Thursday, February 12, 2009

CPSIA - Information Overload

Is it just me (okay, it's probably just me), or are we being overwhelmed with critical information and rulings on a daily basis, to the point where it is impossible on a practical basis to even READ them? I have noticed my hours of operation becoming more and more odd (check out the hours that I post my blogs, keeping in mind that I live in Chicago and not by nature nocturnal) and as I attempt to keep abreast of developments (impossible) and do my day job (what day job?), I fall further and further behind. As anyone who knows me will attest, I am able to manage a fairly robust workload - but this is simply ridiculous, especially if you consider the absolutely critical nature of the challenge.

This has been on my mind increasingly in recent days as the deluge of releases from the CPSC cascade over my inbox. There are critical rules I have not read that directly affect our business and this effort. I am running out of hours. . . .

Then I read an article from a few ago on the BNA Product Safety & Liability Reporter by Ellen Byerrum in the Jan. 26 (?) issue. Ms. Byerrum writes:

"In any case, 2009 promises to be a year of intense activity at the commission, as the CPSIA's demand for regulatory action far outpaces CPSC previous years' standards output. The new law will significantly affect the regulated community, and products available to consumers, in 2009 and in years to come.

'In the agency's history we've issued 35 or 40 final product safety rules--in a 30-year history,' CPSC Acting Chairman Nancy A. Nord told BNA. Before Congress took aim at product safety, there were 13 ongoing product safety rulemakings.

'That was more than we ever had in our agency's history,' Nord said, 'so we were very, very busy pushing forward on a pretty aggressive safety agenda.'

The new law requires CPSC to promulgate about 40 rulemakings over the next several years. In 2009 alone, CPSC expects to work on close to two dozen rulemakings, a number that could increase, according to commission officials."

I had a sense of this. . . .

As if Ms. Nord's observations about rulemaking were not alarming enough, she continues: “I cannot overstate the concern I feel about the agency's ability to implement this law--given our resource constraints--in a way that both advances safety and does not result in regulations that are not well thought through.” I share that concern. . . .

[We will post this article at www.learningresources.com/CPSIA shortly, if you want to read it.]

I have long railed against the complexity of the CPSIA and the practical issues posed by the design of the law. The overload of simultaneous rulemaking processes is part of our practical disenfranchisement by the design of this law. The volume of events is so great that we cannot, as a practical matter, participate. For instance, I have not submitted a comment letter to the CPSC since the request for comments on penalties in mid-December. You can probably safely assume I want to submit comment letters in every rulemarking process under the CPSIA. By running so many rulemaking processes at once, I am excluded because I cannot keep up. This is a serious issue.

In addition, consider the challenge of complying with this law. Before now, we had to concern ourselves with one "per se" violation of law (Lead-in-paint), plus a range of voluntary standards, and mainly, our "duty of care" to consumers. By "we", I refer to toy companies. Clothing companies, publishers and many other industries swept up in the CPSIA had no comparable standard to meet. In other words, for toymakers, there was ONE rule we were never to violate (l-i-p) and could administer the rest by common sense and a sense of consideration toward our valued customers. This system had several advantages: (a) it tended to align safety resources around "real" risks (actual risk of injury in proportion to the probability of injury), (b) it was simple and UNDERSTANDABLE (it was basically governed by common sense, not arbitrary rules that were unrelated to our real world experience) and (c) it was TEACHABLE. The latter point is quite important. Operating businesses have an ever-changing roster of employees/associates. We have new managers, line employees, quality folks, customer service reps, warehouse employees, purchasing assistants, you name it. Every time someone new joins us in one of several departments and numerous functions, we have to teach them how to administer our business, in this case from a safety perspective. In the old scheme, we had one "stop the presses" issue (l-i-p) and designed a quick response/quick notice process to address our duty of care responsibilities. We could teach this system pretty easily and effectively.

What about now? According to the CPSIA, EVERY VIOLATION is now reportable IMMEDIATELY to the CPSC. This means every violation of any provision of the Act exposes our company to potential penalty liability, recalls costs and associated humiliation, and incredibly, CRIMINAL charges. Yes, because every violation can lead to criminal charges if done "knowingly". The "knowingly" standard includes what a "reasonable man" would know if he were exercising "due care". You can imagine how sweeping the knowledge base is of a "reasonable man". [He no doubt gets less sleep than me.] Okay, how does this compare to the old system? A few thoughts:

A. It is incredibly complex and difficult to understand. Ask five people to explain how the law works, and see if there is even ONE point they agree on. Won't happen. This tells you how difficult the law is to understand. We call this "empirical evidence" - data from the real world. Consumer groups and legislators claim to have superior knowledge that allows them to understand the law "perfectly" but we mere mortals can't get it right. I admit it - in the real world, I GUARANTEE no one will completely understand this law, and therefore their failure to fully comply is ASSURED. Should keep the CPSC satisfyingly busy . . . .

