CPSIA - Canada Tries to "Out-Stupid" Us - Is that EVEN Possible?

When I went to Toronto one year ago to attend the international ICPHSO conference, I came away impressed with the sensibility of the Health Canada folks. They were grounded, they were calm and reflective, they seemed to understand that the CPSIA went too far and was not needed as the basis for Canadian law. I left with a sense of admiration and confidence in them.

And one year later - they are showing troubling signs of declining IQ points, a possible sign of lead poisoning! In a stunning turn of events, Canada apparently has decided to play one-upsmanship with the United States. Not satisfied at losing in the international arena of regulatory lunacy, Canada proceeded to tighten up our oh-so-loose CPSIA lead standards.

Editorial Pause Here - Someday I want to see governments everywhere refer to INJURY STATISTICS when they call for new laws to make people safer. To figure out if people are "unsafe", one must certainly know if they are being injured . . . right? You'd really want to be able to measure that, wouldn't you? Please tell me you understand this point . . . . Soooo, if one chooses to argue that we are harming children with "too much" lead in children's products, isn't incumbent on the accuser to demonstrate in some meaningful way that the harm we will spend zillions to "eliminate" actually exists, you know, at a bare minimum? Shouldn't we demand a higher standard of justification than "it stands to reason"?

Back to Canada - Canada announced on November 29th "the most stringent rules in the world" on lead. The Canadians have decided that lead limits should be 90 ppm for toys and any product other than a kitchen utensil intended to come in contact with the mouth for children three years old and under. They will also join us at 90 ppm for lead-in-paint.

Please recall that the dirt in Mr. Obama's backyard tested for lead at higher levels than 90 ppm. His DIRT. So now we know he won't be able make toys or teething rings out of his dirt and sell those products in Canada. Finally, the menace is contained!

So why did they do this? "Health Canada says the new limits are needed because while reputable companies do their best to ensure lead has not been added intentionally to their products, companies can still run into trouble with quality control when importing huge volumes of goods in complex supply chains."

Oh, I see - it's the fault of darkest China! Good Canadians wouldn't do this but those evil people in their complex supply chains - they can't be trusted.

I would toss this off as some kind of joke other than the fact that this creates a massive business problem for us. And, of course, after the cynical and ignorant politicians get past congratulating themselves on saving the populace (from what?), there will be great mystery about what happened to variety of playthings in Canada or why educational products are much harder to find. What a mystery that will be!

As an American supplier of many Canadian school supply dealers and Canadian schools (we make Canada-specific educational products), I want to note that we have never had a single accusation of injury in Canada from any of our products since we were founded in 1984. I do not relish attempting to meet this asinine standard, lower than the loathsome U.S. standard of 100 ppm due to come into being in August for no particular reason other than to kill jobs. Will anyone feel sorry for me when we get our first test report showing lead levels of 93 ppm on a single part in an assembled toy? In other words, compliant with the U.S., but 3 parts-per-million above the arbitrary trace standards of Canada? Nah, it will be ours to savor - no one will care. We have to make children safe, safe, safe and who could put a price of the safety of our children?!

I don't know how long we will sell products for kids under three in Canada if this law goes forward. Perhaps the Canadians figure the kids can start to be educated after three.

Maybe Canada really has a chance to out-stupid us if they keep this up. Bully for you, Canada! And I thought it couldn't be done . . . .

CPSIA - Congressional Terror Campaign Continues (FMLA)

773 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 37 days left until Election Day.

Don't worry, your Congressional tormentors haven't tabled their latest effort to terrorize you, the Foreign Manufacturers Legal Accountability Act. We understand that the Congressional Democrats are still trying to make a "deal" on this terrible law. It's not going away even if you have put it out of your mind.

It doesn't matter that that this law violates WTO rules. it doesn't matter that it is flagrantly protectionist legislation that may trigger a trade war. It doesn't matter that it pissed off the EU, as previously reported in this space. It doesn't matter that we will lose critical vendors. It doesn't matter that we will face retaliatory legislation in other districts, effectively cutting off foreign markets for our export efforts.

All that matters is that Rep. Betty Sutton needs to look heroic to her constituents - the bill is a gift to her. She is fighting for her political life in this Midterm election and your petty concerns pale compared to the needs of the Congressional Democratic majority position. And you thought the politicians worked for you. It may be the other way 'round.

