Search Results for 'component parts'

The “Compromise” Conundrum

With my term drawing to a close at the end of October—amidst forced agency inactivity brought on by the government shutdown with both sides refusing to budge—I have been thinking about the concept of compromise. When do people of good will stand their ground and hold tightly to principle, and when do they budge a bit to reach a beneficial conclusion to a controversy? Is one’s thinking on this issue influenced by whether you hold a majority or minority viewpoint?

In a compromise, each side gives up something. Framed positively, a compromise is the mutual acceptance of an agreement’s terms; framed negatively, a compromise involves each side surrendering to the other on some goal or principle.

The shutdown negotiations (which, like most of you, I can only observe) trigger memories of the CPSC’s experience with compromise over the past several years. On many issues, large and small, the Commissioners have not compromised and instead have voted along party lines with the minority on the losing side of the vote. This produced flawed actions, many of which lacked support from all agency stakeholders. This made the actions more time-consuming and expensive to implement, and has made enforcement of new rules more spotty. Had there been some real compromise, the result would have been regulations, policies, or actions that were equally protective of safety and also more legally, substantively, and politically robust. In short, at the CPSC, too often compromise has been viewed as capitulation, with the parties unwilling to move at all off basic principles to find middle ground, rather than as a tool for finding mutual agreement.

Some examples, you say?

First, consider the database mandated by the CPSIA and which went operational in 2011. This came to the Commissioners for a vote with no effort to find middle ground. The majority rejected every amendment offered by the minority with little or no consideration of the amendment’s merits. Each vote was divided on party lines. Accepting only a few of the offered amendments could have resulted in a database supported by a unanimous vote. Instead we have a database that continues to be controversial and that many, including members of Congress, believe may be salted with complaints generated by plaintiffs’ attorneys anticipating litigation. And we now have a federal district court judge who condemned our process for posting complaints on the database saying that the agency’s process “convert[ed] the CPSIA’s remedial scheme into a ‘sport of chance.’” See Company Doe v. Tenenbaum, Civil Action No. 8:11-cv-02958-AW at *43 (D. Md. Oct. 22, 2012), quoting Judulang v. Holder, 132 S. Ct. 476, 487 (2011).

Our decision to lower lead limits to 100 parts per million (ppm) offers another example. This decision expanded our enforcement challenge dramatically without a corresponding increase in safety. (Remember that our staff found that the health benefits have already been realized without moving to a lower limit. In other words, there was no real health benefit to pushing from 99.97% to 99.99% lead-free children’s products.) Yet it was impossible to find agreement even on so common-sense a thing as a public enforcement policy stating that our compliance resources would be directed to those products that presented the biggest threat to safety. It would be interesting to know how many agency resources are directed at finding violations of items that, although above the statutory lead limit, do not pose any real risk to children.

The testing rule and the component parts rule offer further examples of parties digging in on positions so that the resulting rules are excruciatingly complex—in the case of the testing rule—or so laden with requirements as to render them virtually useless—in the case of the component parts rule (that was touted as offering testing relief).

If I were to continue the list, it would be a long one indeed. But the point is that too often here at the agency, there has been neither incentive nor effort to find positions that accommodate differing points of view. Our organic statute, setting up the agency as a Commission, contemplated that differing points of view would be brought to the table.

If Commissioners who hold a minority viewpoint are being asked to agree to a regulation that requires them to move on points of principle (perhaps by either getting too little or giving up too much) then the majority should acknowledge and respect that, and make accommodation by also moving to the middle. That does not happen much at the CPSC. But it is there that compromise lies, assuming one wants to look for it.

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1110 Series: Hiding the Ball?

Last week, the Commission proposed an update for our rule for certificates of compliance, known as the 1110 rule (part 1110 of title 16 of the Code of Federal Regulations). As the final piece in the testing and certification puzzle created by 2008’s Consumer Product Safety Improvement Act, this rule needed changes. While my colleagues were willing to improve some  problems with the way this rule has functioned in the market—and get public participation in this revision— I was disheartened that we could not find more common ground in trying to craft a rule that would rationalize the certificate requirements.

