GUEST BLOG – Jolie Fay’s Story

I was not sure what all to tell. Narrowing down the story to a blog, or even a short conversation has been a challenge.

Do I mention that we are not “unintended consequences” but rather, “collateral damage”?

Do I bring up the seniors I help who are so old they do chair Tia-chi, who can afford lunch only when they can make it to the senior center, but have made wooden trucks for 40 years?

Do I bring up the fact that with NO notice to this cottage industry we are forced in the middle of the supply chain to test our products because large toy companies were breaking an already existing law?

Too much…too much to tell, so this is what I wrote. Just my story.

In November 2008 I learned about the CPSIA.

I thought that was the beginning of my journey with this law, but I realize now that my journey began when I was seven years old and participating in my first craft show with my mom. I was selling anything I could make, mostly small animals I had made from pom-poms, felt, glue and little googley eyes. Before age 12, I added to my “line” a small army of “pet rocks,” cats cradle kits, quilt patches, purses, and many, many other kids’ crafts.

When planning my family, I decided to start a business that would allow me to stay at home with my children. I started with what I knew, crafty-ness, sewing skills and some of my favorite memories of my childhood, reinvented. One thing lead to another, and before my daughter was a year old I had a business that would eventually help us buy a house in San Francisco.

Time passed, my business grew and so did my family. It was amazing being there to watch both of my daughters take their VERY first steps on their own, to be the one they turned to when they got hurt, to be their mother. I loved being there, and I knew I would not be in that situation without the money from my little on-line business.

We sold our house in San Francisco and moved to Portland, Oregon in March 2008. At the time, my business was strong. My line was growing and investing in my business seemed like the right move. My husband agreed and we invested a large portion of the profits from selling our house into my business.

I bought supplies and began production. When I bought the supplies, what I was making was legal to sell, but in August 2008, unbeknownst to me at the time, my life was taking a U-turn.

By November 2008 we felt the effects of the sluggish economy, but my business was still surviving and I felt optimistic about our future

Then I got the email: “if you make ANY products for kids, this law [CPSIA] affects you!”

I have to admit I ignored the first 20 or so emails, because I could not believe that my little sew-in-my-basement business was being forced into the same regulations as Mattel without any warning. As the days went on, and the number of emails I received grew, I realized my dream was crashing around me.

I called the lab, got the quote and did the math. CPSIA-mandated testing costs for my little product line was over $27,000 for just over $30,000 worth of product. I cannot express the horrible feeling I had when I realized that I had made a mistake that was going to cost my family all of our money. In the business world, companies recover. In my case, I WAS the company and what family can recover from a loss that huge? I was not only losing my investment, but I was also losing my source of income.

With the February 10, 2009 deadline to comply with the new lead standard only weeks away, the panic took over and I was fighting with everything I had to reach someone who would help make this nightmare go away.

I found a group of people nearby who were renting an XRF scanner, and I rented it for 24 hours. I tested every single item, every color way, every button style, every fabric piece, every color and style of trim…I tested in my tiny basement, next to my washer and dryer, for 15 hours. I was driven by a fear that I cannot describe. I needed to know that when I called every person in DC that I could think of, I could be certain that I had a product that was safe in March 2008 and continued to be safe, even though I did not have $27,000 to test my products to prove it.

I would wake up at 5am Portland time, to begin calling everyone imaginable in Washington, DC — any number I could find. I had never been politically active before and had NO IDEA how things worked. I genuinely believed that some Congressman would take my call and realize that a mistake had been made. I would start to tell my story, pacing between my washing machine and computer, crying to these aids who would reply “Thank you for your call. I will pass your message on.” I could just feel the rolling of their eyes and bored posture as I was begging them to let me talk to someone who could help me.

By 8 am, when my girls were up, I would be so emotionally drained and my spirit was crushed. I did this for weeks and it was truly one of the most painful times of my life.

The days passed, the fight went on. I would ask these aides and CPSC staffers “what do I do? Should I just throw it all away?” and their response would be “I cannot tell you what to do.” I was begging for help and they would only give me “I cannot tell you what to do.”.

Eventually the CPSC did issue some rulings that prevented my having to throw all my products in the garbage. However, these rulings were to few and too infrequent. CPSIA is going to doom my business. The testing costs, the paperwork, the liability and for what? Will my products be
any safer? No, instead there will be no products.

I have invested thousands of hours in trying to get the CPSIA changed to allow crafters – young and old – to continue their craft. The time I spent trying to bring common sense to the CPSIA was time I was not investing in my business. I was afraid to let up the fight because I was not seeing anyone else fighting for ME.

Where was my Senator, who told the crowd “folks, we did this for safety”?

Where was the ombudsman to help guide the way at the CPSC? (Surprise! There STILL is not a position at the CPSC to help the crafters, the stay-at-home moms who use skill and time to help feed their kids).

Where were the Congressmen who represent me and the seniors who have made SAFE children’s products for 50 years, and who can barely afford lunch and would NEVER be able to afford testing?

Who is looking out for the children who will learn from their mothers how to nurture their entrepreneurial spirit?

Last July I hit bottom. I had to turn my children over to daycare workers and join the work force just to keep us in our tiny rented house. My little business that helped us buy a home, that kept me at home with my kids to help them learn and grow, was no longer a safe investment of my time.

This is happening all across the county; women just like me, who are making safe kids’ products, are being forced to end their stay-at-home businesses. Mothers who want to obey the law, who are afraid of the consequences of NOT obeying the law, are making the choice to give up their dream to keep their children warm and fed.

We need a law that does not make us criminals. We MUST have a law that does not criminalize the old, young, and poor because they make safe products that they cannot afford to test.

