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Check supply chains for hazards

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Risk managers will need to take a hard look at their companies’ supply chains to ensure production of their products does not rely on the use of toxic substances that could be banned by federal environmental regulators.

Many companies fail to keep good track of the chemicals they buy and distribute, but they will have to review their supply chains to make sure the chemicals meet all U.S. Environmental Protection Agency regulations, said Hans Plugge, Bethesda, Maryland-based senior toxicologist with 3E Co., a unit of Verisk Analytics Inc.

“A lot of companies could use a little attention to their supply chain to make sure that the same thing that they trying to do in their own business also happens within their supply chain, especially when they’re in the formulation business rather than in the manufacturing business,” he said.

Manufacturers may not know that certain chemicals are being used in their product components, but the EPA is going to specifically look for use and exposure information to make a solid assessment of the risks, said Judah Prero, Washington-based counsel at Sidley Austin L.L.P.

“The supply chain is going to have to be much more engaged in this process than ever before,” he said. “That doesn’t necessarily mean they’re going to have to engage with EPA, but I think it will definitely mean they are going to have to engage with their suppliers to get a better idea of what’s in products, to get a feel for what’s in the components, and to then keep track of what is EPA doing with these chemicals.”