Monday, July 6, 2009

CPSIA - How to Solve Your Problems!

The CPSIA Answer Man gets questions, we get questions! The CPSIA is much simpler than most people believe. Congress, having wisely given so much discretion to the CPSC and to you, left many options open for virtually any situation. Here's a few common "dilemmas" and their simple solutions:

Q: "My Company is straining to survive in tough times, and someone told me that because our products are modified by downstream dealers, I might be liable to comply with this law. I have never tested my items, which are known to be safe, but now I understand I will have to test and even label each item by lot. I don't want to do that, and can't figure out how I would afford it. Mr. CPSIA Answer Man, what should I do?"

A: This could be a major bummer for you, my sad friend. Under Section 3(a)(2) of the CPSA, your products would be subject to the new strictures on lead and tracking labels if they are "children's products", that is "a consumer product designed or intended primarily for children 12 years of age or younger". Hmmm, that could be just about anything. The CPSC has clarified this to the opacity of mud. Consider the many unanswered questions of the Promotional Products industry on this very topic, where companies sell "blanks" that are later modified and resold, possibly as items suitable for children.

So let me answer your question with a question: are you one of those small-minded individuals who craves certainty and cannot abide by guessing or living in the shadows? I hope not, because if you are, you will find yourself compelled to pretend all aspects of the law apply to you. After all, having read the pen stay decision, it appears to be a judgment call whether an item is designed or intended "primarily" for children. And in the world of CPSIA judgment calls, you are encouraged to make the right decision - as determined by other people after the fact.

If you conclude that the law MIGHT apply to you, and can tolerate the risk of any of 51 organizations (the CPSC and 50 States SAGs) coming after you, you should adopt the now common approach to dealing with the CPSIA - non-compliance! Yes, it's low cost and gets the job done with very little bureaucracy. It's one of life's little ironies that this law, intended to facilitate tougher regulation of safety, actually ENCOURAGES non-compliance. Our dear friends in the Consumer Group community know it, too. I am not exactly sure what Congress thought it was accomplishing with this new scheme, other than economic devastation, but heck, I always knew I wasn't smart enough to be in government.

Q: "You have GOT to be kidding. When my dealers call up to assert that the law applies to me and to force me to absorb new costs and responsibilities, what am I supposed to tell them?"

A: Now THAT'S a good question. Mr. CPSIA Answer Man has tried several approaches, such as claiming to not speak English, wrong number, out to lunch, etc. These strategies don't seem to work very well. Unfortunately, our friends in government have not left you with much to say. You have your fig leaf, and need to bob and weave to convince your customers that your approach would stand up if tested. These debates are usually settled on the basis of economic power. Oops, you lose!

This raises one of the delicious ironies of this new law. If you are hiding behind a tiny fig leaf and are getting pressure to move into a safe harbor, what can you do? Sometimes, the law's designated safe harbors (such as lead substrate levels of 300 ppm as of August 14 or TRU's 100 ppm limit as of January 1) simply means you must exit your market, which may not be an option for any number of reasons. I am going to assume that safety is not a real concern for your products, since it has been made clear that only a tiny percentage of children's products ever get recalled. Since Congress wants the CPSC to act with "common sense", is there a way to make a case for such safe products to get into that safe harbor? The answer is NO. The law does not allow exceptions. The only exemptions possible under the law are for products that ("on the basis of the best-available, objective, peer-reviewed, scientific evidence") cannot possibly introduce so much as ONE atom of lead into the body. Thus, you get exempted if you can prove it never applied to you in the first place. SAFETY IS IRRELEVANT. Ouch!

Mr. CPSIA Answer Man wants to remind everyone that none of the foregoing has anything to do with safety. We all have a responsibility to our customers to behave honorably and with a sense of duty when it comes to safety. You should always do the safety testing necessary to satisfy yourself that it is safe and appropriate to sell your products, and need to take into account everything you know when you make that judgment. Control of your supply chain is a big part of how you will achieve this. No matter what you conclude in your administration of CPSIA survival, you can never lose sight of your safety responsibilities.

Q: "What if one of my dealers takes it upon him/her to test one of my products that I have concluded is OUTSIDE the law's confines? What am I supposed to do if they show me the report? What if they demand that I recall the product based on this unnecessary, irrelevant and possibly erroneous test report?"

A. Don't go there.

Q: "This is turning into a blood pressure incident for me. I don't believe this blather you are spouting. Where are the rules and regulations so I can read them myself?"

A: Mr. CPSIA Answer Man does not wish to frustrate! Here is the CPSC's highly touted CPSIA website, see if you can find the rules and regulations yourself. Of course, don't forget to look at the FAQs, which are treated with the seriousness of regulations (until they aren't). Also, you should check out the letters of the General Counsel, but they don't always hold up and aren't the equivalent of a Commission decision (in other words, the Commission can back away from the GC if it wants to). And if you are really resourceful, you might try to find an unpublished CPSC or GC letter to a company on its products that holds a clue for you, or perhaps pick up a useful voicemail from a CPSC staffer along the way that seems to shed some light. Sadly, nothing is really obvious in this arena, since there is no way for the CPSC (or anyone, frankly) to regulate such a vast array of products and have sensible rules that apply to all of them - so you will need to hire experienced counsel. Gather all the experts around a table and see what conclusions you come to. If you have more questions, Mr. CPSIA Answer Man remains at your service!