B. It's infinitely more risky. Any violation of ANY provision (and there are a lot of provisions now) can be the subject of a recall. The recent releases from the CPSC suggest that they intend to exercise caution in allowing violative products to remain in the market - get ready for a big jump in recalls. This change in atmosphere won't exactly be free, either. And as noted, these violations can also result in criminal charges. I am on record for months that someone will be going to JAIL in our industry at some point. I don't know who (hope it's not me) but someone's going to the pokey under the law. Is that appropriate? I think not except under the most egregrious circumstances, sight unseen. With 51 CPSCs now (State Attorneys General definitely count), the odds of rationality prevailing are poor.

C. The law has become detached from consideration of risk and thus no longer corresponds to common sense. To administer this law in the real world, we need to keep it simple (stupid). The real world is comprised of ordinary people, not just lawyers. Education levels vary, sophistication varies, knowledge varies. To produce a uniform safety performance, we need a simple message that our people can grasp without a law degree and months of intensive study. By designing a law that does not correspond to our everyday experiences and perception of risk, Congress has created a set of rules that can't be governed by common sense. Hello Congress, the world cannot manage arbitrary rules of this complexity. If you want to rule by arbitrary fiat, you need to limit your rules to just a few (ex.: lead-in-paint ONLY). Otherwise, your regulator construct won't work - in a world of real people, a tangle of complex rules will discourage compliant behavior by encouraging capitulation or scofflaw behavior (e.g., black markets).

D. Finally, and most importantly, these laws are so complex that they cannot be taught. EVERYONE facing this law as a fact of life will admit this point. IF you can grasp how the law works, can you possibly teach it to your co-workers upon whom you depend? Can you create circumstances where you ACTUALLY believe your organization will be conforming to this maze of complicated and inconsistent rules, thus saving you from the risk of jail time? I, for one, am not there yet. With the changing face of the workplace, if you ever succeed to in teaching this complex and evolving set of rules (it seems to change every day right now), the know-how walks out the door every day. At what point do you give up? Has ANYONE in Congress considered this issue, even for a second??? Welcome to my world.

I will (someday) riff on the economic incentives of such a regulatory scheme. It is making our business model obsolete, and I can prove it. I haven't given up on our business, please note, but this law makes the job of making it successful infinitely more difficult - for no particular benefit to anyone. Thanks, Congress!

Rick

15 comments:

Miz Carla said...

Your blog greatly encourages me to keep on keeping on. As one of the smallest of the small businesses suffering under CPSIA, I have NO voice. You are speaking for me. Thank you!!!!

Anonymous said...

Rick,

One other quick observation regarding difficulty of teaching the laws. Besides the complexity of teaching the laws to those who must obey them. The complexity creates significant difficulty for those who administer them. It will be impossible for those administering them to do so fairly, as they mean different things to each. No ruling will be the same, some will recieve overly harsh punishment, some no punishment. Keep it simple (stupid) creates fairness for all.

Thanks for all your effort.

Ron Stuart

Anonymous said...

Passing laws that are hard to follow will ultimately result in a decrease in respect for the law.

That is not a good thing for our country. When Rudolph Guiliani first became Mayor of New York City, he started enforcing J-Walking laws. When asked about this, the former Federal Prosecutor's response was that in order to restore respect for the law, you must enforce the laws. All of them. That is how to restore order.

The CPSIA is going to have the opposite effect. Since it is nearly impossible for the regulatory agency to enforce (see Commissioner Nord's comments above), and since it is less than clear how to follow the law, there will be many companies/people who do not follow the law.

Respect for the law is a bedrock principle in our country. When we start to pass laws that are difficult/impossible for average citizens/companies to follow, we erode respect for the law. And, it won't stop with the CPSIA. Some will figure that since they don't have to follow this law, maybe they won't have to follow other laws as strictly has they once thought they had to.

The CPSIA needs to be understandable, sensible and enforceable. Currently, the CPSIA is "None of the Above".

Lora said...

Along the same line...


I'm getting fed up. (did you catch the pun?)

Right now, my frustration with the Feds is dwarfed by my frustration with the people I am talking to!

"You can't fight city hall" - that's the saying.

Truth is, fighting city hall is easy compared to trying to convince people that there's something to fight about.



