CPSIA – Misery Loves Company

Well, well, look who’s haunting Toyota these days – if it isn’t David Strickland, Administrator of the U.S. National Highway Traffic Safety Administration. Strickland is well-known to the cognoscenti of the CPSIA as the lead staffer in the Senate for our favorite law and as one of its principal authors/shepherds. Having wreaked sufficient havoc with the CPSIA sufficiently to impress the big boss, he was rewarded by Obama with the top job at NHTSA where he can now work his magic to reduce Toyota and the auto industry to a steaming hulk of debris in short order. And that’s not all – Mr. Waxman bared his claws on Toyota, too, asking who knew what when, holding hearings, providing more and more fodder for the media.

How did Toyota get in this mess? Well, they had a big recall, and the newspapers, TV commentators and panicked members of Congress worked in concert to create a frenzy. Wow, that sounds somehow . . . familiar. Isn’t this an election year, too, just like 2008? In other words, a really good time to identify a bad guy, whip up a crisis and then solve it? You know, to protect the populace just before polls open, having worked the people up into a lather. The time-honored, sure-fire formula for reelection. . . . . The CPSIA formula being rolled out again also includes calls for massive corporate penalties, spiraling litigation, increased regulation and more government involvement in oversight of the industry (because everything is better with more government). Sounds GREAT!

And who better to operate this paranoia machinery than Mr. David Strickland in partnership with Henry Waxman? With Strickland’s credentials, it’s only a matter of time before Toyota is so pilloried and shamed that it will become a shadow of its former self.

I have been warned to stay away from the Toyota story. I have been told, “everybody hates Toyota in Washington”, no sympathy is possible. Nonetheless, I resent the effort to destroy a great company because the opportunity to create a crisis presented itself for some Democrats in need of headlines. The parallel to the CPSIA saga is just too compelling. Let me ask you Toyota owners – is this feeding frenzy what you want? Have you grown tired of the good service at the Lexus dealership, the strong record of reliability of your Camry, the innovation of your prized Prius? Wasn’t it just months ago that you drove your Prius as some sort of Green badge of honor? Have you lost confidence in Toyota based on your personal experience . . . or because of the relentless barrage of bad publicity on TV and in the papers?

It’s a great tradition in Congress these days – bring the mighty down low, and be sure to erode all confidence in business enterprises. It’s a hallmark of leading Democrat today. With Strickland in charge at NHTSA, you can be sure that the damage to Toyota will be severe.

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CPSIA – Misery Loves Company

CPSIA – CPSIA Casualty of the Week for January 25

The Alliance for Children’s Product Safety’s “CPSIA Casualty of the Week” highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

Congress and the CPSC need to address the problems with CPSIA implementation to help small businesses by restoring “common sense” to our nation’s product safety laws.

CPSIA Casualty of the Week for January 25, 2010

CPSIA Means No Bling for Baby

When Elementary School teacher Marcy Cohen had her first baby girl, she and her sister Lori Rockoff, a social worker, started making tiny accessories for the newest addition to the family. With only a few strands of hair to adorn, the sister team developed “no slip” clips and bows. Soon, their sparkling rhinestone creations were catching the eye of friends and strangers, prompting them to launch Pea Soup Accessories for Kids, which quickly became a leading manufacturer of hand-made children’s products. Their trendy product line includes a wide variety of accessories from embellished headbands to ornate socks.

Yet, while the sisters behind Pea Soup were busy supplying hundreds of high-end boutiques, Congress was working on the Consumer Product Safety Improvement Act (CPSIA) to devise new testing standards of the metal and crystal embellishments that give Pea Soup accessories their unique flair. While none of Pea Soup’s products ever had any safety or lead problems, the confusing nature of the CPSIA forced the sisters to make substantial changes to much of their line.

“We did not want to take any chances with violating the new law,” says Marcy. “In order to avoid any risks, we scrapped many of the products in our line and had to manufacture new ones with different and compliant materials.”

As a result of the law and the cost of the required testing, Pea Soup was forced to significantly change their product line, eliminating much of the creative embellishments that made their accessories distinctive and leaving them with thousands of dollars worth of perfectly safe (and adorable) unsalable inventory.

For more information about Pea Soup visit, http://www.peasoupaccessories.com/about_us/

For additional information on the Alliance for Children’s Product Safety and CPSIA, and to view previous “Casualties of the Week, visit http://www.AmendTheCPSIA.com/

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CPSIA – CPSIA Casualty of the Week for January 25

CPSIA – CPSIA Casualty of the Week January 7

The Alliance for Children’s Product Safety’s “CPSIA Casualty of the Week” highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

Congress and the CPSC need to address the problems with CPSIA implementation to help small businesses by restoring “common sense” to our nation’s product safety laws.