Q: "The testing costs are going to kill me. We can't afford all these tests because our items generate too little volume to bear the cost. Interestingly, we also don't see much value in purchasing test reports whose results we know before we pay the money. If I really have to bear these unnecessary costs, I will have to gut my product line - and fire some people. My customers want these products, too! What should I do? Also, I know I don't have to test (yet) but am responsible to be compliant with the lead limits. How do I make sure I comply without testing?"

A: I am so glad you asked this question, as it is on so many minds these days. We already covered the fact that an exemption for you is unlikely. Some people want to allow component testing. This sounds good, and for manufacturers of the simplest items, it may work fine. Unfortunately, no one seems to have thought through how a system based on component testing would work. A few "stumbling blocks" might include: (i) incomprehensible test reports (don't correlate or can't be correlated to the finished goods), (ii) reversion to the old "trust me" safety system but with more bureaucracy and cost, (iii) uncooperative component manufacturers who aren't legally required to provide test reports (think of the low volume fabric that is sold in your neighborhood sewing shop), and (iv) ever-finer gradations of components makes the testing scheme into a laughingstock.

As usual, all roads leading to Rome and all that, the issue of what is safe and what is not becomes relevant again. You will not be allowed to argue for an exception based on the safety of your products (socks and underwear?). The rules are blind to safety or risk assessment. Unless and until the law is trimmed back to something more reasonable and appropriate, a la Canada, you better figure out how to finance your testing burden starting with lots made on or after February 10, 2010. The banks are getting healthier - perhaps you can take down a big fat loan!

As to complying without testing, that's a rather metaphysical requirement of this law. Aren't those folks in Congress sneaky?! Wow, if I only had their cleverness . . . . This is the same thinking that underlies their choice to make 600 ppm lead-in-substrate legal from February 10 - August 14, 2009 and then instantly turn it into illegal, dangerous contraband. I wish I could fathom the "logic" of that one. After all, they specifically set the February 10th limit and authorized it for sale, which suggests that they believed it was safe enough to fob off on the American public. Well, it makes a satisfying sound bite at least. I think the requirement to comply while staying the testing requirement is just another compromise on the way to, well you know where. There is no logic to it. You can use supply chain management, selective testing, comprehensive XRF studies of your product range and business judgment. Even this won't work for all of you. Non-compliance anyone?

Q: "My greatest fear is those darned tracking labels. I can't identify my sources on my products, no matter what the Federal government wants. I might as well turn in the keys for my business. Is there ANYTHING I can do? Is there ANY guidance I can hang on to?"

A: The CPSIA Answer Man shares your concern. Today is July 7 and with the tracking labels requirement due to become active in a mere 39 days, the CPSC has yet to so much as float a single sentence of advice. Well, except for Commissioner Moore, who is looking forward to a delightful "learning process". He seems to think that if guidance is put out sometime before the August 14 deadline (August 13, perhaps?) for the crafting community, all would be well. I take it you are not a crafter. Ouch!

Many comment letters have been filed with the CPSC on tracking labels, including mine, which set out concerns like yours. The issue of confidential sources has been highlighted as a "deal killer" yet the CPSC remains silent. Notably, at the ICPHSO conference in February, the General Counsel specifically addressed this point and told the audience to "get past the mourning process" because Congress wants source information to be publicly available. So I guess you should probably begin to hang crepe, if you are to take this advice seriously.

For what it's worth, the NAM petition to stay the tracking labels provision was recently refiled. Hope springs eternal. Let's hope the Commission acts with "common sense" and pushes the day of reckoning on tracking labels far off into the horizon.


108Warren said...

[...]Rick Woldenberg has written yet another compelling post[...]

Geoff Jones said...

Do I detect a hint of sarcasm? If I didn't know any better I would think that you actually were begining to appreciate this law for what it really is...
I keep hearing about new banking regulations touted as being "like the CPSC for banking". I am forewarning the banking industry to start their lobbying in earnest, once they pass a law this congress never looks back at their path of destruction.

Rick Woldenberg, Chairman - Learning Resources Inc. said...

Maybe just a touch of sarcasm, yes.

Anonymous said...

I am the compliance director for a large importer of novelty toys and gifts. Over the last year, we have been forced by some our our larger retail customers ( at the insistance of their Corporate Council ) to test our products for for every "dangerous" element you can think out..."just to be safe". Who cares about the cost ? Well..I finally had it the other day and suggested to one of my customers that we should also test our products for Plutonium..."just to be safe". My customer honestly thought it was a good idea !

Rick Woldenberg, Chairman - Learning Resources Inc. said...

So what are you waiting for? I would feel much safer knowing your products were proven to not be laced with Plutonium!

Anonymous said...

The nonscense surrounding this whole thing is just incredible. Were none of our current leaders taught logic and testing of theories in school?

Anonymous said...

annon @10:07 and most of congress seems to have managed to get an advanced degree without taking a statistics or baby biology course too.

No wonder public education is such a mess. No one believes in a Liberal Arts education anymore--can't be bothered to take all those piddly courses.

Sebastian said...

It's been a while since I've read over here. Thank you for continuing to fight this silly legislation.
I found the letter to the pen industry especially frustrating. Pens wouldn't be considered children's items because they might also appeal to adults? Adults often build Lego models, but I don't think that would get the company around penalties if someone complained that hey weren't testing.