Back on the home front, we are not worried about radioactivity from Japan. Harmless! Rather than focusing on the impact of nuclear material showering down on us from the heavens, into our food, our water, our produce, onto our skin and breathed into our lungs every moment of the day now, those valiant defenders of children, the CPSC, will be holding a highly-publicized hearing on pool drains – because a newspaper currently in bankruptcy hired an uncertified lab to perform tests on drain covers that have not apparently been involved in injuries. This is a TOP priority of our nurturing government. Who says we don’t need more government? Come on, baby, give me MORE!

Of course, I make light – after all, I am a blogger, I must do so. The real scourge for children, as anyone can tell you, is not airborne radioactive material, but lead – which is why our CPSC has worked so tirelessly for three years to identify dangerous items like ballpoint pens, rhinestones, brass bushings on toy car wheels, ATV engine blocks, bicycle frames and bicycle vinyl seats, branding them as unsuitable for sale (or exposure) to children under 13 years of age.

Of course, there’s plenty of legal mumbo-jumbo to consider, provisos and the like. Having carefully sorted out the hazard, our CPSC has determined that pens are only dangerous if they are intended for use by children. [Ballpoint pens have a tiny brass ball at the ink end, and brass contains 2-4% lead by weight. I bet you're scared now!] The ACTUAL USE of pens is not the health concern – what matters instead is what the manufacturer intended – you know, their state of mind at the time of sale. Hasn’t your mother ever told you that it’s what’s in your heart that REALLY matters? The CPSC took this on board. After much cogitating, they determined that it’s not a problem if 100% of children use ballpoint pens – no, it’s only a problem if kids use a ballpoint pen INTENDED for use by children. THAT’S unacceptably dangerous and big penalties and recalls can result if you step over the line. They must have figured out that the state of mind of the manufacturer changes the physical character of the pen – pens literally take on the power to harm when a manufacturer thinks about selling them to kids!

It’s a good thing we employ so many scientists at the CPSC. I hate to think about the crazy rules they’d come up with if they didn’t have such a solid grounding in real science. Of course, they also employ many lawyers . . . . Could it be the lawyers???

Of course, I jest. The CPSC is certainly right – how could such an august organization err? And experts have told them they’re right – that’s a double-check right there. At the February 16th hearing on the 100 ppm lead standard, Don Mays from Consumers Union, a REAL expert, kicked off his testimony by reminding the Commission that there is NO safe level for lead. [I did not provide you with a clip of those magical words, but you can dig them up yourself if you don't believe me.] Mr. Mays was joined on the consumer group panel by another RENOWNED expert, Dr. Dana Best of the American Academy of Pediatrics. Mr. Mays and Dr. Best had a revealing dialogue with Commissioner Anne Northup on the horrors of brass instruments. You will see that the CPSC has no choice, the risks to children are so severe. Here’s a transcript (you can see the video here):

AN: “Do you think that children that are in the 3rd and 4th grade should be prohibited from playing brass instruments considering the lead content of that brass?”

DM: “I think children should not be exposed to lead unnecessarily. And children in the 3rd and 4th grade, I have a daughter in the 4th grade and I certainly wouldn’t want her to be exposed to lead if that was coming from an instrument.”

AN: “So you would not let her play, like, the horn.”

DM: “I would be very concerned about that, that’s for sure. She does not play the horn, she plays the violin. Ha Ha Ha.”

DB: “The mouthpieces on most of those instruments are not brass.”

AN: “Yes, exactly. But they’re holding them. They sling them around and hold them. . . . They could practice at night and play it every day during class. That would mean an every day exposure. I just wondered if that would alarm you.”

DB: “Uh, it would alarm me that children were exposed unnecessarily to lead. And that’s again the responsibility of the CPSC to determine, to look at the studies on individual cases. I’m here to talk about the harms of lead to children and how they need to be protected.”

Frankly, I can’t remember if Ms. Northup started banging her head against a wall at that point or not . . . .

With this kind of counsel, you can rest assured that the CPSC has its priorities straight. Don Mays and Dana Best are on the case! Just PLEASE don’t mention bicycle licking . . . .