My Top Five Frustrations

5. Only a handful of people "truly" know about this
(which is not entirely their fault)

Recanting this saga from the BEGINNING (providing documentation and whatnot) is terribly time consuming - for everybody.

4. Explaining the ramifications

Somehow, the law of physics is understood more readily.

3. Explaining that this effects everyone

"Oh, i really don't buy any of that stuff" (actual quote)

2. The go digital option

I am not opposed to going digital.... if I WANT TO. I don't want to do it because I HAVE TO.

Throwing the tea overboard is (and should) be an individual's choice, but we can only drink hot chocolate and coffee for only soooo long.

And the #1 Frustration...

"I wouldn't worry about it - how could they ever enforce this?"

Yes, in a way this statement is correct - in SOME cases.

In my state of Pennsylvania, it is illegal to talk on a cell phone while driving a car.

This is an extremely hard law to enforce.

If you so choose to talk and drive, you check your review mirror, look around to make sure the coast is clear, and make your call. So long as you stay on your guard, you probably won't get caught.

On the other hand, if you roll down your window and announce, "Hey look at me - I'm talking on the phone!"

It won't be long before the flashing lights announce the police, and they'll pull you over and offer you their congratulations in the form of a fine.

As is the case with this CPSIA law. If you lay low, make discrete sales, and "check your back" frequently, you probably won't get caught.

But can you ever be truly successful this way? Can you ever relax and enjoy your business without fear of getting "caught"?

Isn't having a business all about rolling your window down, attracting attention, and announcing loudly and boldly, "Hey, look at what i have!"?

So in answer to those that say,
"I wouldn't worry about it - how could they ever enforce this?"

You're right... if we want to stay small, cautious, and illegal we shouldn't worry about a thing.

Lora said...

PS... I don't know where to post this so here I go putting it here...

I have not heard anyone mention that there's a New bill that has been introduce H.R.968

So far, three cosponsors... one being my Congressman, Rep. Joe Pitts.

I thought someone ought to be spreading the news TO WRITE THEIR CONGRESS also and ask them to support this bill.


HELP U.S. MANUFACTURERS AND SMALL BUSINESSES

From: The Honorable John B. Shadegg
Sent By: randi.meyers AT mail.house.gov
Date: 2/11/2009

Dear Colleague:

As you know, certain provisions in the Consumer Product Safety Improvement Act of 2008 (CPSIA) are set to take effect on February 10, 2009. While CPSIA is well-intended to improve product safety, it is dangerously flawed.

As supporters of the CPSIA’s intended purpose, which is to assure that no lead is used or added in the manufacture of any children’s products, we understand its importance. However, it appears that there is still great confusion as to what the requirements of this new law are and that the February 10, 2009 compliance deadline is unrealistic.

It is for this reason that we have introduced a bill that will address the complications that implementing the CPSIA will cause. This bill will delay the regulation for six months. Due to the confusion and uncertainty in the small business community, it is crucial that the regulations be delayed so that the small businesses that are the heart of this nation are not forced to close their doors.

Secondly, the bill will allow small manufacturers to use the testing and certification that their component suppliers have done to certify that the components do not contain an impressible amount of lead. This will be both a money and time saver. If lead is not a component when tested, it will not appear when a product is put together.

This bill will exempt thrift stores, yard sales, consignment shops, and other re-sellers from the prohibitions in the Act. When the CPSIA was drafted, it was not the intent of the bill to include Goodwill, the Salvation Army, or flea markets. This is because these sellers are not the source of the product safety concerns that were discussed last year.

Our bill will provide a good-faith exemption that will benefit small manufacturers and help keep them in business. If a manufacturer can show that an error in compliance was made in good-faith, our bill will provide them with a one-time exemption from sanction. This rule is designed so that manufacturers will not take advantage of the exemption, while giving them a chance to adjust to the new regulations.

Finally, our bill will require the Consumer Product Safety Commission (CPSC) to provide small businesses with a compliance guide. The new regulations are extremely technical and impact a number of small businesses who do not have multi-staff compliance departments to interpret and apply regulations. Our bill would require the CPSC, in consultation with the state and federal Small Business Administration, to develop a compliance guide that addresses the concerns of the small business community.

Please join us in supporting our small businesses by co-sponsoring this crucial legislation. If you would like to cosponsor this legislation or if you need any additional information, please contact Randi Meyers in Rep. Shadegg’s office (5-3361) or Sallie Taylor in Rep. Bartlett’s office (5-2721).

