Sunday, November 29, 2009
In my blogpost, I noted that children's products with paint require independent testing while painted non-children's products used in the home and around children only require a GCC, no testing. That makes NO sense to me, as explained in my blogpost.
I received a series of emails from a regular reader of this space, someone with a great deal of expertise in the CPSC and its practices. Let's just say, this person knows quite a bit more than me. Here's what my reader said in reply to this essay:
"I think the implication that children's products needed some special class of testing by someone other than the manufacturer was highly questionable to begin with. (Put another way, why should we distrust children's product manufacturers? Or in the alternative, is the risk from such products really so much higher that special safeguards were necessary? In truth, most of the serious injuries and deaths that led to recalls were because of defects and not because of non-compliance with rules that you could test for.)
. . . .
Unfortunately, there seems to be a national trend--including other agencies and state and local governments--of legislating requirements based on junk science disseminated by interest groups. This leads not only to incredible costs, or loss of product for consumers, but diverts the attention and resources of the agencies from their core mission of reducing deaths, injury, and illness. That is the ultimate irony here: that in promoting safety some of these presumably well intentioned people are in fact likely decreasing the public safety."
Score one for people that actually know what they're talking about! Couldn't say it better myself (although I have been trying for about a year).
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.
Saturday, November 28, 2009
In Mattel's public meeting with Commissioner Bob Adler, Mattel sounded bedraggled and overwhelmed by the new law:
"Peter Biersteker, a lawyer for Mattel with the law firm Jones Day in Washington D.C., said his client is finding the CPSIA difficult to decipher. The law, he said, is unclear on what products the company needs to test, how often it needs to test them, and how many samples need to be tested. 'It's a lot of work. I don't know how smaller companies do it,' Biersteker told Commissioner Robert Adler. Despite Mattel's large team of in-house lawyers, he said, the company needed to hire outside lawyers to help understand the CPSIA. He said Mattel holds weekly conference calls on the issue, discussing how to comply with the act while remaining 'cost competitive.'"
Ed. Note: Hmmm, where have I heard this before??? Oh yeah, in this space, about 100 times since the blog went live in January. Key points:
- The new law is unclear
- The implementing rules are unclear
- CPSC guidance has not resolved these mysteries (and IMHO made them worse)
- A team of lawyers is needed to interpret the mess - a team of business people is insufficient
- Small businesses have no chance under the CPSIA
- Internal resources are overwhelmed by the CPSIA's legal demands - even for companies with a large internal law department
- The seriousness of the legal risks under the CPSIA means that any prudent company MUST hire expensive outside experts to provide compliance advice (and for many small businesses, this is just not a realistic option economically)
- Remaining "cost competitive" is a seemingly unsolvable puzzle under this law.
And if Mattel says so, it MUST be true.
Adler was sympathetic (I can see the tears welling up . . . ):
"Adler responded with, 'Believe me. I've been struggling to learn it myself.' He said it's hard for CPSC to issue guidelines that are applicable to both large and small firms."
So the Commissioners themselves don't understand the law and the agency's rules. Join the club. And Adler admits that the law doesn't permit the agency to address small business concerns adequately.
Perhaps the CPSC leadership should talk to Congress??? Hey, that's an interesting thought . . . .
More good news - Mother Mattel is trying get the rest of the world to adopt the U.S. insanity:
"[Jim Walter, Mattel's senior vice president of product integrity & chief regulatory officer] said Mattel is working to internationally harmonize future product safety standards, finding that harmonizing standards after they have been issued is too difficult."
I have also heard directly from the TIA and others that lobbying efforts are underway to make the CPSIA a world standard. In other words, by drumming up support for this craziness, the big toy companies can ensure that no one will escape the costs that they must incur to remain active in the world's largest toy market, the U.S. To heck with small business interests! How generous of Mattel to get behind the law developed in response to its own bad behavior. I am so grateful for their guidance and oversight - they did such a great job in 2007/8, no doubt they will do even better now!
About the only consolation I can offer is that I don't think the failings of the CPSIA are lost on the outside world. The recent ICPHSO conference in Toronto made clear that no one in Canada is clamoring to use the CPSIA as a model for their new safety law. Contentions to the contrary by officials in this country must be taken with a grain of salt. It is abundantly clear that the CPSIA is yet another self-destructive initiative by the worst Congress in U.S. history - and no foreign government is in any hurry to work that magic on their own economy just because Henry Waxman and his merry band has Hari-Kari in mind for us. Interestingly, other countries seem to know that jobs matter.
Mattel's admissions frame the challenge for the rest of us. We need to make sure that the CPSC is well-aware of the completely unrealistic scenarios they are forcing on businesses (large and small) and to hold them accountable to push Congress to address these issues SOON. 2010 is an election year and it will be increasingly obvious to one and all that we will have our chance to replace those members of Congress who will not cooperate with our reasonable requests. Let's hope that they can see the future . . . and choose to act before it's too late.
- All Terrain Vehicles
- Architectural Glazing Materials
- Bicycle Helmets
- Bunk Beds
- Carpets and rugs
- CB Omnidirectional Base Station Antennas
- Cellulose Insulation
- Contact Adhesives
- Cigarette and Multipurpose Lighters
- Dive Sticks
- Fireworks Devices
- Garage Door Openers
- Lead in paint (We knew about that one! But didja know: "Some applications are exempted including mirror back coatings, metal furniture, blinds, chandeliers, fixtures, appliances, manufactured windows, artist paints. Agricultural and industrial uses are also not covered. Touch up paints for the exempted applications that contain lead must be labeled.")
- Refuse Bins (I was wondering when the CPSC would start regulating garbage cans!)
- Swimming Pool Slides
- Vinyl Plastic Film
- Wearing Apparel (except hats, gloves, andfootwear)
These items may have exceptions - you will have to scrutinize every word of the 31-pager issued by the CPSC to know the full extent of your requirements.
I have always said, there ain't no problem that can't be made better with more paperwork! Pretty soon the CPSC may require that we exchange GCCs before shaking hands (noting the application of Purell at all appropriate times). Nothing Orwellian or self-destructive about this mania, is there???
Okay everybody, call your suppliers and get all that paper flowing!
Sunday, November 22, 2009
This past week, CEH capped off a six-week investigation of 250 children's items at the request of or in partnership with the CA Attorney General's office, finding seven mildly offending items. As detailed in my blogpost last Wednesday, this rogue's gallery of offenders include a pair of shoes (soles), sandals (insoles), a poncho, a small patch of material on a bicycle accessory and the like. The CA AG issued cease-and-desist orders on his own, cutting the CPSC out of the picture, and a media feeding frenzy ensued. Presumably to the delight of the CEH troublemakers, Oregon followed up with its own action. [To Oregon's credit, they indicate they would inform the CPSC of their concerns, not take a direct recall action like the CA AG.] Perhaps other States plan to follow the CA lead and jump down the retailers' throats for these trivial defects.
