Archive for the 'Burden Reduction' Category



Happy (?) Birthday

Perhaps someone, somewhere celebrated the 6th birthday of the CPSIA 10 days ago, but it sure blew right by me.  It took the Product Safety Daily publication to remind me that it had occurred. ?????????????????????????????????????????????????????????????????????????????????

The American Apparel and Footwear Association posted a short, thoughtful blog about the significance of the CPSIA’s anniversary, noting that the law did achieve some important safety benefits but not without some very significant and unnecessary costs.  And it is my position, as a commissioner who lived through the internal debates at the agency, that the CPSC was complicit in exacerbating those unnecessary costs and complexities.  The good things in the law could have been achieved without the heavy toll extracted.  That the agency has not moved to reduce testing burdens as instructed by Congress is either regulatory incompetence or arrogance run amuck.  But I repeat myself.

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Testing Assumptions

This week I had the pleasure of speaking to the leadership and staff of the American Association for Laboratory Accreditation.  The association accredits third party testing laboratories to a wide range of standards including, but not limited to those issued by the CPSC.  My presentation was an opportunity to discuss how the agency has implemented the CPSIA with a special focus on the agency’s testing requirements.  However, this was also an opportunity to have a free-wheeling conversation about the role that testing and testing laboratories play, and should play, in product safety.

I asked these experts whether third party testing of children’s products was the most effective way in all cases to assure regulatory compliance.  Interestingly, these representative of the testing laboratories agreed that while third party testing is the most expensive compliance tool, it is not always the most effective tool.  They pointed to the EPA’s green appliance regulations as an example of an effective regulatory regime that does not mandate third party testing. They pointed to NIST’s accreditation of first, second and third party testing laboratories to make the point that it is possible to oversee the integrity of in-house testing.

I pointed to the rule to require warning labels on slings—cloth infant carriers—that the agency plans to proposed next week, asking whether sending slings to a third party testing laboratory to “test” whether the label was correct was an efficient use of resources.  While the audible answer was “probably not”, judging by the body language of the folks in the room, the real answer was “are you kidding me?!”

I asked these experts about whether testing variability occurs among different labs or within the same lab.  The answer I got was “Of course it exists.  Everyone knows that.”  Apparently, everyone but the CPSC. This is an issue I tried to get the agency to address when I was a Commissioner but agency leadership was steadfast in refusing to even see lab variability as an issue.

We talked about the feasibility of laboratories discounting prices to small businesses who are suffering mightily under the burden of CPSC-required testing.  Commissioner Adler has suggested that laboratories do that since the testing requirements of the law and the CPSC regulations have provided laboratories with such a business windfall.  The conclusion of these experts was that this is not a workable option for a wide variety of reasons.

However, we did talk at some length about the role testing laboratories could play in assuring that testing resources are directed at those products that pose the greatest risk and are not wasted on unnecessary testing.  I challenged the industry to participate constructively in suggesting ways to reduce testing burdens beyond the rather unimaginative actions now being taken by the CPSC. While the industry may experience some short-terms gains by a system that requires excessive and burdensome third party testing, everyone, including testing laboratories, benefits from a system that deploys resources efficiently and reduces the costs that product sellers (and consumers) pay to assure safety in the marketplace.

 

Illusory Process = Diminished Results

The CPSC staff is now collecting and cogitating on information about how phthalates—substances added as plasticizers to make plastics soft and pliable—are used to manufacture children’s toys and child care articles.  This activity is part of the agency’s effort (perhaps its only effort?) to minimize the burdens of third party testing, as required by Congress in P.L. 112-28.  If the agency can conclude that certain substances do not and cannot contain illegal phthalates, then it can determine that products made up of those substances do not need to be tested for phthalates.

The problem is that the way the agency is going about its inquiry is almost guaranteed to result in very little relief.  And since phthalates testing is very costly, an illusory process that is structured to minimize any relief available does not reduce the testing burden Congress was trying to achieve, much less what responsible regulators should insist on.  The problem with the phthalates inquiry is that the agency is requiring that stakeholders not only show that phthalates are not now being used in the manufacturing process, but also to show that it is impossible that they will be so used any time in the future, in any place in the world.  In other words no matter how much real world data one supplies, it cannot proof the negative as is being asked by the CPSC staff.  Although we all know the moon is not made of green cheese, who can say what will happen in the future.