CPSIA Casualty of the Week for January 11, 2010

NEW SAFETY LAW CLEANING OUT “THE KIDS CLOSET”

Kitty Boyce worked for 18 years to build her resale shop, The Kids Closet, located in Rochester, IL, into a well-known resale shop. With its colorful signage, brightly decorated interior and whimsical whale logo, The Kids Closet built its reputation on offering customers quality second-hand children’s products at great values.

Shortly after being voted the “Number One Place to Shop Resale” by the Illinois Times, Kitty announced that because of CPSIA she was converting her store to sell predominately teen and adult clothing, home accessories and furniture, and changing its name to Remarkable Resale. The loss of revenue in her shop due to the changes in inventory forced her to lay off several employees.

“CPSIA has been devastating for us,” said Kitty. “We just decided to get rid of all the toys and furniture. It’s just not worth the risk.”

While the Consumer Product Safety Commission has temporarily stayed requirements for testing and certifying products, all resale shops still must comply with the new lead and phthalate standards. Realistically, resale shops cannot be 100 percent certain that the used items meet the new requirements.

Due to the over-reaching law, Kitty Boyce’s dedicated attempts to provide children and families with reasonably priced, gently used baby equipment, furniture and toys have been shut down. For Kitty and others, the risk of enforcement action by state attorneys general or private groups is too great. The result is that during one of the worst economies in decades, resale shops around the country are avoiding selling winter clothing for kids and other children’s products.

This winter, ask Congress how denying a perfectly safe used winter coat to a child whose parents can’t afford to buy a new one is protecting that child’s health.

For more information about Kitty Boyce, visit http://www.thekidscloset.net/closet.htm

For additional information on the Alliance for Children’s Product Safety and CPSIA, and to view previous “Casualties of the Week, visit http://www.AmendTheCPSIA.com/.

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CPSIA – CPSIA Casualty of the Week January 7

CPSIA – Republican Senators Call for CPSC Advice on Law Change

Senators Kay Bailey Hutchison and Roger Wicker sent a letter today to Inez Tenenbaum asking for detailed recommendations on how to fix the CPSIA. You can see their letter here. In closing, they note:

“We all agree protection of our children is paramount. Congress can fix the CPSIA to ensure it accomplishes the safety intended without necessarily overburdening our economy. This can only be achieved with your assistance, the mandated detailed report to Congress, and increased transparency of your efforts to implement the law. We look forward to your report.”

Amen, brother!

The Commission noted in its meeting yesterday that the agency has not been given much time to get this report done. In addition, there seems to be little consensus on the Commission on the content of the report. Finally, as you may have figured out by now, I think there may be some value in talking about the issues in an open meeting. . . . So I call on the CPSC to get this report RIGHT. Be late, if you must, but get the recommendations done properly. AND, I call on the Commission to reverse its partisan and ill-considered decision to forgo public debate on the content of this report. Let’s learn from the lessons of Watergate and let the light shine in. Trust the public as they trust you, and let them hear you state your positions and work together as a Commission, not a collection of individuals.

It’s time to step up to the challenge, guys.

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CPSIA – Republican Senators Call for CPSC Advice on Law Change

CPSIA – Another Big Fine for L-I-P: What Does It Mean?

The CPSC today lashed out at RC2 Corp. for significant lead-in-paint violations on its Thomas & Friends wooden toys in 2007. The fine totalled $1.25 million. The facts of the case are relatively simple – an original recall in June 2007 of 1.5 million pieces was quickly followed by an additional September 2007 recall of 200,000 units. You can read all the details in the provisional agreement between RC2 and the CPSC. The agreement, however, doesn’t mention the really famous bit, namely that the second lead-in-paint recall included some of the “bonus gifts” that RC2 sent out to people who returned items in the first recall. Not a real confidence builder, apparently . . . .

We probably owe the CPSIA to RC2 and Mattel, who together so shocked and motivated Congress (and my hometown newspaper, the Chicago Tribune) that nothing could stop that runaway train. Since Thomas the Tank Engine was such a beloved traditional toy, the public’s sense of betrayal was understandable. Unfortunately, it is hard to believe that RC2 didn’t see this coming. The law on lead-in-paint was clear and unambiguous. The righteous outrage and the perceived need for retribution eventually led not only to the awful new law but also to this fine.

Let’s try to put it in perspective.