Read more here:
CPSIA – Good News and Bad News (Update No. 1)

Michelle Rena Jones, the unemployed person featured in the video is a victim of our economic downturn, and of Michigan’s long dependence on the auto industry. She seems intelligent and highly employable. . . yet she is the part of the long term unemployed. She’s not alone by a long shot.

We employ about 150 people in our educational toy business. We consider ourselves fortunate to be able to provide these jobs, given the terrible recession, awful State funding prospects, and most importantly, the overhang of the fatal CPSIA. When I thought about Ms. Jones, I asked myself why we aren’t hiring right now.

Frankly, our business reflects the punk economy you hear about on TV. Right now, we lack the confidence that we can safely add people, or even more importantly, that we will see the sales volume to support new people. This closes most doors to new jobs at our shop.

Then there’s our ole’ pal, the CPSIA. What impact does the CPSIA have on our hiring mentality? Hey, I’m the guy who figured out that this government intends to jam me with a requirement to spend $15 million per annum on testing – how do you think it makes me feel? I assume smaller companies, including the crafters comprising the HTA, realize that despite the various promises and wiped-away tears at the CPSC, the new rules offer scant relief to the small fry. The rules mean business death – and that ain’t a job program, kids. If we’re toast, so are other small businesses. Actually, if we’re toast, everyone’s toast.

Right now, I cannot abide investing in our business. Expansion is a joke since the federal government has totally abandoned us. Trust has been obliterated, shredded, stomped on. Congress is completely deaf and the CPSC doesn’t give a darn – which is why after two years of work and “dialogue”, they produced the drivel we were to comment on last week. [For a candid assessment of those rules, please see my comment to Anne Northup's blogpost of August 11.]

Do you think any rational business manager would hire anyone while fearing that costs far exceeding his annual profits are about to be imposed? Forget it – business people suffering under the crushing burden of the wave of Obama hyper-regulation are thinking of how to survive. Bucking the rules won’t work, either – don’t forget that the agency has the power to press felony charges against anyone who knowingly breaks this law. 2011 is Tenenbaum’s “year of enforcement”.

Can’t wait. . . .

Ms. Jones won’t be likely getting a job from a children’s product company anytime soon.

Apparently, some people still wonder why voters are angry and why the Dems are being blamed. If anyone seriously can’t figure that one out, they’re as deaf as the stone deaf members of Congress we will be voting out of office . . . soon.

Very soon.

Read more here:
CPSIA – Jobs, the CPSIA and me

In response to questions by Ranking Member Whitfield, Steve Levy discussed lead in zippers at about the 47 minute mark in the testimony video. He noted that zippers are made of five to seven components, one of which has been found to have trace lead amounts in excess of current limits. The component in question is not accessible (it’s sewn into the crotch of the pant) but since the CPSC can reach the component with a probe, it is considered violative. Fabric is not considered a “barrier” to access under CPSC rules. Bummer, that’s thousands of pairs of pants into the garbage.

Self-appointed “Safety Czarina” Rachel Weintraub was quick to object to the horrors of Mr. Levy’s jeans: “The problem is, unfortunately, that children mouth zippers all the time. You know I have three young children. My oldest child who is almost six, he mouths zippers as well. . . . The problem is that children interact with clothing in dynamic ways.” This Rachel-speak is the version of “common sense” that imbues the CPSIA. Perhaps you recognized the valuable insights.

Whoa! Children are so “dynamic” with their clothes, this little zipper could be zapping IQ points every day. Wow. I am quite a worrier as you know, so I have been fretting about zippers almost non-stop for a month. After all, we clothed our children in pants with zippers since they were born (many years ago). I can’t detect any missing IQ points in my kids, but of course, I am not nearly as smart as Rachel Weintraub or the other safety zealots perhaps as a result of my wearing jeans to this very day. Still, I could not ignore Rachel’s serious warning but needed to better understand the danger.

So we asked a four-year-old volunteer to suck on his jeans zipper. Here’s what happened. Don’t worry, no IQ points were killed or harmed in the making of this video.