The latest sign of the cost of this self-destructive act is the inflamed outrage of our closed trading partner, Canada. For some reason, Canadians aren't too psyched up about being subject to class action lawsuits in this country. Weird, you'd think they would LOVE it. . . .

" . . . Canadian Trade Minister Peter Van Loan says the 'badly crafted' bill could end up side-swiping Canadian exporters, even though U.S. officials insist Canada isn't the intended target. 'There are enough thinking people that realize that this is a badly crafted bill that causes harm to a whole bunch of people,' Van Loan said Thursday."

No sense of humor up north, eh? How can those Canadians act so superior, criticizing the handiwork of our very own Democrat-dominated Congress? Badly crafted legislation? Please! Never heard of such a thing.

"Van Loan says the Canadian government is holding out hope the bill won't reach a vote before Congress adjourns in the coming weeks. 'If it gets voted on, the charged political environment means it will almost certainly pass, because you can't be seen voting to protect people dumping toxic drywall from China and stuff like that in your country,' said the minister. The [Canadian] government is keeping 'all options' open if the bill passes, but would likely seek a waiver similar to the Buy American exemption, he said." [Emphasis added]

Congress giving a gift to itself with self-destructive legislation, and a major trading partner implicitly threatening retaliatory legislation. Wow, we have a great government, don't we?

Is anyone besides me TIRED of being the object of continuing terrorist attacks by our OWN government?

When can I start to vote? Someone please help me . . . .

CPSIA - WARNING: Spine Alert!

761 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 50 days left until Election Day.

Imagine pushing back on a regulatory agency. Imagine protesting demands for a knee-jerk recall of an item without a demonstrated (as opposed to asserted) substantial product hazard. Imagine someone standing up to the CPSC. Imagine . . . .

Okay, it didn't happen here. But Elfe Juvenile Products did zing the CPSC in its letter resisting a mimic recall of strollers by Health Canada. It even took them to task for a crib recall - wow! Without coming out and using pejorative terms, only implying them, Elfe accused Health Canada of "blindly" following the CPSC and conceding the authority of the U.S. agency. That can't be a compliment . . . .

“'My review of the applicable Canadian legislation does not reveal any mandate given to Health Canada to blindly accept decisions made by an administrative agency in a foreign jurisdiction. To do so, would, of course, be an unacceptable submission to the sovereignty of another country,' Ivan Bern, Elfe’s general counsel, wrote to Health Canada on Jan. 19."

Ouch. The next day our highly reactive agency announced a recall of 1.5 million strollers for laceration hazards and fingertip amputations.

Have you ever scratched your head and asked why the stroller and crib folks aren't pushing back? Well, confronting a federal agency that has already sic'ced the U.S. Attorney on some of its hapless victims (notably, Daiso) and rabid State Attorneys General like Illinois' Lisa Madigan is to tempt a deluge of litigation all over the country, merited or not. And they are certainly not above manipulating the press for the kind of hysterical headlnes certain to kill your business. Look at baby slings. Bankruptcy is your likely fate if you try to defend yourself. Never litigate with someone who has a printing press, as they say.

Well, one of them finally spoke up. The day after the U.S. stroller recall, Health Canada posted a recall for the Elfe-distributed stroller for the same hazard. "'In our opinion, there is no ‘trend’ to be discerned, unless it is that of 1,499,993 consumers acting responsibly, and possible seven instances where the goal of perfection in human behaviour was demonstrated to be unattainable,' Elfe’s general counsel told Health Canada." Not that it mattered what they thought - Health Canada proceeded with a recall immediately anyhow.

To add to the strangeness of this interaction, Elfe was also a distributor of Simplicity cribs at the time. Those cribs started crib mania at the CPSC and also created a craze over "responsible parties" after Simplicity was driven into bankruptcy. The CPSC busily talked down Simplicity cribs, labeling them "dangerous". No statistical analysis of the use of these cribs was released to my knowledge, just an injury count over many years. [I raised three children with dropside cribs without incident. I was also raised in a dropside crib to my knowledge. Although some people think I was dropped on my head as a child, that's not the crib's fault.]

