Phthalates NPR: A No-Win for CPSC

Assuming that the Commission does not vote to again extend it, the period for filing comments on its proposal to permanently ban certain phthalates closes in a few days.  At that point the monkey will be really on the back of the agency and none of its choices are very good.

Because the way the statute was written, the Chronic Hazard Advisory Panel (CHAP) that Congress directed the agency establish to study the health effects of phthalates, without strong direction from the management of the agency, easily could move into policy issues and this is what has happened with its recommendations.  If the agency holds with the recommendations of the CHAP, it faces sure, and probably successful, litigation at the end of the process.  If it tries to walk back the CHAP recommendations, it gets accused of disregarding “scientific” recommendations protecting children. A real no-win for the agency.

I have written before in this blog about the serious regulatory policy issues that the phthalates rulemaking raises.  For those who are interested in this issue and those who are concerned about the use of cumulative risk assessments, I wanted to bring to your attention an article I authored that appeared today in The Hill Congress Blog publication.  You can find it here.

Should Congress decide to do oversight of the CPSC, there are a number of issues that need examining.  This issue should be added to the list.

Note to CPSC: You Really Dropped a Stitch Here!

I am a knitter.  Knitting teaches patience and is a great way to pass time on an airplane.  While traveling, I missed a recent CPSC recall and am thankful to my friendclip-art-knitting-981445 Lenore Skenazy, the author of the blog Free Range Kids, for bringing to my attention important information about a silent killer—yarn.  Since she said it better than I could, the following is from her blog post:

Gracious me! This brand of yarn can unravel! Have you ever heard of such a thing? It’s just too scary! How irresponsible can a yarn maker be? No wonder the Consumer Product Safety Commission just issued this dire warning:

Name of Product: Bernat Tizzy Yarn

Hazard: In finished knit or crochet items, the yarn can unravel or snag and form a loop, posing an entanglement hazard to young children.

Incidents/Injuries: Bernat has received two reports of children becoming entangled from unraveling or snagging yarn blankets. No injuries have been reported.

Remedy: Consumers should immediately stop using the yarn or finished yarn projects, keep them out of the reach of young children, and contact Bernat for a full refund.

Remember! Children are only safe near items that can never unravel or make a loop. Kindly avoid all necklaces, ponytails, jumbo rubber bands, snakes, shoelaces, licorice whips, octopi, thread, phone cords, scarves, kites, jump ropes, taffy (long form), fishing line, string cheese, and, of course, marionettes. – L.

What is the agency thinking?  While unraveling yarn may be a quality problem (for the company to address with unhappy customers), turning a quality problem into a safety issue takes the agency way outside its mandate.

In an earlier post I addressed my concern that silly recalls can serve to make consumers stop listening.  This certainly qualifies as a silly recall. Consumer safety is not advanced by such a result.  However, if the agency persists in pushing its mandate so that product quality problems are viewed as safety issues warranting a recall, what unravels is any predictable definition of a safety hazard and then safety becomes what the agency says it is at any given time. Now that is a snag folks should be worried about.

Phthalates NPR: Flawed Theory Supported by Flawed Data

risk_measurement_400_clr_5483-300x300On March 16, 2015, the comment period will close for the CPSC’s proposed rule banning specified concentrations of phthalates in children’s toys and child care articles.  While those who make and use phthalates are well aware of this proceeding, it has much broader implications for the entire regulated community.

The proposed rule is flawed not only in terms of substance but also of process.  The manner in which it used a cumulative risk assessment to justify banning products that contribute little, if any, exposure to phthalates has broad and troubling implications that extend well beyond this proceeding.

The proposed rule comes out the report of the Chronic Hazard Advisory Panel (CHAP), established by the CPSIA.  Using a cumulative risk assessment, the CHAP advised, and the Commission majority agreed, that concentrations of the phthalate DINP should be banned in all children’s toys and child care articles.  The CHAP found that “food, rather than children’s toys or child care articles, provides the primary source of exposure to both women and children….”  Nevertheless, the CHAP expressed its concern “that toys and child care articles may contribute to the overall exposure.” (See staff briefing package, “Prohibition of Children’s Toys and Child Care Articles Containing Phthalates”, page 13, emphasis added.)

