CPSIA – Lowest Common Denominator Government

We saw a display of Mr. Obama’s team in action this past week as McDonald’s was cornered into a national recall of a safe product. How did it happen? Did our government rise to the occasion, or simply resume its descent into the abyss?

“Americans want to be safe. And they expect their federal government to protect them. So that is what I’m here to do.” Chairman Inez Tenenbaum, NPR Report “Under Obama, Agencies Step Up Rule-Making”

Last week in a coordinated media extravaganza, an anonymous caller alerted Rep. Jackie Speier (D-CA) to the trace presence of cadmium in Shrek glasses being sold by McDonald’s. In a rapid fire series of events, McDonald’s announced a voluntary recall of the offending Made-in-America glasses “at the urging of the [CPSC] commission ”. The CPSC apparently pushed for the recall of the glasses by McDonald’s after quickly testing the glasses.

[It turns out that there were two "anonymous tipsters", one of whom is Jennifer Taggart, a regular reader of this blog. Ms. Taggart has acknowledged that cadmium levels on the McDonald's glasses are well within California's Proposition 65 restrictions. Prop. 65 is easily the most restrictive and challenging of the myriad local safety regulations.]

Rep. Speier seized the election year opportunity to lecture McDonald’s on safety: “’Our children’s health should not depend on the consciences of anonymous sources. Although McDonald’s did the right thing by recalling these products, we need stronger testing standards to ensure that all children’s products are proven safe before they hit the shelves,’ said Speier. ‘Cadmium is a toxic substance that is extremely dangerous to the developmental health of children. . . . Thanks to this anonymous tip received by my office, the proper agencies were alerted, necessary action was taken by McDonald’s, and the long-term health of millions of children is no longer at risk.’”

Jackie Speier is a Democrat representing the San Francisco area.

A media deluge followed the recall. Typical of the hyperbole is this article from NJ.com: “McDonald’s announced the voluntary recall after small amounts of cadmium were found in the enamel with which character images were painted on the glasses . . . . Long-term exposure to low levels of cadmium from those glasses can cause various health problems, including cancer, bone softening and severe kidney problems. [NJ State Assemblyman Paul] Moriarty, in a news release, demanded an investigation . . . . ‘It’s stunning that in this day and age our children can still come into contact with toxic materials just by using a glass featuring a cartoon character,’ Moriarty said in the release. . . . ” [Emphasis added] AP could not resist the McDonald’s cadmium frenzy that it helped to create: “A recall of 12 million cadmium-tainted ”Shrek” drinking glasses sold by McDonald’s raises questions about the safety of millions of similar cheap promotional products that have been sitting in Americans’ kitchen cabinets for years.”

It all boils down to trust, right? After all, it’s McDonald’s. McDonald’s is America, McDonald’s is children. If you can’t trust McDonald’s, who can you trust?

I will attempt to answer that question.

First – Can you trust McDonald’s?

Yes, absolutely, without reservation. McDonald’s (not a customer of ours, never was) has the best reputation of any company in the toy industry (in my humble opinion) for safety, conscientiousness and attention to detail. McDonald’s is HARDLY asleep at the wheel. Rep. Speier’s remarks are outrageous but for the fact that she is a California Democrat from San Francisco. Consider the source. I believe McDonald’s ten times out of ten against Rep. Speier.

On the other hand, if McDonald’s is so wonderful, why on Earth did they recall these glasses? Okay, you be the CEO of McDonald’s for a moment – what would you do? Fight for the right to sell cadmium-laced glasses? Argue that the glasses are “safe”, that toxic cadmium isn’t harmful? Please, McDonald’s had no choice because it has to protect its brand. Listen to the Moms in the video above. If they don’t trust McDonald’s, they will walk across the street to Wendy’s. McDonald’s has NO CHOICE but to “do the right thing”. The cost of the recall is a secondary concern. Burn, baby, burn.

Second – Can you trust an anonymous tipster?

Why be anonymous if you are acting “heroically”? Well, for one thing, being anonymous means you aren’t accountable if you are wrong. The two tipsters were using XRF guns, acknowledged by the CPSC to be imperfect and best used to screen for possible faults. It might be embarrassing – or expensive – to start a public panic and then be proven wrong. This mess might be seen as your fault and somebody might want you to pay for the expenses. Hmmm.