Ball

One of my biggest frustrations was that my colleagues were unwilling not just to do more to reduce the annual costs of this rule but even to be upfront in the way we presented its costs to the public. I wanted to include a chart that would lay out what we expect this change to cost in concert with the rule it replaces and the rules it supports (parts 1107 and 1109, the testing and certification rules for children’s products and their component parts). My colleagues insisted that we only needed to talk about the costs presented in the analysis prepared for this specific set of amendments. None of our rules operates in a vacuum, and the original 1110 rule was short on economic analysis because of the tiny 90-day window we had to pass it, so I thought it more transparent to give the public a chance to see and comment on the total tab. After all, companies don’t have the choice of conforming just with the new language—they have to follow all of our rules—so it is inconsistent with reality to tell people about only the new costs.

Since my colleagues refused to include this vital information, I have posted it here. The chart below breaks down how each component of the certificate rule adds to the prices consumers pay. Remember these are annual costs—and will be incurred year after year. Note also that this does not account for the actual set-up costs already expended to create and maintain the certificates, nor does it necessarily account for the costs of changes needed to comply with this proposal. And remember that these numbers apply only to paperwork—the costs of these sister rules are surely much, much larger.

Requirements

General Certificates of Conformity

Children’s Product Certificates

Document test results

$118 million[1]

 

$216.4 million[2]

Create certificate

Disclose certificate

$ 14.9 million[3]

File certificate with CBP

$56 million[4]

$18.7 million[5]

Subtotal

$174.2 million

$250 million

Total

$424.2 million

I’ll talk about more of my concerns with the rule change we just proposed—and the stilted process that led to it—the rest of the week, but I wanted to put the bottom line up front, just as we should have done in the rule.


[1] Pt. 1110 PRA (March 2013)

[2] Pts. 1107 & 1109 PRAs (November 2011)

[3] Pt. 1110 PRA (March 2013)

[4] Pt. 1110 PRA (March 2013)

[5] Pt. 1110 PRA (March 2013)

Ready…Fire…Aim (3)

My last two blogs have discussed shortcomings in the soon-to-be-voted-on testing and certification rule.  A third aspect of this testing and certification rule that concerns me is how it has mired another rule in an arbitrary process: our voluntary component testing rule.

The component testing rule clarifies that testing done by a component part manufacturer can be relied upon by the manufacturer of the final product.  The rule would allow component part manufacturers (like the company that makes the plastic for the teddy bear’s nose) to test and certify those component parts themselves. The final manufacturers of consumer products (here, the teddy bears) could then pass through the compliance maze more quickly by relying entirely on components that were already tested and certified. The goal of the component testing rule is to mitigate the burden of testing by spreading those costs across the supply chain.  It recognizes that, from a safety standpoint, the whole really is just the sum of its parts. And, it effectively pushes safety up the supply chain.

The component testing rule could have been issued months ago.  Indeed, all year long I have been asking the majority why they were holding back this rule and have yet to receive a satisfactory answer.  Apparently, their thinking is that if this is tied to the testing and certification rule, it will make the whole indigestible package more palatable.  They are wrong in thinking this.  And they are wrong, by holding the component parts rule hostage, to regulate with such disregard for how their actions impact those who have to live with them.

The CPSC today is announcing that it is sincerely concerned about the crushing, job killing impact of the CPSIA on small businesses! 

Oops!  I just checked my calendar – it’s April 1.

Many in the agency have been touting the much anticipated component parts testing rule as a real boon for small businesses.  I share this hope.  Therefore, I am more and more perplexed: if it will be so useful, why is the component parts testing rule (proposed 10 months ago) being held hostage to the more complicated, more complex “15 month” testing and certification rule??? That’s what is happening.  While the component parts rule may help businesses cope with their testing requirements, our very cursory assessment of the testing and certification rule shows it will impose several hundred millions dollars of costs on product manufacturers.  Unfortunately neither the costs nor the benefits of this rule have been properly quantified so the agency will be regulating blindly.  Never mind that there is no reason for sitting on the component parts rule and that our words pointing to it as a boon for small business ring hollow by our actions. 

We haven’t been able to put out succinct, helpful rules (see our muddled definition of “children’s products”). When we have the opportunity to do it with component testing, we delay.

Sadly, the real April fool’s joke is on both businesses and consumers.

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.