First, RC2 Corp. is a big company and won’t feel much pain from today’s action. It has peak sales of over $500 million and peak earnings of over $80 million. It has generated over $100 million in annual cash flow at least twice. In other words, they have pretty deep pockets. This fine is basically “walking around money” for them. They are even projecting earnings this year in excess of $25 million and cash flow of over $40 million – and 2009 was an awful year for the toy industry. As if that weren’t enough evidence of the symbolic nature of the fine, RC2 recently raised almost $60 million in a stock offering. In no sense will this fine imperil or even perturb the business over at RC2 – as an official “big business”, they seem structurally exempt from the pain we ankle-biters might feel.

That said, hasn’t RC2 paid quite a bit for its folly already? According to their 2008 year end financials, they incurred recall-related costs of $28.3 million in 2007, $14.3 million in 2008 and a further $13.9 million in 2009 year-to-date. Those are total costs of $56.5 million, excluding the new CPSC fine. Arguably, the CPSC recalls induced or precipitated these costs. These costs presumably also take into account the impact of RC2’s $30 million settlement of a class action lawsuit and related legal expenses.

[According to the provisional settlement agreement, in the wake of the publicity of the recalls, RC2 was hit with a number of allegations of injuries and claims from lead-in-paint, leading to lawsuits. I have no way of estimating the financial impact of these claims on RC2. The validity of the claims is also unknown. Welcome to America.]

These losses exceed RC2’s typical annual earnings – most people would call that a pretty high price paid, something that gets your attention.

And as the CPSC slams the barn door long after the horses got out, the company must now reiterate that it learned its lesson . . . three years ago. The press, however, will frame this case as a remedy much needed: “Toymaker’s fine in lead case tops $1 million. Oak Brook-based RC2 sold Chinese-made toys that were later recalled” [Headline from print edition].

With all this as background, I think the fine looks a bit different:

a. The fine cannot be justified as punishment, as the CPSC’s previous actions induced a very high stream of costs for the company. It cannot be justified as an inducement to behavioral reform, as better safety practices at RC2 began in 2007. What is the purpose of the fine then? I think the fine is intended for political purposes, to make the CPSC look “active” and “tough”. It hardly matters that the fine is opportunistic and coercive. [CPSC fines under the CPSIA are also arbitrary and hard if not impossible to negotiate.] Apparently, the RC2 recalls were not enough to satisfy the personified “Congress” – it wanted pecuniary revenge. This allows the Chairman and her fellow Commissioners to look “tough” to Congress and it allows the RC2 company to look “contrite”. Two needs met, neither of which should be part of our law.

b. The fine (the supposed punishment for the “crime”) is so detached from the time of the infraction that it has no actual connection as a “remedy”. The passage of time sacrificed any moral high ground for the regulators – its fine is only a gratuitous penalty now.

c. By waiting three years to impose a high profile penalty like this, the CPSC deals the company a cruel blow to its market. The fine makes it look like RC2 needed more correcting three years after the fact – isn’t that what any rational person would think? Yet RC2 already paid for its failings to the tune of more than $50 million out-of-pocket. [This does not include the significant loss of goodwill from the recalls, a tangible loss to RC2 business managers.] They also changed their safety practices, presumably quite significantly. The defective goods are long off the market. Yet, with the imposition of this high fine now, the company looks like a creep, again – even though there is no sign that it is anything but a good citizen today. As a consequence of the CPSC’s action, RC2 must again counter with more PR to attempt to preserve its good name.

Even more outrageous, to squeeze in the fine under the wording of the CPSIA, the CPSC asserts that the RC2 violation was made “knowingly”. [See par. 16 of the provisional settlement agreement.] I highly doubt that it was “knowing” in the plain meaning of the word and naturally, the company denies it, too. It’s a ridiculous contention. However, the law defines “knowingly” to include imputed knowledge; if the CPSC deems that RC2 should have never let this happen (duh), they can assert the imputed knowledge of a reasonable man to convert the infraction into a “knowing” violation. Prest-o, change-o! Incompetence or organizational failure can thus be given the appearance of ill intent. Since virtually any violation can be deemed “knowing” with the aid of 20/20 hindsight under this terrible law, the CPSC now has an unwritten strict liability penalty policy at its disposal. That’s sweet for an agency that is part legislature, part judge, part jury. As for companies cited for “knowing” violations, denials ring hollow. Frankly, it’s a set-up . . . and when this happens to you, it will feel the same way.

d. The CPSC’s apparent indifference to these factors will have a chilling effect on the children’s product market. There is no question that business people tend to look at these cases as “there, but for the grace of G-d, go I”. If RC2 can be hammered this way, what will happen to us if we make a mistake? There is just no way to tell. But, the RC2 and Mattel fines make it clear that “over” isn’t “over” with the CPSC until the statute of limitations passes. This fine came more than three years after the recalls. When are you allowed to move on from your mistakes? Seems like never. The recent fines levied against Excelligence for $25,000 are of a similar vintage, so this can happen to small companies with small infractions, too. This is randomness run amok. The fact that the agency has been unable to issue final penalty factors in more than a year does not help matters.