What if the caller had reason to hide his/her identity? This is the very worrisome scenario. There are many people who might want to rat out a McDonald’s. How about a competitor? Or a spurned supplier? A disgruntled employee or spouse of an employee? This is one of the primary objections I made to the public database – the potential for abuse is rampant. An anonymous tipster very well might be up to no good. McDonald’s loss could be the tipster’s gain – an ill-intentioned tipster in partnership with a self-promoting fear monger in election season (like Jackie Speier) could be a powder keg. [Ed. Note: It is worth noting for clarity's sake that Jennifer Taggart has identified herself so this discussion does not apply to her.]

This could happen to you, too. The CPSIA encourages this kind of rat-me-out frenzy. How many businesses will close or sell out because of this shameful law? Time will tell. In the meantime, the sport of trashing trademarks and company reputations will thrive at the hands of the “anonymous tipsters”.

Third – Can you trust the CPSC?

We ought to be able to trust them. Have they earned this trust?

Here’s a June 4th tweet from Scott Wolfson, Director of Public Affairs: “Scott_Wolfson: Note to reporters: the recalled McDonald’s glasses are not toxic.” Interesting – the CPSC apparently pushed for the recall of safe products. Wolfson is also responsible for the press release detailing this recall: “The designs on the glasses contain cadmium. Long term exposure to cadmium can cause adverse health effects.” Same guy. And Wolfson offered these calming words of reassurance to the AP: “Wolfson said the recalled glasses have ‘far less cadmium’ than the [recently] recalled jewelry. He would not say how much cadmium leached from the glasses in tests, only that it was ‘slightly above the protective level currently being developed by the agency.’”

I believe Mr. Wolfson is the author of the CPSC’s OnSafety blog – here’s how he counseled consumers about the McDonald’s glasses in a recent post: “If you bought these “Shrek Forever After 3D” glasses at McDonald’s – millions of you did – stop using them immediately. . . . The glasses contain low-levels of cadmium. . . . The company has stepped up to do the right thing [in issuing a recall].” [Emphasis added] He also justified the recall of non-toxic glasses in the New York Times as follows: “Both C.P.S.C. and McDonald’s are being highly protective of children in announcing this recall.”

Scott has a way with words, doesn’t he? Makes you wonder what his job is, exactly.

So the CPSC admits that the glasses were safe. Yet the “commission” urged McDonald’s to recall the glasses. Why? Wolfson says implausibly that the CPSC was being “highly protective” in recalling non-toxic glasses. Actually, “Why” may not even be the right question.

Let’s consider the question of “how”. On what legal basis did the CPSC press McDonald’s to take this step? The authority of the agency to demand a recall depends on the presence of a “substantial product hazard”. There is no other basis for the agency to take action – it cannot act on whims or because it is always crabby on Mondays. I have addressed this issue previously in this space, and noted that the authority to initiate a recall is based on the existence of “a product defect which (because of the pattern of defect, the number of defective products distributed in commerce, the severity of the risk, or otherwise) creates a substantial risk of injury to the public.”

If the CPSC’s Director of Public Affairs notifies the press that the product is not toxic, it is incontestably certain that the glasses don’t present a substantial product hazard in this case. For perspective, consider the views of the U.S. factory responsible for the glasses:

“[VP Ron] Biagi . . . added that [in addition to McDonald's] Durand Glass also does material safety tests. ‘We will do nothing (different) because we don’t need to,’ Biagi added. ‘You are always looking for the most healthful way to make a product. What we’re producing today, it is safe.’ Biagi said there are multiple suppliers, domestic and foreign, of the enamel used for the Shrek glasses. Other glass producers use the same product, he said. Late Friday, the company issued a short statement from its CEO for North American operations, Fred Dohn. ‘All the products, whether decorated or undecorated, that Arc International is delivering on the markets meet the highest standards of quality and safety,’ Dohn stated. ‘Arc International is a professional manufacturer that stands behind all its products. We therefore see this as an internal decision by McDonald’s and will be investigating the matter once we receive more information.’”

So what gives? By all appearances, the leadership of the agency substantially exceeded its legal authority in pressuring McDonald’s to recall these glasses. Any problem with that?

I won’t insult your intelligence with a rant about the trustworthiness of the Democrats who are running the shop these days. If you trust Jackie Speier and the like after this sorry tale, I can’t help you.

In closing, let’s recall the words of Ms. Tenenbaum: “Americans want to be safe. And they expect their federal government to protect them. So that is what I’m here to do.” By all appearances, Ms. Tenenbaum was doing exactly what she promised – her agency is wrapping you in bubble wrap whether you need it or not. She says that’s how you want it – no matter that it’s outside her legal authority, well-beyond any notion of common sense and implemented with a complete disregard to economic consequences or the impact on other market participants. It’s okay because the press eats it up . . . and it helps reelect members of Congress. Everybody’s a winner as we sink into the abyss.

