The campaigning organization found the containment 1,4-Dioxane in a number of cosmetics labeled as organic including those produced by popular brands such as Jason Natural & Organic, Kiss My Face and Nature's Gate Organic.
It called on manufacturers using ethoxylate ingredients, which generate 1,4-Dioxane, to drop any organic claims.
The presence of the by-product in organic cosmetics courts controversy and exposes sharp differences of opinion in the industry.
Many companies use ingredients especially certain surfactants and preservatives that others believe to have no place in organic personal care products because suitable alternatives are hard to come by.
Organic Monitor spokesperson Tina Gill told CosmeticsDesign.com that disagreement does indeed exist between companies and certification bodies regarding the use of certain ingredients.
She said more dialogue and research is needed to build a consensus over the use of these substances and the best way for organic firms to overcome formulation difficulties.
Is 1,4-Dioxane hazardous?
Regarding the presence of 1,4-Dioxane in organic cosmetics the OCA said it is a carcinogen that is also suspected of causing other serious health problems.
Debate has also arisen over the appearance of 1,4-Dioxane in conventional cosmetics.
However, the FDA claims that 1,4-dioxane levels observed in its monitoring of cosmetics do not present a hazard to consumers.