Cumulative risk assessments can be a useful analytic tool in certain circumstances where risks come from identified multiple sources. However, in this instance, it is very clear that the CHAP had issues about how to do the risk assessment and then how to use it.  Cutting through the scientific jargon, the CHAP report and the CPSC’s proposed rule based on it address a potential health risk by proposing to ban a speculative contributor to the risk.  The notion that this rule will make the marketplace safer is belied by the fact that the CHAP report describes the many other and more primary exposure routes from the other products that contain phthalates—most of which are outside the jurisdiction of the CPSC and many of which are not being used by children.

I believe that the CHAP fell far short of carrying out its duties.  Since the CHAP believed that certain phthalates present health risks, it should have called upon those agencies with jurisdiction to initiate appropriate action rather than just issue its tepid call for more interagency study.   However, for the CHAP go on and “cya”  by recommending regulation of a product class that contributes little, if anything, to the hazard as a way to protect human health is akin to emptying a lake with a teaspoon—lots of effort; little results. And it is an intrusion into a policy area where it has no expertise.

These concerns are amplified by the fact that the CHAP based its findings on stale data, when there is ample evidence that had it used the most recent data available to it, the analysis may well have reached a different conclusion.  For the CPSC, which prides itself on being a “data-driven agency”, to acquiesce in such an inexplicable use of flawed data, much less base a proposed rule on it, is puzzling.  It might lead a cynic to wonder if this was a politically driven decision rather than a scientifically driven one.

Commissioner Beurkle has addressed the shortcomings of the CHAP report in a statement explaining why she could not support the NPR.  It is worth reading.

However, going forward, if the CPSC is going to use cumulative risk assessments to justify banning substances that contribute little if anything to a risk and do so based on stale data and flawed analysis, then all CPSC stakeholders should be concerned.  This is an issue that affects not just the chemical industry.  Those who make and sell products subject to the jurisdiction of the CPSC should weigh in on this troubling dumbing down of science in the name of science.

Retailer Reporting: Something for Nothing?

Over ten years ago, the CPSC compliance staff negotiated an agreement with Wal-Mart that has grown over the years into what is now known as the retailer reporting policy. Under the agreement, Wal-Mart agreed to file weekly reports with the CPSC documenting safety issues reported to its stores about products it sold. This reporting gave the agency important insights into the range of safety issues the world’s largest retailer was seeing. It allowed the agency to get an early heads-up on potential safety issues before they matured into “substantial product hazards.” And Wal-Mart got some protection from allegations that it had failed to report substantial product hazards to the agency.

Because this was such a win-win for both the agency and the company, other large retailers and then several large manufacturers soon began asking to participate in the program as well. In response, the agency expanded the program over the years. However, several years ago, the retailer reporting program was put on hold.

The agency staff has now decided to revise the program. Only selected companies will be “invited” to participate. The revised program makes very clear that participation in the program does not provide a substitute for or otherwise impact any reporting requirements under Section 15(b) of the law. However “consideration” may be given to participating companies should they be faced with subsequent enforcement actions for failure to report. The confidentiality protections applying to Information submitted under Section 15(b) of the law would not apply to these reports.

The staff believes that these changes make the program more transparent and answer long-standing questions about how the program operates. That is certainly true. But the changes also raise several other questions as well. For example, the selective nature of the program and the “consideration”, if any, given to participants does raise troubling fairness issues,  A company wishing to participate and frozen out of the program will have little recourse in challenging the decision of some invisible staffer. What kind of consideration will be available to some but not others?

But more basically, the changes raise the question of why any company should bother to participate. When I raised that question, when I was still a Commissioner, the answer I got was “that it is the right thing for companies to do.” Perhaps there are companies who will find the CPSC staff “invitation” irresistible. (I assume that there will be no measure of bullying associated with these invitations.)  However, there may be others who believe that the effort involved and the benefits to be gained are not worth it. In this case the agency will lose out on an important source of information that could help it identify risks as they come up over the horizon.

However, the biggest concern is a process one. The program has been in place for over ten years. Although it was initiated by the staff, it has grown over the years and it has consumed considerable staff resources. Changes of this magnitude should be placed before the Commission for explanation and approval in a public meeting. The program’s role in gathering useful information should be better explained and it should be part of the agency’s annual operating plan. Regardless of what one thinks of the merits of the program and the changes being made, this is something that Commissioners should consider and approve, not delegate to staff.

Debbie Downer Goes to the Super Bowl?