On the second day of after-school care, I went to pick up my 5 year old daughter from school and the “teacher” pulled us aside as we were leaving. She said, “Jane had a tough day today, she did not want to be here. She wanted to be with her mom.” The “teacher” continued, “I am a grandmother and I know how to deal with this, so I took her by the hand and walked her to the mirror and said, ‘Jane, look at your face. Look at how UGLY you look when you cry.’”

I blame every one of the Energy and Commerce legislative staffers for the emotional injury to my daughter that day. She should be home with me, being raised by a mother who believes in the American spirit of hard work, integrity, and honesty.

She should be home with me while I continue my business of making safe children’s products.

She should be home with me, making pet rocks (illegal to sell today) and having fun making pom-pom animals with her mother – like the ones we used to sell at the local Saturday market.

My daughter is the CPSIA casualty of the week.

Blog post written by Jolie Fay, founder of Skipping Hippos clothing (www.skippinghippos.com) in Portland, OR and a
Board Member of the Handmade Toy Alliance

Read more here:
GUEST BLOG – Jolie Fay’s Story

CPSIA – Casualty of the Week for June 1

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 June 1, 2010:

CPSIA RULES! (THOUSANDS OF PAGES OF THEM)

Educational Products Market Overwhelmed by CPSIA-Mandated Testing and Paperwork

American Educational Products LLC (AMEP) is a Fort Collins, Colorado-based company selling classroom teaching aids like flash cards, animal models, globes and relief maps that educators rely on to teach their students. Despite a sterling safety record, AMEP President Michael Warring is worried that the ever-increasing amount of time that his company is spending on compliance with the CPSIA threatens the future of his company.

Warring explained, “We sold 5,600 different SKU’s in 2009 to 2,600 different customers. Approximately 2,000 of these SKUs might be considered ‘children’s products’, meaning that they must be tested by a third party for lead. My 64 employees and I are finding it virtually impossible to manage the scale of this CPSIA-mandated testing. Each SKU takes approximately eight hours a year in compliance and testing administration. This means that 24 of my 64 employees would need to work full-time, year-round just to ensure compliance with CPSIA – even though our supply chain controls effectively manage the risk of lead violations. I cannot afford a 37% increase in employees nor can I force 40 employees to do the work of 64. Neither alternative can be achieved.”

Warring also said his company has lost business due to CPSIA.

“One customer cancelled a $5,000 custom rock order after deciding that rocks were too ‘dangerous’ for a geology lesson because of the CPSIA lead rules and elected to use posters instead,” said Warring. “What caliber of young scientists are we nurturing in our country when we won’t let students touch and feel the textures, densities and hues of naturally-occurring rocks in a classroom? After all, kids pick up rocks outside the classroom every day. Our laws are scaring schools away from common sense choices about how our kids are educated.”

He continued, “Another customer insisted that we use XRF scanning for lead-in-paint, a procedure not approved by the CPSC for compliance testing because XRF tests may produce erroneous results. We showed him independent test results that confirmed that our products were well within the CPSIA lead limits, but our inability to provide XRF testing resulted in the customer canceling orders worth about $35,000 to our company. Confusion reigns supreme – two years after passage of the CPSIA”

Warring fears that the CPSIA’s senseless testing requirements and voluminous paperwork will mean that many of the 5,600 educational products that AMEP produces will disappear from the marketplace.

“As we offer fewer choices to the distributors we serve, our position as a vendor will deteriorate and our very viability in the marketplace could be at risk,” said Warring.

Warring concluded, “I’m not sure how children’s safety and well being is being addressed when their parents’ livelihoods disappear and when their education is being limited to material in printed form. These are two of the many real consequences, intended or otherwise, that CPSIA has imposed on my company, my employees, the vendors we support, our customers, and the children we help to educate.”

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.

Read more here:
CPSIA – Casualty of the Week for June 1

CPSIA – HTA Letter Blasts Imperfect Waxman Amendment (CPSEA)

[Emphasis added. Actual Letter can be viewed here.]

May 12, 2010

To:

The Honorable Bobby Rush
Chairman, Subcommittee on Commerce, Trade and Consumer Protection

The Honorable Ed Whitfield
Ranking Member, Subcommittee on Commerce, Trade and Consumer Protection

The Honorable Henry Waxman
Chairman, Committee on Energy & Commerce

The Honorable Joe Barton
Ranking Member, Committee on Energy & Commerce

Re: The Consumer Product Safety Enhancement Act (CPSEA)

To the Leadership of the House Commerce Committee:

Thank you again for the opportunity to testify before your committee and for your continued attention to the needs of our small businesses. We would like to reiterate our position on the CPSEA and the relief we are seeking for our members.

We have previously endorsed the CPSEA because it is the only opportunity currently available to save small batch manufacturers from extinction after February 10, 2011, when the CPSC’s stay of enforcement of third party testing requirements expires. Under the CPSIA as it currently stands, many of our members are substantially limiting the products that they offer–some foregoing children’s products altogether–while others are laying off employees or limiting their business growth.

We have stated clearly that the CPSEA can and should be improved to reduce unnecessary regulatory burdens on small businesses without compromising safety. The CPSEA as currently written will likely save some of our member businesses. With improvements, however, you can save almost all of them. For the record, we would like to review the improvements we would like you to consider.