WARNING: The following video contains dramatic footage of a four-year-old attempting to suck on his jeans zipper. Such graphic footage may not be appropriate for everyone. Please think carefully about watching the video if you are a member of a consumer group.

Read more here:
CPSIA – Fear of Zippers

1. Rosario Palmieri, Vice President for Infrastructure, Legal, and Regulatory Policy, National Association of Manufacturers
2. Paul Vitrano, General Counsel, Motorcycle Industry Council
3. Jim Gibbons, President and Chief Executive Officer, Goodwill Industries International
4. Dan Marshall, Handmade Toy Alliance
5. Rachel Weintraub, Director of Product Safety and Senior Counsel, Consumer Federation of America
6. Steve Levy, American Apparel and Footwear Association

The hearing today was apparently available only by audio feed. That is unfortunate because it was good theater, you would have enjoyed it. I don’t know if the video will make an appearance (ever) but when we get links to whatever media is available, I will post it for you.

Read more here:
CPSIA – Today’s Hearing Testimony

Read more here:
CPSIA – The Text of Inez Tenenbaum’s Keynote Speech at ICPHSO

• 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.

Read more here:
CPSIA – ICPHSO Update on Public Database

[Thank you, Jennifer.]

Read more here:
CPSIA – Let the SUNSHINE In!

I was thinking of that phase today as I was pondering the astounding mental gymnastics employed by Chairman Inez Tenenbaum and Commissioner Bob Adler to justify keeping private the Commissioners’ debate over the agency’s recommendations to change the CPSIA until the report is delivered to Congress. Tenenbaum and Adler both asserted yesterday that the private deliberations currently going on were more than sufficient to create the necessary “vigorous debate” all of us Americans hope would occur on a five-person Commission.

You are probably scratching your head. What’s the big deal about the Commissioners sitting in one room and discussing an important issue? Well, there’s a legal problem here: the Government in the Sunshine Act prohibits meetings of more than two Commissioners without announcing the meeting publicly and making it available to the public. [You owe C-SPAN to this law.] Arguably, three Commissioners can’t take a taxi together or gather around the water cooler to resolve issues relating to the Cubs Spring Training line-up without an Internet camera firing away.

Here’s some background on the Sunshine Act:

“The Government in the Sunshine Act was passed by the Congress of the United States in 1976. It required for the first time that all multithreaded federal agencies (meaning those which have units that work independent of each other) hold their meetings regularly in public session. The bill explicitly defined meetings as essentially any gathering, formal or informal, of agency members, stretching so far as to include conference calls.

This bill was conceived and passed in the wake of the Watergate scandal, when American mistrust of government was running very high. The government responded by creating various committees to open the meetings of the government, but without a legal backbone to stand on, these groups were wholly ineffective. After some pressure from the public, the act was passed in order to provide a legal backbone for the opening of meeting records to the public.”

So the Commissioners are not allowed to meet as a group unless you (the general public) are invited. As the above link attests, this means Commissioners may be constrained in what they choose to say – because you are peering in. Mr. Adler noted this issue yesterday and also expressed his frustration that as soon as he says something in a public meeting, “it’s all over the blogosphere”. You know, like in this column. Aside from the fact that the Sunshine Act is MEANT to facilitate precisely that, it also fosters accountability. I believe these same concepts underlie the Freedom of Speech, something we are all dependent on.

Ms. Nord pointed out that the purpose of a five-person Commission is to meet and work as a group. I would note (the obvious) that the debate proposed by Ms. Northup would occur AFTER all the private deliberations, and thus might occur at a very productive time. Whatever, Mr. Adler said he was satisfied with the current process, notwithstanding Ms. Northup’s point that if meetings involved more than two Commissioners or were exposed to the light of day, errors might get corrected.

Errors – that’s an interesting point, isn’t it? Correcting erroneous information, probably a good thing, right? Bad information could lead to bad decisions. . . .