How did this come to pass? It turns out that the starting point was a tip by CEH on another lead case, this one involving Mattel. As you know, Mattel was responsible for some major lead-in-paint recalls in 2007/8. These recalls were a result of a violation of longstanding federal law, and the authority for the recall was found in the CPSA (before its amendment by the CPSIA). [In other words, the new law was not required to force Mattel to recall these items.] It turns out that California's Proposition 65, its notorious consumer-right-to-know law, was also violated by those recalls. The insidious Prop. 65 (explicitly exempted from preemption under the CPSIA by the powerful California Congressional delegation including Senators Boxer and Feinstein and Reps. Pelosi and Waxman) requires that products exceeding (in this case) its lead standard be labeled to "inform" the consumer. Prop. 65 lead standards now match the federal standards. By violating the federal standards, Mattel also violated the Prop. 65 label requirements, thus giving California the chance to extend its palm for penalties and other concessions.
In the first of many settlements relating to its recalls, Mattel and other companies settled
a Prop. 65 lawsuit and paid a collective $1.56 million in penalties and fees. [The CA AG extracted similar penalties from Target, TRU and KMart for lead violations earlier this month.] It turns out that this $550,000 penalty case stemmed from a rat out by CEH: "This agreement settles a lawsuit filed by the State of California and the LA City Attorney in November 2007, after receiving notices of violation from the Center for Environmental Health, As you Sow, and the Environmental Law Foundation." Part of the money extracted ($550,000) was applied to a fund "to test toys for lead and improve outreach about future recalls."
So how did Mattel's misery pay off for CEH? The CA AG's press release tells all: "In 2008, Brown's office reached a settlement with several major toy companies over excessive levels of lead in their products. The settlement allocated $548,000 in funding for consumer safety groups to monitor lead levels in consumer goods and to provide outreach about product recalls. The Center for Environmental Health discovered the current violations with a grant from the Public Health Trust, which administers the settlement fund."
So, here's the game - CEH finds violations of the law, and then puts in for grants to find more violations, all funded by the violators. CEH is a not-for-profit - it is not a business, does not make or sell products or services for a profit and its officers and employees have no source of funding other than contributions . . . until now. Proposition 65 is their new funding source. Shaking down corporations under the auspices of Prop. 65 to provide funds for new hires, salaries, raises, perhaps even bonuses. Thus, the unholy alliance of plaintiff lawyers and consumer groups is made even more cozy. Consumer protection as a plaintiff lawyer's dream. Job well done, CEH!
CEH and its ilk want you to believe that they are simply out there to protect your interests, which is the reason presented to explain their "passionate" search for "scofflaws". But does that explanation hold water when the consumer group is essentially working on a commission for pay? Can you really be sure these violations are actually dangerous when it is clear that CEH must find them to pay its rent or keep its officers on the job? And what about the interests of the local politicians in this dynamic? Jerry Brown wants to be California's governor - what are his incentives in this case, being egged on by the pay-by-the-violation consumer group?
Does anyone see the possibility of conflicts of interest here? What is that odor I smell?
Aside from the OUTRAGE of CEH taking money for its escapades, the entire Proposition 65 gambit seems to be a parallel safety law allowing a local politician to upstage and trump federal regulation, all the while shaking down companies with duplicative penalties for the same offense. Mattel, no particular object of sympathy in my book, was hit with Prop. 65 penalties (collectively with others, $1.56 million), a "consumer fraud" settlement with 38 states for $12 million, a CPSC fine of $2.3 million and a class action settlement said to be worth more than $50 million. Since Proposition 65 is exempted from preemption by our wise Congress, this liability bonanza will continue to plague the toy industry for a long time to come (forever?).
What is the consequences of the long term, relentless, pointless (from a social good standpoint) assault on our industry under Proposition 65? A poisoned well. What do you think will happen to small business vendors to retailers who have been hounded and hunted under this law? The ultimate in skittishness. It is just not possible to satisfy their hunger for safety mania. As an example, a large national retailer has been demanding that our company test every product for lead-in-paint . . . regardless of whether it has any paint on it. That can only make sense in a world where the consequences of violations are too horrible to contemplate.
Is a violation of this law really worse than mass murder? I think not. This week's CEH violations are innocent and have not and will not harm anyone. They are minor manufacturing defects and can be corrected easily and inexpensively. By making each such trivial violation into a capital case, the cost of doing business skyrockets, profit incentive crashes and many players exit. We have already seen one offering memorandum for a customer of ours who can't take it anymore. Most of the exits are quieter and harder to detect. See my post about Whimsical Walney. If we allow regulators to run roughshod over our industry this way, there won't be anything left to protect. That would be terrible for all Americans. Sometimes you don't know what you have until you lose it.
This is your country. Think about the corruption of fee-driven consumer groups and marauding State AGs who don't answer to the CPSC. What are you going to do about it???
It is worth noting that Michelle's testimony provides evidence that considerable infrastructure exists now - widely-adopted voluntary standards designed to protect consumer privacy and to make visible the practices of direct marketers. Michelle argues that the empowerment of consumers online makes these good practices a market necessity.
In fact, consumer data is rarely if ever sold (to my knowledge, we have never purchased it). Consumer data is RENTED for one-time uses typically and is not disclosed to the company renting the data. For instance, if we mail a catalog, we define the kind of names we want to rent, but never SEE them - they go directly to the mailing house and do not become our property. This makes perfect sense because the compiled lists are the intellectual property of the company that rents them out - and if they SOLD the names once, they could never sell them again. They would be out of business after one sale. Thus, we never get to see the names we rent. In fact, it is highly likely that we have rented many of the same names over and over for different mailings or email blasts. Privacy cannot be violated by uses that do not involve disclosure!
Michelle's statement is found below (sorry, the audio is a bit tinny). Media coverage of the hearing highlighted Michelle's testimony.
Thursday, November 19, 2009
CPSIA Casualty of the Week for November 16:
“Pockets of Learning” Emptied by CPSIA
Special Needs Products Being Driven from Market By Testing Costs
Pockets of Learning is a Rhode Island-based company that for 20 years has designed, manufactured and sold unique heirloom-quality cloth toys and gifts, many of which offer skill-building experiences to children such as tying, matching, buttoning and counting. The company helps fill niche markets, including special needs, religious and independent retailers. Pockets of Learning has an impeccable safety record, and has never offered a product to the marketplace that had not been tested according to CPSC requirements.
On November 10, 2009, Pockets of Learning informed its customers that thanks to CPSIA, it will no longer sell its "How Do I Feel Today?" wall hanging, a bear-themed product sold for young children with special and emotional needs. The company told its customers that it "can no longer afford to manufacture and offer these products, due to the over 500% increase in safety testing cost…The annual volume of the product does not allow for the investment required to properly safety test under the new CPSIA guidelines."
The loss of this item was made known to us by a leading distributor of therapy tools and other products for educational professionals and psychologists who had his order cancelled.
Pockets of Learning President Jack Grant told us in an e-mail that this product loss is only the "tip of the iceberg." Due to the financial impact of CPSIA testing, Pockets of Learning is planning to reduce its product line from about 65 products to approximately 22 because of "the reality that CPSIA testing would typically add 30% or more to the cost of each item" made in small production runs.
