CPSIA – ICPHSO Update -Remarks of Chairman Inez Tenenbaum

Inez Tenenbaum gave a keynote address at lunch at ICPHSO today. I would have preferred to rely on the actual text of the speech before writing about it (not yet available online at the CPSC website), but wanted to give you my impressions quickly. If I took erroneous notes, I apologize and will correct errors, if any, later.

Critical points from the speech:

• The speech was tough and hostile to “uncooperative” businesses.
• She gave plugs to Consumers Union, PIRG and CEH. Draw your own conclusions. She balanced those plugs with a hearty pat on the back for RILA which she said has proposed its own uniform testing “problem”. Oops, Freudian slip . . . she corrected herself to clarify that it is actually a uniform testing program. Program, problem – these are synonyms at the new CPSC.
• She wants to dispel the “rumor” that the agency is overwhelmed by mandates and is distracted from its mission. Further to this point, with regard to Internet “rumors” like the foregoing, she recommends that you only believe websites that end in “dot gov”.

Let me repeat that last one: Tenenbaum says you should ONLY believe websites that end in “dot gov”. That means you shouldn’t believe me, just her. Don’t be cynical, guys. Speaking for myself, when a high public official tells me not to believe the media chatter, just to believe them, I always take the heartfelt advice. After all, they only mean to protect me from scurrilous gossip that I am too dumb to figure out for myself. For instance, I still believe everything John Edwards says . . . .

• Regarding recalls involving a death, Tenenbaum warned companies NOT to blame parents in the press even if they are involved in litigation with the family. If they do, Tenenbaum promised (in strong terms) to “call [them] out”. I was floored by this. Is she our mother now? Our mother government, perhaps.
• She urged us to “stop fighting old battles” and get prepared. She was referring to the new era of the Public Database. Hmmm. We are to stop fighting old battles. Okay, everyone, put down your arms!
• She reiterated that the CPSIA was the “most substantial and positive” development in the CPSC’s (recent) history. She noted her love of the tracking labels provision and the removal of lead from zippers. Apparently my many comments and objections to tracking labels were ALL wrong. Darn! I must learn to love tracking labels. Repeat five hundred times, I must learn to love . . . .
• On the subject of voluntary standards, she emphasized that if industry doesn’t move fast to do it the CPSC’s way, the agency will just put out mandatory standards more to its liking. She specifically cited the JPMA and ASTM on the crib standards. She sounds really open-minded on that one. Tenenbaum also recommends that industries proactively make their standards more stringent so the agency can make them MANDATORY. Or . . . the agency will just do it itself. Nice! I feel trust building, building, building.
• She noted that the law applies to big and small companies ALIKE “for good reason”. Hey, crafters, get the message – there will no free pass for you. Of course, this actually makes sense because product injuries should not be okay simply because the manufacturer is small. The way to fix things for small companies is to rework the definition of hazard to be limited to ACTUAL hazards only, which will focus safety efforts in a logical fashion, thereby helping out the small guys. The crafters are a victim not of fair rules that are blind to small business interests – but instead of a terrible law that is so fatally flawed that no business can deal with it.

Here’s the best part:

1. Chairman Tenenbaum said that she won’t tolerate resistance to recalls that the agency wants to make. If you do dare resist, the agency will use its many tools to force the “right” outcome. Chairman of the CPSC or Chairman of the Politburo? Individual rights and due process are apparently a secondary consideration now, to judge from Tenenbaum’s fiery speech. There’s a big incentive to invest, right?
2. Tenenbaum cited Toyota as an example of how “this government” will NOT tolerate slow recalls. Oh boy. Think of the Toyota food fight when you imagine the future of CPSIA enforcement. Recall first, ask questions later and let the media sort out the details. And be sure to bring the mighty down low. That sounds so fair!

There are many industries that are going to be victimized by this new enforcement regime. The list will be LONG.

Lots of tough talk, saber rattling and scare tactics. Of particular concern is the implicit erosion in corporate legal rights and the continuing demonization of businesses and business people. The Obamist populist rhetoric was quite recognizable, and one must wonder who Tenenbaum really intended to reach with the speech. Whoever they are, I hope they were happy. As for me, I got the willies and thought that whatever progress I sensed earlier today was an illusion.

Will the Dems ever learn?