Lowest Common Denominator Government. Yes We Can.

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CPSIA – Lowest Common Denominator Government

CPSIA – I Will Appear as a Witness in Thursday’s House Hearing on CPSIA

I have been invited to appear as a witness at Thursday’s hearing before the House Committee on Energy and Commerce’s Subcommittee on Commerce, Trade and Consumer Protection. The hearing on the “Consumer Product Safety Enhancement Act of 2010″ (the Waxman Amendment 2.0 in its latest form) will take place at 10 AM EST on Thursday, April 29 at 2322 Rayburn House Office Building.

The hearing will be streamed live, but I don’t have the link to give you yet. You may be able to find it at this link on Thursday or on the home page of the committee. I will try to get the link posted in my blog before showtime.

I intend to tell my story and your story to the committee and look forward to exploring the bedeviling issues of the CPSIA in the open air. If you have any ideas or suggestions for my testimony, please feel free to share them here, or send me an email. Thanks.

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CPSIA – I Will Appear as a Witness in Thursday’s House Hearing on CPSIA

CPSIA – I Will Appear as a Witness in Thursday’s House Hearing on CPSIA

I have been invited to appear as a witness at Thursday’s hearing before the House Committee on Energy and Commerce’s Subcommittee on Commerce, Trade and Consumer Protection. The hearing on the “Consumer Product Safety Enhancement Act of 2010″ (the Waxman Amendment 2.0 in its latest form) will take place at 10 AM EST on Thursday, April 29 at 2322 Rayburn House Office Building.

The hearing will be streamed live, but I don’t have the link to give you yet. You may be able to find it at this link on Thursday or on the home page of the committee. I will try to get the link posted in my blog before showtime.

I intend to tell my story and your story to the committee and look forward to exploring the bedeviling issues of the CPSIA in the open air. If you have any ideas or suggestions for my testimony, please feel free to share them here, or send me an email. Thanks.

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CPSIA – I Will Appear as a Witness in Thursday’s House Hearing on CPSIA

CPSIA – Broken Record . . . Does Anyone Care Anymore?

Misallocated safety resources – I have made the point again and again, that the misconceived CPSIA diverts limited resources away from real safety issues and lards them on bureaucratic exercises unlikely to produce safety results. [A pile of safety reports up to the sky does not constitute "results", btw.] This misallocation is not restricted to private companies – it also adversely impacts the CPSC. As they say, there are only so many hours in the day, even with an annual budget of $118 million.

The back-up in work at the CPSC is part of the untold story of the CPSIA. Certainly the zealots do not want to expose the damage done by their favorite law to this proud agency. The fantasy goes like this: if the CPSC isn’t acting, there isn’t anything to act on. Ergo if recalls go down, we must be safer – because the all-knowing CPSC is everywhere, instantly processing data, and recalling everything that is “bad”. If you believe that fairy tale, I have a bridge to sell you, or perhaps some lovely swamp land. This fantasy was on display in the recent hearing on the public database in which absurd promises were made about timely agency review of database postings. The agency’s inability to keep up with the data flow, probably from day one, will turn the database into a national commercial slander bulletin board. Among other things, this is because there aren’t and will never be enough hands on deck to manage the work flow with good quality control and concern for truth.

Some recent evidence of misallocated resources was provided by the General Accounting Office in their April 2010 report to Congressional Committees entitled “ALL-TERRAIN VEHICLES: How They Are Used, Crashes, and Sales of Adult-Sized Vehicles for Children’s Use“. Remember, it is almost inevitable that misallocated safety resources will lead to disaster, just as driving while taking your eyes off the road invites tragedy. Tragedy . . . you heard it here first.

The GAO report notes:

“[ATV industry] officials said they are taking actions to prevent the sale of adult-sized ATVs for use by children and Commission staff said they have taken steps to ensure compliance . . . . Since 1998, Commission staff have conducted undercover inspections of ATV dealers, by posing as buyers, to check compliance with the age recommendations. Nevertheless, compliance rates of the ATV dealers that Commission staff checked decreased from 85 percent in 1999 to 63 percent in 2007 . . . . A Commission compliance official said no undercover inspections of dealers had been conducted since early 2008 because Commission staff were focused on preparing to implement the Consumer Product Safety Improvement Act, but that inspections will be resumed in the future. . . .

