Archive for October, 2013

Singing a Different Tune?

Why put off until tomorrow what you can do today?  With respect to reducing the unjustified costs of its testing rule, the Commission has followed the notion of why correct today the problems you have made when you can put them off until tomorrow . . . or maybe until never.

We all know the history:  in 2011, Congress told the agency to look for ways to reduce testing costs and if it needed new authorities to do that, then ask for those authorities.  Since 2011, the agency has asked the public repeatedly for comments on how to carry out that mandate.  In spite of good suggestions from the public and from the staff, the Commission has taken no real action to implement any of those suggestions for well over two years.  In the meantime, product sellers are having to pay for tests that do not necessarily enhance safety but cost consumers in terms of higher prices and fewer choices.

I have written about this over and over again until I sound like a broken record.  Indeed, perhaps the CPSC theme song should be “Maybe Tomorrow” by the Jackson Five.  How about Amy Winehouse’s “Procrastination”? Or is it better to stick with an old standard such as Sinatra’s “Call Me Irresponsible”?

Given all this, I was surprised and pleased to hear all four Commissioners at yesterday’s briefing on the agency’s FY’14 Operating Plan say how much they each supported moving ahead with efforts to reduce testing burdens.  The two new Commissioners are dealing with this issue for the first time, and so their reaction that this is an issue overdue for attention makes perfect sense.  But it was startling to hear Chairman Tenenbaum and Commissioner Adler join that particular chorus since they have been less than positive about moving this issue forward.

Why this change of tune?  Perhaps the need to respond to inquiries from the Congress about the agency’s inaction has triggered this sudden interest.  And perhaps hard questions from new Commissioners has jolted them out of their somnolence on this issue.  At the briefing, there seemed to be some acknowledgement that products made from manufactured woods were real candidates for relief.  It would be a pity if the agency stopped there.  As Commissioner Buerkle pointed out, there are plenty of other areas where relief seems to be warranted.

And hard questions need to be asked about why this is taking so long.  Comments were submitted months (years) ago and there has been plenty of time to read, analyze, come to some conclusions, and initiate some real actions by the agency—if only the Commission gave the signal to do so.  Unfortunately, for example when I, as a Commissioner, tried to include some action to bring this to conclusion in the FY’14 budget, my effort was summarily rejected by both Chairman Tenenbaum and Commissioner Adler.  So it was especially gratifying that both now appear to have joined their colleagues in singing about the need for some relief.

To continue the musical theme, the agency now has some New Kids on the Block.  I hope we will hear their hit song, “No More Games” start being played at the CPSC.

To The Staff: Thanks!

As readers are aware, my term of office as a CPSC Commissioner ended on October 26. Yesterday, I had the chance to go back to the CPSC to say good bye to the dedicated agency staff who work so hard to protect American consumers.  Having the opportunity to work with, and learn from, professionals of the caliber of the CPSC career staff has been a high point of my career.  I know a number of CPSC staff members follow this blog so I wanted to use it to again say thank you to the staff for all the help, support, learning and spirited discussions you provided as we worked through so many important safety issues.

Changes

Tomorrow, after 8½ years, my term as a member of the Consumer Product Safety Commission ends. It has been quite a ride—smooth at times, bumpy at others, but always interesting.Change I will let others judge my successes and failures, but I have always striven to help the American consumer by ensuring that their products are safe and their options plentiful. It is my deep conviction that this agency does its job best when it works alongside stakeholders, not against them. All sides have valid concerns. All deserve to be heard. As a commissioner and then as acting chairman and then again as a commissioner, I have always tried to work collaboratively with my colleagues and with stakeholders. I am proud of the work that we do here at the CPSC, and I will be more than a little interested to see where the agency goes in the future.

As a matter of fact, more than just staying interested, I plan to stay engaged. (After having been involved with the agency in some way or another for nigh on 30 years, you wouldn’t expect me to just disappear, would you?) I have very much enjoyed writing this blog since I started it in 2009, and I’ll be keeping it up. There will be posts about the CPSC, and perhaps about other subjects like administrative law and regulatory policy. I won’t just be posting because I’m interested—I’ll be posting because all of us who know and work with the CPSC have a responsibility to stay engaged with the agency. Regulators and the regulated (and other interested parties like yours truly) have to keep talking with each other, not going back into our shells, in order to avoid the kind of groupthink that leads to bad decisions or an us-versus-them mentality. So let’s keep the conversation going.

