Archive for January, 2011

Stay of Enforcement – Good News/Bad News

Concerning the Stay of Enforcement on lead content third party testing, there is both good news and bad news. 

First the good news:  We have a recommendation from the CPSC staff to extend the stay of enforcement – now slated to expire on February 10, 2011 – until September 14, 2011.  This gives product makers a seven month reprieve from one of the most expensive, job-killing provisions of the CPSIA.  Since the agency is required to identify a level lower than 300 ppm that is technologically feasible to become effective August 14, 2011,  it is unfair to require products to be tested to the 300 ppm standard and then again potentially to some other standard shortly thereafter.  This delay will also give the agency more time to finalize both the testing and certification proposed rule (the 15 month rule) and the component testing proposed rule.  Both these rules are linked with the lifting of the stay. 

Now the bad news:  The recommendation before the Commission is for a delay only until September 14, 2011.  While this extension is certainly better than nothing, I question whether this extension is long enough to accomplish all we and the marketplace need to do before the stay lifts.  It is unclear when we will issue the final 15 month rule and the component testing rule.  While, right now, I anticipate that we will issue both sometime this spring or summer, in particular the 15 month rule is proving to be more expensive and more complex than we initially thought. 

Ideally, both these rules should be in place before we lift the stay of enforcement.  As I stated in an earlier blog post, the component testing concept cannot work without its underlying rules being in place.  Component manufacturers reasonably may not take on the responsibility without knowing what their continuing testing obligations would be.  And without component testing, the final product makers will be burdened with the entire testing regime required by the CPSIA. 

It is my understanding that while large manufacturers gear up for holiday manufacturing in late winter and spring to complete this work by summer, that is not true for medium and small product makers. The September date falls right when small manufacturers are finishing up their work for the holiday season.  We are imposing a requirement in a way that unduly penalizes small businesses.  Why would we do this?

As we debate the appropriate date for extending the stay, it should be kept in mind that an extension is just that – only an extension.  The CPSIA requires third party testing and the Commission cannot change that requirement.  Our responsibility is to impose it in a way that does the least amount of damage to those who must live with this law.  Our responsibility is to try to smooth out the speed bumps and also let Congress know of the issues we are seeing with respect to this law.  However, at the end of the day, third party testing was mandated by Congress and Congress needs to decide whether or not to change that mandate. 

The Commission will soon be voting on the staff recommendation.  Let me know how the September date impacts you.

Stay of Enforcement: Let’s Decide Already

I recently wrote about the status of the stay of enforcement (SOE) of the lead content testing and certification requirements of the CPSIA.  Unless the CPSC acts, the SOE lifts on February 10, in 3 weeks.  We have received a number of petitions and requests to extend the stay.  Although specific action has not yet been taken – on either these petitions or my request for a Commission meeting on these issues – I can assure you there have been a lot of conversations going on and serious thought being given to this impending problem.

 I believe that, as we address the SOE, we need to be mindful of its relationship to the component parts proposed rule and the proposed testing and certification rule (the “15 month rule”).  Commissioners have pointed to the availability of component testing as a way of easing the significant testing burden on final product makers, especially small crafters.  We have heard from some component makers that they are not planning to third party test and certify until they understand the rules of the road and can make a rational business-based decision.  It is understandable that a component parts manufacturer would not want to do the initial third party testing and certification without understanding what its continuing testing responsibilities may be.  On the other hand, perhaps there are some component makers who are willing to take on this unknown liability.  We just do not know. 

Whether this is resolved in a public discussion as I requested, or otherwise, we need to reach a decision ASAP.

“…common sense rules of the road…” – President Barack Obama, Wall Street Journal, January 18, 2011

Today the President issued an Executive Order emphasizing that, as federal agencies carry out their responsibilities to protect the public interest, they also consider how those rules impact economic growth, innovation and job creation.  In a Wall Street Journal editorial published today, the President acknowledges that some regulations “have stifled innovation and have had a chilling effect on growth and jobs.”  He calls on all agencies to “root out regulations that…are not worth the cost, or that are just plain dumb.”  The CPSC could provide a number of candidates for rules that meet this description.  For example, aspects of the recently-issued children’s product definition which impose expensive and burdensome third party testing on products that were not traditionally thought of as children’s products – such as carpets and rugs – fall into both categories, that is, not worth the cost and just plain dumb.  Aspects of the recently issued database rule would also qualify, e.g. allowing inaccurate information to mislead consumers. 

While it is true that independent regulatory agencies such as the CPSC are not formally bound by executive orders, it has been the past practice of this agency to follow executive orders if they are not in conflict with our statutes.  This past practice has fallen by the wayside recently.  We will soon be considering a final rule on testing and certification.  While we have some initial indications from a summary regulatory flexibility analysis that this rule will impose very significant costs on small business, we have not done the analysis called for by the executive order.  Without this analysis, the Commission will be acting without full information. 

We know that regulations issued by this agency in response to the CPSIA have forced safe products off the market and have driven small companies out of business.  Doing the analysis the President calls for could help quantify the impact of our rules on the public – both from a cost and from a benefit standpoint. We need to maintain our focus on safety and health by focusing our regulatory efforts on products that present serious hazards.  I hope that we will follow his call.

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