First and foremost, we would like the CPSEA to clearly state that small batch manufacturers are exempt from third party testing requirements. While report language to that affect would be helpful, a more explicit exemption within the language of the bill itself would provide more immediate and substantial relief. You can accomplish this by allowing:

* the use of XRF testing as an alternative testing method for lead in paint and lead in substrate

* alternative testing methods for products intended for use in classrooms or for children ages 7-12

* EN-71 testing as an alternative testing method

* CPSC rulemaking to allow for alternative testing methods based on risk analysis

* exemptions for small batch toymakers from ASTM F-963 testing

This language should be in the bill itself, not just in the report language. In the intervening days since our initial endorsement of the CPSEA, we have heard conflicting answers from several different CPSC commissioners as to the commission’s willingness or ability to provide affordable alternative testing methods for small batch manufacturers. If this bill is truly meant to benefit small batch manufacturers, it must be more clear and explicit in the exemptions it provides.

Second, we wish to reiterate our belief that alternative testing methods should be available to all companies. The Small Business Administration defines toy and clothing manufacturers with less than 500 employees as small businesses, which is far in excess of the CPSEA’s $1 million limit. If a revenue limit is used, it should be based only on income generated by the manufacture or importation of children’s products without including other unrelated business income. A manufacturer’s ability to pay for testing any given product is a function of the revenue it generates from that particular product, not the overall size of the company.

Third, we stated publicly during the April 29 hearing that the functional purpose exemption for products exceeding 300ppm/100ppm lead will not benefit our members because of the narrow scope of the exemption and the cost required to obtain it. The CPSC should instead be given authority to make exemptions to specific materials or product categories based on risk analysis. For example, the commission should have the power to exempt brass as a material and children’s saddles or microscopes as a product category. This is the only way in which small businesses would be able to take advantage of the functional purpose exemption.

Fourth, we believe that small batch manufacturers should be entirely exempted from mandatory labeling requirements.

Finally, we hope to settle any confusion regarding our intent in endorsing the CPSEA. We endorsed it as our only available alternative. We truly believe that many of our members will be forced out of business after February 10, 2011 without meaningful, clear reform provided by your committee. We believe that the CPSEA can and should be improved to better target risk and provide more comprehensive relief for our members, who were never the source of unsafe products in the first place.

We remain hopeful that the democratic process can prevail and that a meaningful and bipartisan reform of the CPSIA can be enacted. We urge members of the committee to mark up the CPSEA and allow open discussion within the product safety subcommittee. The CPSIA was a bipartisan bill—its reform should be, too.

You hold the livelihoods of hundreds of small businesses in your hands. Please, make this work.

On behalf of the 435 small business members of the Handmade Toy Alliance, we thank you again for your attention to this important issue.

Respectfully,

The Handmade Toy Alliance

savehandmadetoys@gmail.com
http://www.handmadetoyalliance.org/

Board members:

Cecilia Leibovitz, Craftsbury Kids, VT
Dan Marshall, Peapods Natural Toys, MN
Jill Chuckas, Crafty Baby, CT
Mary Newell, Terrapin Toys, OR
Jolie Fay, Skipping Hippos, OR
Marianne Mullen, Polkadotpatch, VT
Rob Wilson, Challenge & Fun, MA
Randy Hertzler, euroSource, PA
Kate Glynn, A Child’s Garden, MA

Read more here:
CPSIA – HTA Letter Blasts Imperfect Waxman Amendment (CPSEA)

CPSIA – But Who Will Test the Test Lab Testing Testers???

Demonstrating that creative, innovative flair we look for in our regulatory agencies, the CPSC has just announced its discovery of a much-needed new testing protocol, the test lab testing tester. Okay, so you say someone’s been playing with their clacker balls a bit too much, but heck, they gotta know what they’re doing, right?

Embedded deep in the impressively long 160-pager entitled “Proposed Rule: Testing and Labeling Pertaining to Product Certification, April 1, 2010“, the CPSC reveals that there’s trouble in La-La-Land over variances between lab tests performed at different certified labs: “Another comment noted that variations in sample preparation by conformity assessment bodies can and do lead to differing test results. One comment, noting lab-to-lab variations in test results for the same product, suggested that CPSC should require CPSC-recognized third party conformity assessment bodies to conduct blind correlation studies and lab audits.”

Oy vey, what do people EXPECT? The CPSC can’t help out on every niggling problem: “The Commission’s limited resources preclude CPSC from directly conducting verification of the numerous CPSC recognized conformity assessment bodies. Additionally, the activities and requirements for accrediting conformity assessment bodies are outside the scope of this rulemaking.”

Case closed?

Au contraire, Pierre! This CPSC will face down every challenge! They ain’t no teething tiger any more, they are a Lion of Safety now, so they came up with the perfect rule to resolve this dilemma. After all, lest we forget, you CAN’T be too safe! Here’s what they came up with:

“Proposed § 1107.24(a) would state that a manufacturer is responsible for verifying that its children’s products, as tested by a third party conformity assessment body, comply with applicable children’s product safety rules. For purposes of proposed § 1107.24, “verification” would mean testing that demonstrates that the test results from one third party conformity assessment body are consistent with the test results from another third party conformity assessment body for a particular children’s product. Proposed § 1107.24(a) would require a manufacturer to send samples of a previously certified children’s product or a children’s product that previously has been tested periodically pursuant to proposed § 1107.21 to a third party conformity assessment body for verification.

. . . . Proposed § 1107.24(b) would require verification to occur on a reoccurring basis and be conducted at a frequent enough interval to provide a high degree of assurance that the children’s product that had been certified previously continues to comply with the applicable children’s product safety rules or that the periodic test for the children’s product was performed correctly.”

]Emphasis most enthusiastically added.]