The spectacle that is the super bowl is for some (including me) as much about the ads as it is about football.  On this day after the big game, the morning talk shows offered up various commentators’ lists of the best and worst of those advertisements.  One ad that seemed to show up on everyone’s worst ad list is the “Make Safe Happen” ad sponsored by Nationwide Insurance.  Even one of my heroines, Lenore Iskenazy, in her Free Range Kids blog, tagged it as the worst super bowl ad.

For the benefit of the maybe ten people in the country not watching the super bowl, this ad featured a child musing about all the things he would not be able to do—learn to ride a bike, fly, get married–because he had died in an accident. Was the ad provocative? Yes.  Did it get people’s attention?  By all means.  Did it highlight an important issue that gets only passing attention from many?   It did.  And I believe that Nationwide deserves praise for its courage in running the ad.

As Nationwide points out in its response to the ad’s critics, “preventable injuries around the home are the leading cause of childhood deaths in America.”  As a CPSC commissioner I saw, first-hand and every day, the tragedies caused by accidents in the home that were entirely preventable.  Shining a light on risks such as accidental drowning and tipping furniture serves as a reminder to all of us that accidents often happen in places where we feel the safest—our homes—and can happen in the blink of an eye and when we least expect it. Getting this reminder from a child who has died brings home with real impact the fact that many of the worst accidents happen to our children.

Some may say that the ad somehow suggests that parents who have suffered these tragedies are to blame for not being careful enough or that these accidents point to the need for more governmental involvement in how we raise our children. Not so. The ad sought to build awareness and awareness is the first step in solving a problem that, as parents, we must address in the way that is best for our own families.

Shopping the Global E-Mall, Round 2

In my last post, I discussed the growing phenomenon of e-commerce sales directly to consumers from foreign (Chinese) manufacturers. My concern is that the regulatory stance of the CPSC—asserting that a foreign manufacturer is legally responsible for compliance with all U.S. safety standards when a U.S. consumer buys a product directly from that manufacturer—is both naïve and unenforceable.

Therefore, I was interested to see the announcement last week from the CPSC that it has entered into a voluntary agreement with Alibaba, the Chinese e-commerce direct sales company, to work with the agency to try to monitor its platforms for dangerous products.  Kudos to the agency for negotiating this agreement, as modest as it is.

According to press reports, Alibaba handles more e-commerce business than Amazon.com and eBay Inc. combined and, as a platform for third parties, it controls as much as 80 per cent of the Chinese e-commerce business.  Obviously, Alibaba can be a potent ally in policing the marketplace for unsafe products.

Looking at the reported details of the agreement, it is not clear whether it will prove to advance consumer safety in the global e-mall or merely serve as a fig leaf to which the parties can point to show they are doing something.  Alibaba has apparently agreed to block sales of up to 15 recalled products upon request from the CPSC.  Since a substantial number of the over-400 recalls the CPSC does each year are of products from China, there should be no problem finding candidates for this list.  All concede that this agreement is not enforceable. It remains to be seen how aggressive Alibaba will be carrying it out over time.

More interesting is the company’s agreement to make available information about safety requirements to importers into the United States.  U.S. safety requirements are not easily understood, especially those issued since 2009 in response to the CPSIA—see the labyrinthine regulations dealing with testing and certification for examples. Any way to get information to those who are honestly trying to comply can do nothing but help.

Whether this agreement is a modest, but effective first step or just another counterfeit product remains to be seen.  Stay tuned.

Shopping the Global E-Mall

While holiday shopping memories may have faded to a blur, holiday gift returns and shopping for bargains are very much a part of the January ritual.  That is why a Wall Street Journal article that showed up right at the end of the year has stayed in my mind.

The article, by Dennis Berman, examines the growing phenomenon of e-commerce sales directly between Chinese manufacturers and global consumers. Berman’s piece provides a fascinating peek at China’s ability to merchandize goods–ranging from electronics to household products to wedding dresses–directly to consumers anywhere in the world using the web, global transportation networks and consumers’ increasing comfort level with and demand for products that transcend national boundaries.

For those of us who are concerned about consumer safety, the implications of this change in consumer buying patterns are obvious.  And, as a former safety regulator, I am troubled by the U.S. Government’s awkward and clumsy approach to the issue.  The Consumer Product Safety Commission has outstanding a proposed rule to address the safety of imported goods but that proposal actually adds costs, burdens and bureaucracy to the import process while adding little if any added safety. While the proposal creates detailed new rules for manufacturers who import products for sale in the U.S. through traditional distribution methods such as retail stores, it treats foreign manufacturers who sell directly to U.S. consumers almost as an afterthought.