This leads us back to “bad optics”. As you may recall, the Commission held a hearing on November 4th to decide the fate of Learning Curve and its famous brass bushings. Despite conceding that the brass bushings were perfectly safe, Mr. Adler voted against the exemption petition. Along the way (at about 25:00 in the video of the hearing), Mr. Adler launched into an unprompted and rather condescending bashing of Learning Curve, accusing them of “bad optics”. Why did he do this? As I explained in a blogpost on November 5, Mr. Adler had received erroneous information about the company’s sales practices from a member of another Commissioner’s staff. Taking this information as fact, he gratuitously offered the company some coaching on managing appearances in Washington: “If I had to give any advice to [Learning Curve] on ‘optics’, I don’t think it’s such a good idea to come in and say ‘We admit we’re breaking the law, we’d like an exclusion but oh, by the way, we’re going to continue selling this product during the pendency of the proceeding.’ I would urge them at least as a matter of courtesy to withhold sale and distribution during the pendency of this proceeding.” [Emphasis added] Of course, Learning Curve never said any of this.

You can imagine how Learning Curve must have felt about this – they were later to get whacked with a massive penalty for lead-in-paint, and those negotiations must have been going on at that very moment. When I wrote about this on November 4, Learning Curve’s lawyer read my blog and contacted Mr. Adler, who then urgently called me (as I sat down to dinner while on vacation) to ask that I publish his retraction right away. You will find the retraction in the November 5 blogpost above and on the CPSC website.

Presumably this kind of experience leaves scars but now two months later, Mr. Adler appears to have forgotten it all. In early November, he was left exposed and embarrassed by erroneous information passed along in a private meeting. He was not protected by checks-and-balances because the Commissioners are unable to meet in groups and as a result, laid an egg in a very important hearing. To judge by the urgency of his appeal in November (and his remarks in yesterday’s meeting), Mr. Adler does not like to be wrong nor be exposed as wrong. YET he now defends the very system that caused his own demise.

“Bad optics”, indeed. Mr. Adler, what is the message here?

Read more here:
CPSIA – "Bad Optics" or Did Bob Adler Actually Learn His Lesson?

• Our companies are members of the Toy Industry Association (TIA).
• We are on the record as opposing the Toy Safety Certification Program (TSCP).
• The dues of TIA members paid (and continue to pay) for the development of the TSCP, as well as the salaries and bonuses of the representatives mentioned below.
• The “15 month rule” will soon be released by the CPSC (on or before November 14). It will address, among other things, testing frequency and sample sizes for testing, and is expected to include the so-called component testing rule.

Did any of you watch the lengthy TSCP hearing (video link and text link) at the CPSC on October 14? This hearing was apparently jointly requested by the TIA, Consumers Union (CU) and Consumer Federation of America (CFA). Interesting bedfellows, huh? This hearing provided much to reflect upon. In this post, I will address the issues presented by the TIA’s program and the TIA’s authorship from a small business perspective. I will return to the consumer groups later.

[Some of my readers may be from outside the toy industry and may think "This does not apply to me!" Please bear with me and read on. This may not be your problem TODAY, but it is a sign of things to come.]

TSCP Basics:

The TSCP is a complicated initiative that is difficult to explain succinctly. Here is the document defining the TSCP. You can access the TSCP website here. While I will attempt to summarize it here, you should rely instead on the definitive documents published by the TIA.

The TSCP is a program designed by the TIA to ensure that toy companies comply with law. As Elizabeth Borrelli (Executive Director, TSCP) puts it: “TSCP is a conformity assessment system. It is not a testing program but a comprehensive, effective and efficient system to verify that toy manufacturers have satisfied requirements of the CPSIA (and retailers) and that their toys confirm to applicable safety standards.” The TIA says that the TSCP is a “work in progress”.

The TSCP goes far beyond the requirements of the CPSIA. [The TIA acknowledged this repeatedly at the hearing. For instance, see the video at 134:30 and 149:30.] It is also a “voluntary” program, not a requirement of law. The TIA wants to foster broad acceptance of its initiative. They presented it to the CPSC for the agency’s endorsement. Carter Keithley, President of the TIA, called the need for CPSC support “absolutely crucial”. [Also, see the video at 135:15.] According to the TSCP specifications, the program includes: “1) hazard analysis andor risk assessment for toy product design, 2) factory process control audits and 3) production sample testing to validate that the factory is producing, at the time of sampling, toys that meet U.S. safety standards. These three elements will be verified or audited by accredited certification bodies.”

