CPSIA - Analysis of Pending House CPSIA Amendment (Sections 3-11)

Continuing with my analysis of the pending draft of the CPSIA Amendment:

Section 3  Application of Third Party Testing Requirements: Merry Christmas, this provision ends mandatory phthalate and lead-in-substrate testing! Yes, Virginia, you read that right - there is a Santa Claus after all. Of course, as noted in my earlier blogpost, you are still subject to broad standards applying to many of your products. How will you know if you comply without some testing? You won't. Hmmm - a Catch-22!  The limitations in the definition of Children's Products echo here.  Removing mandatory testing is not the whole solution, unfortunately.

You still must test for lead-in-paint, small parts, children's metal jewelry and certain juvenile products.

The provision does not remove the CPSC from the process of certifying labs. This needless expansion of the role of our government in this market has never had a sufficient justification, in my view. Why are they in this business? What problem does it solve? Can ANYONE provide evidence that the market wasn't "working" before the CPSC arrived on the lab certification scene? This CPSIA provision is probably a historic consumer group wish-list item or perhaps a staffer's stray term that was never removed. The CPSIA was drafted in a fever of "our government failed us", so it's only natural that the law inserted the CPSC into every nook and cranny of the market. In this case, their conscription has not proven valuable, just another wasteful expense of the federal government that we all will pay for (again and again and again).

Ironically, the provision seems to create even more involvement in certification by the agency, if it chooses to require third party testing. Among other things, the agency must assess testing "capacity". That should prove "interesting".

This section provides some exemption for crafters, products focused on disabled persons (this phrasing only awkwardly covers certain "special needs" children) and one-of-a-kind items. The definition of the exemption incorporates the unfortunate term "not economically practicable" for testing to be excused. I can only imagine the serious of hearings and "stakeholder" meetings required to define what is and is not covered by this new term. This anticipatory compromise (perhaps as a concession to as-yet-encountered resistance in the Senate) likely spoils the workings of this well-intended provision.

A small quantity exemption modeled on Henry Waxman's formula has survived into this draft, unfortunately. The rule incorporates an arbitrary and otherwise meaningless volume rule to identify those companies too small to be required to test. I have never understood why Congress would want to let small companies flaunt safety rules because of their size. Is it okay to be poisoned by a little company but not by a big one? Isn't this law about SAFETY first and foremost? Perhaps we would do better to home in on REAL problems and leave everything else basically unregulated? After all, the substantial product hazard standard gives the agency a LOT of power to change course if they identify a new and REAL problem at a later time.

Under this amendment, the amoeba that is the CPSIA spread in yet another new direction. Today's new priority is apparently small parts. Why? Not explained. Has someone concluded that the former reliance on voluntary standards for small parts failed? On what basis? Does a lab putting products through a choke tube really save lives over relying on voluntary compliance (without specifying the use of outside labs)? Perhaps the best solution is to hold companies responsible for compliance with ASTM F963 without requiring testing (thus preserving the agency's ability to enforce), and holding the line on lead-in-paint testing? After all, L-I-P is easily tested and probably should always be subject to testing owing to the nature of the hazard. I don't know that small companies deserve an "out" on L-I-P because of the ease of controlling sources of paint and getting documentation on lead content. On the other hand, I don't understand why small parts needs this special mention.

Perhaps the sweetest term in this entire document is the new requirement that the agency perform a cost-benefit analysis on ANY mandated third party testing and further, that the testing imposes the least possible burden. This is a pure post-midterm election "smaller government" provision and something to be cherished. This requirement will be applied retroactively on any mandatory testing passed after August 14, 2009. Nice!!!

Finally, this provision makes the "15 Month Rule" voluntary by the CPSC, rather than Congressionally-mandated. Does this mean that it's dead? I can't say for sure. Let's hope so. Better yet, why not change this provision to get the CPSC out of the business of telling us how to be reasonable? Reasonableness is a term that courts have successfully interpreted for years without Congress' help. Why not let the courts decide what's reasonable if there is a dispute?

Section 4  Application of and Process for Updating Durable Nursery Products Standards:  I skipped this as it relates to cribs. Not my area.

Section 5  Application of Section 106 to FDA-Regulated Products:  Pulls in FDA rules into mandatory toy safety standards enforceable by the CPSC.  Does not apply to me, not sure which is you this will impact.

Section 6  Application of Phthalates Standard:  This provision limits the application of the phthalates ban to only certain parts of a "toy" (as defined). 

First, the rule makes ALL phthalates rules PROSPECTIVE from the date of enactment.  For those of you sitting on old inventory with the vain hope that someday it will saleable, this might be your lucky day!

The rule also gives the agency the power to exempt products from the phthalates ban if deemed "not necessary to protect children's health".  This can be done only by rule under the amendment, so don't expect anything quick or cheap. This will be a long, drawn-out and arduous process - in other words, it is highly unlikely to occur.

As noted above, the term "necessary to protect children's health" conflicts with (or at least differs from) the substantial product hazard standard already in use. This is wrong and should be changed.  Congress should use ONE standard for all matters relating to health under the CPSA, namely substantial product hazard, and it should resist the urge to introduce new standards throughout this document. That will only confuse things and make matters worse.

The provision adds a firm deadline for the end of the ban of the three phthalates the subject of the CHAP, if the agency does not act promptly after the CHAP is concluded.  This provision seems to express distrust between Congress and the current administration of the CPSC.  Will safety zealots hijack the CHAP process?  This provision aims to prevent it.  Hmmm.

