Wednesday, September 16, 2009

CPSIA - Phthalates Test Standard Comment Letter 9-16-09

[As submitted 9-16-09]

To Whom It May Concern:

I am hereby submitting comments in response to the Notice of Availability of a Statement of Policy: Testing of Component Parts With Respect to Section 108 of the Consumer Product Safety Improvement Act [CPSC Docket Number: CPSC–2009–0063] dated August 17, 2009.

1. Applicability of Component Testing. We believe the clear language of the CPSIA provides that TOTAL WEIGHT OF THE PRODUCT be the basis of any calculation of phthalate content. Sections 108(a) and 108(b)(1) state that “it shall be unlawful for any person to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children’s toy or child care article that contains concentrations of more than 0.1 percent of [certain phthalates].”

Notably, in the August 7, 2009 Statement of Policy on the Phthalate Testing Standard (the "Statement"), justification for component level testing is based on an argument that Section 108 of the CPSIA uses the term "children's product" incorporates the term "consumer product" which is defined in Section 3 of the CPSA as "any article, or component part thereof, produced or distributed . . . ." The Statement concludes: "Because the term consumer product includes components of an article, the Commission believes that the phthalate limits in section 108 of the CPSIA apply to each component part of any article." This reasoning overlooks the fact that the CPSIA also uses the same term "children's product" in Section 101 in regard to the new lead standards but clarifies it in the following terms: " . . . the lead limit referred to in paragraph (1) is 600 parts per million total lead content by weight for any part of the product." [Section 101(a)(2)(A)] [Emphasis added] Rules of statutory construction require that the words of a statute be interpreted to give meaning to all the words used. Therefore, apparently, Congress did not impute an obligation to test components for the term "children's product" in Section 101 and felt it necessary to state plainly that the lead standard applied to "parts", whereas no such limitation was incorporated into Section 108. The reasoning used to justify component testing on this basis is thus faulty. Without further action by Congress, the July revision revision of the March standard previously announced by the CPSC should be revoked and total toy phthalate concentration testing protocols be restored.

2. The Apparent Paradox of a Component in a Hypothetical Toy Containing Phthalates. The introduction to the July 27 Test Method (the "Standard") refers to a hypothetical toy containing a teether with phthalates in excess of permitted levels. The introduction refers to this as a "paradox". In fact, it is hardly paradoxical. The law does not prohibit parts containing phthalates, as illustrated above. In addition, the CPSC has on two occasions (CHAPS in 1998 and 2001) concluded that phthalates do not present a material health risk to children. Thus, I do not understand how the CPSC can express concern that a part in a hypothetical toy contains phthalates that might violate the standards IF the part were a stand-alone toy as the CPSC itself has stated publicly that this would not present a health risk. The apparent meaning of the "paradox" referred to in the Standard is that Congress outlawed six phthalates as a health risk in contravention of the reasoned and well-researched opinion of the CPSC scientists. This conflict does not justify reading the law more broadly than it is written.

Many companies and many valued products will be sacrificed to this "paradox" if the meaning of the underlying law is not respected. I think it is highly unlikely that any parts in a hypothetical toy will contain the six "bad" phthalates when they are outlawed all over the world. The economic incentive to use them is too low, and legal and uncontroversial substitutes are too readily available. Needless to say, the very existence of the CPSIA (not to mention the EU ban) cuts the market for the six phthalates substantially, if not entirely. With much lower volumes, these chemicals will rise in price and will become harder to find. In due course, manufacturers will literally have to work to obtain supplies of the six phthalates and take considerable risk to use them, all for no economic incentive. In a nutshell, right or wrong, the CPSIA will have the effect of ridding the market of these chemicals as long as they are illegal (which is not the same thing as saying that they are dangerous). YET under the test standards, we must forever test each and every component to prove that these hard-to-find chemicals are not present. That is the true "paradox" of the Standard's example - it is paradoxical that our safety system requires that we prove the absence of chemicals that are not economically or functionally advantageous nor easy to find.

In any event, in the cited hypothetical example, a teether is at issue. Why not simply require testing for all components which are suitable for children up to 36 months old and which can be placed in the mouth? In the past, the CPSC has asked industry to take certain phthalates out of products like this (without controversy, I should add). Companies can certainly test teethers, pacifiers and rattles without testing each other component that is not likely to be placed into the mouth. Given that this test procedure includes items suitable for children up to 12 years old, the Standard will impose widespread economic harm apparently in order to catch teething rings. I think this is unwise and unnecessary and will harm markets.

3. The Rationale Offered for Component Testing. In the Statement, the following rationale for the change to component testing is offered: "Given that testing the phthalate content of an entire children’s toy or child care article presents certain difficulties, may lead to dilution of the phthalate concentrations compared to that in one or more of its component parts, differs from similar regulations issued by other jurisdictions, and can be prohibitively expensive, the Commission believes that phthalate testing should be limited to those plastic parts or other product parts which could conceivably contain phthalates ('plasticized component parts')." I have previously addressed the inapplicability of component testing under Section 108. I will now address the other rationales offered in this statement.