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CPSIA – ICPHSO Update -Remarks of Chairman Inez Tenenbaum

CPSIA – Tracking Labels Answer Received Today

The CPSC answered my letter of September 18 regarding tracking labels today. In a nutshell, my question was about how small businesses are supposed to ascertain “cohort information” from fungible products if we are permitted to not use lot markings. The answer to that question was not clear (to me) from the Tracking Labels Guidance.

In today’s response, the CPSC seems to indicate more flexibility than I had read into the Guidance. Tony Cook of the Office of General Counsel states: “Your letter suggests that the manufacturer lacks flexibility regarding information that must be ‘ascertainable’. As with the ‘marking’ requirement, the manufacturer’s reasonable judgment and consideration of the manufacturer’s particular circumstances, are guiding issues.” He carries on helpfully: “Without such an approach, an absolute requirement to have ascertainable all required information would in effect swallow the Commission’s considered course with respect to marking.” This is the conflict that motivated my concern.

On the other hand, Mr. Cook states “. . . what can be marked and what can be ascertainable are separate questions”. This is the rub, of course. This means that even if you can’t mark the item, you might still have to be able to ascertain the cohort information. How do you do that? Well, you can’t.

It all boils down to what is considered “reasonable judgment”. In fact, I have never found this a challenging standard to meet in our business but that was before there were huge penalties and possibly jail time to consider.

In an environment where the regulators want us to exercise sound judgment, there needs to be some recognition that the incentive to take the risk of exercising judgment only makes sense when that judgment is PROTECTED. No one wants to risk huge fines for doing their job (or let their teammates incur this risk). Thus, I think the CPSC needs to look at the question about ascertainability again. The CPSC needs to say flat out that it will respect the judgment of manufacturers on how they determine which information, if any, can be ascertainable, as long as the decision on marking was deliberate, consistent and made on a good faith basis.

In the case of our business, tracking labels serve no particular purpose except to slow us down and waste our money. We have recalled 130 pieces since 1984 (out of an estimated one billion shipped, all units believed recovered) so the risk to consumers, at least thus far, seems controlled. I would like the authority to decide how much to spend on tracking labels and information retention/accessibility, based on my knowledge of our products, our market, our track record and our legal obligations. Then, if we exercise good faith and are reasonable and consistent in our approach to markings and cohort information, the CPSC should respect our decisions. thus, a failure to mark or ascertain would not be held against us unless our balancing of the equities is demonstrated to be unreasonable.

None of this would be necessary except for the ridiculous penalties and fines possible under the CPSIA. The indiscriminate manner of penalizing under the law makes minor issues (even inconsequential errors) into potentially serious problems. In addition, given that the CPSC recent practice of doling out penalties for long ago settled disputes, the long tail of 20-20 hindsight makes this dilemma particularly uncomfortable.

I appreciate the CPSC’s effort in replying to me, and look forward to working with them to bring more clarity to this very important point.

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CPSIA – Tracking Labels Answer Received Today

CPSIA – CPSIA Casualty of the Week for November 2

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 November 2:

The Final Adventure of Whimsical Walney:
CPSIA Claims another Home Crafter

Dana Lardner started Whimsical Walney in 2004 to showcase handmade products with the theme “let children play.” She sold items such as kids’ fabric books, foreign language-focused clothing, and outdoor blankets on her website. Dana always focused on product designs that promoted a child’s imagination. In April 2009, almost a year to the day that she reintroduced Whimsical Walney with new branding and a new website, Dana shut down her business because of CPSIA.

“I decided to close my business because I had planned to introduce a new line of products. I was going to sell off existing inventory and then discontinue several of my old products to focus my business and build my brand. Because all my products would be defined as “children’s products” under the CPSIA, I would be required to test everything for lead and some for phthalates. It would have been cost prohibitive not only to test products that I don’t intend to continue selling, but also to test yet-to-be-released products whose acceptance in the market is unknown. I know that there was a stay of the testing requirement, but the writing was on the wall for businesses like mine. From the tracking label requirements to the prohibitive penalties, I just could not take the risk of staying in the children’s product market.”

Dana has shifted her business to focus on products specifically designed for adult consumers such as handmade housewares and accessories. Unfortunately for kids, Whimsical Walney is yet another product line and small business that has left the children’s product market – not because any of the products were unsafe, contained dangerous levels of lead, or could anyway harm a child, but because of the inability to concurrently market and build her business while also managing the undue overhead of the irrational provisions of CPSIA.

Dana started a CPSIA blog at her website: www.WhimsicalWalney.com.