Large multinational manufacturers who make high volume items can absorb higher testing costs imposed by CPSIA. But the thousands of small businesses across the country that fulfill specific, niche markets are the untold casualties of this law. Worse yet, kids in need are losing access to essential teaching materials. "How Do I Feel Today?", indeed!
For more information, please contact Caitlin Andrews at (202) 828-7637 or e-mail firstname.lastname@example.org
These standards are yet another massive threat to the manufacturing community. It is essential that MANY companies contribute their ideas and comments to protect our ability to do business with the mass market merchants. Frankly, you ignore this standard at your peril. Please send RILA your comments.
Earlier this year, the Retail Industry Leaders Association (RILA) joined with the British Retail Consortium (BRC) to develop a retail-led, Global Standard for Consumer Product Manufacturing (GSCPM). RILA has been distributing drafts of the Standard through fellow trade associations, including possibly your own, since July 2009.
You have been identified by a RILA member as a key stakeholder in the development of this Standard and attached you’ll find the latest draft of the BRC/RILA Global Standard for Consumer Product Manufacturing.
As the BRC/RILA Standard drafting process comes to an end, we welcome your comments and value your feedback on the content. Please email all comments directly to Jim.Neill@rila.org by December 1, 2009.
Key components of the BRC/RILA Standard includes development of Sector Specific Guidelines, as well as a phased, orderly implementation. Please consider working with us in the development of these in the near future and let me know if you’re interested.
In addition to the BRC/RILA Standard, you will also find attached a Frequently Asked Questions document about the Standard and the program. If you have further questions, please do not hesitate to contact me.
I look forward to working with you in the upcoming months.
Vice President, Product Safety
Retail Industry Leaders Association
1700 N. Moore Street, Suite 2250
Arlington, VA 22209
Wednesday, November 18, 2009
CEH justifies its actions to destroy the children's product industry with misleading facts about lead. Here's how they describe the dreaded danger they are "protecting us" against:
"Lead is a stunningly toxic metal. A long list of problems has been linked to lead exposure: lowered intelligence, behavior problems, cancer, strokes, high blood pressure, kidney problems, anemia, cavities, and delayed puberty. While exposure to lead paint in old houses remains the most significant source of children’s lead exposure, about 30 percent of children with high blood lead levels are exposed to other sources of lead, including toys and other children’s products."
They go on to list a parade of horribles, such as "University of Cincinnati researchers found that arrest rates of young adults (both for violent crimes and all arrests) were linked to the blood lead levels of these adults when they were children. Higher childhood lead exposure was associated with higher arrest rates."
The interesting thing about these assertions about lead is that they are TRUE . . . and they are also IRRELEVANT in this case. There is absolutely no way to prove or even assert in any reasonable fashion that the products cited here could EVER poison children in this way or are responsible for ANY of the cited lead horrors. The CEH is just using plain vanilla scare tactics - did it work on you? Unfortunately, some newspapers bought it, hook line and sinker.
I hardly know where to start. Here are a few reasons to be flippin' mad about this stunt:
I. The Seven Items Present Little or No Risk. Consider this list of "frightening" product defects:
a. Disney Tinkerbell Water Lily necklace - Connector on pixie dust charm contains 22,000 parts per million lead. [I believe this connector is perhaps 3 mm in diameter.]
b. Barbie Bike Flair Accessory Kit - Pink star fabric contains 6196 parts per million lead. [This is an item used on a bicycle.]
c. Dora the Explorer Activity Tote - Orange fabric on back of tote contains 2348 parts per million lead. [I believe his fabric is not detachable and cannot be chewed.]
d. [This one's my favorite] TKS girl’s sandals - Orange insole contains 3957 parts per million lead. [To access this lead, you must lick or chew on the INSOLE of a pair of sandals. Yum!]
e. Kids poncho - Yellow fabric contains 677 parts per million lead. [Gotta chew on your poncho.]
f. [This is a close second] Faded Glory girl’s shoes - Sole contains 1331 parts per million lead. [It's like my old joke about licking the soles of your shoes after walking to school. Happens all the time . . . .]
g. Cherokee boys belt - Surface of belt contains 4270 parts per million lead. [I have no idea what the problem is here. Still, belt chewing is exceptionally rare and not foreseeable in my opinion.]
I hope you haven't begun rioting in the streets over these tragic "violations of law". Let's recap - this rogue's gallery includes a CONNECTOR, the fabric of a decorative star on a bike accessory, backing on a tote, the INSOLE OF A SHOE, the SOLE OF A SHOE, a poncho and a belt.
Let me be blunt - how brain-damaged must someone be to actually believe these things are dangerous?
II. Cassandra Here, Have I Mentioned My Concern about State AGs? Ahem, I believe I have noted my strong concerns about State AG enforcement of the CPSIA in the past (note, especially my April 4 post about Mr. Brown). In fact, I made a big point of this issue in my unread letters sent to the Congressional conferees in July 2008 . . . to no avail. Obviously, I was way off in my thinking. Worrywart . . . .
How outrageous is Mr. Brown's enforcement action? Well, he worked in concert with CEH apparently without talking to the CPSC. CEH practically brags about this ("In collaboration with the California Attorney General the Center for Environmental Health has spent the last six weeks monitoring compliance with the new law. . . . In October and November 2009 we purchased about 250 children’s products from major retailers in the Bay Area and San Diego. . . . We provided information about all of the violations to the California attorney general for enforcement action."). The CPSC seems to be irrelevant to CEH and Mr. Brown.
Ahem, CPSC - what do you think about being rendered irrelevant by a grandstanding State AG and an even more disruptive consumer group? Welcome to my world. Ms. Tenenbaum, in your continuing efforts to cultivate a positive relationship with the State AGs, you may wish to reflect on the behavior of Mr. Brown and his apparent commitment to you and your efforts to calm the markets and implement the new law. Yes, commitment, that's a nice word for it, don't you think?
Here's a word to ponder: "preemption".
III. Publicity-Hungry Consumer Groups Have Proven Their Own Corruption. Stirring up this kind of public shame and panic may be good for raising contributions to CEH, but it is nothing more than a shameful demonstration of anti-social behavior. REAL JOBS and REAL LIVELIHOODS are impacted by CEH grandstanding and NO possible public good was accomplished by the latest losses inflicted by the new toy safety laws. Even CEH concedes things are much better these days (on CBS News, Executive Director Michael Green noted "It is definitely a safer Christmas than it was two years ago."). Thanks, Mike, you have really reassured the American consumer!
CEH's grandstanding over ridiculous assertions of danger is irresponsible and in light of Green's concession of the safety of the marketplace, morally corrupt. Consider that in a six-week effort to find something "bad", the CEH schemers examined 250 products, and all they could find is a connector to a charm, the sole of a shoe and the INSOLE of a shoe. Wow, what a smoking gun! However, with a hepped-up State AG perhaps preparing a gubernatorial bid, even these pathetic findings are the perfect makings for a publicity event.