This is GENIUS! Thank heavens we have the CPSC to protect us. Who else would have spotted this terrible and threatening gap in our consumer safety network? But having added this new layer of “protection”, aren’t other safety holes now visible? I call on the CPSC to bring out rules clarifying:

• Certification of testing testers;
• Certification of testing tester testing testers (you need those, too);
• Certification of testing tester testing certifiers;
• Rules for tolerable variances among testing labs for each certified test, record keeping on all test results and variances for at least 100 years, and plans of remediation for every conceivable variance for each possible test under all conceivable circumstances;
• Rules for a new agency to check all the work of the CPSC and to reconsider and rewrite every rule they have ever written, plus record keeping and hearings and comment periods for this new agency;

I think the new agency to check the work of the CPSC should be called the Consumer Product Safety Commission Checking Commission for Safety Enhancement and Verification Processes (CPSCCCSEVP), you know, for simplicity. Gotta keep it simple and efficient. That’s my motto!

[For more pleasure reading on this important topic, don't miss the 110-page Staff briefing or the equally riveting 29-page Slide Presentation for the April 15 Commission meeting on the same topic. Happy reading!]

Read more here:
CPSIA – But Who Will Test the Test Lab Testing Testers???

CPSIA – A Quick and Incomplete Analysis of New Draft Waxman Amendment 2.0

With only a few hours to look over the new draft of the Waxman Amendment 2.0 before tomorrow’s meeting, I guess the idea is that we are supposed to drop what we are doing to complete an analysis fire drill. Power trip for the Waxman staffers? Possibly. Still, what choice do we have? I thought I would outline my preliminary comments to contribute to the debate.

It goes without saying that this is entirely my own work without the benefit of discussing it with others similarly situated and without the opportunity to compare notes. It is therefore likely that I have missed something important or made other mistakes. Sorry . . . . This post is also painfully long. Again, given that Mr. Waxman hardly cares about your problems or mine, I have little choice but to post this as one essay. Again, sorry . . . .

a. Modifications to Section 101(b)(2) Exemption Process:

• The idiotic post-exemption warnings provision has been deleted.
• The three-pronged exemption test remains in place, as does the ambiguous and troubling term “practicable”. “Practicable” is a sneaky Waxman approach to providing an escape hatch for big industries with narrow product definitions like ATVs and books. You’re not supposed to know this. Our laws aren’t for the little people anymore.
• The third prong of the exemption test has been clarified from no effect on “public health or safety” to no effect on “the user’s health or safety, taking into account normal and foreseeable use and abuse by all foreseeable users.” This change seems like new belts and suspenders to make it easy to deny an exemption. The Dem zealots want to be sure no one gets an exemption but ATVs and books, wink-wink-nudge-nudge.
• Poor applicants for exemptions are still obliged to wait hungrily by the door of the CPSC for the leavings of rich supplicants. Yes, small business owners who want exemptions like the big guys but can’t afford to pay the big bucks can reuse the big guys’ consultant’s reports provided the evidence is considered non-proprietary. [Whatever that might be.] Nice . . . if someone else has already paid for it and submitted it in an exemption process, and if you have access to it (and have found it), you can use it. Noblesse oblige, I guess. Thank You, Kind Sir. I speak for all the little people . . . . Oddly, this concept reappears in a confusing provision called “Previously Denied Petitions” that only refers to previously denied petitions in its title (I don’t get it).
• In another “how closely are you watching me?” change, the grounds for decision provision now permits the Commission to consider “only” evidence presented by “interested parties”, rather than the evidence presented by the party seeking such exceptions. So if you ever get as far as an exemption hearing, this provision turns it into a town meeting. How would you like it if anyone could enter and participate in your litigation without your consent . . . like your competitors or your business enemies? I have a good idea – why not just write into the law that Rachel Weintraub will be considered a party in interest to every action at the CPSC?
• The Narrowest Scope provision has been modified to clarify that you must not only address each component but also each material. The paranoia you sense in this legislation is just the precautionary principle at work. The staffer-gnomes who have been crafting this legislation are not thinking about how our markets work or should work – they are simply obsessing over how we business people might find loopholes. Of course, it is in the nature of business people to try to avoid laws, we are all so evil. Oh yeah, I forgot . . . .
• The Limitation of Exception provision now is framed in terms of “all foreseeable users” which I can only assume is meant to make the burden of proof higher for supplicants. After all, if you can foresee a so-and-so using the product (I won’t supply the colorful example), then the Commission must limit the exception. No possibility of risk can be tolerated by the precautionary principle folks.

As the provision for exclusions has not changed much, here is my analysis of the original language for your reference.

b. Treatment of Resale Shops by the Waxman Amendment:

• The provision defining a “used children’s product” seems to now mean (a) an actual used children’s product, and (b) new goods donated for a charitable purpose. This would seem to protect resale shops from liability for sale of items violating the lead provisions (but not the phthalates ban, notably) unless the seller or the person who supplied it to the seller knew it was in violation of the lead provisions. If that seems somewhat circular, it is. In this case, the law as drafted encourages resale shops to remain as ignorant as possible. This is Waxman’s “Don’t Ask, Don’t Tell” policy. Nice.
• There has been no clarification about the application of this provision to consignment shops. Do they “obtain” goods for resale if they never take title? Something fun to speculate about!
• In a little-noticed provision, the definition of “seller” includes lenders or donators of used children’s products. Thus, for lending libraries, they will be in the clear if they lend used goods, but will be on the hook if they lend new product. Does it become “used” after one loan, and if so, what does this mean? The legal department in your local children’s library will figure this out. Sure. As to people who donate, the provision is circular again. As best I can figure out, you are not subject to the lead rules (only) if you are donating something used for charitable purposes, but if you give away something new, you are on the hook. At least, that’s how I read it. So the bottom line is – don’t give anything new to a charity, just give them junk. This is what Mr. Waxman wants. And that means this is what Congress wants.