Do not accept the status quo! Tell Congress and the CPSC to restore “common sense” to our nation’s product safety laws. Click here for instructions on how to contact the CPSC and your representatives in Congress.

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CPSIA – CPSIA Casualty of the Week for November 2

CPSIA – Tenenbaum Doesn’t Know What Testing Costs

At a public meeting this week on September 30 between Chairman Inez Tenenbaum and representatives of the NSSEA (National School Supply and Equipment Assocation, http://www.nssea.org/ ), Ms. Tenenbaum related her belief that a lead test costs “$35″. This is consistent with propaganda put out by consumer groups. I recently wrote about a representative of WashPIRG who contends that testing costs are as low as $75. Yet, I have documented testing costs FAR higher than this. Who is right? I would like to report that the rumored $35-$75 lead tests is RIGHT . . . and WRONG. As the linked test quotes and invoices indicate, our (recent) cost for a lead test (plastics) is $75, less our 35% discount ($49). The cost of a lead test (metal) is $90 less discount ($59). Since I know you are curious, flammability is $70 less discount ($46), physical and mechanical is $245 less discount ($159) and phthalates is $350 less discount ($228). You will notice that these prices are not firm, and vary from one invoice and quote to the next. That said, it’s close enough for government work, as they say . . . . If the individual test cost was all we needed to know, Ms. Tenenbaum might be completely right, at least directionally. But she’s not. Of course, unless you use only one material in your product, you will have to pay for more than one test. Normally, this adds up to quite a few tests for a single item. I have summarized the test details below for the attached test quotes and invoices. As you will see, the tests required per item range from 9 – 121 lead and phthalates tests. [This ignores the miscellaneous tests and charges. You will note, by the way, that one of the attached invoices include a $101 charge to confirm that our tracking label was compliant. Good work if you can get it, I guess . . . .] The notion that testing costs are $35 is pure fantasy, Ms. Tenenbaum. The world is more complicated than that. Amazing, it turns out that what I have been saying since November is right! Shame that no one at the CPSC or Congress was listening. See the data below: Telescope: 24 lead in substrate 23 lead in substrate (metal) 26 phthalates (7) Cost: $8,635 [I am reporting only the quoted or invoiced test costs. There will other, significant costs, associated with these test reports. In the case of the telescope, we have to give 23-24 samples ($2600) plus spend at least $500 on FedEx costs. I have also omitted the smaller tests, to keep this essay focused. You are welcome to examine the test data linked above.] Pretend & Play Bakery Set: 9 lead in coatings 22 lead in substrate 21 phthalates Cost: $5,350 Let’s Tackle Kindergarten: 5 lead in coatings 30 lead in substrate 5 phthalates Cost: $2,397 Talking Microscope: 6 lead in coatings 20 lead in substrate 41 phthalates Cost: $3,678 Playfoam Creativity Set: 56 lead in substrate and coatings 34 cadmium 31 phthalates Cost: $6,483 Busy Pets: 3 lead in coatings 21 lead in substrate 7 phthalates Cost: $2,114 Jumbo Animals: 24 lead in coatings 22 lead in substrate 12 phthalates Cost: $3,565 Healthy Food Set: 11 lead in coatings 35 lead in substrate 48 phthalates Cost: $5,973 Trail Mix & Match: 12 phthalates Cost: $1,714 Over & Under The Sea Mat: 9 phthalates Cost: $1,130

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CPSIA – Tenenbaum Doesn’t Know What Testing Costs

CPSIA – CPSC, An Award-Winning Agency!

Ever have a bad day and solve the problem by giving yourself an award? World’s Greatest Dad, perhaps

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CPSIA – CPSC, An Award-Winning Agency!

CPSIA – Video Blog on Tracking Labels Guidance

In this video, I analyze the recent CPSC Tracking Labels Guidance to answer the following question: “If I don’t label my products (as provided in the guidance) BUT must be able provide all the information specified in Section 103, how is it possible to do that without labels ?” The guidance, deemed sensitive to the needs of small business, addresses this question. For my take on the new requirements, please watch below.

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CPSIA – Video Blog on Tracking Labels Guidance

CPSIA – Unanswered Tracking Labels Questions ("Clear as Mud")

The recent tracking labels guidance by the CPSC was greeted with relief by some commentators who interpreted it as signaling flexibility and “common sense” implementation of Section 103 of the CPSIA. Is that true

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CPSIA – Unanswered Tracking Labels Questions ("Clear as Mud")

A Quick Guide to What’s Wrong with the CPSIA

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!