A few details about the TSCP:

• Factory Ratings – There are three levels of factory compliance under the TSCP: Tier 3 (non-ISO 9001 factories), Tier 2 (ISO 9001 factories) and Tier 1 (ISO-9001 factories that have met unspecified additional criteria to be established by the TSCP). Mass market factories are highly likely to be Tier 1, and small fry factories are likely to be Tier 3 or Tier 2. The terms below, according to the TIA, are designed to provide an “incentive” for non-Tier 1 factories to raise their compliance to Tier 1 standards. [Too bad for you if you and your factory don't want to incur this expense.]
• Hazard assessment – This pre-production analysis must prepared by or under the supervision of a responsible officer of the company on a product-by-product basis and must be attested to in writing. [Remember this.]
• Testing Sample Sizes - Under 3′s: not less than 18 pieces; over 3′s: not less than 12 pieces; big or expensive items: not less than 3 pieces; under 1000 pieces sold per year: sample size TBD; minimum production run: 500-1000 pcs (whatever this means).
• Sampling procedure – Tier 3 – need outsider to select all samples; Tier 2 – outsider picks samples randomly 4-6 times per year; Tier 1 – The factories select samples themselves.
• Testing frequency – Tier 1: greater of once a year or every million pieces, plus one extra heavy metals test annually (Max – never more than four times a year); Tier 2: greater of twice-a-year or every 500,000 pcs. (Max – monthly); Tier 3: greater of quarterly or every 150,000 pcs. (Max – every other week). [You read that right.]
• Security – Samples must have special seals to avoid “adulteration”

The TIA insists that the TSCP was designed with small business in mind, has been vetted by small business interests and has been applauded by small businesses.

What Happened at the Hearing:

The TIA spent a great deal of time explaining the terms of the TSCP. The consumer groups spent their time explaining why this program that goes far beyond the law ISN’T ENOUGH. The CPSC Commission asked a lot of questions and spent a bit too much energy (in my view) complimenting the TIA on their work. One Commissioner (Anne Northrup) pushed back with probing questions about TSCP economics and the intiative’s impact on small business (see the video at 78:49 for about 15 minutes and later at 146:35).

What Does the TSCP Mean for Small Business?

The TSCP, if adopted, would be catastrophic for small toy companies or companies making toys with factories catering to the specialty market (rather than the mass market). Although the TIA denies this point (explicitly), the TSCP significantly favors mass market companies in an almost shameless way. Consider, for instance, the cost of participation in the TSCP. Rick Locker, outside counsel to the TIA, talked about a cost of $65 per item to enter the program. [He noted that for this $65, toy companies "now have $2 million of technology available to them" (123:48). Hey, TIA Members, do you realize what Mr. Locker means? The website they created cost $2 million. That's some fancy website they built with your money.] Upon questioning by Ms. Northrup, none of the TIA spokespeople would admit or guess at the overall cost to participate in the program (84:00 – and check out Northrup’s reaction at 85:15).

What might those costs be? Well, we know it costs $65 per item simply to key the product into the website. Then there’s the cost of the rating of the factory. [The TIA insists that this cost will not be borne by importers but instead by the factory. See video at 150:50. Apparently, this overhead is not passed along to the factory's customers, unlike all other factory overhead.] What might this cost? The TIA provided no estimates. I believe the one-time cost of becoming ISO 9001 is estimated at tens of thousands of dollars from a “standing start”. Likewise, the comparable compliance process with ICTI-CARE (Toy industry Code of Conduct) ain’t cheap. Figure TSCP ratings to cost thousands, and possibly much more, depending on the actions required to make the transition to the new TSCP standards. Then there’s the cost of regular audits and re-certifications. Many of the new requirements will likely lead to on-going, incremental administrative expenses at the factories, suggesting that product costs will float upward on a go-forward basis under the TSCP.