As if these acts of desperation, self-interest or moral degradation were not enough, both CEH and State AG Brown then attempt to convince the public that these products actually constitute a danger. "'Private testing uncovered a number of products designed for children that contain dangerous and illegal levels of lead,' Brown said in a prepared statement. 'These products must be removed from store shelves at once to protect our kids from toxic lead exposure.'" In the quote above, CEH contends that the presence of lead in products like this can be connected to "lowered intelligence, behavior problems, cancer, strokes, high blood pressure, kidney problems, anemia, cavities, and delayed puberty". Oooh, sounds AWFUL - now prove it! CEH and their merry band of anti-commerce loonies can only assert these harms - NO data exists that can link lead in these manifestations to ANY physical harm. But what's a good consumer group publicity event without unaccountable fear mongering?
Any sane adult or experienced parent knows that all this is baloney. This sad state of affairs confirms that the consumer groups do NOT deserve a leading role in setting the rules of the road in safety. They gave up the moral high ground when they decided to sell fear rather than advocate for safety.
Final Words: I was recently sent a blogpost link written by a consumer group about my testimony at the CPSC on November 10 about the CPSIA public database. Of course, since I am apparently a force from the Heart of Darkness (as you know), the consumer group blogpost scorned my testimony and painted the usual conspiracy theories that the wingnuts tend to favor. What was particularly notable about this post was the following note at the bottom of the page: "Comments are closed."
Get it? The consumer groups like having the last word. They like spreading the news that best suits their interests but don't want to answer to anyone else. [We have seen this before.] The consumer groups depend on the kindness of strangers - they need your contributions to pay their salaries. What better way to do this than sell their souls for some headlines? If you are the ones paying into their coffers with the thinking that they are looking out for you, I think you should carefully ponder the "good work" of Mike Green and his gang this week. Is this good for America? Is anyone safer now or better off? Or . . . are CEH and the other aligned consumer groups a bigger part of the problem than previously recognized?
After this stunt, I certainly hope no one will stick a microphone in Mike Green's face again.
Saturday, November 14, 2009
Consumer 'safety' law strikes bad notes
Seventy-six trombones left the big charade. A thousand and 10 store debts are close at hand. There are zippers, keys - so many amenities - all outlawed because Congress is blind. With apologies to Meredith Willson's 1957 Broadway show "The Music Man," such could be the latest fallout from the draconian Consumer Product Safety Improvement Act.
Congress passed the misnamed CPSIA in 2008 to protect consumers, especially children, from all manner of supposed dangers in ordinary products. The CPSIA's most stringently targeted danger is lead, which clearly can be a health hazard. The problem is that the CPSIA leaves all reason behind, setting allowable lead limits so low, with so little room for common-sense exceptions, that it effectively bans huge numbers of harmless products used in everyday life.
A veritable smorgasbord of business groups and grass-roots activists have arisen to fight the CPSIA - among them an outfit called the Alliance for Children's Product Safety. Its Web site, Amend the CPSIA, used the "76 Trombones" motif to complain about the Consumer Product Safety Commission's latest ruling concerning the CPSIA, which effectively outlaws all brass used in children's products. (One component of brass is lead.) By a 3-2 vote on Nov. 4, the commission decided that Congress had left no leeway for common-sense exceptions to the brass ban.
Result? To quote at some length from the alliance's Web site, "In addition to brass zippers, grommets and other apparel and footwear components, victims of this decision include brass instruments, musical bells and certain strings used in a string instrument. By in effect outlawing brass in children's products as defined by CPSIA, ... the CPSC's actions call into question the future of school bands. Will young musicians in their school band's brass section now have to hum along with their peers, or switch to the recorder or a (plastic) kazoo?
"The fact is that brass is routinely used in countless products used and touched by children daily, including door knobs, locker handles, and much, much more. There is no danger of lead poisoning from brass. CPSC staff wrote that they consider brass bushings safe. ... However, staff believed that CPSIA offers no flexibility to the CPSC to assess risk."
Commissioners Nancy Nord (former chairman of the commission) and Anne Northup (former congressman from Kentucky) dissented from the hard-line anti-brass vote. Wrote Ms. Nord: "This does not advance consumer safety, diverts staff resources from real safety issues, and puts an unnecessary burden on manufacturers and sellers of children's products." Ms. Northup chimed in that "unless [Congress] act* soon, more small businesses will be forced to shut down."
Ms. Northup is right to put the onus on Congress, which passed a truly counterproductive law. For well over a year now, Congress has been flooded with specific and reasonable complaints about multiple aspects of the CPSIA. These consequences include the destruction of children's books published before 1985, the silencing of charitable auctions and the shuttering of thrift shops nationwide.
Yet the congressional leadership has turned a blind eye to all the evidence that its handiwork is awful. Neither congressional committee with jurisdiction over the law has held a single hearing featuring a single critic of the CPSIA.
With more than 10 percent of the American work force officially unemployed, Congress should be jumping through brass hoops to fix any laws, such as CPSIA, that hobble the economy. But when it comes to putting practicality over rigid ideology, it seems Congress' top brass can't be bothered.
Wednesday, November 11, 2009
Please note that this is the third time I have testified in front of the CPSC about the CPSIA (lead panel, tracking labels panel, database panel). I believe that out of the 30 presenters at these hearings, I was the only operating company that stood up and gave comments, besides a ladder company at this week's hearing and a software company shamelessly trying to sell tracking label software. I cannot do this alone. You will get out of this what you put into it.
There is a great chance to make a contribution at the upcoming IMPORTANT two-day workshop on the so-called 15 Month Rule at the CPSC on December 11/12. See the CPSC notice here. We need to have some bodies at this meeting. The CPSC wants feedback from the regulated community, from real people with pain points. If we want the CPSC to work with Congress to fix the law and to implement it in as sensible a way as possible, we need to provide direct feedback. Ask yourself whether it matters that no children's product company testified about the database besides Learning Resources after you watch my presentation. It's a pretty important subject, others should have been there to defend their interests. Get involved - we need your help.
Part I (5:19)
Part II (6:20)
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.
♪ ♫ 76 Trombones Taken Away by the CPSC… ♪ ♫
CPSC Ruling: The Day the Music Died for Elementary School Brass Bands?
In an unfortunate but widely expected decision last week, the Consumer Product Safety Commission (CPSC) voted 3-2 to reject a petition to exempt brass from the new CPSIA-mandated lead standard.
The Guidance is generally helpful and clearly well-intended. This is a helpful change in tone that will be welcomed by the business community. I encourage the CPSC to keep working on the tone of its communications to rebuild trust with the business community.