Consider what happened next in Canada: "Following these statements, Elfe, the former distributor of Simplicity products in Canada, provided different advice to Canadian parents, telling them to make sure the crib was assembled properly. And 'if the drop-side is installed upside down or not securely attached,' Elfe recommended parents reinstall the drop-side the proper way with new hardware, to be provided free of charge by the company. A few days later, Health Canada posted Elfe’s voluntary recall on its website, saying the department had assessed Elfe’s metal retrofit kit and determined that it did not adequately correct the hazard posed by the drop-side crib. The newly released private correspondence reveals Elfe didn’t think this course of action was needed, accusing Health Canada again 'deferring to the CPSC’s unilateral actions' in the face of negative press." [Emphasis added]

Frankly, this is the closest the press has come to reporting the truth about the CPSC and the mania spawned by the CPSIA. The CPSC is feeding public perceptions of danger where the agency formerly took the view that consumers bore some responsibility to use their equipment properly and to maintain it in good condition. Nowadays, these issues are twisted into asserted "substantial product hazards" and are accompanied by a government-sponsored negative publicity campaign (think of all the Good Morning America appearances you have seen Tenenbaum make). The agency almost blatantly dares companies to push back - with Lisa Madigan, Jerry Brown and other State Attorney General thugs waiting to pounce. The toxic commercial environment in the U.S. is not enough to satiate them - they must cross borders to spread ill will and poisonous markets to other countries.

There is no way to argue with this kind of tyranny. Their assertions are considered "findings". The political nature of such "findings" is rarely outed. Even when the company itself initiates a recall, the agency implicitly claims it as its own (like a skin on the wall) and announces it as one of its consumer "triumphs". These recalls exist on the CPSC website as precedent undistinguished from other recalls - influencing the decision-making of other companies and eroding the confidence of consumers. With the CPSC imprimatur, recalls are taken as signs of further corporate bad behavior.

Hats off to Elfe for at least trying to push back. I wish they had more company. The only way to end this kind of regulatory tyranny is to expose it and to resist corporate slander at the hands of a rogue agency.

CPSIA - ICPHSO Toronto Update

I attended this week's ICPHSO meeting in Toronto. The meeting was located in Toronto and focused much attention on the proposed amendment to Canada's 40-year-old Hazardous Products Act (the so-called Bill C-6). The meeting was attended by more than 250 people, largely comprised of Health Canada officials (the analog to the CPSC), CPSC staff, including Chairman Inez Tenenbaum directly from China, a variety of testing companies, mass market companies, Canadian companies, lawyers and other interested parties.

I thought I would share a few tidbits from the meeting:

Chairman Tenenbaum's Keynote Speech: Chairman Tenenbaum addressed the conference on Wednesday morning. Her speech is posted on the CPSC website. The speech included a few hints of movement toward accommodation of businesses under the CPSIA, but unfortunately, it is only provides hints at this point. It is worth noting that sidebars at the conference suggest that there is more sensitivity to business concerns than CPSC public statements might suggest, but then again, we can only rely on real action, not just words. The next development to look for is a change in tone and a change in actions. When we can triangulate from words to actions, and see a real easing of the intense pressure on businesses, then we can take the off-line assurances more seriously.

Some highlights from the speech:

• The "good": The "15 Month Rule" is due soon. Tenenbaum promised a special two-day workshop on this rulemaking IN ADDITION to normal public outreach. She emphasized that they want to "get it right". [Ed. Note: Rumorville has it that this rulemaking will be delayed, and the two day workshop may precede the issuance of the draft rule. Likewise, there is growing suspicion that the testing stay may therefore have to be stayed. There are multiple reasons why this may have to happen.]
• She emphasized a need to minimize the burden on small businesses. [Minimize is a relative term, let's not get too giddy yet. Need to see what they have up their sleeves.]
• The CPSC is reaching out to SAGs to make them partners in the safety process. She wants to minimize competition between the CPSC and the SAGs. I consider this a major advancement in CPSC practice and a nice contribution by Ms. Tenenbaum in the early days of her administration. Arguably, the 2007-8 crush of State legislation and SAG grandstanding evidenced strong State feelings of isolation and legal impoverishment (in addition to a general desire of local politicians to appeal to the populace before elections). A proactive approach by the CPSC to working with the SAGs is the best chance for ANY OF US to neutralize or minimize the disruptive behavior of States and SAGs in the future.
• Ms. Tenenbaum announced a substantial change to the penalty factors when she said: "In cases where CPSC may impose a financial penalty on a U.S importer for violations, CPSC may to take into account whether the importer has safety or compliance programs in place and whether they conducted pre-market and production testing to minimize safety risks." Gib Mullan also acknowledged that the penalty factors will be changing. This is another faint sign that we are being heard. The penalty factors were very harsh in the first draft. After a bit of an uproar, it appears now that the agency is going to moderate its approach somewhat. If this turns out to be a "real" shift, it is good news indeed.
• The "bad": The overall tone of the speech remained harsh and somewhat threatening, at least that's how it felt to me. Phrases such as the following were reminders that the CPSC has a big club and intends to use it:

- "Chinese suppliers and U.S. importers are now on notice from both governments that it is a mistake to depend on good intentions and a few final inspections to ensure compliance with safety requirements."