Regarding "dilution", it can only be considered an issue here if component testing is required under the law. At the moment, the law as written (as explained above) specifies phthalate levels for the entire toy. Dilution would only be an issue if the law read differently, requiring certification by part, which it does not. As the CPSC has already ruled out in two previous CHAPS that the six phthalates present a material health risk to children, it lacks the legal authority under the FHSA to impose restrictions on products containing them as "banned hazardous substances". It is therefore entirely dependent on Section 108 to justify this new Standard. Dilution is therefore legally irrelevant as a consideration.

It has not been our experience in testing for phthalates that testing the whole toy presents any "difficulties". Testing for phthalates is, in general, prohibitively expensive. The right way to moderate that expense is to run fewer tests. Testing an entire toy is definitely cheaper than testing every component because it requires fewer tests. If a manufacturer encounters "certain difficulties" or finds that testing the entire toy is somehow more expensive than testing components, your rule should permit the manufacturer to opt for component testing. This simple solution will preserve the benefit those of us who have discovered that testing the entire toy is cheaper.

The concern expressed for coordinating test requirements with other jurisdictions is commendable, but which jurisdictions are the CPSC attempting to align with? If the Statement is referring to a state (like California), the Standard and Federal law should preempt the state standard. I think that industry action can be used to help bring different jurisdictions in line on testing standards. If that is not sufficient, legislative action is the next step. [It is ironic, actually, that this justification for the phthalate standard has been offered, as for many years the CPSC has stood pat and refused to align its testing procedures with European standards, causing U.S. manufacturers to test repetitively to two standards.] In this case, the alignment justification is going to cost industry millions of dollars in excessive and ineffective component testing. Unless the law requires that the CPSC correlate its testing standard, I think the March Standard should be remain in place (toy-level testing).

The Statement also notes: "Testing component parts to the phthalates limits established in section 108 is more protective of human health . . . ." As noted above, the CPSC has twice rejected the notion that phthalates are dangerous in CHAPS in 1998 and 2001. This statement should be struck from the Statement for that reason alone. The fact that Congress outlawed six phthalates does not invalidate the scientific conclusions reached in the agency's two CHAPS.

4. Inaccessible Components. The Statement and Standard do not differentiate between accessible and inaccessible components. Without meaning to contradict my comments above on the invalidity of component testing requirements, I believe there MUST be a distinction in the rules between accessible and inaccessible parts in any testing standard for phthalates. Inaccessible parts should be exempt from testing, whether on a component or whole toy basis, as there is no known health risk possible from inaccessible parts (whether or not the results of the two CHAPS are respected). This is a rather self-evident concept, as phthalates do not have the ability to "leap" from inside a toy into the human body. There is only one mechanism that can transport phthalates from a toy into the human body, namely mouthing or chewing. Inaccessible parts cannot be mouthed or chew without unforeseeable and substantial toy abuse, and thus should be excluded entirely from the testing requirements.

5. Vague Standards. In the Statement as quoted above, the test standard now requires that any "plastic parts or other product parts which could conceivably contain phthalates" be tested. This expansive definition is not only vague and undefined but it is also subject to second guessing. Vague terms like this also tend to cause disagreements in the supply chain, leading to loss of revenue and unnecessary testing. The Standard does not let the manufacturer make this judgment definitively, either. The inability of a manufacturer to rely on a "safe harbor" rule, short of testing every component of every product, is a major economic disincentive and will certainly disrupt markets. The CPSC has already received MUCH data from companies documenting this kind of market disruption. Although the CPSIA may have been cleansed of any reference to money or economics, the CPSC has no legal or moral obligation to promulgate rules that are devoid of sensitivity to market considerations. In this case, please consider that the financial implications of the new Standard making new products too expensive to develop, manufacture or distribute will stifle innovation, reduce the diversity of products available in specialty markets, stunt new company formation and reduce jobs - all to enforce a law which is directly contravenes the results of two CPSC CHAPS. To do so will severely disrupts markets regulated by the CPSC and disproportionately harm Small Business. In light of the CPSC's stated opinion on the safety of phthalates, this is unacceptable as a matter of public policy.

The Standard should specify which materials are known to contain phthalates and restrict it to known materials meeting physical examination criteria. In other words, it should not be sufficient that it is "conceivable" that phthalates have been used in a particular plastic or component. The part or material itself must also exhibit the characteristics of a plastic or part containing phthalates (in other words, it is pliable). This is a highly effective and low cost way to differentiate between plastics that have phthalates and those that do not. The presence of phthalates is not hard to detect with a physical examination.