Finally, of course, we private business people can’t just stick our palm out to Wall Street for more money whenever we need to restock the coffers. The RC2 capital raise restores 100% of their losses from the recalls. Nice for them! Small private businesses have to go to their banks or our personal bank accounts to fund remediation of these problems. And let’s hope your bank sticks with you after bad publicity. . . .

Could the CSPC be so myopic that it doesn’t know how these risks affect the thinking and planning of small businesses? I can only conclude that the answer is yes.

Let’s hope that the RC2 fine helps the agency and its leadership build up a suitably tough image. And for their sake, one can only hope that the architects of this law and the agency’s penalty strategy are long gone, onto their next glories, before the cumulative impact of the CPSIA and its implementation are felt. And for the rest of us . . . good luck!

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CPSIA – Another Big Fine for L-I-P: What Does It Mean?

CPSIA – Anne Northup’s Op-Ed in the Wall Street Journal

For those of you who may have missed it over the holidays, here is Commissioner Anne Northup’s Op-Ed in Thursday’s WSJ:

OPINION
DECEMBER 24, 2009
12:07 A.M. ET

There Is No Joy in Toyland
The overreach of a child-safety law is killing American jobs and businesses. It’s not too late for some common-sense changes.

By ANNE M. NORTHUP

With the unemployment rate stubbornly high and President Obama focused on job creation, it’s a perfect time for Congress to revisit a law that’s making our economic problems worse, and spoiling Christmas for many kids to boot.

Thanks to the Consumer Product Safety Improvement Act (CPSIA), small businesses like Baby Sprout Naturals and Whimsical Walney have already closed their doors. And some 40% of companies responding to a Toy Industry Association survey planned to eliminate jobs this year because the cost and complexity of compliance with this law is too great. For manufacturers and sellers of children’s products, perhaps a renewed interest in saving small businesses comes in the nick of time.

The safety legislation, which passed with overwhelming bipartisan support in 2008, is a study in the law of unintended consequences. The new law reduced the Consumer Product Safety Commission’s longstanding discretion to act in response to genuine risks, substituting instead the rigid, broad-brush, and unscientific judgment of Congress.

Though written in response to dozens of recalls of Chinese-made toys with lead paint, the law goes well beyond lead paint (which poses an undeniable risk to children) to ban all children’s products that contain a component with more than three one-hundredths of 1% lead. This means such ordinary items as zippers, buttons, belts, the hinge on a child’s dresser—and even that bicycle from Santa Claus—are outlawed.

These products often contain lead in excess of the new legal limit, but unlike lead surface paint, this lead is contained within the metal or other substrate material. The lead can rub off these items in miniscule amounts detectable only with sensitive lab equipment, but it is not “bioavailable”—meaning it is unable to be extracted and absorbed into a child’s bloodstream. By failing to distinguish between easily absorbable lead in paint and not easily absorbable lead in other materials, the legislation was a dramatic overreach.

It gets worse. In addition to banning components that do not create a lead hazard for children, the law also imposes onerous product testing by outside labs that smaller manufacturers and handicraft makers simply cannot afford. Instead of spending money to expand and create jobs, companies have diverted billions of dollars so far to destroy innocuous but noncompliant inventory, as well as to understand and meet complex new compliance obligations.

Major charities, like Goodwill Industries and the Salvation Army, have publicly estimated lost inventory and disposal costs at $100 million to $170 million in secondhand children’s clothing—such as winter coats with metal snaps—that’s not affordable to test for compliance, yet still needed by many families.

Bicycle manufacturers have re-engineered dozens of parts from more expensive and less environmentally friendly materials to replace handle bars, spokes, tire valve stems and other harmless metal parts that contain lead.

To cope with annual testing costs running to half a million dollars or more, domestic retailers and manufacturers like Challenge & Fun, Inc., Constructive Playthings, and ETA Cuisenaire (a maker of educational tools), have reduced payrolls or limited product lines. Many small apparel companies, including JenLynnDesigns, have either closed shop or exited the children’s apparel market completely.

