Alert 07.14.22
ESG over the 2022 Proxy Season
Pillsbury lawyers review the 2022 Proxy Season and offer practical tips on how to leverage auditing in your organization’s ESG strategy.
Alert
Alert
08.04.22
Introduction
The U.S. General Services Administration (GSA) has issued an Advance Notice of Proposed Rulemaking (ANPR), requesting feedback on the potential economic impact and feasibility of a potential rulemaking to reduce single-use plastics in packaging and shipping materials for products procured by the federal government.
GSA performs numerous administerial and supportive functions on behalf of the federal government, including procuring goods and services for other agencies. Every year, GSA facilitates the spending of tens of billions of dollars on federal procurement. GSA also maintains the GSA Schedule, a series of pre-negotiated contracts that other agencies can use to procure goods and services.
Due to GSA’s buying power, GSA’s procurement rules can have a considerable influence on economic sectors or companies related to the supply of goods and services to the federal government. Any GSA rulemaking imposing requirements on or reductions of single-use plastic packaging could affect numerous industries—from the plastics industry to the packaging and shipping industry, to even the food and beverage industry.
Background
Earlier this year, GSA received a rulemaking petition from the Center for Biological Diversity that requested GSA promulgate a rule “committing the federal government to reducing and eventually eliminating its procurement and acquisition of single-use disposable plastic products.” GSA has now moved forward by issuing its ANPR and seeking public feedback on plastic packaging as it evaluates the petition.
Although not ordinarily thought of as an environmental regulator, GSA referenced two recent Executive Orders as its basis for the ANPR: E.O. 14008 and E.O. 14057. President Biden signed E.O. 14008 on “Tackling the Climate Crisis at Home and Abroad” on January 27, 2021, and, in part, established a policy to manage federal procurement in a way that would “support robust climate action.”
More recently, E.O. 14057 on “Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability” directed federal agencies to minimize waste, support markets for recycled products, and promote a transition to a circular economy. E.O. 14057 also set an ambitious target for federal agencies to divert from landfills at least 50 percent of non-hazardous solid waste by 2025, and 75 percent by 2030. GSA’s ANPR explained that, as a leader in federal procurement, GSA is “interested in its potential to play a supporting role including by reducing single-use plastics,” and “[w]ith single-use plastics being a significant contributor to the global plastic pollution concern, it is a logical step for the agency to examine this.”
GSA has shown it is willing to quickly modify acquisition regulations to address recyclability and waste. After E.O. 14008, GSA amended its acquisition manual to direct that during acquisition planning, consideration be given to buying items with less packaging, greater recycled content or less waste. Given its stated goals, and the diversion targets in E.O. 14057, companies should anticipate that GSA will move forward with a rulemaking addressing single-use plastic packaging.
Requested Information
GSA has stated its focus is reducing single-use plastic packaging while limiting the burden and liability on its industry and logistics partners. GSA therefore seeks feedback on the potential economic consequences, feasibility, measurability and related aspects of any rulemaking aimed at reducing single-use plastic packaging.
GSA’s ANPR requests commenters answer questions related to their business and the feasibility of potential changes, such as the commenter’s operations and packaging options, the existence and performance of alternative packaging, and market, regulatory, statutory and cost barriers to alternative packaging. Other questions focus on the rulemaking itself, such as how GSA can support contractors in switching to environmentally preferred packaging, compliance and verification mechanisms for any single-use plastic reductions, and the timeline for any such changes.
In addition to these considerations, one of GSA’s primary concerns is the economic impact of new requirements for single-use plastic products and packaging. Questions here seek more detailed economic information, such as estimated costs to change, reduce or eliminate single-use plastic from product lines or packaging, corresponding changes in freight costs, liability risks if packaging is reduced or changes, or other identifiable economic risks to industry or the government.
Agencies use ANPRs as a way to formally invite public participation in shaping the proposed rule, often when they need more information or data to determine whether a rule is needed, what regulations to develop to achieve goal, or to explore alternative suggestions or ideas for dealing with a specific topic. ANPRs traditionally help shape the scope and trajectory of notices of proposed rulemaking, and the information agencies receive from the ANPR process can help frame the rulemaking process and influence the outcome of the final rule.
Feedback on GSA’s questions will likely influence the agency’s views on what is possible in any near-term rulemaking, packaging types and materials where GSA may best focus its attention, and impact to federal operations and cost. Comments will also help GSA properly evaluate the economic impact both to the federal government and to industry of any potential rulemaking. Because an ANPR is the first, important step in a longer process, participating in GSA’s request for public feedback can create early engagement with the agency and ensure that stakeholders have a seat at the table during the rulemaking process.
Commenting on these topics could therefore help individual companies and industry by ensuring that GSA’s rulemaking considers the challenges to any reduction in single-use plastic packaging, and by encouraging GSA to adopt mechanisms to support federal contractors who make these moves.
Conclusion
GSA’s proposal falls squarely in line with the Biden Administration’s focus on circular economy approaches and policies. However, the agency’s plans to regulate single-use plastics in federal purchasing are particularly significant given GSA’s volume of spending and immense presence in the procurement space. Any potential rulemaking by GSA that imposes requirements on single-use plastics will have far-reaching impacts on numerous industry stakeholders—from manufacturers to distributors, to the individual vendors and contractors that supply such goods to government customers.
Potentially impacted parties are therefore advised to participate in GSA’s rulemaking efforts and submit comments as the agency scrutinizes single-use plastics and contemplates a path forward.
Public comments on GSA’s proposed rulemaking are due by September 6, 2022. Pillsbury is well-suited to provide public policy and rulemaking support to ensure any potential GSA rulemaking is implemented in a way that is favorable to long-term business interests.