Deadlines Looming

Over the past few months the agency has been busy issuing for public comment proposed rules required by CPSIA. Consumer safety is unquestionably our goal at the CPSC, however, some of these proposals are questionable in how consumer safety might be achieved, and unclear at what expense. Some of these proposals are aimed at specific products, some are administrative in nature and some are very significant and will have a profound impact, for better or worse, on the cost and availability of consumer products.  It is so important that those who will be affected by these proposed rules let us know how they will impact you.  Your comments can indeed shape the final product.  In past blogs, I have discussed the importance of getting comments from those affected by our actions.  Because the public comment period for many of these proposals is closing over the upcoming summer months, I thought it would be useful to list some of them and the end date for comments.  So here goes:

Interpretation of Children’s Product — June 21, 2010

Publicly Available Consumer Complaint Database — July 23, 2010

Testing Rules for Component Parts — August 3, 2010

Testing and Labeling Pertaining to Product Certification (15 Month Rule) — August 3, 2010

We also have out for comment several proposed rules dealing with specific products such as toddler bed, bassinets, and drawstrings on children’s outwear, among others. 

While these proposed rules are important, I don’t have to remind you they impose a real impact on those who make consumer products.  Since the agency has abandoned cost/ benefit analysis of these rules, we will not have information on the real world impact of our rules – unless you tell us.

Notes from China

Over the past week I have traveled to Hong Kong and to Guangzhou,China to talk with representatives of the apparel and toy industry about CPSIA implementation issues. Because of the complexity of this law, it is so important that we make ourselves available to those who are actually making consumer products for the US market to educate them about their safety obligations under the law. In no particular order, here are some of the things I heard:
• I heard consistent complaints about the very short comment periods being made available to those who want to have input into our various regulations. The observation was made more than once that perhaps the agency did not really welcome public comment because the comments periods where typically too short for thoughtful input. I want you to know I have been pushing for longer comment periods because your insights are both welcome and needed.
• Another theme I heard was the need for more flexibility to be built into the testing requirements. Many believe they are spending money with no real safety gain when the funds could be targeted to the areas of actual risk.
• For industries with rapidly changing inventory, such as the fashion industry, requiring random statistical sampling for all changes in product lines will result in enormous costs. There is a great deal of concern about how our soon-to-be-published proposed rule on periodic testing will impact this industry.
• There is great hope that component testing will offer some solutions to decrease costs and increase efficiencies. However, I got conflicting messages about whether this will actually result in developing a market for third party tested component parts. In some instances, this is already happening. However, I heard complaints that, for certain commodity-type products, such as wire, there is no real way for component testing to be helpful.
• With respect to phthalates testing, the agency’s change in test methods has resulted in significantly increased costs and our list of products with either a high or low risk of phthalates has caused confusion.
• A constant theme was the need for greater harmonization. The cost of testing and complying with various standards around the world is a burden on the manufacturing process and impacting consumer choice.
• More than one company told of sending the same product for testing at various accredited labs only to get different test results back, as well as conflicting advice on what testing is required.
Talking directly to those who are trying to implement this law is an invaluable experience. I continue to welcome your thoughts as we try to roll out new requirements imposed by the law. With safety as our constant goal, we are trying to get it right but we need your input to make that happen.

…repeat: testing 1,2,3…

As every business that sells products in the U.S. should know, the CPSIA puts in place “bright line” standards for lead and phthalates, mandates a number of other safety regulations, and requires that product sellers show compliance by following prescribed testing and certification procedures.  Sellers of children’s products must do this testing at CPSC approved independent third party testing laboratories.  The statutory deadlines for these requirements proved to be unrealistic and to forestall chaos in the marketplace, the CPSC, in February 2009, stayed enforcement of the testing and certification requirements for a number of types of products for at least one year  (February 2010) and until the Commission affirmatively votes to lift the stay.   At its meeting this morning, the Commission began a public discussion of a timeline for lifting the stay and implementing the testing and certification requirements of the CPSIA. 

A critical part of the discussion of testing and certification involves how we are going to treat component parts used in children’s products (remember that children’s products must be third party tested) when those component parts are not themselves children’s products.  We now have under active consideration an enforcement policy for lead paint and lead content that would allow certification based on component part testing.  Component part testing could work in one of two ways:

  • First, a children’s product manufacturer could send component samples out for testing at a CPSC approved third party lab.  As an example, a children’s garment manufacturer could send samples of buttons out for testing and then use those buttons on all garments that it makes. 
  • Second, a children’s product manufacturer could rely on a certificate from another person certifying that the component had been third party tested and met the lead limits.  As an example, a home-based producer of little girls’ dresses could go to a local hobby store and purchase buttons certified as having been third party tested by a CPSC approved lab.

