CPSIA - Letter to CPSC Re Continuation of Testing and Certification Stay

Dear Chairman Tenenbaum, Commissioners Adler, Moore, Nord and Northup:

I am writing to strongly urge the Commission to vote to extend the CPSIA testing and certification stay (the “Stay”) originally implemented on January 30, 2009 and due to expire on February 10, 2010. The Stay should be continued for at least one year PAST issuance of final implementing rules and regulations relating to testing frequency, sampling, component testing, re-testing requirements, testing standards for phthalates and ASTM F963, enforcement policies and certification of sufficient laboratories to handle the market’s volume requirements.

The Stay has served its purpose well. When originally adopted in January, the Commission intended to create a pause to allow the issuance of implementing rules and further permit market adjustment to those new rules. The Stay was needed to avoid confusion and chaos in the marketplace. Unfortunately, the task of issuing implementing rules to fully realize the goals of the Stay has not been completed. The incomplete state of the full range of testing rules and related activities (like test lab certification) has prevented full implementation of testing and certification in the marketplace. While many companies are testing aggressively, as the much-reduced toy recall rates attest, the market is simply not ready for full implementation. No one knows what full implementation even means.

Many critical tasks remain incomplete:

• The "15 Month Rule" was not issued when due on November 14th. The stakeholder feedback from this week’s workshop on the “15 Month Rule” has not been received, much less reviewed or digested.
• Comments on the "15 Month Rule" are due on January 11. These comments have not received yet.
• The CPSC has not even solicited comments on the lifting of the Stay from stakeholders.
• Component testing rules have not been promulgated, despite calls by Commissioner Nord in her January 30th Statement on the Stay.
• The CPSC has not issued its phthalates test standard.
• The CPSC has not certified any testing laboratories for the phthalates test standard yet.
  The CPSC has not certified labs for ASTM F963 testing yet.
• The CPSC admits that it has not certified enough labs to handle a full burden of testing for many product classes or safety tests.
• The CPSC acknowledges that fixed testing costs are creating a serious burden on small businesses.
• The CPSC has not defined "children's product", "toy", "play" or "childcare article" yet.
• The CPSC acknowledges that many companies have not acted to fill market gaps like component testing because the rules are not final (or even drafted in this case).
• The CPSC is on its third enforcement policy on lead and lead-in-paint.

Other serious issues relate to the practical impact of the rules on the marketplace. First, the current rules are complex and disorganized, having been released in several places and formats. Even video testimony includes unique statements of agency policy. Some “rules” contradict other rules. Many important industry questions posed to the CPSC remain unanswered months or more than a year later. The task of mastering the vast array of FAQs, letter rulings, rules, exemption requests and so on baffles even the largest companies. Notably, Mattel officials complained of this very problem in a recent meeting with Commissioner Adler and speculated on the practical impossibility of compliance by small companies. The timing of the lifting of the Stay in February will clearly affect small businesses adversely.

Second, manufacturers and their supply chains need time to adjust to new rules. Many of these new rules are not even drafted yet, much less ready to be issued in final form after public comment. This delay is not the fault of the manufacturing community . . . but the consequences could be quite significant for manufacturers if the Stay is lifted suddenly. Most legislative programs that involve a significant change in process or requirements include time for adjustment by manufacturers. It is not unusual for supply chains to receive two or even three years to shift to the new requirements. For instance, U.S. Customs started working on its new “10+2” program in June 2004, issued final rules in November 2008, has been running seminars nationwide for more than a year, and will only fully implement 14 months later in late January 2010 (compliance date). A reasonable lifting of the Stay requires at least a 12 month lead-time from implementation of the last component of the testing rules. Furthermore, to ensure successful implementation, the agency will need to make considerable investments in supply chain education and training during that 12 month lead-time. The agency must also make sure that the final rules are clear, simplified and understandable. Anything less will expose most businesses to the constant risk of conflict with 51 different regulators – regardless of their corporate efforts to comply.

Some suggestions have been made to lift the Stay in piecemeal fashion. We strongly urge the Commission to lift the Stay in the “right way” all at once after offering the regulated community a clean, complete, coherent package of rules, regulations and certifications sufficient to put manufacturers in an adequate position to successfully and efficiently comply with the new rules. Rolling out testing rules one-by-one with a similar ramp-up of compliance will only ensure that no one understands the rules for as long as possible.

The confusion engendered by a piecemeal implementation of the new testing rules will not only constitute a form of regulatory water torture, but will certainly cause regular conflicts between (a) the CPSC and its regulated community, (b) consumer groups, regulators and regulated companies, (c) State Attorneys General and regulated companies, and (d) regulated companies and their dealers/retailers. By lifting the Stay under these uncertain conditions, the Commission would be risking complete market chaos. The misery suffered by regulated companies and industries would be matched by equal misery at the CPSC. Under these circumstances, the agency would face a steady stream of crises caused by testing controversies and confusion without end. I fear that a drip-drip-drip implementation of the testing and certification requirements will render the agency crippled with overwork, inefficiencies and wear-and-tear.

These poor outcomes are avoidable by dynamic Commission action to delay the lifting of the Stay.

Manufacturers of children’s products are good law-abiding citizens who want to follow the law. Until the CPSIA rules are clearly written and implemented, following the law is an impossible task. Please take bold action to support the lawful activities of the regulated community by promptly continuing the Stay for one year past the issuance of final implementing rules and regulations relating to testing frequency, sampling, component testing, re-testing requirements, testing standards for phthalates and ASTM F963, enforcement policies and certification of sufficient laboratories to handle the market’s volume requirements.

Thank you for consideration of my views on this important topic.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.

Chairman
Alliance for Children’s Product Safety