As a general matter, I find that this guidance speaks with two voices, one focused on reasonableness and good judgment with the goal of safety, and the other focused on rule-following and a byzantine structure for compliance judgments that is divorced from concepts of safety. For instance, the guidance stresses the importance of third party testing of lead-in-paint on children's products. The guidance includes an extensive section with very specific suggestions on how to accommodate lab testing for various paint scenarios (Sec. D), suggesting that the CPSC thinks that lab testing is absolutely required to assure compliance with this standard. Later, the guidance notes that "Painted non-children's products likely to be used in the home and around children, and wet paint in the can also must comply but can be accompanied by a general certificate of conformity." So, the CPSC apparently thinks it is essential to test SOME products for lead-in-paint that children will regularly encounter in the home, and as for the rest, they are prepared to trust the manufacturer. It also suggests a much lower sense of urgency on lead levels in those other products. From a safety perspective, one of these approaches must be right but they both cannot be right at the same time. How does the CPSC expect their rules to be respected (or understood) if they blow hot and cold on such an important subject?
There are other conundrums, such as conflicting uses of the term "reasonable certainty" and "reasonable assurance" when describing compliance. These terms have very different meanings and connotations. [The better term is "reasonable assurances" because "reasonable certainty" is an illogical term akin to "nearly precise".] In addition, at times in the guidance, the CPSC describes in great detail the factors that a reasonable manufacturer should weigh in making judgments, and then in other seemingly similar circumstances, articulates bright line compliance requirements. Bright line rules are almost certain to cause chafing, as there are so many different industries affected, and many companies have innovated in safety and supply chain processes designed to assure good quality. Specific bright line rules will offend innovators and will tend to force them to share or squander their proprietary efficiency gains. For instance, phthalate testing plans and frequency is something that should be left to the best judgment of manufacturers. Why? Because phthalates are additives not found in nature, and if the manufacturer's supply chain has been trained to eliminate it as an additive, testing and retesting won't find it. The incentive to run your business well is eliminated when you cannot capture the benefits of efficiency.
It would be my strong preference that the CPSC rethink this guidance from the perspective solely of a safe environment for children. As a starting point, the CPSC Staff must candidly decide if they think children are in danger now and describe precisely how they are in danger. The concept of "no safe levels of lead" has been debunked by CPSC Staff and even the Commission itself. To my recollection, no lead exemption request under Section 101(b) has been rejected for safety reasons, only for lack of flexibility in the statute. In addition, in last week's brass bushings hearing, Commissioner Adler repeated the consumer group's slogan "no safe level for lead" and then went on to state that the Learning Curve toy cars (subject of the exemption request) were perfectly safe to use even with a child at some hypothetical tipping point in blood lead levels. Thus, both CPSC staff and Commissioners concede that there are safe (tolerable) levels of lead. We need to move past sound bites and refocus on the real safety problems faced by children. Some of these problems probably involve lead (bio-available lead). I believe the agency can identify those risks that deserve attention, and would concede that the rest do not (at this time). This is crucial for a system of rules that will be respected by the stakeholders in the safety debate. Silly implementing rules lead to silly results, unfortunately; famously, the CPSC has "okayed" several metals for inclusion in children's products that are KNOWN to be quite dangerous - all because they are also known to be lead-free. A set of rules focused on real safety considerations will be much better received and will be far more effective, too.
It is also worth noting that the complexity of this guidance will likely defeat its purpose. When it takes 31 pages to explain how to sensibly test your products, with two dozen FAQs to clarify the ornate rules, it is clear that something's wrong. If the CPSC wants rules that will be understood by the "masses", the rules must be simpler and more focused and manageable. It is important that to note that the regulated community will not put the time into mastering the nuances of these rules like the few interested parties have done for the last year. Rules that work are shorter and simpler. My preference would be rules along the line of the factors listed in B.4 coupled with a requirement that manufacturers exercise good faith, make best efforts to comply and use reasonable or best judgment in making decisions. This both describes how a best-of-class enterprise thinks through safety issues and creates a basis for the CPSC to take action against "bad guys". The rules can sacrifice some complexity and even some coverage in favor of ease of understanding in order to assure practical effectiveness.
a. The Five Steps approach to designing a "reasonable testing program" creates a mega-bureaucracy, but to what end? Is this being created because the CPSC thinks it is necessary to solve a known safety problem or crisis, or just to accommodate a badly-written law? I think it's the latter, and thus I believe it is appropriate to consider the new mega-bureaucracy to be a misdirected tax we will pay (to testing companies and others) annually. I think that's bad government policy, as I think taxes (if necessary) should be paid to the government, not to private parties. Notably, the five steps do not include any advice on supply chain management. The issues in supply chain management (addressed in part in a different list in B.4.) are the source of most non-design legal compliance issues. A testing-focused set of guidelines is unlikely to change safety statistics, in my view.
b. I am blown away by the list of items subject now to GCCs outside children's products. This completely escaped my attention previously. I think this will shock a lot of people. Again, this is a most unwelcome creation of new bureaucracy that is unlikely to serve any safety purpose. It is not designed to solve a real problem and thus cannot be justified.
c. The guidance makes the following distinction: "regulations concerning reporting, recordkeeping, inspections,: guaranties, certification, or tracking labels are not 'similar'" but "any requirement of a rule, standard or ban under another act enforced by the Commission other than the CPSA that requires a warning or instruction, or specifies the form thereof, is similar". How are manufacturers supposed to figure this out? What's an "instruction"? Why is a "tracking label" not "similar" but a "warning" is "similar"?
d. In the section entitled "Will the Commission Require General Conformity Certification that a Product is Not Subject to a Ban?", the guidance articulates a rule that everything within a class of products subject to a ban must be tested to back up a GCC. This will significantly increase costs but may not contribute to safety. The better rule is again to leave it to the reasonable judgment of manufacturers, as this will retain a focus on compliance, rather than testing for compliance. Overtesting, for instance for phthalates, will hurt small businesses disproportionately. If a business can organize its affairs to comply, they should be rewarded, not subjected to the same costs of companies less capable of managing their compliance obligations.
Overtesting and other bureaucracy that is not focused on safety will tend to punish U.S. small businesses in the international marketplace. Many companies, like ours, make a significant market outside the U.S. where our competitors do not have to follow U.S. rules to compete in those foreign markets. Overtesting for the U.S. market, or barriers like retesting for changing suppliers, will tend to create a long term cost advantages for foreign companies in foreign markets, reducing the ability of U.S. small business to enter foreign markets or remain competitive there. [Some members of the toy industry are advocating for international harmonization around U.S., rather than attempting to get U.S. standards and practices to become more rational. This "race to the bottom" can do tremendous damage - we need to rise above and set up a system that works but costs a lot less.]
e. The guidance should differentiate treatment of ink under the L-I-P rules and should state plainly the basic rule that if the can says "ink", it's ink and is not subject to the L-I-P test requirements.
f. The rules on retesting for a change in manufacturer need to be loosened. The guidance strongly favors mass market companies for their economies of scale and creates a barrier preventing or inhibiting small volume manufacturers from lowering their manufacturing costs. It goes without saying that lowered costs cannot sacrifice legal compliance or the duty of care toward consumers. It rarely does, in fact. The requirement for retesting will significantly hurt small businesses, however. It is important to note that changes in manufacturers is the most common reason for a change in components. For companies with stable product lines, swapping of components may not be very common. In our business, it is rare to change a component and not change the factory. Thus, we will gain little advantage from the rules focused on switching out components.