While these changes may be an improvement, they are sadly improvements without much impact. This provision remains convoluted and hard to understand. The definition has numerous exceptions and also avoids giving the same shelter to resale shops for all the other picayune provisions of the law, like the phthalates ban. Frankly, without a clean exemption for this industry, resale stores are all going to avoid this class of goods. The complexity alone will kill this exemption except for the most sophisticated participants in an industry not known for its legal skills or resources. These stores won’t hire lawyers to check their work. They can’t afford it.

This is my original criticism of this provision, which is still applicable.

c. Prospective Application of 100 ppm Lead Limits – this provision was not changed in the new draft.

d. Low Volume Manufacturer “Exceptions”:

• Thank heavens, they changed the term of art for these small fry to Small Batch Manufacturers. This was done at the insistence of the HTA. What a victory! Someone please explain this to me.
• The “In General” provision is basically unchanged, other than the fancy new name for the supposed beneficiaries of this largess. Notably, the last sentence was clarified to make sure no one could contend that Waxman inadvertently gave the Commission the power to grant “alternative testing methodologies” for ANYONE but the small batch guys. There’s so much trust and love flowing here . . . .
• The truly non-existent “relief” of this provision remains EXACTLY the same. Here it is, bask in its wonderfulness: “The Commission . . . may, by regulation, provide alternative testing requirements for covered products manufactured by small batch manufacturers in lieu of those required under subsection (a) or (b). Any such alternative requirements shall provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards. [Emphasis added] Standing ovation? These lucky micro-businesses must meet alternative TESTING methodologies that ASSURE compliance with the standards. In other words, they gotta test. They even added a “savings clause” to forbid any relief here (such as it is) if any foreseeable user might be foreseeably at risk. Some relief.

Notably, the reach of this section has now been limited to “covered products”. This new term, which incorporates a three-prong test (this is the second three-pronger of this amendment so far, but not the last). [See below.] Please NOTE that this new term means that the ONLY relief the CPSC can grant is to these small fry products. A product that exceeds the limits of a “covered product” will NOT enjoy any theoretical testing relief, even if made by a business qualifying for relief overall. Should you care? Well, in my view, if you have to endure the burden of full compliance with one product, you have to build the full infrastructure and bear the related liabilities. Thus, these micro-businesses supposedly being saved here are actually at substantial risk of suffocation if even ONE product sells well. Too bad for them.

The absurd and utterly inappropriate definition of a “low volume manufacturer” has been completely jumbled and incorporates the new concept of “covered products”, too. Let me try to sort out this for you.

- As noted above, only “covered product” enjoy any potential relief under this section. The “covered products” test is a three-prong test: (i) manufactured not more than 5,000 “units” of the product in the prior fiscal year, (ii) had not more than $30,000 in sales of the product in the prior fiscal year, AND (iii) had no more than $500,000 in total sales in the prior fiscal year. [Do you feel vines growing over your brain yet?] Dollars are indexed for inflation. Notably, the definition ONLY applies to the manufacture of these items, NOT importation. Too bad, importers. GOTCHA!

The implication of this definition is that if you grow to over $500,000 in total sales, all exemptions applicable to any of your low volume items goes up in smoke instantly. That last dollar is gonna HURT. You also cannot get relief for any individual product if your sales of THAT item are greater than 5,000 “units” per year or $30,000 in sales. Here’s another compliance tip: don’t grow your business! Too hard? Don’t worry, the other policies of this government should help you meet this goal . . . .

- The definition of a “small batch manufacturer” defines who should be treated with special charity by the CPSC under this marvelous section of the amendment. It’s not going be a long list. Who wants to see another three-prong test?! Okay, break out your calculator so you can figure out if they are referring to you: (a) AT LEAST TWO-THIRDS of “the manufacturer’s products” (I love that term) meets this two-part test: (i) the manufacturer manufactured or imported not more than 5,000 units of the product in the prior CALENDAR year, AND (ii) the manufacturer had not more than $30,000 in sales of the product in the prior CALENDAR year, AND (b) the manufacturer had not more than $500,000 in sales in the prior CALENDAR year.

This is getting fun! Okay, first we need to decide – is it a two-prong test with one prong having two sub-prongs, or is it a three-prong test? This is a rather metaphysical question . . . but I say it’s our third three-prong test of this short amendment. [Imagine how many three-prong tests are in the health care bill.] I welcome your insights on this question.

There are some interesting quirks in the Small Batch Manufacturer definition. First, this provision applies to imported products, but the “covered products” definition does not. Gotcha! What does this mean? Who knows. The head spins . . . . Even better, the definition of “Small Batch Manufacturer” is based on calendar year calculations and the definition of “covered products” is based on fiscal year calculations. Love it. I learn so much from Mr. Congress. Apparently, Congress wants it to work this way because there must be some sort of dangerous loophole for people who have fiscal years which are not the calendar year. Mr. Waxman is onto your game, you desperadoes! There’s no escape!

At least the Waxmanis kept it simple. Good job, guys, it’s artful!

Btw, they added a little provision to make sure that the Commission investigates the structure of your business’ “affiliations”. Clearly, the Commission needs to make SURE they correctly tote up your revenues for this ornate determination. [Little known fact: the CPSC uses clacker balls for this work.] The reach of the Obamist/Waxman government into your private affairs, in ways completely and utterly unrelated to public interest or safety, apparently knows no bounds. Get your files ready, little businesses – the CPSC wants to take a peek. Perhaps check out your tax returns and . . . oops, it appears you took a few deductions that you weren’t entitled to. We can just let our sister agency know, you don’t have to do ANYTHING, we’re just here to help.