Listening to Constructive Criticism

Yesterday, I met with representatives of the National Association of Manufacturers Product Safety Coalition. Participants at the meeting represented a broad spectrum of businesses that make and sell consumer products, and so are under the jurisdiction of the CPSC, and they shared their concerns over the direction the agency is headed. Here is a summary of some concerns expressed at the meeting:

  • A perceived breakdown in communications between the agency and business stakeholders is causing great frustration among those trying to comply with CPSC requirements.
  • The proposed rule setting out voluntary recall procedures was labeled as “a solution in search of a problem.” Great concern was expressed that this rule could make the process more time-consuming and resource intensive, both for the companies and the agency.
  • The move to mandate corporate compliance programs as a part of a penalty settlement or as part of a voluntary recall is viewed as excessively intrusive. If the agency insists on these programs as part of recall corrective action plans (as allowed by the proposed voluntary recall rule), this insistence will slow down the recall process greatly.
  • There seems to be no logic or systematic rationale about how penalties are being assessed so that past penalties are not predictive of future penalty demands. The process for referring cases to the Department of Justice is opaque.
  • While agency participation in the voluntary standards process is welcome and helpful, there is concern that technical discussions need to be held in an environment that fosters and encourages full participation from corporate technical experts. There is also concern that voluntary standards are becoming de facto mandatory standards.
  • Questions were raised about why the agency is moving forward with a wholesale change to the certification requirements (as proposed in the rule changes to 16 CFR 1110).  Companies have already set up systems to implement existing certification requirements and changing those systems will be resource intensive and is not justified.
  • There is ongoing concern that the agency is not moving forward with addressing the burdens that are associated with its testing and certification regime. There is a great deal of unnecessary testing being done, especially with respect to phthalates. A plea was made for aligning our standards with other international standards.

While a number of other issues were raised, the participants also reaffirmed their underlying support for the agency and its important safety mission. The message I took away is that we need to interact with our business stakeholders in a more collaborative and cooperative manner. Obviously, the range of issues we deal with is so broad that without this collaboration, we will not succeed in carrying out our mission to protect consumers.

Firing Blanks

While some of us may be old enough to remember playing with toy cap guns, this relic of another time has pretty much faded into the memories of kids, now long grown up, who counted the Lone Ranger, Matt Dillon or Dale Evans as a hero—except at the CPSC.  Today the Commissioners received a proposal to repeal longstanding regulations dealing with toy caps.

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This proposal is part (actually, the biggest part) of the agency’s “commitment” to undertake regulatory review.

I have written before of the agency’s disregard of the President’s direction to agencies to undertake rule review. He said that “if there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them.” Apparently we have combed our rules and the repeal of the toy cap rule is all we could come up with. Never mind that this rule was already subsumed by another regulation and that other than cleaning up the Code of Federal Regulations, our actions have no effect—no one claims that the toy cap rule is stifling economic growth. Never mind that it took well over a year to go through the process of repealing a rule that impacted no one.

Yet there are many rules on the books here at the CPSC that do needlessly stifle economic growth. The testing rule is a good example of where we went overboard in our enthusiasm to regulate. In 2011, Congress asked us to take another look at testing costs and to take action to reduce the costs and burdens of testing consistent with consumer safety. We have repeatedly asked for comment on the same issues and then slow-walked any effort to take action in response to those comments.

Rather than taking honest action to address real pressing problems presented by overly-broad rules, we have hidden behind a rule review fig leaf—toy caps. It would be funny if it were not so serious.

Marshall Dillon, where are you when we need you?  Load up your toy cap gun and come to the rescue.

CPSC to Congress: Still Kicking the Can

Kick_The_Can

The government shutdown eclipsed an important letter that the agency received on October 1 from our congressional overseers asking us explain our failure to move forward on addressing the costs of CPSIA-mandated third-party testing. You will recall that Public Law 112-28 required us to address those costs and let the Congress know if we needed new authorities to do so. Congress asked for a response by October 21—today. No answer has yet gone back to the Hill, although the shutdown explains some brief delay.