g. In Section B.2, the guidance strongly encourages annual testing. This will hurt small businesses. Our company's focus is on producing safe and legally compliant products. We tend to focus on those issues that might affect safety or legal compliance. In our case, few things change in our manufacturing processes that would affect either safety or compliance over time. Thus, annual testing is a waste of money and rarely provides useful information in the administration of our business. If you test and test and test and get the same results each time, what is likely achieved by the next test? Again, the guidance should be focused on substantive safety compliance, not substantive testing compliance. The ONLY solution that will work for all companies in all circumstances is a rule dependent on good faith and best judgment. The principles outlined in B.4. form a good starting point on principles of supply chain management for this purpose.
h. The concept that someone can track the myriad different testing cycles by the components in a product, for most businesses, is a fantasy. In addition, the guidance notes that it may make sense to simply retest the whole product on a regular schedule "a means of simplifying cost, administrative burdens, or other factors." In other words, the CPSC concedes that the market will not likely accept this relief. The scheme is unworkable as a practical matter. The CPSC should not put out rules it knows won' t work.
i. Small volume is not best described as 10,000 units. Remember, there are 300 million people living in this country and more than 100,000 elementary schools. TRU won't sell a product that sells only 10,000 pieces per year in its stores - and that's just one outlet. The better definition would be 100,000 pieces or at a minimum, 50,000 pieces.
j. The guidance confuses the purpose of testing for compliance with the purpose of MAQL testing/inspections. Testing for MAQL (Minimum Acceptable Quality Levels) requires a MILSPEC sample size. This is appropriate because you are usually looking for defects in manufacturing, not legal compliance issues. In my experience, most if not all defects that have legal compliance implications are managed adequately with a single sample. Think of lead-in-paint, for instance. Multiple samples pulled from the same lot will NEVER produce different test results unless there are two or more sources of paint being used. That's so rare and unexpected that it cannot justify regular testing of multiple samples. As with most of this guidance, the variance from the standard approach should only be justified by a real need, nothing less.
k. I must admit that while I find the rules on component testing helpful, I cannot help but think that they are making the CPSIA testing regime into a sham. A thick bundle of component tests performed at different times, in different labs, for a patchwork quilt of standards, will defeat the CPSC's, Customs' and our customers' best efforts to understand them. If the purpose of the testing is not to communicate information, then what are we trying to achieve? The absurdly complex result from the component testing rules may bring relief to small businesses but at a high cost - by turning the entire testing scheme into a "check the box" exercise for manufacturers, dealers and regulators. If that's what this is all about, why is anyone contending that children are not safe and need all these tests to be "safe"? This scheme is simply a by-product of writing rules to implement a mis-focused law, resulting in misguided rules that don't make a lot of sense for their original purpose, rendering the entire system an embarrassing mess. Rather than burn in a terrible legacy of high costs, incomprehensible rules and test reports that cannot be interpreted, why not rethink the system from scratch and come up with rules responding to real, known problems, and leaving everything else to the best judgment and good faith of manufacturers? After all, without any additional regulation by the CPSC, every manufacturer is already subject to a common law duty of care. Why not simply describe minimally some basics of a duty of care and let the market sort out the rest, reserving the right to regulate in greater detail as real dangers are identified?
l. The sample size rules on lead-in-paint will not work for products purchased through trading companies. This is a somewhat complex subject that requires more details than I can provide in this space right now (it's late!). Again, there needs to be some recognition that the general purpose of the legislation is to get people to test for lead-in-paint. If so, why not leave the rules on this to the best judgment of manufacturers when facing the de minimus paint issue? These instances are not likely to be true human health issues anyhow. The CPSC should also consider a de minimus rule on lead-in-paint to avoid the massive and wasteful losses from recalls like the Sarge cars in 2007 (over 400,000 units recalled because of two bad cans of paint used for detailing the cars). If you can't obtain enough paint from one sample to perform the test, perhaps the amount of lead at issue is simply not worth worry about!
m. The guidance (logic) on one-of-a-kind products (which allows the manufacturer to exercise judgment as to whether versions are "the same product") should apply to all manufacturers and all products. That is, manufacturers should be free to exercise this judgment on all products to simplify their testing without making any compliance sacrifices. This is something they can likely do with great insight. Consider, for instance, a manufacturer of 3-D topographical maps: do they need to test each different map or can they consider each variant the same "product"? The rules should permit this reasonable judgment by ALL manufacturers.. This will save many companies a lot of money. They are waiting for the CPSC to say it's okay, and then they can start grouping test reports to save money. This will be a big win for small businesses, if accepted by the CPSC.
n. The CPSC should put out a FAQ about the formation of groups for testing purposes. In other words, they should bless companies or trade associations testing on behalf of groups of users of components or materials.
To sum up, the rules are helpful but would be much better if refocused on real safety issues, if shorter and less complex, and if they were more reliant on the good faith and best judgment of manufacturers based on common sense principles of duty of care.
Saturday, November 7, 2009
NOVEMBER 7, 2009
Congress's Brass Knuckles
Another casualty of the lead toy 'safety' law.
The wheels on the bus won't go 'round and 'round in many playrooms this year if the Consumer Product Safety Commission has its way. On Wednesday, the Commission voted against a petition to exempt small pieces of brass used in the wheels on toy cars, tractors and buses from draconian lead standards. The fiasco is one more sign that Congress must address the chaos created by its 2008 law regulating lead in toys.
Lead is a typical component of brass but poses minuscule risk to children through toys. As the CPSC's own staff remarked, "the estimated exposure to lead from children's contact with the die-cast toys would have little impact on the blood lead level." But no matter, the language of the law says the Commission can't consider risk in granting exclusions. Any potential absorption of lead at all is grounds for a ban, despite its presence in other common brass fixtures kids get their hands on regularly, like doorknobs and keys.
Democrats in Congress have insisted that problems with the law they wrote are the fault of the CPSC charged with implementing it. How's that going? Following the Commission's 3-2 vote against the brass exemption, CPSC Commissioner Anne Northrop noted that the decision not to grant a brass exemption shows that "the Commission does not believe there is any [flexibility] written into the law." Without action from Congress to address the chaos it created, Ms. Northrop said, "More small businesses will be forced to shut down."
CPSC Chairman Inez Tenenbaum has insisted that changing the law would be "premature." Yet it has already been more than a year of bedlam for manufacturers and retailers negotiating these rules. In February, the CPSC's one year stay of enforcement on testing will expire, opening the field to more crackdowns on small businesses.
Many of the worst problems were apparent when the bill was written but lawmakers ignored the warnings in order to satisfy Naderite interest groups. Democrats have refused to fix this mess, at great cost to businesses, and further underscoring government's reputation for unfairness and incompetence.