In just the first eight months after enactment, the Consumer Product Safety Commission estimated that the 2008 safety law cost businesses in the “billions of dollars range,” including: more than $2 billion in losses to the toy industry; $200 million in potentially violative inventory for members of one apparel industry group (the California Fashion Association); and an estimated $1 billion in annual losses reported by the Motorcycle Industry Council for lost sales of youth model motorbikes and off-road vehicles. Several popular German toymakers such as Selecta Spielzeug, whose products comply with stringent EU regulations, have stopped selling their toys in this country. Consumers are facing higher prices for a smaller variety of products that are no safer than before.

Some of the commission’s decisions have made matters worse. Last month my colleagues in the majority interpreted one exclusion built into the statute based on the absorbability of lead so inflexibly that not a single children’s product could qualify for it. That vote denied a petition for exemption to brass axle collars on toy cars even though—as one majority commissioner admitted—the commission’s staff would have no concerns about letting their own children play with them. The commission thus decided that the law prohibits the sale of toys that impart less lead than the Food and Drug Administration allows in a piece of candy.

For the past several months, American businesses have been caught in the middle of a classic standoff between the federal commissioners in the majority, who argue that the statute ties their hands, and members of Congress, who claim they wrote flexibility into the law and blame the commission for any harsh consequences. Although the commission steadfastly refused to reach out to Congress to seek clarifications to the law, Congress has now reached out to us—asking the agency last week for a list of recommendations to amend the statute.

Thankfully the commission responded, in part, by agreeing to extend the stay on testing and certification for lead content. This window gives Congress time to consider such common-sense changes as: allowing for higher lead content in products like bicycles where only a tiny amount could be absorbed; restoring the commission’s longstanding discretion to focus its efforts in response to genuine risks; lowering the age range covered by the law so that products for 12-year-old children and 12-month-old babies are not treated identically; and eliminating the retroactive effect of the law—which disproportionately affects libraries and thrift stores. Hopefully, this request from Congress will result in real changes to the law, not a half-hearted effort on our part or Congress’s to avoid responsibility for the problem.

President Obama could help this process along by urging Congress to pursue a bipartisan fix. We can protect children from harmful products without striking a blow against the teetering American economy—but we must act quickly. Otherwise, the CPSIA’s Grinch-like rules will needlessly cost our country more jobs and reduce the opportunity for small businesses to help lead our country out of recession.

Ms. Northup is a Republican commissioner on the Consumer Product Safety Commission. She represented Louisville, Ky., in Congress from 1997-2006.

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CPSIA – Anne Northup’s Op-Ed in the Wall Street Journal

CPSIA – The Eyes Glaze Over . . . .

Sometimes I wonder if they have completely lost it at the CPSC. This evening we received the CPSC Federal Register notice on the Stay decision (actually entitled “Consumer Product Safety Act: Notice of Commission Action on the Stay of Enforcement of Testing and Certification Requirements”). I seriously wonder if anyone read it over in Bethesda. I have NEVER seen anything this dense and unintelligible come out of that office.

As the Commission tucks itself into bed before an exciting day tomorrow in which it can either decently provide enough time for an orderly implementation of this mess of a law or send small businesses down the river, I hope somebody is thinking about the complexity of what they have wrought. Of course, rules always seem more complex when they apply to you than when they apply to someone else. Still, perhaps a quick scan of this document might enlighten the Democrat Commissioners who seem particularly dense on the subject of why businesses want more clarity before the rules go “hard”.

I uncovered this while on a mission from a reader of this space. I had been alerted to the possibility that this document said that the lead content stay was LIFTED. This could not be true, since a ballot vote is definitely docketed for tomorrow on this subject. Even at a Waxman-dominated CPSC, it would be rather ballsy to issue a notice announcing a decision before the vote was tallied. With three Democrats “highly sympathetic” and “seriously considering” the opposing views but by all appearances having irretrievably made up their minds, it is not hard to imagine that skipping a step might have a certain appeal. Why bother waiting for the Republicans to lose (again)???

Well, incredibly, my reader was RIGHT – the document states that the date for the lead content rules to become effective is August 10, 2010, a “date certain”:

“With regard to lead content, the Commission has determined that testing of children’s products for lead content by a third party conformity assessment body and certification based upon that testing should begin on products manufactured after August 10, 2010 to allow component testing to form the basis for certifications for lead content and permit the staff to complete an interpretative rule on the meaning of the term ‘children’s product.’ An interpretative rule on the meaning of the term ‘children’s product’ would provide firms with additional guidance on when testing for lead content will be required by the Commission.”

Apparently, no one updated this FR notice for this morning’s motion to docket this decision for ballot vote tomorrow. Oops!

