CPSIA - Interesting Admissions by Mattel

In a November 9 Product Safety Letter article, Mattel spokesmen were quoted bemoaning the burdens and confusion of the CPSIA.

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.

CPSIA - RILA Requests Comments on its Global Standards

We received the following request from RILA about its new Global Standards. Here are some FAQs they supplied. RILA is asking for comments by December 1 which I think is too tight. We have asked them to extend the date into mid-January . . . it is the Xmas season.

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.


Dear Supplier,

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.

Best Regards,

Jim Neill
Vice President, Product Safety
Retail Industry Leaders Association
1700 N. Moore Street, Suite 2250
Arlington, VA 22209
Direct: 703∙600∙2022
Mobile: 202∙412∙8960
Fax: 703∙841∙1184
mailto:Jim.Neill@retail-leaders.org

CPSIA - More New Standards to Help Put The Fork Into Small Business

Perhaps you are aware that the Retail Industry Leaders Association (RILA) and British Retail Consortium (BRC) are working on new "Global Standards for Consumer Goods". RILA presented this new construct to the CPSC on October 5 and were warmly greeted for their efforts. According to the Product Safety Letter: "Tenenbaum termed the effort 'encouraging' and urged the group to include details in upcoming comments on CPSIA-related reasonable testing programs. She said it is good that the release of the RILA program and the pending comment period (slated to open in November) are likely to coincide. 'The timing could not be better,' she told the visitors. She also noted the power of retailers to push standards: 'The way that you all could fan out in China would really facilitate the process exponentially.' Adler said, 'What I heard is terrific. You're all ferocious competitors and will remain so. But you're not going to compete on safety.' Also pointing to the power of retailers to impose standards, he called regulators and retailer allies.

A quick glance at these standards makes clear that they are a death sentence to small businesses. The practical impact of the rules will be to bifurcate the market for importers and factories - suppliers to mass market and suppliers to the rest. You won't be able to be in the mass market camp without complying with these standards. There won't be any halfway point - it will be like a pregnancy test, you comply or you don't (pregnant or not pregnant). Of course, this also means that you must incur a HUGE cost to sell even one product into the mass market. This barrier to entry will make the mass market off-limits to small fry. Goodbye American Dream?

I find it interesting that the CPSC jumped at the chance to support these standards. Where did the standards come from? The mass market, of course. RILA is a mass market enterprise, designed to represent the interests of a few large (LARGE) retailers. Ditto for the BRC. Notably, when the CPSIA was in gestation in 2007/8, the folks behind the law reached out to the likes of Wal-Mart to ask about the feasibility of their brilliant safety innovations. By several reports (to me directly), Wal-Mart and their ilk expressed little concern about their ability to comply. Case closed. Ahem, what about the rest of us? Congress overlooked that little detail, figuring that what Wal-Mart can do, the rest of us can do, too.

Have we learned NOTHING in the last 18 months? Please don't make me answer that one.

A quick glance at the standards reveals that they are really only suitable for mega-businesses, particularly those that have committed to ISO 9001 and the like. This group does NOT include EVERYONE. The sections on Risk Management and Management (check out 3.8 Traceability - yeah, FULL traceability is required) are particularly out of reach for small businesses. Some of the new standards have already been addressed by initiatives in recent years to address "Code of Conduct" issues, like ICTI-CARE, and will probably be okay (within limits). But the RILA/BRC standards go much, much further. The cost implications of these standards for small business are breathtaking.

If a "damn the consequences, don't bother me with the details" rush to implement these new standards takes hold, there will be little reason left to try to be a small business in America. After all, standards like the RILA/BRC global standards are a classic glass ceiling to growth. I hope somebody takes note of the impact of these awful standards on small business, the largest creator of jobs in America. Small business needs an advocate, and these days, it's hard to identify anyone in Congress that gives a darn. If no one will rise to the occasion, I guess we can always open up a sandwich shop. That's about the only option that will be left for small business. Making products, besides sandwiches, has become a very unrewarding pastime.