A Quick Guide to What’s Wrong with the CPSIA

March 29, 2009 by Rick Woldenberg, Chairman, Learning Resources, Inc.
Filed under BLOG

1. CPSIA Needs a Concept of Risk Assessment. The new law has absolute standards which are difficult or impossible to modify.Without consideration of quantifiable risk of injury, far too many safe products are swept up into this broad safety legislation.

2. Definition of Children’s Products Too Broad. By defining Children’s Products to include ALL consumer goods intended or designed for use by children up to 12 years of age, the new law incorporates many categories of products not previously subject to regulation or known to present a quantifiable risk of injury to children. There are similar concerns about the definition of Toys in the phthalate ban.

3. Retroactive Application of New Standards is Excessively and Unnecessarily Penal. The retroactive application of the new standards is causing widespread market chaos and significant business losses in a range of industries, including thrift stores, ATV dealerships, educational suppliers, mass market retailers and so on. The retroactive application is virtually unprecedented in the history of the CPSC and is not merited by quantifiable assessment of risk of injury.

4. Implementation Timeline is Unreasonable. The timeline of implementation of the new law left insufficient time to sell off inventory or transition manufacturing standards. Likewise, there was not enough time for the CPSC to manage the deluge of questions, certifications, rulemakings, etc. Lack of preparation time led to larger business losses.

5. Excessive Penalties and Possible Criminal Charges Are Unfair. The historical behavior of Children’s Products companies does not merit such extreme personal and financial risk. Whistleblower provision is equally inappropriate.

6. The Complexity of the Law Will Depress Markets. The many compliance and immediate self-reporting requirements makes compliance with all aspects of the new law unlikely for most companies with more than 50 products in their line.

7. Tracking Labels Will Cost Too Much and Bring Little Benefit. The cost-benefit of this provision is very unfavorable as vast numbers of items which would never be recalled will have to be tracked by lot. This provision will be very disruptive and expensive for most companies.

8. The Sum of the Requirements under the CPSIA Are Penal to Small Business. Large businesses selling through mass market outlets can manage the high expense of compliance with the CPSIA with high volume items. Small businesses will incur much greater costs per item, and will suffer competitively. Many small businesses are suffering because of this law already.

9. Effective Pre-Emption is a “Must”. As many as 38 States have pending or active children’s product safety legislation. The burden of understanding and complying with so many competing legislative schemes exceeds most companies’ capabilities. This explosion of law may reduce inter-state commerce.True pre-emption to restore Federal regulation of children’s product safety is called for.

10. State Attorney General Enforcement of the CPSIA Should be Abolished. Arguments that SAG enforcement increases the number of “cops on the beat” are false. SAGs have no obligation under the law to follow the lead of the CPSC or even tell the CPSC what they are doing. This means that there are now 51 CPSCs, an untenable situation for the business community – very risky!

Tags: assessment, broad, business, changes, cpsia, criminal, economy, labels, risk, standards, tracking