Because Commission staff had not conducted any undercover inspections of dealers since 2008 and because the number of new entrants in the marketplace that had not been checked (as of February 2010, 37 companies had ATV action plans authorizing them to sell ATVs in the United States, compared with 8 companies in 2008), we conducted undercover operations of selected dealers to check whether dealers were willing to sell adult-sized ATVs for use by children under the age of 16. . . . The dealers who were willing to sell adult-sized ATVs for use by children included retailers that sold ATVs made by the traditional manufacturers and new market entrants as well as those that sold a single brand and a variety of brands. In some cases, sales staff subtly and in other cases blatantly admitted that they should not be selling adult-sized ATVs for use by a 13-year-old, but would do so anyway. In addition, one dealer we visited was selling ATVs manufactured by a company without an ATV action plan.” [Emphasis added]

I quote from this report not to indict ATV’rs. Some bad apples will be in every barrel, so almost any market sweep will turn up something. In this case, however, the GAO confirms that the CPSC has been in a two year nap induced by the CPSIA. And the nap isn’t over, either.

This problem explains why, in a recent conversation, a CPSC staffer referred to the agency as the Children’s Product Safety Commission (that’s not its name!). Something has been diverted or polluted in its mission by the CPSIA.

I feel we are sliding down this slippery slope to the doom of the critical market for children’s products. After two years of whining, I must sound like a broken record. That said, the CPSIA implementing rules aren’t survivable and with full implementation now just months away, there’s almost no time left to do anything about it. I have not yet explained in this space the so-called 15 Month Rule to be discussed this week in Thursday morning’s Commission meeting. When the time comes, you will get a strong sense of what a railroad job this entire process has been. The priority has been irretrievably shifted to paper pushing. The strictures imposed by the testing zealots will snuff out many businesses – or send us all underground.

Consumers will suffer and so will your business. We will see more collapses and will see markets go under-served. You were warned.

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CPSIA – Broken Record . . . Does Anyone Care Anymore?

CPSIA – ICPHSO Update on Public Database

Remarks of Ming Zhu and Chad Tompkins, Office of Info Technology, on the Public Database. This presentation will apparently be posted online at www.saferproducts.gov.

• They are very excited about the database. They acknowledge that they are IT guys, not lawyers. Gotcha.
• Will give access to “far more” product info than previously available. Will provide much faster access to the info.
• Corporate participants can also get incident reports much more quickly and act much more quickly. [This is an obvious set up for an opportunity to judge the speed of your surveillance and response. I think it's best understood as the basis for compelling a certain helter skelter speed to respond. The populace demands it . . . .]
• Chairman Tenenbaum noted that www.saferproducts.gov has gone live, although the database is not yet functional. She says you can track the progress of the database on the website and kick the tires of its new design before its March 2011 rollout.
• They are looking forward to enhanced early detection of hazards.
• Consumers will have access to all consumer reports and manufacturer replies when making consumer product choices. Oooh, this is a good one. I am so glad I gave comments on this database. Why not just let us put our comment letters through the shredder ourselves?
• Will capture info on the submitters and the incident on the site.
• Phase I is to “turn on the fire hose” and phase II is where the agency improves its infrastructure to handle it. They recounted the overall IT improvement plan.
• Will use Social Media to drive traffic. Earlier in the day, Cheri Falvey noted the popularity of the video showing a carrot being severed by a stroller. Cute!
• They want us to talk about our website at our Tupperware parties. Something to think about.

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CPSIA – ICPHSO Update on Public Database

CPSIA – Randy Swart Takes My Spot in PSL!

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CPSIA – Randy Swart Takes My Spot in PSL!