Friday, November 6, 2009
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 November 2:
The Final Adventure of Whimsical Walney:
CPSIA Claims another Home Crafter
Dana Lardner started Whimsical Walney in 2004 to showcase handmade products with the theme "let children play." She sold items such as kids' fabric books, foreign language-focused clothing, and outdoor blankets on her website. Dana always focused on product designs that promoted a child's imagination. In April 2009, almost a year to the day that she reintroduced Whimsical Walney with new branding and a new website, Dana shut down her business because of CPSIA.
"I decided to close my business because I had planned to introduce a new line of products. I was going to sell off existing inventory and then discontinue several of my old products to focus my business and build my brand. Because all my products would be defined as “children's products” under the CPSIA, I would be required to test everything for lead and some for phthalates. It would have been cost prohibitive not only to test products that I don’t intend to continue selling, but also to test yet-to-be-released products whose acceptance in the market is unknown. I know that there was a stay of the testing requirement, but the writing was on the wall for businesses like mine. From the tracking label requirements to the prohibitive penalties, I just could not take the risk of staying in the children's product market."
Dana has shifted her business to focus on products specifically designed for adult consumers such as handmade housewares and accessories. Unfortunately for kids, Whimsical Walney is yet another product line and small business that has left the children's product market – not because any of the products were unsafe, contained dangerous levels of lead, or could anyway harm a child, but because of the inability to concurrently market and build her business while also managing the undue overhead of the irrational provisions of CPSIA.
Dana started a CPSIA blog at her website: www.WhimsicalWalney.com.
Do not accept the status quo! Tell Congress and the CPSC to restore "common sense" to our nation's product safety laws. Click here for instructions on how to contact the CPSC and your representatives in Congress.
Thursday, November 5, 2009
a. Both Anne Northup and Nancy Nord put out press releases today lambasting the Learning Curve decision. The (apparent) polarization of the debate has now gone very public. The shame of it is that the Republicans seem to be the ones advocating for common sense while the Democrats continue to support decisions that would puzzle the man on the street. There is no reason that common sense should divide the Commission. Of course, it would be wrong to accuse the Democratic appointees of lacking common sense. Still, it's hard to argue with the position of the Republicans from the perspective of real world problems and risks. At least they are speaking out against Congressionally-sponsored folly compelling the agency to hold hearings about how many angels can dance on the head of a pin.
b. Commissioner Bob Adler called me today to retract his accusation discussed at the end of my last blogpost in a short section entitled "Interesting Side bar". Mr. Adler was contacted by representatives of Learning Curve who were upset at the idea that they had been selling toy cars in violation of the ban. It turns out that this is not true. When Mr. Adler became of his mistake, he (decently) sought to correct the record immediately. For that, he is to be commended. I want to make clear - the testimony at the LCI hearing that I reported actually took place BUT the substance of Mr. Adler's remarks was incorrect. Mr. Adler expressed his regret to me, and asked that I pass it along to you.
You have to admit that this is rather ironic. Mr. Adler accused Learning Curve of exhibiting "bad optics". Bad optics, indeed. The source of his misinformation was a staffer to one of the Commissioners who bought a LCI car from Amazon.com and assumed that this meant that LCI was violating the ban. This staffer took it upon himself/herself to pass on this assumption as a FACT to Mr. Adler. Actually, the inventory for sale on Amazon had been bouncing around for some time, and did not come from LCI after the ban went into effect.
To me, this mistake (and that's all it was) demonstrates several important points:
- The CPSC has a VERY HARD TIME understanding supply chains. There may be a tendency among some people working at the CPSC to see the economy as a very simple, linear beast. It's not. This situation illustrates the danger is making assumptions about how the economy is organized or underestimating the complexity of how goods go to market. Let's not forget the immortal words of Felix Unger in The Odd Couple TV Show: "When you assume you make an ass out of u - you - and me."
- To a business person (like me), it feels so often that the CPSC holds businesses guilty until proven innocent. Mr. Adler made a mistake, and that's to be expected of all of us mortals, BUT it feels too easy for the CPSC to judge us without digging too deeply into the merits. Maybe the business community isn't a nest of vipers. Just a thought. . . .
- The Commission has a tremendous ability to do harm. This (minor) incident will certainly not enhance LCI in any way. The Commission treads with elephant feet - it needs to try to be a ballet dancer.
- The problem of "bad optics" is resident at the CPSC today. The issue of tone and appearance and how they affect market participants - that is VERY deserving of consideration at the CPSC TODAY.
I hope this incident is reviewed carefully at the CPSC for "lessons learned". Mr. Adler's culpability here is not, IMHO, the issue. The bigger concern is the hair trigger, the guilty-until-proven-innocent atmosphere, the power to do harm, the effect of words and actions and inactions on behavior in the market. The Commission needs to pause for a moment and use this incident to do some soul searching. If that exercise is productive, we will all be grateful that this mistake took place.
Wednesday, November 4, 2009
PLEASE NOTE THAT I HAVE ADDED A POSTSCRIPT TO THIS ESSAY (11-5-09).
As expected today, the CPSC Commission rejected the petition of Learning Curve to exempt brass bushings in the wheel assemblies of its toy cars. I have written about this several times in recent weeks, most recently issuing my own "ruling". This innocent request was a loser from the start, not because of any safety issue but because of a very rigid and technical law that caught up brass bushings in its terrible web.
Some quick comments and tidbits:
a. Anne Northup emerged as the beacon of rationality in this debate, constructively offering a lawyer's argument that the word "any" means de minimus amounts of lead, not none. She pointed out that Congress okayed 300 ppm lead content in substrate suggesting that it considered some amount of lead to be tolerable. Adler called this analysis "brilliant" but disagreed with it, contending that the clear meaning of the word "any" is . . . "any". [The word "any" is critical to derive meaning from Section 101(b), the lead exemption section of the CPSIA. He also pointed out that the precedent in prior Commission decisions is that "any" means "any". [Who knew they'd read all those old decisions anyhow?!] Mr. Adler dipped into the consumer group handbook and stressed the health dangers of lead and repeated the "no safe level of lead" mantra. [It is hard to defend lead, and I have no intention of doing so, but as a matter of science, I think this is flat out wrong. Aside from the fact that we all consume lead by breathing, eating and drinking every day and must therefore being slowly poisoned with the government's apparent permission, toxicologists will tell you that the dose makes the poison. Thus, there are in fact safe levels for lead, notwithstanding that lead is a known neurotoxin.]
I agree with Adler's legal analysis and support reading the law using the plain English meaning of the words. I prefer the OUTCOME offered by Northup, but a rational set of laws depends on use of the plain meaning of the words. I am also supportive of respecting precedent if we want to maintain a sense of the Rule of Law. So . . . this means we are stuck with this awful law and its awful strictures until it is amended.
b. I wasn't the only one who realized that Congress needs to get engaged for the Commission to emerge from this corner. The debate on this topic was vigorous and fascinating. I recommend that you check out the video at your convenience. Adler pointed out that the language of the law is stringent ("rarely seen anything this emphatic"), intentionally so. Nord expressed severe reservations over this removal of discretion, noting that the CPSC is "the expert agency".