Small business people, you should be flipping mad over this pathetic attempt to “help” you. My original criticism of this provision is still largely applicable.

e. Phthalates Ban Exception for Internal Components: This is largely intact from the prior draft although they did add a provision modifying the Commission’s right to adopt the definition of an internal component from the lead accessibility standard. The Commission must now, “as appropriate”, consider whether the component can be placed in the mouth. We are talking about internal components here.

I wish I had a laugh track for my blog . . . .

f. Removal of CPSA Section 6(b) Due Process Rights of Manufacturers: has been eliminated from the draft.

g. Voluntary Recall Standards to be Matched to Mandatory Recalls: has been eliminated from this draft.

h. Imminent Hazard Panic Attacks by the Commission: has been eliminated from this draft.

i. Subpoena Power for Underlings at the CPSC: This provision was trimmed back partially to apply only to physical and documentary evidence. This modest restructuring of this new right does not in any way address the issues I have pointed out in the past (here and here). This new subpoena power is not essential to the operation of the CPSC, regardless of their assertions, and represents a significant degradation of procedural protections that encourage business people to invest. When all trust is destroyed among the regulated community and its safety regulator, who will want to invest? Hello, Congress?

CONCLUSIONS:

The Waxman Amendment has been improved mainly by deletions of several truly awful and duplicitous provisions. Many defective provisions in the original draft survived the revisions. What’s left provides little substantive relief to the unwashed masses, but promises some sub rosa relief to the book industry and ATV’rs without giving the appearance of favoritism. There is little to cheer here for resale shops, small businesses (even micro-businesses, hello HTA, are you there?), education companies, apparel companies, you-name-it.

And many important issues are left completely unaddressed. I have previously provided my most discrete list of CRITICAL missing elements that must be part of any meaningful amendment of the CPSIA:

• Risk Assessment by the CPSC and/or the Commission.
• Changes in age limits for the lead standards and phthalates ban.
• Narrowing of the scope of “Children’s Product” to eliminate many categories of products unthinkingly pulled into this law by its overly broad language.
• True reform to protect small businesses.
• Tracking labels relief.

My full list of needed changes is found here.

More fun to follow tomorrow, I am sure.

Read more here:
CPSIA – A Quick and Incomplete Analysis of New Draft Waxman Amendment 2.0

CPSIA – It’s Raining Paper . . . .

I have previously made the point (again and again) that the paperwork involved in complying or even understanding the CPSIA has escalated to absurd and previously unimaginable levels. When I recently posted my latest video blog, I noted that MY count of the pages of rules implementing the CPSIA was over 1800. [The CPSC has not promulgated a list of these documents and some of them may not even be publicly available, so that's just my count - no one knows the true number.]

Since then, the paper shower has continued unabated. Here are a few new shovel fulls from your CPSC:

Definition of “Children’s Products”: 52 pages

Standard Operating Procedure for Determination of Phthalates: 8 pages

Proposed Rule: Conditions and Requirements for Testing Component Parts of Consumer Products: 69 pages

Draft Notice of Proposed Rule -Publicly Available Consumer Product Safety Information Database: 172 pages

Proposed Rule: Testing and Labeling Pertaining to Product Certification: 160 pages

Staff Briefing Package CPSIA Certification & Testing, April 1, 2010: 110 pages

Total pages: 571

In addition, public meetings of the Commission on Wednesday morning and all day on Thursday this week will feature major topics of great importance to those companies affected by the CPSIA. These will be Must Watch hearings. Hope you aren’t too busy running your business to stop what you are doing and tune in all day.

There cannot be any rational expectation by the CPSC that businesses interested in the development of CPSIA implementation rules could POSSIBLY keep up with this torrent of paper and hearings. The impracticality of participating in this process means that it is a railroad job, plain and simple. It is intentional, too – overwhelming the regulated community is one way to silence the critics.

Despite the absence of any credible evidence that such a massive expansion in safety rules is justified by injury statistics or any form of safety data from marketplace, the CPSC is in the process of gleefully converting the safety rules governing children’s products into something approaching the Internal Revenue Code in complexity. The compliance burden on businesses will be overwhelming – or simply impossible in a practical sense. As important as Ms. Tenenbaum’s instant death rules are, running our operating businesses will take priority for most people.

With this inundation of complexity, the point of capitulation is upon us. Add to this the known risk of mega penalties. Remember, this CPSC has warned businesses not to dare resist it. The consequences of resistance can be interpolated from the Daiso penalty – $2.05 million for recalls of 698 pieces in five recalls of 19 products over two years without a single reported injury. [Imagine what Mattel or RC2 would pay today under this enforcement scheme. I wonder if my calculator has enough digits for that number . . . .] Ms. Tenenbaum has demonstrated that she will have no reluctance to sic the U.S. Attorney on us for our transgressions without regard to actual market impact, striving to impose “a very high hurdle to jump over to ever get back in the import business again”.

This approach to regulation is an irresponsible act by our government and very damaging to the market. It’s naive and shortsighted, but in the “Father Knows Best” world wrought by Mr. Obama, it’s useless to attempt to reason with the regulators. The promised “dialogue” with the regulated community has been exposed as a sham. It’s hard not to conclude that businesses have now been deemed evil by nature. Otherwise, how do you explain the paper blizzard? Sadly, none of this holds any prospect of making kids safer.

I hate the feeling of shouting in a vacuum. I am not sure what will trigger a revolt against this insanity. Does another work assignment of 600 pages anger you . . . yet? The mountain is at about 2500 pages to read now, and there’s more to come. What outrages will have to take place before you resist?

This may be too urgent to wait for November. Think about how you will deal with penalties for complying with rules you have never read, cannot possibly read and may not even understand. This regulator has already acted to put a minor player out of business. Are you next?