Sincerely,
Roscoe Bartlett
Member of Congress

John Shadegg
Member of Congress

Valerie Jacobsen said...

Lora, I agree with you. What I find frustrating [don't tell THEM this] is the number of people who know something about CPSIA and try to keep up with the latest news--but see just what they hoped to see in the first half of a press release and then miss the fact that their worst fears are consistently right there in black and white in the last half of the press release.

I talked to a lawyer and a newspaper reporter today.

From the reporter, "That law's been put on hold for a year, so it's not in force right now." Reference: CPSIA Press Release

From the lawyer, "That doesn't apply to you. They came out with a ruling that it doesn't apply to any resellers at all." Reference: CPSIA Press Release

I collected the statements from the guidelines and press releases that concern me at http://bookroomblog.com/2009/02/13/telling-the-whole-truth-cpsc-press-releases/

Sebastian said...

I just wanted to thank you for your excellent remarks during public comments. I have mostly been focused on the impact this law has on the older books that our family loves to read and collect.
When I watched your remarks, I realized that this law could also wipe out the industry that makes the math manipulatives and science kits that I rely on as a homeschooler.
Please keep up the good fight. It is far too easy to discount some of the complaints as whining from micro business owners and crafters. It is so helpful to hear a CEO also making forceful comments about the foolishness of this law.

Theodore L. Casey said...

Please keep up your tremendous work against this unjust bill that probably could be described as "Orwellian" some 25 years after 1984.

Sebastian said...

I just wanted to leave some encouragement. I had my two older sons watch your hearing remarks. Great civics lesson and instruction for them. We homeschool and I kept grabbing items off the shelves or out of drawers to show them what books and manipulatives are now at risk. Keep fighting. Individually, we're easy to discount as a special interest group or as poorly informed individuals. Together, maybe we can get some attention.

Lora said...

Valerie,

No one "gets it" -
lawyer, reporter, or Indian chief.

And it's the butcher, the baker, and the candlestick maker that are going down... if they've been printed in a book before 1985.

It's been this way since the beginning of time. The smallest group of individuals fight for what means liberty for the people. And one of the biggest adversaries is always the people themselves.

Anonymous said...

http://www.usatoday.com/news/nation/2009-02-16-motorcycleban_N.htm

At least this will get some new folks writing congress....

Lora said...

just found something very interesting in this CPSIA law
http://www.cpsc.gov/cpsia.Pdf

isn't this a tad racist???? i think we should alert the authorities.
ummm.... are you saying minorities are imbeciles and don't know how to care for their children? actually, the law is basically saying we're all imbeciles regardless of color, but they make a special point to address minorities. i think this is a ball to run with. betcha it would get some attention.


Quote:
SEC. 107. STUDY OF PREVENTABLE INJURIES AND DEATHS IN
MINORITY CHILDREN RELATED TO CONSUMER PRODUCTS.
(a) IN GENERAL.—Not later than 90 days after the date of
enactment of this Act, the Comptroller General shall initiate a
study, by the Government Accountability Office or by contract
through an independent entity, to assess disparities in the risks
and incidence of preventable injuries and deaths among children
of minority populations, including Black, Hispanic, American
Indian, Alaska Native, Native Hawaiian, and Asian/Pacific Islander
children in the United States. The Comptroller General shall consult
with the Commission as necessary.
(b) REQUIREMENTS.—The study shall examine the racial disparities
of the rates of preventable injuries and deaths related to
suffocation, poisonings, and drownings, including those associated
with the use of cribs, mattresses and bedding materials, swimming
pools and spas, and toys and other products intended for use by
children.
(c) REPORT.—Not later than 1 year after the date of enactment
of this Act, the Comptroller General shall report the findings to
the appropriate Congressional committees. The report shall
include—
(1) the Comptroller General’s findings on the incidence
of preventable risks of injuries and deaths among children
Deadline.
Deadline.
VerDate Aug 31 2005 12:46 Aug 26, 2008 Jkt 069139 PO 00314 Frm 00021 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL314.110 APPS10 PsN: PUBL314 dkrause on GSDDPC44 with PUBLIC LAWS
122 STAT. 3036 PUBLIC LAW 110–314—AUG. 14, 2008
of minority populations and recommendations for minimizing
such risks;
(2) recommendations for public outreach, awareness, and
prevention campaigns specifically aimed at racial minority
populations; and
(3) recommendations for education initiatives that may
reduce statistical disparities.

Heather said...

Here is a Dr. Seuss style story about the CPSIA to cheer you just a little!


http://easyfunschool.com/the_CPSIA_meets_Dr_Seuss.html

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