But every day that we delay in reducing the costs of often-unnecessary testing we fail to perform our job to regulate rationally, opening the agency up to deserved criticism. And it is no wonder that Congress asks why we haven’t addressed this issue. To review: In November 2011, we asked the public for ideas on reducing testing costs and, based on some of those comments, our staff came up with a list of 16 recommendations. A year later, the Commissioners pared the list down to nine items, and then further shrunk it down to four ideas, none of which have been acted upon.

It has been said that there is a six-word formula for success: think things through, then follow through. Our regulations on third-party testing were not thought through, so Congress stepped in, asking  us to try again and this time follow through by either addressing the problem or asking for authorities to do so. Our response? We kicked the can down the road.  Maybe it’s wishful thinking, but I do hope this letter draws enough attention here to trigger real follow-through.

Like others, I will be most interested to read our response to the Congress, whenever it comes. One suspects we will point to the fact that we have gathered public comments on at three separate occasions. One further  suspects we will plead poverty, saying we have no resources for doing this important work. But asking stakeholders to comment over and over again on the same issues does not advance the ball. And claiming lack of resources as preventing solutions to problems of our own making rings pretty hollow.

Ben Franklin said, “Never confuse motion with action.”  We have had lots of motion.  We need some action before those who would benefit just give up.

The Fast Track to Unintended Consequences

Before the government shutdown threw so many plans up in the air, the Commissioners were scheduled to meet on October 23rd to deliberate and vote on whether to issue for comment an interpretive rule setting out guidelines for voluntary recalls.  While I have discussed my concerns about the overall approach outlined in the draft rule (see my post here), I am especially concerned about the impact it will have on our fast track recall program.

My concern flows from the provision in the proposed rule that gives the staff the authority to insist on implementation of a corporate compliance program as a part of the corrective action plan (CAP) being negotiated. Normally, a CAP is limited to a refund, a repair, and/or a return. The direction to the staff here is somewhat vague but the proposed rule states that a company’s history of recalls could trigger such a demand.

The fast track recall program is an innovative procedure put in place a number of years ago to get recalls conducted as efficiently and quickly as possible.  Under the fast track approach, a company can bring a potential recall to our attention, the staff will agree with the recall without making any finding that the product violates a rule or has a defect and the whole matter will be resolved within 20 days of the first notice to the agency (in the majority of cases).  This approach benefits the agency in that it resolves safety problems with minimum resources, it benefits the company in that it gets the recall out efficiently, and most importantly, it benefits consumers by getting product issues quickly resolved.  Consequently, the fast track option is used frequently, especially for those recalls where hazards are speculative or inconclusive.  (I am reminded of the recalls of beaded curtains that took place several years ago, when one company, seeing that another had recalled these left-overs of an earlier hippie era, also recalled its beaded curtains without any incidents or other data to justify such a recall.)

All of us hear anecdotal comments on a regular basis of companies that use the fast track program when quality control (as opposed to safety) issues have been discovered and we readily agree with such recalls.  We also hear that the fast track program is used when there is concern that there may be a potential safety issue but that has not been determined and the company, out of an abundance of caution, decides that it will do a recall early rather than wait for more evidence of the existence (or not) of a safety issue.  We have even heard of companies who have integrated the fast track concept into their compliance programs, making the default a fast track report to the agency.

These are generally positive developments.  But the incentives to use the fast track may be curtailed if using fast track could be the basis for a demand that a company supply information about its compliance program. The incentives would be further undermined if the agency treats the mere fact of past  recalls as proof that a compliance program needs to be scrapped or reworked under the watchful eye of the CPSC.  I am not suggesting that products with real safety problems are not recalled under the fast track program.  Of course they are.  But the staff has not made any finding of the existence of the hazard.  It would be a very bad result if this provision in the proposed rule made companies either reconsider or forego taking advantage of the benefits of the fast track option in marginal cases because that decision could come back to haunt them later.

And the time of our hard-working (and often over-worked) compliance officers is best spent getting unsafe products out of the hands of consumers. Their expertise is in negotiating recalls, not designing corporate compliance programs.


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