It’s time to act with a sense of urgency. Your customers, your employees, your stakeholders are counting on you.

Read more here:
CPSIA – It’s Raining Paper . . . .

CPSIA – Some ICPHSO Humor

After a day at ICPHSO when

• The General Counsel quizzed the audience perhaps ten times about who was tweeting (my spies indicate that three people tweeted from that session, including me), ribbing us (me?) for letting you know what she was saying. [I blogged live from last year's event, which was noted with shock by some participants.]
• The Chairman instructed us not to believe “Internet rumors” and to only believe websites ending in “dot gov”. You know, you can always believe your government!
• The Chairman told us to stop fighting old battles – in other words, give up, guys!
• The Chairman heralded the work of the Center for Environmental Health, one of the most noxious of the consumer group terrorists active in today’s market. Their tactic of extracting coercive settlements under CA Proposition 65 to set precedent and to fund their activities has been well-documented in this space.
• The looming reality of the public database was shoved in our faces (Tenenbaum: It’s time to get prepared). We confronted the realization that we will be forced to treat every consumer report as an emergency simply because of the database, and
• The Chairman pointed to the Toyota feeding frenzy as the model for future regulatory action on “slow” recalls in this era of populist corporation bashing,

where do you think the ICPHSO planners sent everyone on last night’s social event?

To see “Sheer Madness”, of course!

You have to admit, it was a perfect choice.

Read more here:
CPSIA – Some ICPHSO Humor

CPSIA – Playing Footsie with Lead Standards

I have complained in this space from time to time about the recent success of Center for Environmental Health in inducing public officials to recall shoes for lead in their soles and insoles. In that case, CA AG Jerry Brown fell right in line and recalled seven items, including a pair of shoes and a pair of sandals for these frightening infractions. The CPSC, as far as I know, was not consulted – this was State AG enforcement of the CPSIA at its best! Did I mention that Jerry Brown is running for governor again . . . .

Of course, a mania over lead in shoe soles and sandal insoles is kooky. You would hope that the CPSC wouldn’t fall prey to such nonsense. Of course, the insightfully-written CPSIA makes no such distinction in the wording on its lead content restrictions. This is one reason why the footwear folks are so concerned about the law. Still, the CPSC is not so reactive to recall shoes for this reason . . . are they?

Regular readers of this space know the answer already. Here it is, the CPSC saving the world from “dangerous” leather work boots for kids! This public menace was recalled because the “Classic Scuffproof Boots” have a logo stamped on its insole that exceeds the new lead-in-paint standard. Whoa! The notice warns that “Consumers should stop using recalled products immediately unless otherwise instructed” and later advises that “Consumers should immediately take the recalled boots away from children”. The number of scuffproof work boots affected is 21,000 pairs sold for between $50-$70, or between $1-1.5 million in retail value. That’s real money, guys. No doubt there’ll also be a penalty in, say, three years.

Soooo, what are we looking at here? These are children’s leather ankle high work boots with a logo ON THE INSOLE that might violate the lead-in-paint standard. [Personally, I STRONGLY doubt that Timberland uses paint for its insole logos - we believe it's made with an ink, thus not affected by the lead-in-paint standard.] Let me ask you an important question – have you EVER licked the insole of an ankle high boot? If you have, can you please send me a diagram of how you did it? While we’re at it, do you believe a child ANYWHERE has EVER licked the insole of their ankle high leather work boot? Chewed off the yummy logo? Just curious . . . .

Man, are we safe now! Is it a huge stretch to contend that most people would not let their kids consume their scuffproof leather work boots, no matter how tasty? It is my distinct impression that many icky chemicals are used to make leather. That’s a “watch out”, if you ask me.

Furthermore, Timberland is a corporate “good guy”. Their website practically oozes with enviro-friendly policies and social responsibility. In fact, they are famous for their personnel practices and activism. Here, for instance, is a portion of their mission statement:

• Value. Humanity. Humility. Integrity. Excellence. These are the core values that we inject into everything we do, everyday.
• Purpose. Creating positive change in our company, community and environment. Any way you can.

Clearly, the government needs to keep a close eye on these people.

Unfortunately, now that a lunatic law governs the country and CPSC leadership seeks to please a cartoon character Congress that “wants” products like this off the market, embarrassing and demoralizing recalls like this become commonplace. For business people, these irrational recalls only heighten the fear and amplify the lack of trust that now infect the regulatory environment. After all, if the CPSC would stick it to Timberland for this, what would stop them from wreaking similar havoc on you?

Somehow we have to stop this runaway train. If you don’t want your country run like this, you better do something about it.

Read more here:
CPSIA – Playing Footsie with Lead Standards

CPSIA – Consumer Groups are Grasping at Straws

Last week, in their usual pre-Xmas slanderfest, the full range of consumer groups unleashed their annual list of bad and dangerous toy lists on a pandering media. The pickin’s were slim this year, but that didn’t stop them.

I have heard from friends outside the toy industry who expressed horror and disbelief at these widely-publicized attacks. Toy industry insiders are used to it, frankly. Actually, speaking candidly, some of these annual efforts are useful and appreciated. I think that bad products (generally reflecting poor judgment, nothing more venal than that) have been usefully exposed by these groups in the past. However, of late the consumer groups have been obsessed by “toxics” – pushing the notion that toys are poisonous, rather than simply irresponsibly-designed. I think the reason is simple – the media and reactive politicians respond to this accusation, so why give up a “good thing”? You have to wonder if their goal is to simply make toys safer. Their attacks are remain more vicious than in the past and much more pointed.