Subsection (e) fiddles with the definition of "toy" to align it with the definition in the now mandatory ASTM F963 standard.  Not sure how this will affect you (or me).  The ASTM standard includes many different age ranges (by item) so some may even expand.  Many will contract. 

Finally, the revised definition excludes parts that can only be "licked".  Frankly, based on my recollection of the CPSC's serious approach to this in the past, I anticipate that they will assume children have serpent tongues making almost everything "lickable".  Sadly, Congress probably can't rely on the CPSC to take a simple definition and let companies administer it.  This provision is an invitation to make "rules".  I would suggest that the amendment be modified to specifically permit companies to exercise their reasonable business judgment on what is "lickable".  I would point out that in the absence of victims that people besides Diane Feinstein can identify, the need to treat the possible presence of phthalates in these items as a public health crisis is unsupported. The CPSC, on the other hand, WILL treat it as a crisis since Congress banned the substances in toys. That makes it quite serious for the agency.  To restore sanity, Congress will either need to give very specific instructions to the CPSC, or mandate the use of risk assessment to resolve this matter.

Personally, I am tired of all this, and hope Congress can find a way to put this to bed.  I don't relish another three years of hearings, comment letters, begging and the like.  Let My People Go - build some easy rules, let us exercise judgment and re-focus the agency on substantial product hazards.

The rule does NOT limit the application of the ban to ONLY plasticized parts, meaning that testing costs to assure compliance may remain in place for wood, metal, labels and other sundry items. Believe it or not, that's where we are now.  [The CPSC seems stuck on phthalates right now - no final rules have been promulgated on this simple ban and no labs have been certified since August 2008.] It is a complete waste of money, particularly since only Diane Feinstein knows of victims of this purported hazard.  The rule should be revised to limit toy industry legal exposure for what is best characterized as a ban based on conjecture and fear, not actual science or identifiable injury victims.

Section 7  Exemption Authority for Tracking Labels Requirement:  This provision gives the agency the ability (by regulation) to exclude specific products or classes of products from the tracking label requirement if the Commission determines that it is not "economically practicable" to apply tracking labels.  Even for those products thrown a lifeline, they may still have to provide the information through alternative means devised by the CPSC.

I believe cynically that our very existence, the very fact that we are still breathing today, can be used to rebut the argument that tracking labels are not "economically practicable".  A better rule would be to let us decide for ourselves whether we want to use tracking labels.  Companies can be relied upon to decide on an economically rational basis.  If it's a good use of money, we'll do it. Otherwise, we won't.

In the case of our company, in fact, that's what we used to do.  Some of our items had tracking labels, most did not.  Our motivation had nothing to do with recalls.  That's because our recall record was so good that tracking labels never made sense as a "defensive" move. The few tracking labels we added were to assist us on quality issues (generally relating to the production of electronic items).  We used product identifiers to improve our supply chain and raise our quality levels.  Why not let businesses exercise judgment and live with the consequences?  Make good decisions, innovate in value-added ways  and profit, OR make bad decisions, cut corners and lose.  Simple.  This provision should be revised accordingly.

I have also suggested in the past that mandatory tracking labels be restricted to long-life, heirloom-style products, mainly juvenile products like cribs.   These items have a checkered past, and are used with the most vulnerable children (babies).  There is reason to believe tracking labels will have some value in this arena, and in addition, since these items are generally big ticket items, the cost of the labels is not material.  As for everything else, forget it.

Section 8  Requirements for Public Database:  The very encouraging changes proposed in this section would provide basic safety net protections to innocent companies possibly subject to unmerited attack in the database. I have not taken the time to compare these provisions to the Nord/Northup draft rule on the database, but believe they are consistent or at least Nord/Northup provided inspiration for these changes. The changes reduce the scope of people who can file a report, and gives companies more authority to resist publication of material inaccuracies.

The time frames for circulation of data needs to lengthened considerably.  The prospect of "doom" flaunted by consumer groups needs to be downplayed. While the drama of pending disaster makes grist for the newspaper mill, it is unrealistic and has driven the database process in an abusive direction unnecessarily.  Giving more time for back and forth means that the agency will have fewer occasions to knowingly publish false information. In addition, there is always the possibility that working together on a more relaxed schedule will allow the CPSC and businesses to work together better.

My interaction with the agency has reduced my confidence in getting a fair hearing on material inaccuracy.  We presented information rebutting definitively an accusation made by a consumer, and we were told that we had not demonstrated "material inaccuracy".  That seemed to fly in the face of the facts but we could not rebut what the filer "thought".  I do not see anything in the new language that would prevent the agency from publishing that original filing.  If good faith were the metric, I would worry about it.  But today's CPSC is highly-politicized so I am not prepared to say I believe they will interpret clear language "clearly" or behave in a "reasonable" manner.  I call on Congress and the CPSC to jointly figure out how to solve this trust problem.  Should there be a way to appeal the judgment of the CPSC?  It would have to be simple and cheap - something administrative and independent - to give companies a way to protect themselves if they feel they're not getting a fair shake.  It may be worth the effort to restore faith in the database.

The database is a very expensive trifle.  I question whether we can afford it.  Think about how much time and resources will be devoted by the CPSC to the database.  Is this really the best way to spend our money on safety?  A "nice to have", perhaps, but probably not a "must have".

Misidentified products and reports proven materially inaccurate will not be allowed to be published under this amendment.  Thank heavens . . . .

Section 9-11:  Technical amendments as far as I can tell.