- "We will enforce in a firm but a fair manner the new federal law that puts strict limits on lead and phthalates in children’s products and makes all toy requirements mandatory." [The emphasis was hers in the live speech.]

- "As I have consistently stated, we intend to enforce this law that Congress put in place in a firm but fair manner. CPSC also has a federal rule making underway that puts U.S. importers on notice."

- "Another area that we at CPSC are rethinking is the singular approach used in the past to identify risks and simply recall products when necessary. This is one aspect of enforcement that will not work if pursued alone."

So Ms. Tenenbaum maintained the tough tone but gave hints of a coming thaw. We'll see in due course if I am imagining things. Needless to say, I hope not!

Remarks of Gib Mullan: Gib Mullan, the CPSC chief enforcement officer, gave a short speech summarizing the CPSIA and recent events. I must say I found some of this speech positively chilling. For one thing, Mr. Mullan noted with apparent satisfaction the first recall of a toy for violations of the phthalates ban. I believe this refers to the recall of 40 inflatable toy baseball bats previously highlighted in this space. Aside from the fact that Mr. Mullan confirmed that the enforcement focus of the agency is (supposedly) bath squeeze toys, which certainly does not include inflatable baseball bats, this micro-recall of 40 bats is highly suggestive of a strict liability enforcement policy. If that is so, then what is the purpose of pointing out this recall to the crowd at ICPHSO? I would suggest that it is intended to scare the business community. Mission accomplished?!

Further to that mission, Mr. Mullan announced that the agency is attempting to be more "consistent" and "rigorous" in assessing penalties. Okay kids, think of Target's $600,000 penalty - if the CPSC is going to be "consistent", what does that precedent mean for the rest of us? If Target gets hit with a massive penalty after it performed preshipment testing, had no actual knowledge, was increasing its safety surveillance and turned itself in voluntarily after catching its own errors, what should we expect from a "consistent" penalty practice at the agency now? Mr. Mullan continued by noting (again, with a bit too much relish) the rising tide of penalties assessed by the agency in 2009, and further noted that they haven't even cracked the 2007 lead-in-paint violations yet. He said larger penalties should be expected now, given the new powers allowed the agency under the CPSIA.

What is the purpose of this announcement? What else could it be, besides an intent to scare you and me? And, hats off to the chef, it succeeded. Among the many outrages of this new practice is the focus on retribution for old recalls with new penalties. Why is this a problem in my view? Well, for one thing, no one can do anything about the 2007 recalls at this point. Is the CPSC under the impression that the toy industry hasn't "learned its lesson" yet? If that isn't their view, then why lay on mega-penalties for matters that were apparently closed with significant expense now almost three years ago?

At what point is our penance complete? I can only supply a couple suggestions to explain this new penalty practice - (a) vindictiveness (as in CPSC meting out "justice", rather than simply ensuring a safe marketplace), and (b) terrorizing the corporate community into "compliance". Both rationales are wrongheaded and destructive. I continue to return to my original comment (December 17) on the penalty factors - CPSC penalties can only be consistent, rigorous, purposeful and (importantly) predictable if they are restricted to egregious conduct. Until the CPSC disciplines itself to a fairer penalty system, ALL OF US will assume we are next in line to get whacked like Target. After all, the CPSC has said publicly that they intend to be consistent and rigorous on penalties - in other words, they are telling us that we can and should learn from Target's experience. That message unleashes a parade of horribles. The CPSC needs to take this on board.