The consumer group continue to package the idea that consumers do not realize that “no government agency tests toys before they are put on the shelves.” This self-declared “fact” is an essential justification of their “precautionary principle” – that is, we need an activist government approving everything before you get your hands on it. President Obama’s assertion on Late Night with David Letterman that we need a lot more government these days is right in line with the precautionary principle. Others call this movement the Nanny State.

The precautionary principle holds that no risk is too small to address – in advance. Thus, the neurosis underlying the assertion that Americans think the government must be “testing” toys before they are sold is the same as Consumer Union’s David Pittle’s admission in the TSCP hearing (beginning at about 90 minutes in the video) that he is “nervous” when he buys a toy (not sure what or whom to trust), and ergo, his rules for how manufacturers run their businesses must be imposed. Mr. Pittle’s demands seem designed to relieve his anxieties, rather than improve safety. [He might contend that it is one and the same but I disagree.] Inciting terror through various means, the consumer groups place a real emphasis on how consumers FEEL and whether products and their manufacturers have earned consumer confidence (an emotional standard), not whether (objectively or actually), the products are actually safe.

Perhaps your mother told you once that it is hard to control how others feel – you can only control what you do and how you do it. Maybe she should be running Congress . . . .

In any event, the number of offending children’s products uncovered this year by the consumer groups is rather meagre. As previously noted, Center for Environmental Health (CEH) drummed up seven items after six weeks of testing on 250 items. The CEH rogue’s gallery featured NO soluble lead in toys, but did feature one pair of shoes with lead in the soles . . . a pair of sandals with lead in the insole . . . a trinket with a bad connector link . . . a poncho with lead in the vinyl material, etc. And now the PIRGs have joined in the fun. The annual Trouble in Toyland report was issued this week by national PIRG and the equally hyperbolic Illinois PIRG issued its own “Chemical Compliance: Testing for Toxics in Children’s Products” report. [I am only focusing on lead and phthalates in these reports.] The PIRG “bounty”: a zipper “pull” and a yellow cow with lead-in-paint, one piece of lead jewelry, and two toys with phthalates (one an “unidentified” phthalate that might not be illegal, and the other just slightly over the limit). Illinois PIRG found only a small handful of violative products: only six of 87 products tested positive for violative lead levels using XRF guns, winnowing down to three items when tested by an independent lab.

Illinois PIRG failed to find lead or phthalates in the items featured in this TV segment. Unfortunately, that makes bad TV, so the head of Illinois PIRG lowered the standard to create something new to worry about (watch from 1:00 for 30 seconds in the video): “Most of the toys PIRG bought at target came up clean. But three of the toys had small amounts of lead — MUCH LESS THAN the current safety standard but enough for the gun to detect. ‘Really, children shouldn’t be exposed to lead at all,’ said [Brian] Imus.” [Emphasis added]

An implication of the 2009 reports is that the onerous new CPSIA lead standards are simply not tough enough. For instance, PIRG says “Regulations should simply ban lead except at trace amounts (90-100 ppm), whether in paint, coatings or any toys, jewelry or other products for use by children under 12 years old.” Where did this come from? Some ideas:

• They are laying the groundwork for the August 2011 determination by the CPSC about implementing a 100 ppm lead limit. To do so, the agency must conclude that it is “technologically feasible” as defined in the CPSIA.
• The groups are desperate to make their work seem relevant and constructive.
• They are confused or want to confuse consumers about HOW lead harms children, ignoring, covering up or blurring important distinctions between bio-available lead and inaccessible lead.

The latter point is so critical to understand. Lead can only harm a child if it gets into the bloodstream. Notably, lead is present throughout the environment (lead is found in at least 40 ppm concentrations in dirt, unless you are referring to the Obama’s vegetable garden which has lead in concentrations of 93 ppm). Lead is in our food, drink and air, so kids consume it all the time. Apparently, lead in certain amounts must not be a problem, or else we would all have suffered reduced IQs (no comment in my case). The lead that should concern us is soluble lead, as in lead-in-paint and in jewelry, because it can easily get into the bloodstream. In any event, PIRG knows that toys and children’s products aren’t the problem. In their report, they cite a 2005 article (“Lead Exposure in Children: Prevention, Detection and Management,” Pediatrics, 1036-1048 (October 2005)) which makes clear that the problem with childhood blood lead levels is in lead-in-paint used in housing. There is NO mention anywhere that I can find where academic studies blame national blood lead levels on toys, etc., and likewise, I find all credit for lowering blood lead levels is given to efforts to rid the world of lead-in-paint in housing. Period.

So why does PIRG and its brethren continue to flog the notion that lead in all manifestations is dangerous? And why are they now saying that ANY lead, even below the draconian levels in the current law, is dangerous to children’s health?

Questions worth pondering.

Finally, not content to blur the lines on lead, PIRG also recommends that the phthalates ban be extended: “CPSC should ban phthalates in toys and other products intended for children under five and work with the Federal Trade Commission to ensure that toys labeled ‘phthalate-free’ do not contain phthalates.” So apparently PIRG wants ALL phthalates eliminated from toys, no matter the absence of science behind their new manic fear. Even more importantly, they apparently concede that the blanket ban on six phthalates for toys intended for children 6-12 is excessive and damaging. At least that’s a positive contribution!

So another Xmas toy bashing seems to be behind us. The pseudo-science underlying the consumer groups’ attacks on children’s products was again exposed, as was the basic integrity and safety of the marketplace. Does that do us any good? That remains to be seen. Perhaps the leadership at the CPSC will tire of this relentless war (which is eroding their professional reputations) and do something to get Congress to fix a truly defective and damaging law. Let’s hope so.

Read more here:
CPSIA – Consumer Groups are Grasping at Straws

« Previous Page