CPSIA – Letter to CPSC re Tracking Labels Guidance 9-18-09

September 18, 2009 VIA FEDERAL EXPRESS Todd Stevenson Director, Office of the Secretary U.S. Consumer Product Safety Commission 4330 East West Highway Bethesda, MD 20814 Re: Section 103 Tracking Labels Guidance Dear Mr. Stevenson: I am writing on behalf of the Alliance for Children’s Product Safety, an organization comprised of small businesses in many industries impacted by the Consumer Product Safety Improvement Act (CPSIA). I request your prompt consideration of an urgent matter regarding the impact of Section 103 tracking labels guidance issued on July 21 (the “Guidance”) on small businesses in America. By way of background, I would like to draw your attention to the fact that I have expended considerable effort to help the agency avoid mishap in the implementation of the CPSIA’s troubling tracking labels provision in recent months. I have testified before the CPSC on tracking labels (May 12 hearing, second panel), wrote a comment letter on Section 103 , sent a letter to Rep. John Dingell in part addressing tracking labels and posted no less than 38 blog entries related to tracking labels, including a comprehensive list of “unanswered questions” about the Guidance. To date, none of my “unanswered questions” have been addressed by the agency in any form as far as I know. The Guidance was originally heralded as a document sensitive to the interests of small businesses. Some terms seemed to offer relief to small lot manufacturers who did not already mark products with lot information. This regulatory approach was forecast by Commissioner Moore in his May 13 statement explaining his vote on the NAM tracking labels stay petition, when he noted that tracking labels implementation would be “a learning process for all of us and not an excuse to punish an unwitting mistake.” Unfortunately, the Guidance also specified that all of the information in Section 103 needed to be “ascertainable” by both the manufacturer and consumers. This has been interpreted to mean that manufacturers must be able to produce “detailed production information, including the means to distinguish products made from different factories, made with different components, at different times” for any product pulled from any store shelf anywhere and at any time. The Commission made it clear that this is a serious legal obligation. As Mr. Moore wrote on July 20, “those who fail to keep the information required by the tracking label provision . . . will not find a very sympathetic ear at the Commission.” The issue of what “ascertainable” means gets to the heart of the issue that Mr. Moore highlighted. It is also at the heart of the tracking labels dilemma for small businesses. In my “unanswered questions” blogpost on August 14, I posed the following question: The Guidance states: “The question of what should be ascertainable is a different question than whether that specific information can be marked on the product or packaging.” [Emphasis added.] Thus, it appears that the CPSC will not permit ANY manufacturers to sell ANY children’s product for which the specified Section 103 information is not “ascertainable”. In other words, if a consumer calls up to inquire about the Section 103 information for any unit of a children’s product made on or after August 14, regardless of whether made by a small lot manufacturer, that information must be available – or less. Correct? Elsewhere in the Guidance, the CPSC advises that small lot manufacturers need not create a lot marking system if one does not currently exist. So, essentially, the rules require that co-hort information be “ascertainable” on items without lot markings. This is, for all practical purposes, impossible. An unmarked item is fungible with all other similar unmarked items. If small businesses are not required to mark by lot, then it will be impossible to distinguish products by lot. This is a massive problem for small businesses. It is not solvable as far as I can tell. The Guidance says on one hand that we do not need to mark by lot, and on the other hand, says we will be exposed to civil and criminal penalties if we cannot “ascertain” lot information. This is faulty “guidance” at a minimum. It is tantamount to requiring universal marking of products by lot – although the Guidance states the exact opposite. Please do not overlook the fact that Section 103 applies to every children’s product sold in this country without exception. It is a common misconception in the market that tracking labels are only required for items subject to the new lead limits or the phthalates ban. Thus, the scale of affected industries and product classes is incomprehensibly large. As I have testified and written extensively on the issues relating to tracking labels for businesses catering to low volume specialty markets, I will not highlight again the many reasons why this rule is impractical in the extreme. Please consider, however, a very practical business problem. Many specialty items are low-priced and have not been designed optimally for tracking labels. The Guidance recognized the seriousness of this issue for the bulk vending industry, but overlooked it for everyone else. Frankly, the practical issues for items that sell for $0.25 are virtually identical for items that sell for $10. In any event, “ascertaining” co-hort information on any children’s product without a lot marking is basically impossible (without changing every lot in some physical way, a manufacturing “solution” likely to quickly degrade into utter chaos or commercial disaster). It is therefore likely that most products sold into specialty markets will violate the Guidance unless they incorporate permanent lot markings. Members of the Alliance for Children’s Product Safety are facing a profound disaster as a consequence of this rule. Products are already being dropped for an inability to meet the “ascertainable” rule, particularly under threat of penalties under the CPSIA. No one working for a children’s product manufacturer will risk going to jail over co-hort information; they are much more likely to drop products to avoid the issue entirely. The economic damage will be deep and wide – and will contribute nothing to consumer safety. It is ironic that declining product availability as a result of implementation of Section 103 may lead to fewer recalls, thus giving the misimpression that children are safer. In fact, children will simply go to poorly-stocked schools and enjoy a lower standard of living. I call on the Commission to review and modify the Guidance to provide real and meaningful relief from the requirement on “ascertainability” for small businesses catering to specialty markets. Your prompt attention to this urgent issue will save jobs, products and industries. Thank you for your prompt consideration of this important matter. Sincerely, Richard Woldenberg Chairman Alliance for Children’s Product Safety cc: Chairman Inez Tenenbaum Commissioner Robert Adler Commissioner Thomas Moore Commissioner Nancy Nord Commissioner Anne Northrup

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CPSIA – Letter to CPSC re Tracking Labels Guidance 9-18-09

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