
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