One last observation about Mr. Mullan's speech - he noted that recalls from China fell by 40% in 2009, the first fall in years. This is of course good news for everyone, most of all the children's product industry. As we know, success has many fathers but failure is an orphan. Many pundits point to the CPSIA as the reason that recalls have fallen. Mr. Mullan added another factor, the deep recession of 2009. Both of these factors contributed, but I think the real "father" of this success is that the notorious publicity of the new law and the new strict enforcement of the lead-in-paint rules (under the old law) led various companies and industry organizations to get mobilized to address safety practices. Who among us wasn't shocked and horrified by the suicide of the owner of a Chinese factory that supplied Mattel with lead-in-paint toys? The horrors of the recall frenzy and everything it entailed led to changes in practice. The remaining hubbub of the new law is just a hang-over IMHO, and does not explain the good recent reduction in recalls. For this reason, I believe the focus of the CPSC and its enforcement activities can and should SHIFT toward maintaining these gains through industry outreach, education, targeted and focused enforcement, and development of new and modern systems appropriate to the changing marketplace. It even calls into question the value of the law's kneejerk requirement of prophylactic testing, something I am on record opposing.

Health Canada and Bill C-6: Frankly, I have not had time to dig into the Bill C-6 yet but it got a lot of air-play at ICPHSO. Much of the brass at Health Canada was there, and I attended several talks by these professionals. I must say I left impressed with the Health Canada leadership. They were incredibly approachable and engaged. I was not made to feel like the "enemy". Especially notable was their TONE. They don't even imply that businesses are populated with bad or untrustworthy people. They repeatedly pledged to work cooperatively with businesses and noted that they have done well for 40 years with voluntary recalls and non-confrontational relationships. Hmmm, could it really be true that you catch more flies with honey than with vinegar?

They also stressed their interest in hearing about "lessons learned" and engaging in real dialogue as the new bill is crafted and refined. They noted some real gaps in their enforcement empowerment under the existing law, which they characterize as outmoded, but then again, they also stressed that these powers are intended to be used only if necessary. What a different tone they struck. They convinced me that they are nice people who mean to be partners in safety with industry. A refreshing change.

The contrast with the last year of CPSC hostility was palpable. It gave me reason to reflect on the course of my own relationship with the CPSC. Interestingly, I was a big fan of the agency until about two years ago. For 17 years I trusted them, I consulted with them, I had no reluctance to work with them and thought of them as partners, I advised friends to trust them, I did not see them as the 'enemy". The CPSIA and the feeding frenzy of the last two years sadly eroded that trust. Trust has to be earned, of course. I believe trust in the CPSC can be restored but not without real effort and real action. The Health Canada folks struck the right tone, and we can only hope that the CPSC was listening. Industry and the CPSC do not have to be at loggerheads, and there can be trust (there MUST BE trust). To get there, the "new" CPSC may need to make some concessions, but a path to this worthy karma level does exist. This detente does not need to involve endangering children, either. Health Canada implicitly recognizes that industry has no interest in harming children. Considerable efforts by industry are expended to avoid this terrible outcome. The presence of a few bad or incompetent actors in a massive marketplace of many thousands of companies and millions of different products does not make the rest of the market participants into bad guys, too. This is the notion that must be abandoned.

Final Thoughts: ICPHSO was a great event for networking, off-line conversations and sharing of perspectives. I feel that there is room for more dialogue. We can only hope that some barriers are being broken down, and that we may see some positive surprises (for a change). It is also clear, as Health Canada demonstrated, that a regulator can be effective and non-confrontational at the same time. We know the CPSC has a big stick, perhaps they can stop reminding us with harsh rhetoric and harsh actions (we won't forget about the stick, trust me). Next on the agenda is a rationalizing of the rules to allow businesses to function economically. Unfortunately, I cannot conceive of this development without a change in the law. To do this, the CPSC must summon up its resolve and TELL Congress that changes are needed. I do not see any way to avoid this. Time has a value, too, so the CPSC leadership must weigh the consequences of waiting - costs are mounting rapidly as time goes by.

I hope I'm not dreaming. This can be done. The coming weeks will reveal a lot about the direction and resolution of the pending issues confronting the business community.

CPSIA - Do-Gooders Playing a Role in Train Crashes?

Consumer Groups, media and panicky politicians led a feeding frenzy last year over toy recalls that resulted in remarkably broad legislation restricting the presence of lead in children's products, yes our old friend the CPSIA. Of course, the determined "do-gooders" in the consumer group corner have asserted that there is "no safe level" for lead and thus, it makes "sense" to eliminate it totally from children's products (and the world at large, if possible). Remember, you can't be too safe . . . . A leader of this charge was a staff person at the American Academy of Pediatrics who presented unchallenged statistics in September 2007 to a House Subcommittee. With the lilly-white AAP backing of this notion, Congress swung into action and outlawed lead effectively from all children's products. Sounds good, right? Well, as with most manias, the "unintended consequences" have been terrible. This has been well-documented in this space.