Remember the part in the hearing today where they discussed market disruptions and the need for businesses to have time to absorb and adjust to the new rules? Does anyone wonder why we have confusion in the market after you read this document? Please be honest. Myself, I experience shortness of breath when I read dense prose like this. I think the works of David Hume seem more accessible than this kind of thing – so why does the Commission delude itself that anyone undersands the mountains of rules and rulings it spews out? Market confusion is all but certain when implementation is handled this insensitively.

One reason is that some Commissioners hear what they want to hear, and ignore the rest. This is called “selective hearing”; I know all about this topic, as there is at least one person who lives in my house who has been regularly accused of this malady. [No names, please.] For instance, yours truly pointed out serious errors in the presentations by CPSC professional staff during last week’s workshop as well as in the preceding December 2 hearing to a Commission staffer. I don’t blame the CPSC staff nor do I consider these errors to mean much . . . other than the fact that the CPSC staff is supposed to know these rules better than anyone else, and if they make errors (understandable), what do they honestly expect of the regulated community??? If we make these errors, we get whacked with high fines or possibly, if the CPSC is riled up enough, go to the pokey. Isn’t the occurrence of serious errors by CPSC staff an indication of over-complexity? This was all known to the Commission before today’s hearing. Get this – the Emperor has no clothes.

Still not convinced? Try this passage on for size, and then TRY to imagine running a normal business catering to children and in your spare time attempting to comply with this law. Imagine trying to master this law as implemented by the CPSC, given that you are not a lawyer, can’t afford a lawyer or a legal department, and don’t have a few unoccupied months to study the mountains of paper the CPSC emits. It’s something you have to do in between everything else you do in your job. And the CPSC says:

“In the months after the Commission issued the stay of enforcement, the regulatory environment has changed significantly [No problemo!], and both the CPSC and interested parties have increased their understanding of the CPSIA and its requirements. [Yes, bring it, baby!] For example, between February 9, 2009 and the date of publication of this notice, the Commission issued more than 20 FEDERAL REGISTER notices, statements of policy, guidance documents, proposed rules, interim final rules, and final rules pertaining to the CPSIA, and most of these documents pertained to testing and certification issues. [This is not a joke. I didn't write this part, either.] These FEDERAL REGISTER documents include:

• “Third Party Testing for Certain Children’s Products; Notice of Requirements for the Accreditation of Third Party Conformity Assessment Bodies to Assess Conformity with the Limits on Total Lead in Children’s Products,” 74 FR 55820 (October 29, 2009);
• “Notice of Availability of a Statement of Policy: Testing and Certification of Lead Content in Children’s Products,” 74 FR 55820 (October 29, 2009);
• Proposed Rule on “Safety Standard for Infant Walkers,” 74 FR 45704 (September 3, 2009);
• Proposed Rule on “Safety Standard for Bath Seats,” 74 FR 45719 (September 3, 2009);
• “Third Party Testing for Certain Children’s Products; Notice of Requirements for Accreditation of Third Party Conformity Assessment Bodies to Assess Conformity with Parts 1203,1510,1512, and/or 1513 and Section 1500.86(a)(7) and/or (a)(8) of Title 16, Code of Federal Regulations,” 74 FR 45428 (September 2,2009);
• Final Rule on “Children’s Products Containing Lead; Determinations Regarding Lead Content Limits on Certain Materials or Products,” 74 FR 43031 (Aug. 26, 2009);
• “Notice of Availability of a Statement of Policy: Testing of Component Parts With Respect to Section 108 of the Consumer Product Safety Improvement Act,” 74 FR 41400 (August 17,2009);
• Final Rule on “Children’s Products Containing Lead; Interpretative Rule on Inaccessible Component Parts,” 74 FR 39535 (August 7, 2009);
• Proposed Rule on Requirements for Consumer Registration of Durable Infant or Toddler Products, 74 FR 30983 (June 29, 2009);
• Final Rule on “Children’s Products Containing Lead; Final Rule; Procedures and Requirements for a Commission Determination of Exclusion,” 74 FR 10475 (Mar. 11,2009);
• Notice of Availability of Draft Guidance Regarding Which Children’s Products are Subject to the Requirements of CPSIA Section 108; Request for Comments and Information, 74 FR 8058 (Feb. 23, 2009); and
• Interim Final Rule on “Children’s Products Containing Lead; Exemptions for Certain Electronic Devices; Interim Final Rule,” 74 FR 6990 (Feb. 12, 2009).