De minimus risk of phthalates used in low mass components or materials, especially noting the function of the parts, should be exempt from testing. As an example, coatings on parts that are not likely to be mouthed (in other words, they are not intended for children under three years old or cannot be placed in the mouth) should not require testing. In addition, the mass of the possible phthalates in such coatings is likely completely immaterial. The repetitive testing of low value, low risk items or parts will bankrupt companies still remaining in this devastated market. Some exercise of regulatory judgment is necessary to save the children's market here.

6. Multiple Components. If component testing is required in the final standard, the standard should not require repetitive testing of the same component. If a component is used in multiples in a particular product or is used in more than one toy, the testing standard should permit use of a single test on a single component to apply for all of its uses in applicable toys.

It is also our recommendation that raw material testing be accepted in lieu of component testing. That said, raw materials testing is not likely to resolve testing problems under the CPSIA except for the simplest products. While I have consistently written that raw materials testing is an appropriate and effective supply chain management technique, raw materials test reports when compiled for a complex product will tend to raise questions (they will form an unreconcilable, incomprehensible mass of seemingly meaningless reports) and will in fact, detract from assurances that the final product actually complies with law. This flaw, which is highly likely to cause expensive delays at the border when U.S. Customs begins to examine test reports under the CPSIA, will again tend to force companies to test whole products at high expense, simply to keep products moving across borders and to make it easier to sell them into retailers who do not want to accept such reports for legal liability reasons or spend the time or money trying to reconstruct a passing test report on a toy from a pile of raw material test reports.

7. The Phthalates Standard is Effectively a Requirement to Test Every Component in Every Toy. The Statement does not rule out testing of ANY material as far as I can tell. The standard even leaves open the possibility that natural sand, glass, crystal, unfinished metal, cotton textiles or even natural wood might need testing under some circumstances. This is particularly perplexing because the CPSC knows that phthalates are an additive and do not exist in nature. They are also an organic chemical that would not survive the heat necessary to forge steel or melt sand into glass. To suggest that these items "might" have phthalates is quite a stretch - and all manufacturers using these materials will pay dearly for this stretch.

As if that wasn't bad enough, the Statement goes on to note: "Manufacturers either know or should know what materials and components go into the products they make, and if the product or its components contain one of the plasticizers specified in section 108 of the CPSIA, the manufacturer or importer certifying the product must test the component or product to ensure that it complies with the CPSIA. Failure to comply with section 108 of the CPSIA is a prohibited act under section 19 of the Consumer Product Safety Act (CPSA) and can result in civil and criminal penalties. Likewise, failure to have a product subject to section 108 of the CPSIA tested by an accredited third-party laboratory and have the appropriate certification for that product is also a prohibited act under section 19 (CPSA)." Such remarks are guaranteed to create insatiable demand among risk-averse retailers for complete suites of tests on every component in every toy, no matter what. The Statement could not be clearer that ALL mistakes, oversights or judgments invalidated with 20-20 hindsight by the CPSC will be held against the supply chain selling the product. As the CPSC penalties and saber rattling of the agency have been widely publicized, this rule is certain to depress trade and shrink markets. No one will be willing to take the risks outlined in this paragraph.

I would note also that a standard that puts the onus on manufacturers to make judgments on whether to test or not, and then attempt to get their customers (and testing labs) to go along with their judgments, seems particularly impractical and unrealistic. The scenario is apparently that manufacturers must prove to all of their trading partners, again and again, that their judgment to not test certain components or materials is legitimate. That judgment will not be accepted lightly, with or without documentary proof, by trading partners who have read the Statement's stern warning about liability. In any event, a long inquiry by trading partners and testing labs into any such manufacturer's judgment can be anticipated with a high degree of certainty. While some manufacturers may be looking forward to spending the rest of their working lives arguing with customers to accept a decision to save $500 in testing costs, I personally find it quite unappealing and unworkable. We have a business to run and cannot spend all day on test reports - we have to make some sales (to pay for the tests). If this is how the rules will work, we will either have to test everything comprehensively or drop the products. Please think realistically about the commercial implications of the rules you are promulgating.

If it is the intention of the Commission to require comprehensive testing of every component of every toy with no exceptions, I think the standard should be rewritten to say so directly and unambiguously. Writing a standard that uses vague language stating that incomplete testing is permissible under some circumstances, but only at high risk of civil or criminal liability, is disingenuous, as the agency knows full well the impact and meaning of those words.

Thank you for considering my views on this important topic.


Richard Woldenberg
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061
Tel 847-573-8420

1 comment:

Michael said...

Rick, thank you for applying the time and energy to create a well thought out, sound set of recommendations founded in and on the law itself. I would imagine that you are somewhat fatigued with carrying the torch for so long, but your background in law and science is obvious. You are the right person at the right time. I wish I had more than kudos to offer here, I'm sure that you could use some real help carrying the load.