Interestingly, I found an article recently that suggested that elimination of lead from circuitry (solder), courtesy of our friends in EU bureaucracy, may have played a role in the recent terrible Washington, D.C. Metro train crash. [Lest we forget, it is worth noting that the motivation behind the EU's elimination of lead from solder was protection of the environment, not a fear over direct human poisoning, the basis of the current U.S. mania.] This article points out something that the amateur scientist fear mongers may not have known, which is that lead plays a useful role in solder, and in its absence . . . more "unintended consequences". In this case, the consequence is something called "tin whiskers", a phenomenon created by "untamed" tin in solder. Tin behaves differently in the absence of lead, and will grow "whiskers" that create electrical shorts. The article suggests that this explains the intermittent electrical failures of the crash detection system on the Washington Metro. Other deadly accidents have been linked to tin whiskers. Precautionary, indeed.

Among the many things that disgust me about the lead mania is the illusion (delusion) that controlling lead-in-substrate in children's products will have any material impact on exposure to lead. In fact, it's just a way to put blinders on. By publicly and notoriously addressing the "lead problem" - problem solved!! This is absurd, of course, but has only encouraged the maniacs. Take, for example, the recent hubbub over the Obama's "lead-contaminated" vegetable garden. Incredibly, the lead levels detected in the White House garden (presumably by people with too much time on their hands) was 93 ppm. Our dear friends at the AAP assert that background lead levels in dirt is 40 ppm. This was the rationale behind the recent Illinois lead labeling legislation profiled in this space. As the Obama article makes clear, the controversy over lead in dirt is just politics, not science, and is WAY out of proportion to both the health threat and the presence of lead all around us. Dr. Kimberly Gray, Director of the Environmental Sciences Program at Northwestern University comments: "It’s inflammatory. 93 ppm is well below background lead for an urban environment. It’s what you’d expect just from atmospheric deposition." The article continues: "Atmospheric deposition is lead particles that fall out of the sky, from things like auto emissions." You mean there's lead in the air, too - oh, no!

The do-gooders have infinite justifications for their bans of lead in children's products, their current obsession, but (other than economic devastation) what has actually been accomplished for the American public by their handiwork? Only the illusion of "better safety". The legislation markets the idea that elimination of insoluble lead from substrate makes a marginal, incremental difference to health, as though it were the only (or principal) source of lead in our bodies. This flawed logic also underlies the dangerous Proposition 65 in California. The labels required by Proposition 65 sounds sensible, intended to advise consumers of the presence of "toxins" in their products (even if legally there) so they can decide whether to expose themselves or their families to the "deadly" substances. Who could object to that? Well . . . the selective presence of these labels gives false comfort to consumers who may believe that the labels highlight the ONLY places where the noted risk occurs. The implicit reasoning goes like this . . . why would the government require lead labels on lip gloss if the government knows that this risk is miniscule compared to MANY other sources of lead in daily life? Aren't they requiring labels on EVERYTHING with lead? And, if so (the government wouldn't let us down!), isn't this buying decision critical, a highlighted choice that might make the difference between good health and some form of miserable, painful, lingering death?! That's the implication, however erroneous.

I do not accept that this is the only way to run a sensible society. Canada has attempted to truncate our fancy new safety system, by tailoring it to a narrow and specific class of products or situations. That seems like a good place to start. It's time for all concerned to acknowledge that the "perfect legislative process" had a faulty outcome. Real leaders are prepared to admit error and to do the right thing for their troops. Congress???

CPSIA - How to Solve Your Problems!

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

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

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

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

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

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

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

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

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

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

A. Don't go there.

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

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

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

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

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

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

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

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

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

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

CPSIA - What Does Canada Know (That We Don't)?

Our friends to the North have been following developments under the CPSIA, and in a race to the bottom, decided to implement their own version of our new safety law restrictions. However, to their credit, Canadian regulators chose to carefully and sensibly limit their bans and have thereby introduced focus and rationality to their scheme. What an innovation!