Additionally, the Commission has met with numerous parties to discuss various aspects of the CPSIA or educate interested parties about the CPSIA’s requirements, and, on December 10, and 11, 2009, it held a two-day workshop to discuss issues relating to the testing, certification, and labeling of certain consumer products pursuant to section 14 of the CPSA (see 74 FR 58611 (November 13, 2009). [You know, the one last Thursday and Friday with simultaneous panels going on all day on both days. There has been no time to review or consider the data gathered at the workshop, or the written comments which will continue to come in for the next 25 days.] Given the issuance of many rules and other FEDERAL REGISTER documents, statements of policy, and guidance documents [OMG, there were other documents besides these?!], as well as increased understanding of the CPSIA’s requirements, the Commission believes it is appropriate to phase in the testing and certification requirements as described in more detail below.” [This passage is followed by pages of details of stays lifted, extended, partially extended, whathaveyou. It also includes the errant language on the lead content stay.]

I find myself scratching my head in wonder. What is going on here? Is this being staged for effect, or are they SERIOUSLY trying to regulate this way? Is ANYONE accountable over at the CPSC? Can they get away with anything and everything?

It is sickening that a discussion is even necessary for the extension of the stay on lead content. The Commission should hang its head in shame for foisting this mess off on an innocent manufacturing community. What on earth did we do to deserve this treatment? I am tired of this Commission bowing down to Henry Waxman and a howling pack of fear mongering consumer groups. Those people have never worked for actual operating companies and know nothing about the realities of the marketplace or manufacturing itself. It’s time to stop sticking it to the manufacturing community.

The WSJ noted tonight that Congress and Mr. Obama have hit new lows in popularity. I particularly found interesting that 81% of the participants in the new poll considered this “a period of division where the parties held fast to their positions and showed little willingness to compromise” in Congress. Do we really want this export at the CPSC? As a member of the regulated community, I vote no!

Tomorrow’s vote is going to tell us all a lot about this Commission and its leadership. Watch this space for news.

Read more here:
CPSIA – The Eyes Glaze Over . . . .

CPSIA – Waxman Language Dropped from Defense Bill

In a triumph for rationality (?), the Waxman CPSIA amendment has been DROPPED as an attachment to the Defense Appropriations Bill. It is dead and will not become law (the bill is posted on the House Rules Committee page and does not include this amendment). The people have spoken! Apparently, no one particularly liked the process dreamt up by the Waxmanites, and with full rebellion by various industry groups, certain CPSC Commissioners, other House Democrats, the Senate and of course, the slighted Republicans, the language was killed.

Notably, the very fact that Waxman himself proposed this amendment is a strong concession that something needs to be done legislatively to fix the law. This is also an acknowledgement from the top that the CPSIA can’t be fixed by the CPSC alone. Furthermore, it is clear that the language didn’t go nearly far enough to address the many well-known issues or put the CPSC in a position to take sensible steps to fix the mess. Finally, I sense a growing desire among legislators to work cooperatively and in a bipartisan way to fix the law. Perhaps more than a year of vicious fighting is wearing everyone down. Let’s not forget that the CPSIA was originally the product of bipartisanship. The withdrawal of the Waxman amendment is a strong vote AGAINST poisonous relations across the aisle, at least as it relates to safety.

Because of its evident flaws, the demise of the Waxman amendment is a very positive development, although I would (of course) prefer to see the law fixed. But fixing the law needs to be done the right way. It’s time to move beyond message control and the false notion that any amount of lead is dangerous somehow like uranium. We are all adults here, and know that something less than an outright ban of trace levels of lead would work just fine to protect consumers. There may be legitimate consumer concerns over toy safety and the safety of other children’s products, but the CPSIA (a law borne in anger) is misconceived as a solution.

Perhaps this crash-and-burn will bring about real change. The best outcome would be an overall change in atmosphere. There is NO REASON that all the stakeholders must continually fight like cats and dogs. When it comes to safety, this is a particularly ridiculous situation. The common interest of all adults is to protect children – NO ONE opposes safety. However, the issues in safety are procedural and economic in nature, which must be acknowledged, and the solution is more complex than may be apparent. It is my belief that a reconsideration of the CPSC’s relationship with the market may provide the best “pop” for safety. A reinvigorated CPSC committed to industry outreach and partnership would work wonders. Rebuilding a genuine sense of mutual trust, rather than a mutual sense of fear and loathing, will provide the best long term protection of consumer interests.

This is NOT a pipe dream! In the wake of the demise of the Waxman amendment , we need to move forward TOGETHER to recast the law to facilitate the strength of the U.S. marketplace while protecting the legitimate interests and rights of consumers. No one needs to lose in this process. And a lot of jobs can be saved – if we act promptly and with insight.