Nord and Northup wanted the vote on the LCI petition delayed or enforcement stayed until the CPSC could seek guidance from Congress or feedback from OMB. Adler would have none of it. He cited the super-majority that voted for the law and expressed the view that Congress didn't need to hear from the CPSC on this subject because of its decisive action. There were echoes in Adler's argument of assertions by House staffers that the CPSIA didn't need amendment because of its "perfect legislative process", implying an all-knowing, never incorrect or regretful Congress. He said Congress "shot real bullets" and went so far as to state that not only would Congress refuse to act if CPSC approached it, but that it might actually harden its stance ESPECIALLY if the CPSC reached out. In other words, according to Adler, going to the Hill to get relief or guidance might not make things better, it might antagonize them and make things worse. Believe it or not.
c. Northup noted that she was the only Commissioner who has served in Congress and confirmed . . . (are you sitting down?) that some members of Congress do not master every nuance of every bill. Some might not read the bills at all. OMG! Anyhow, she says that the exemption section was likely considered by members of Congress voting for the CPSIA to be a real, if stringent, exemption process, not the inert and impotent process that it has become. This argument did not seem to persuade Adler or Tenenbaum. Adler said he had seen no indication yet that Congress was interested in changes to the law. This got a hot reply from Nord who offered him her file of letters from members of Congress asking for change in the law (including a letter from Senator Klobuchar (MN) specifically on the point of the meaning of "any").
The meeting veered off in a schizophrenic direction at the end when Northup and Nord asked for a public debate to be scheduled on the meaning of this precedent and its far reaching implications. Adler replied that he wanted to see their "letter" because he said he might be "very sympathetic".
I found this last exchange extremely confusing. Adler gave me the impression of speaking out of both sides of his mouth. Tenenbaum remained basically silent, which was disappointing, given the importance of this decision and of her leadership role on the Commission. She can provide more leadership to this group than by simply presiding over the meeting. A lack of coordination among the Commissioners or perhaps off-line dialogue seems to be missing. In any event, I may be some kind of political idiot but the Commission's strategy or even the thinking about how to resolve this terrible impasse is not apparent to me. For them to reject the LCI petition (voted down 3-2, with the deciding vote cast by a MIA Thomas Moore), refuse the opportunity to kick the can down the road by asking Congress for guidance and then to seem interested in reaching out in some way anyhow, left me utterly confused. Should we trust them to guide us home, or are they lost, too? What's the path forward, and why won't they 'fess up to both their problems and their strategy? What happens next and who will protect us? These are troubling questions.
The business community will be understandably horrified and demoralized by this decision. The strict interpretation of the CPSIA has now been blessed by a full Commission. They have hardened on the plain meaning of the law. While the Rule of Law has been upheld, and that's a good thing, it also means that the worst parts of the law will be respected, too. Thus, the economic destruction that we have been predicting based on the plain meaning of the law was given a boost today by the Commission. If you want to see the future, read the law. It's all in there. Until proven otherwise, this Commission has yet to signal an interest in going across town to talk to Mr. Waxman and his lot.
Interesting Side bar: Learning Curve apparently brazenly and openly continued to sell these items during the pendency of this petition. That risky strategy involved knowingly selling a product that they believed was illegal (that's why they asked for an exemption). That's a no-no, although it had no safety consequences for anyone (as acknowledged by CPSC Staff and certain Commissioners in today's debate). Notably, Mr. Adler asserted that the CPSC Staff would let their own kids play with these cars even if the kids' blood lead levels were right at some sort of hypothetical lead "tipping point" - in other words, the cars are perfectly safe, no point denying it. Nevertheless, Mr. Adler upbraided LCI for this procedural faux pas. He cited them for bad "optics".
Bad optics - after today's decision, I think that's something for the Commission to think about.
POSTSCRIPT - Mr. Adler retracted his accusation of LCI above. Please see this blogpost for details.
Monday, November 2, 2009
"The workshop will be held from 9:30 a.m. to 4 p.m. on Thursday, December 10, 2009, and Friday, December 11,2009 at the CPSC's headquarters building at 4330 East West Highway, Bethesda, Maryland 20814, in the 4th Floor Hearing Room.
The workshop will open with a review of CPSC staffs current work on sections 14(a) and 14(d)(2) of the CPSA, including a discussion of the factors involved in sampling and an overview of the economic issues, followed by break-out sessions on the following subjects:
- The Consumer Product Labeling Program;
- Reasonable Testing Programs;
- Sampling Plans;
- Safeguarding Against Undue Influence on Product Testing;
- Additional Third-Party Testing Requirements for Children's Products; and
- Verification of Children's Product Testing Results.
The panels at the break-out sessions will consist of Commission staff and invited members from the public. If you would like to make a presentation at the workshop or be considered as a panel member for a specific break-out session, please send, via electronic mail (e-mail), a note indicating your desire to participate and/or indicating which of the break-out sessions you wish to join. We ask that you limit the number of break-out sessions to no more than three. We will select panelists and persons who will make presentations at the workshop, based on considerations such as: the individual's familiarity or expertise with the topic to be discussed; the practical utility of the information to be presented (such as a discussion of specific standards, methods, or other regulatory approaches), and the individual's viewpoint or ability to represent certain interests (such as large manufacturers, small manufacturers, consumer organizations, etc.). The e-mail should be sent to Robert Howell at email@example.com no later than November 20, 2009."
As noted, comments are due on January 11. As this is expected to be one of the most hotly-debated subjects under the CPSIA, the promulgation of the "15 Month Rule" will take some time thereafter and may be subject to comments again before the rule becomes "final". The "15 Month Rule" is far off at this point. This suggests some action, hopefully soon, to extend the testing and certification stay. Fingers crossed . . . .
The CPSC document is remarkable for its candor about problems with this troubling rule. Considerable detail is provided in their 25 page announcement. Their acknowledgement is, in and of itself, a shift. [The delay was announced over the weekend by Nancy Nord in her new blog.] The fact that the CPSC evidences deep concern over the challenges in this rule implies that it recognizes the severity of the business community's issues under this law. [The CPSC and its professional staff are likewise victims of the CPSIA, but at times a forgotten victim.] Their admission in advance of the November 14 deadline can only be interpreted as a courtesy to the business community, a much-appreciated one, too. This has been in the works for some time, apparently - I am personally grateful that they didn't wait to the very last minute to let us know of the delay.
I think it is becoming clearer that the CPSC is listening. Now the next challenge is to translate listening into action. No one, NO ONE, wants to endanger children. In fact, no one EVER wanted to endanger children. The challenge before us (Congress, the CPSC and the business community together) is to craft rules and mechanisms that reasonably protect children while not snuffing out markets, products or companies. I hope that the CPSC and its leadership also see clearly that important parts of the problem are beyond their power to remedy - and that they must go to Congress to get help. To me, this is a "lesson learned". And . . . the sooner, the better.