Canada has apparently decided to ban the notorious six phthalates. As I have written on several occasions, it appears that the science behind the fears of phthalates is unclear at best. That being said, I have never opposed a ban on phthalates for the most vulnerable class of consumers, namely children under three. This ban was implemented by the EU years ago, with years of forewarning (REAL forewarning, Mr. Moore, not requiring telepathy) with a limited focus on products for the "Under 3's" and was accommodated by industry with barely a peep of pushback. Canada seems to have learned from the EU, and bans the chemicals only in soft vinyl toys and childcare articles. This narrowing of the ban makes it consistent with the EU regulations and makes it much easier for industry to accommodate. It is also arguably better focused on what may be the only safety issue with phthalates. It was Canada's intention to correlate its rules with the EU.

Needless to say, the Canadian regulators did not have to contend with a different legislative scheme in California or the City of Chicago or whatever. They set a central policy for everyone.

On the subject of lead, the new Canadian rules take the U.S. rules and add sense to them. The new lead limits are for products suitable for children under three (not based on intent but on objectivity) and also on products intended or likely to be placed in the mouth. Frankly, this is hard to object to - as it is any responsible company's obligation to take reasonable measures to protect its customers, particularly the most vulnerable ones. This precautionary measure would not be problematic in my view, as it is entirely limited to the class most likely to be adversely affected by the (possible) hazard. Our rules do not permit this kind of focus or devotion of resources. The age limits of the CPSIA applies to everything but the kitchen sink. This is a major source of strife under the U.S. law.

It is also notable that our rules are made even more unpalatable by the extraordinarily coercive liability rules imposed by the (ridiculous) CPSIA. I cannot over-emphasize the dread I personally experience when I have to deal with ANY quality issue nowadays. The specter of liability is constantly on my mind - but notably it does nothing to affect my judgment on what's the right resolution of a quality issue. It just raises my blood pressure. If you are a consumer advocate, you may be rubbing your hands in glee, but I would caution you against too much exuberance. If you make it miserable enough for manufacturers to ply their trade, they'll go elsewhere. Is that really what you want from us? Our companies are world leaders in hands-on learning. Does the world have an oversupply of good educational companies, particularly focusing on early education? Not in my opinion. Btw, I hear about other people's dilemmas under the CPSIA from time to time. The liability clouds are changing behavior in the community of companies serving children's markets. Either the companies are shifting away from their traditional markets to avoid the hassle and tight noose of this law, or else they are simply ignoring it.

Do you get it? The response of many companies is to IGNORE the new law. Question: Isn't ignoring the law how we got in this mess in the first place? Great solution, guys! Please call me when you are ready to talk sense.

One last note: Nancy Nord issued a statement yesterday about the bicycles stay of enforcement. The bikes stay is another in a series of illegal (un-Constitutional) legislative actions by the CPSC, forced on it by an inflexible and off-target law. Ms. Nord's statement was picked up on Twitter; I cannot find it on the newly re-jumbled CPSC website. Ms. Nord continues to bravely speak sense to Congress and the public in her statements on CPSIA decisions, and I hope she will continue this important work. Please note her comments on the enforcement stay on bikes:

"From the standpoint of the consumer, enforcement of the law as written by the Congress would limit the availability and increase the costs of a product that is almost synonymous with childhood. But most importantly, because lead adds to the strength of the metal used and has other useful attributes, enforcement of the law could adversely impact the safety of children’s bicycles, leading to more deaths and injuries. A stay of enforcement is our only option to protect children. While the stay of enforcement will allow children’s bicycles to continue to be sold over the next two years, the stay also contemplates that manufacturers develop plans to reengineer their products to remove the lead from the metal used in children’s bicycles. In other words, we are requiring that manufacturers use scarce resources in challenging economic times to attempt to address a risk that children just do not encounter. It is very troubling that the commission has had to resort to using stays of enforcement to avoid the unexpected, and, in some cases, the dangerous consequences that would result from enforcement of the CPSIA. Such a result does not increase consumer confidence and creates uncertainty in the marketplace. There are those who would add that, at some point, regular use of stays opens the agency up to legal challenge for not enforcing the law."

I hope someone besides me is listening to Ms. Nord (hello, Congress?). Her arguments deserve thoughtful consideration, notwithstanding that Mr. Bush appointed her. This is serious business. The laws that the CPSC is required to enforce matter a great deal to consumers and to our economy. Forcing the CPSC to enforce a terrible law with terrible incentives for industry has a predictable outcome - and not a good one.

Perhaps our neighbors in Canada can help us sort out a direction forward.