 

We anticipate that smaller manufacturers, specialized producers and crafters will find the second option of use.   However, since there is currently no requirement that components be tested, the question arises as to how long it will take for market forces to produce components that are being third party tested on a voluntary basis.  Without this general availability of tested components, our vision to maintain safety while relieving some testing and certification burdens, will not be realized. 

The answer to this question also will inform us with respect to when to lift the stay for lead content.  If we lift the stay prematurely, then the chaos we were trying to forestall a year ago will still be at our door.  In this case, consumer safety will not be advanced, consumer choice will be curtailed and businesses, especially small businesses, will suffer unduly. 

The Commission’s discussion on these issues was webcast and I recommend that anyone interested in this issue watch the webcast.  On December 10 and 11, CPSC will be having workshops to better inform the agency on these and related issues.  Though registration for attendance is closed, you can view the proceedings on CPSC’s website.

I would welcome feedback from you on what other actions the Commission can take to make component testing a useful tool for ensuring safety while lessening the testing burdens imposed by the CPSIA.

Exposing Exposure For What It Is

Last Friday the Commission unanimously reached an important, eminently practical, and pretty obvious decision: there are children’s products that have more than 100 parts per million (ppm) of lead that should be allowed to be sold. That’s because removing lead at that trace level is not really feasible and that trace amount of lead will not cause a safety risk to a child.

That’s a lot to say, but it says a lot.

Although last summer the agency said there was no technological reason not to impose a 100 ppm lead-content limit on children’s products, thanks to Public Law 112-28 (also known as H.R. 2715), we now have found a way to provide realistic exceptions to that rule. Why? Because in that law Congress emphasized that exposure to lead, not just the mere presence, is the key to determining the true risk of harm. If reducing lead content is not practicable or technologically feasible, if the product isn’t likely to be mouthed, and if using the product won’t measurably increase blood lead levels, then the product can be over 100 ppm—and be okay. There’s no health risk.

There are other components of children’s products, beyond those dealt with in the petition spurring this decision, which may similarly qualify. I hope the Commission continues to use this reasonable approach, albeit long overdue.

HOW MUCH TESTING IS TOO MUCH TESTING? Or, Button, Button, Who’s Got the Button? (and who tested the button? certified the button? materially changed the button? periodically tested the button? randomly sampled the button?)

Today the Commission is putting out for comment two proposed rules for doing the testing required by the CPSIA.   It is important that the basic rule be in place before the testing and certification stay of enforcement is lifted in February 2011.  Given the importance of this rule, we need to hear from the public about whether this proposal gets close to being right. 

This proposed rule, in an unprecedented way, puts federal regulators onto the factory floor.  The proposed rule is over 170 pages long and is by its nature very complex.  I am not confident we have written a rule that works for all the products under our jurisdiction.

One important aspect of the proposal deals with component testing and certification.  If suppliers of the paint or the resin or the buttons and zippers that go into a product are willing to test and certify for compliance, it is wasteful to also require the manufacturer who is using those components to repeat the testing.  This only makes sense.  However, if the components are going into children’s products, they need to be tested by a third party laboratory approved by the CPSC.  Further, the component maker is also responsible for doing periodic testing and for testing when a material change takes place, as is also required by the statute. 

We are hoping the component testing rule will result in the development of a market for third party tested components to especially help small businesses.  During my recent trip to China, I specifically asked various manufacturers whether component testing would address the concerns I was hearing about the immense costs of testing.  Several manufacturers told me they were already seeing tested components being advertised.  Others told me that for commodity type products, such as wire, it is unlikely such a market will develop.  I would be interested in your thoughts on how component testing will help you and what more we can do to develop this process.

In a statement I filed today, I lay out some of the serious concerns I have with the proposed rule.  This proposal will be open for comment for 75 days.  The text of the rule tells you the process for submitting comments.  I urge you to weigh in.  We need to hear from you before you’re told what testing you’ll have to do year after year, product after product.

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