Finally, the TSCP costs will include all the usual safety tests required for each participating item, plus additional testing and processes. I have previously posted typical safety test costs in this space. [Rick Locker cited a cost of $300 per phthalate test in his testimony, as a point of reference.] INCREDIBLY, by publishing the TSCP terms, the TIA has apparently conceded that safety testing might be necessary or desirable multiple times per year. Testing frequency has NEVER been regulated by the U.S. government previously but will be addressed by the “15 month rule” shortly. I believe the TIA’s actions here will provide cover for the CPSC to impose similar testing requirements, despite the obvious market interference. How easy will it be for me, as an industry participant, to argue against testing frequencies put forth by my own trade association? Surely they are looking out for my best interests and would only suggest what’s reasonable and necessary – RIGHT?! Ummm, let me get back to you on that . . . .

Taking all of the above into account, I personally think the per-item cost to “pass” TSCP will be in the many thousands of dollars per item per year. For illustration purposes, however, I think we can confidently use a cost of $5,000 per item (all-in, blended). [Yes, I am predicting a blended cost of $5,000 per item to get this coveted certificate. Quite affordable . . . .]

How would a $5,000 TSCP cost affect you versus Big Toy? To answer this question, we must make some reasonable assumptions. For Big Toy, I am going to assume annual production of 1 million units of a hypothetical toy at a Tier 1 factory. For you, I am going to assume production runs of various sizes, all at a Tier 3 factory (which means you must test each time you produce, since you are unlikely to produce more often than twice-a-month!). For both you and Big Toy, I am going to assume a FOB factory cost of $5.00 per unit.

Here are the numbers:

Big Toy:

• COGS: $5.00
• TSCP: $5,000
• Production Size: 1,000,000 per run (or per year, doesn’t matter under Tier 1 rules)
• Cost per unit for testing: $5,000 divided by 1,000,000 ($.005, rounded to one penny)
• New blended cost, including testing: $5.01, or a cost increase of 0.1% – NOT BAD FOR BIG TOY!

You:

• COGS: $5.00
• TSCP: $5,000
• Production Size: Various run sizes illustrated below (as a Tier 3 factory, you will test each lot)
• Cost per unit for testing: 1,000 pcs – $5.00 per unit; 2500 pcs – $2.00 per unit; 5,000 pcs – $1.00 per unit; 25,000 pcs – $.20 per unit
• New blended cost, including testing: 1,000 pcs – $10.00 (a cost increase of 100%); 2,500 pcs – $7.00 per unit (40% increase), 5,000 pcs – $6.00 (20% increase); 25,000 pcs – $5.20 per unit (4% increase).

Call me crazy, but I think this is rather favorable to Big Toy. Let’s see, a cost increase of 0.1% versus a cost increase of 4-100%, which is better? Notably, for importers that sell to dealers, these cost increases are MULTIPLIED at retail, only compounding the competitive problem. The TSCP-induced gulf between specialty and mass markets costs will massacre specialty market toys. MASSACRE.

There is simply NO WAY that this program was vetted in any meaningful way by small business. If you were one of the small business reviewers, please announce yourself to my readers by commenting on this post (with name, email and phone number). Let’s have a debate!

There are other factors here that favor Big Toy, such as TSCP sampling methods and sample sizes which will punish small toy companies in more than one way, and TSCP’s required full traceability of components (also found in the RILA-BRC standards).

Even the liability risks under the TSCP favor Big Toy which can afford to provide expensive lawyers to back-up company officers. Notably, the TSCP requires a written personal attestation by a senior company officer of the TSCP product hazard assessment. Do you want to sign this little piece of paper and take on some serious personal liability? If that sounds really good to you, please consider the remarks of Chuck Rogers, Senior Technical Director for the TSCP, at the hearing (139:28): “. . . under CPSIA, when that company official signs that attestation, and it becomes part of what is required to get a safety mark [under the TSCP], I can tell you company officials I have talked to take that very, very seriously and they’re going to be extremely cautious and prudent before they sign that. AND IF SOMEONE DOES SIGN AN IMPROPER ATTESTATION, AND THAT PRODUCT IS LATER FOUND TO HAVE A SIGNIFICANT DEFECT, YOU KNOW, IT WOULD BE WITHIN THE COMMISSION’S PURVIEW, I SUSPECT, TO ASK FOR THAT ATTESTATION.” [Emphasis added.] So, in other words, the TIA is trying to sell this program to the CPSC as a source of evidence to be used against its members and its industry. Love it! Where do I sign up?