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CPSIA – Waxman Language Dropped from Defense Bill

CPSIA – Thoughts on First Day of CPSC Workshops

1. The broad participation of so many different kinds of stakeholders provided the CPSC with valuable feedback on the current state of the marketplace. The Commission knows now that things remain messed up. Even component testing, the hot topic for today’s session, is somehow controversial. One can only hope that the Commission recognizes that lifting the Stay at this point will be hazardous not only to the market but also to its own agency’s health.

At a public meeting with Chairman Tenenbaum yesterday, she acknowledged that the Stay can only be lifted by action of the Commission. PLEASE KEEP THOSE EMAILS FLOWING TO THE COMMISSIONERS URGING THEM TO CONTINUE THE STAY.

Commissioner Northup asks that you use the following email address: Commissioner_Northup@cpsc.gov.

2. Consumer groups continue to aggressively seek to dominate the safety debate. David Pittle announced in my first panel discussion that he alone represented consumers in the discussion (on that panel). Of course, this is not true. Every single person at the table was a consumer, as were all their customers, suppliers, employees and families. It’s time for the consumer advocates to stop asserting the higher moral ground and to limit their discussion to the issues at hand. We are all qualified to be at the table to discuss these issues of mutual interest and deserve to do so without arguing about who is more righteous.

3. An interesting point also came from the first panel, namely the distinction between COMPLIANCE and SAFETY. Can something be non-compliant but still safe? Of course, the answer is yes. It makes about as much sense to enforce the new standards as a strict liability limit as it does handing out speeding tickets for going one mile-an-hour over the speed limit. The debate needs to be exclusively about safety, not compliance, not how we feel or how we should feel. It’s all about SAFETY.

4. I am increasingly hearing from CPSC Staff about the need to “keep things simple”. This is music to my ears. Of course, it’s a 12-step program because the law is still goofed up, their allocation of resources is therefore inherently goofed up, and we are already in a deep hole. Still, the very fact that complexity has been acknowledged as an issue is another sign that WE ARE BEING HEARD.

5. The CPSC is doing itself some good at this workshop by signalling that it is genuinely interested in dialogue. Coming on the heels of their strong effort to maintain an orderly marketplace for toys (Zhu Zhu Pet rescue effort), the good faith of the agency should be nurtured. They want to be trusted again, and I recommend that we return the favor with good will and good faith back to them. They deserve a chance as a good partner, and frankly, we need them as a partner. If they will honor this responsibility, again, we are making progress.

That’s it for now!

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CPSIA – Thoughts on First Day of CPSC Workshops

CPSIA – Thoughts Ahead of Today’s CPSC Workshop

A few tidbits ahead of today’s workshop:

1. Your letters are hitting the mark. PLEASE keep the letters on the Stay coming. The CPSC continues to believe that it can fix the law piece-by-piece with more rules and interpretations, and is ignoring the practical problems that you face. They MUST delay the lifting of the Stay until they either FINISH THE JOB or get Congress to restore sanity to safety administration. I am on record that they cannot fix this WITHOUT a change in the law. You need to make yourself heard.

2. Here’s a shocker – there will be people at the workshop who are AGAINST component testing. For one, in a recent public meeting, YKK (a well-known zipper maker) has come out strongly against component testing on the grounds that it will encourage counterfeiting. To be frank, I have not seen or heard a comprehensive statement of their position and look forward to hearing it. My gut tells me that their principal concern is competition, not counterfeiting. Component testing is extremely beneficial to small businesses. Arguably, Big Business is only minimally affected by the CPSIA, at least in comparison to the impossible burdens borne by small business. Be prepared to argue your case.

3. The CPSC doesn’t want to see their workshop derailed by a complaint session about the many problems with the law. I think that’s a fair request. In any event, find the opportunity to stress the burdens that you bear and try to get them to focus on the challenges posed by COMPLEXITY. This issue is not something that the CPSC wants to fully acknowledge and seems bent on building more and more complexity into their system to compensate for the many, many flaws in the law. They need to know that it’s a real factor that will have a serious impact on the effectiveness of this safety regime. Likewise, it is a killer in the marketplace, especially in relations with dealers and retailers.

4. Finally, don’t forget to ask yourself today about SAFETY. This workshop is about RULES divorced from reality. As we argue endlessly about how many angels can dance on the head of a pin, ask yourself and remind the CPSC how much all of this has to do with SAFETY. We are getting lost in the weeds as we try to build a set of rules to accommodate a terrible and defective law. If we allow the fantasy to go forward that the new rules are somehow about safety (e.g., is a zipper tested by components or as a completed product safer one way or the other? OR are zippers known to be safe already?!), we are going to actually help them build the structure to kill us. We don’t want to do that!

I will try to report from the workshop as time permits.

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CPSIA – Thoughts Ahead of Today’s CPSC Workshop

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