Here is some background.  Since 2008, the law has required that importers of consumer products certify that their products meet U.S. safety standards, including testing requirements. Those certificates must be available for inspection by the CPSC upon demand.  In addition, the agency established a program that targets shipments for inspection based on a risk assessment methodology that includes criteria (such as type of product, identity of shipper, and location of shipper) which, in the agency’s judgment, have proven to be indicative of high-risk shipments.  This program has been supplemented with aggressive work with the Chinese government to address the serious safety issues that were identified in the last decade.

The agency now proposes changes to this system but the changes focus almost exclusively on importers who bring product into the U.S. for sale through traditional distribution channels.  The agency seeks to establish a system under which every certificate of an imported product must be filed electronically with Customs at least 24 hours before the product is presented for entry into the United States.  The proposed regulation also expands the data requirements of the certificates, and imposes on common carriers, such as Federal Express and UPS, the requirement to file (and be responsible for the accuracy of) certificates when they act as importers of record for their clients. The agency also proposes to build the capability to “look” at every shipment entering the U.S. and would fund the increased staff that this will take by imposing a fee on importers.  I have discussed these issues in the past.

While this proposal certainly increases the regulatory reach of the CPSC, I am not certain that it actually increases the safety of the marketplace. I question the effectiveness—and the fairness–of imposing on UPS the job of policing the safety practices of the global supply chain.  I do not understand why billions of certificates for perfectly safe products need to be retained under penalty of law for years when much of the same information is required to be retained under other CPSC regulations.  I do not understand why expensive new computer and administrative systems have to be established by importers to file these certificates with Customs when it is unlikely that the vast majority of certificates will ever be looked at by the CPSC.  I do not understand why the agency wishes to upset a system that seems to be working—except to scratch the itch to push its regulatory boundaries (and, perhaps, its budget as well).

But none of these measures address what happens when a foreign manufacturer sells a product directly to a U.S. consumer.   While the proposed rule recognizes that, in this case, the U.S. consumer is technically the importer of the product, it would be impossible to impose a requirement on the individual consumer to certify the safety of the product that is being purchased.  Therefore, the regulation solves the problem by putting onto the foreign manufacturer the legal requirement to certify that the product it is selling meets all U.S. safety standards before shipping it to the U.S. consumer.

How this requirement can be enforced, especially against a company that may have no presence in the U.S, is conveniently left unaddressed.  But the arm of the U.S. government is neither long enough nor strong enough to reach so far.  As an enforcement device, this requirement seems to be an illusion.

The regulation fails to adequately address many of the issues that are implicitly raised in Berman’s article.  First, and right out front, is the question of personal choice and responsibility:  if I knowing chose to purchase a product from China, do I assume the risk for any safety defects that may exist?

The nimble quality of the e-commerce marketplace means that little inventory is stored, that product is sourced from suppliers as needed and send to consumers around the world.  That is the economic reality.  Unfortunately the regulatory reality has not kept pace with that economic reality.  And, in large part, that is the fault of regulators.

Here is an example.  Assume that Europe and the United States have similar but not identical safety standards for the same product (a very real-world assumption).  If the Chinese company gets an order for an identical individual product from both an American and a European consumer, is it likely that the Chinese factory will do two separate tests and certify that the same product being shipped to the European and American consumers satisfy the two regulatory requirements?  What if the order came from Mexico? Or Australia? Can they realistically be expected to know, and certify to, the differing requirements around the world?  At what point will the Chinese factory just ship the product out without thinking about safety?  If safety standards were aligned, would there not be more market incentive to design products that meet those standards? Perhaps so. Yet, practical and realistic efforts to harmonize safety standards have not been encouraged by U.S. regulators.

These companies are selling products to consumers in countries all over the world—countries with differing safety standards and legal requirements. Rather than imposing a legal requirement that cannot be enforced, would it not make more sense to try to reach consensus with other stakeholders, including the Chinese, about what should be required?  The CPSC has made good strides in working with the Chinese Government but these efforts can be greatly enhanced—to the benefit not only of U.S. consumers but also of Chinese consumers as well.  Minimal standards for commonly recognized hazards such as exposure to heavy metals, flammability of fabrics, and choking hazards to children could be established and these standards would find their way into the products that are shipped around the world. Then we could build on that progress.

If a global e-commerce marketplace is our reality, then we need to rethink how our country’s safety regulations fit within that reality.  So far the CPSC has not shown itself at being very adept at thinking globally.


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