A Few More Hearing Highlights:

- Ms. Tenenbaum asked about counterfeit certificates. The continuing interest of the CPSC in the “switcheroo” and other nefarious acts mystifies me. What is the basis for treating me and all other members of our industry as scumbag cheaters? Why is this kind of question even posed? Of course, the TIA only feeds these suspicions by specifying tamper-proof seals on samples. Why would such a thing be necessary, other than a conviction that toy companies are such creeps that consumers and the government can’t only trust them? How often does this kind of fraud happen, and if the CPSC knows about it, why haven’t they acted decisively against the bad guys? Your guess is as good as mine.

- The hearing featured several TIA assertions that small businesses will be so, so grateful for the TSCP. The most surreal sell job was by Chuck Rogers, who illustrated virtually every remark with anecdotes from his days at Sunbeam and Wal-Mart. Very relevant to this topic. . . . Rick Locker twice gave detailed explanations of how small businesses will save money with the TSCP (at 77:30 emphasizing reduced record keeping and at 87:50 emphasizing safety test cost savings). Mr. Locker seemed to confuse the cost of factory audits with the cost of safety tests under the CPSIA – he used an example of 20 customers requiring 20 different tests, thereby multipying testing costs 20x. This scenario makes no sense to me since only certain specific safety tests are required to comply with the CPSA, as amended. You don’t need a different safety test report for each customer – but you might need a different audit report for each mass market customer. Factory audits, notably, are a mass market phenomena, and typically confront small businesses only when dealing with mass market customers.

- The TSCP is good news for you, according to Elizabeth Borrelli (90:40): “If [the TSCP] was significantly additive [to costs], then our membership and our Board wouldn’t support us moving forward with it, frankly.” Feel better yet?

Final Thoughts:

The astounding TSCP initiative crafted by the TIA is a BUSINESS. The TIA, in proposing it, is going into business in competition with certain of its members. This move is troubling for a trade association. In addition, the TSCP adds significantly to the burden of the already excessively burdensome CPSIA. To promote this change to a regulator seemingly predisposed to treat our industry harshly is reckless and shortsighted. It is known, however, that certain toy companies are already planning to take these compliance steps and more. [In response to a question by Commissioner Adler, Hasbro's representative at the hearing confirmed that Hasbro will exceed the TSCP requirements.] Was the TIA acting with the notion that what’s good for Big Toy is good for everyone else? Amazingly, this disruptive program is clearly favorable to only a small handful of TIA members and seemingly disadvantageous to a far larger number of toy companies. [I don't put much stock in the hand waving by TIA representatives at the hearing - show me the detailed analysis proving that this initiative saves money for any small business.] Given the heavy presence of mass market companies behind the development of this program, the mass market benefits and focus come as no surprise (to me).

It is worth noting one more full disclosure item: Earlier this year, I asked the TIA to help defray our advocacy expenses in opposition to the CPSIA. Despite their massive lobbying budget, they turned me down for several reasons. In a remarkable phone call, they explained to me that, among other things, (a) the TIA would not contribute to the expenses of the Alliance for Children’s Product Safety unless I would allow them to exercise control over its activities, and (b) they believe the law would never be changed and preferred to channel the TIA’s “limited” resources into efforts to live with the law. [There is obviously a gulf between my views and theirs.] In any event, whether it is cause or effect, the TSCP seems to have attracted a multi-million dollar investment by the TIA and essentially it appears that the TIA burned the bridges behind it – promoting the TSCP now is a primary focus of the TIA.

For those TIA members who have gotten this far in this long post, you may want to ask a few questions of TIA officers and board members.

Read more here:
CPSIA – The TIA Just Wants to HELP You!