The outcome of this inquiry is pretty clear.  Certain predictable substances, such as natural wood and fibers, will eventually receive exclusions from testing (after how many years of costly and unnecessary testing?).  The bulk of products that do not use phthalates but whose makers cannot now predict the future in the absolute terms required by the agency will not get relief.  The agency will claim this as an accomplishment and close up shop on any real burden reduction.

I do not understand why the agency has taken the approach it has.  A real and honest effort to understand where phthalates are used, where they are not and then address its compliance efforts at where they are used and its burden reduction efforts at where they are not would result in significant relief.  Rather than ask stakeholders to prove a negative, they should ask stakeholders to help them understand where the agency should be looking for phthalates.

The response, no doubt, is that a collaborative approach does not guarantee that phthalates will not be added by some unscrupulous manufacturer at some point in the future.  However testing relief does not relieve anyone of complying with the underlying phthalates prohibition.  And the agency has plenty of tools to address that eventually if it were to occur.  Because the phthalates prohibition must be complied with regardless of testing, the agency cannot say that its current constrained approach is required to be consistent with assuring compliance with the existing law.  Denying testing relief to the vast majority of manufacturers who do not use phthalates because of some imagined future scenario which the agency can address should it occur does not carry out the spirit of the law Congress passed.

Betting on the CPSC–never a sure bet

Earlier this week the Senate Commerce Committee had a marathon confirmation hearing with several subcabinet nominees from various federal agencies.  The hearing included in this disparate group Commissioner Robert Adler who has been nominated for a second seven year term on the CPSC.  Because of the number of nominees before the Committee and votes on the Senate floor, the hearing was rather truncated without much probing of Commissioner Adler’s views on issues before the CPSC.

Nevertheless, Senator Thune, the senior Republican on the Committee, did ask Commissioner Adler to explain the agency’s delay in implementing PL 112-28, which directed the agency to work to reduce the costs of third party testing.  Senator Thune made similar inquiries with the two earlier nominees, demonstrating that he has concerns with the manner that the agency is implementing the law.

Commissioner Adler’s response to Senator Thune was both interesting and disturbing for at least two reasons.  First, Commissioner Adler said that because of the way the law is written, it is “not easy to come up with” constructive ways to reduce burdens.  Huh?!  The public has presented many suggestions over the years as has the agency staff.  What is not easy is to get the Commission to devote the staff resources to get the job done.  This is a problem of the Commission’s own making and clearly the Commission does not want to clean up after itself—to do so would implicate several of the rules the agency put in place without regard to the burdens them impose.  The Congress told the CPSC that if it needed additional authorities to get the job done, then it was to come back to Congress with a request for tool to do the job.  No such report has been sent.  In other words, it is too hard to do the job, but the agency will not ask for what it needs to do the job.  In the meantime, scare resources are being spent on testing that does not advance safety.

Second, to demonstrate his commitment to carrying out Congressional direction, Commission Adler pointed to the one proceeding the agency has ongoing to address burden reduction.  This proceeding is to come up with “determinations” that certain products do not and cannot contain phthalates and various heavy metals.  This determinations proceeding, first suggested in 2011, finds precedent in similar action the agency took in 2009 to determine certain materials did not contain lead and so did not require testing.  However, the lead determinations took the agency a matter of months to put in place not the years that the current proceeding is eating up.

Commission Adler also stated that the determinations will solve the problem saying that the “small businesses I have talked to want expanded determinations” as if this is all they want.  Of course, if you are a small business making toys out of natural wood, you do not want to have to test for phthalates and heavy metals when you know they are not present.  That is pretty obvious. However, there are many other small businesses who look to the federal government not to put in place regulations that impose costs without added safety benefits; who want the federal government to consider laws in other jurisdictions and minimize repetitive testing; and who want to be able to have manufacturing processes that are flexible enough to meet market demands without having to stop to do third party testing when this does not add to safety but does impact their bottom line and their ability to expand and create jobs.

If confirmed, Commissioner Adler will be in office until 2021.  I was thinking about starting a pool on whether the agency will actually complete meaningful action to reduce testing burdens before his new term expires.  But given the agency’s pace and progress so far, betting on the agency to act is not a sure bet.

Time for Doing the Work, Not Looking for Shortcuts

Those who follow the CPSC closely expect that the President’s new commission nominees will be confirmed soon.  The question is: will new leadership change either the tone or the direction of the agency?  Two exchanges during the confirmation hearings made my ears perk up since they went to that question.  Both exchanges addressed the regulatory approach of the nominees.

The first exchange dealt with testing burden reduction.  Remember that PL 112-28 directed the Commission to undertake actions to reduce the costs of third party testing or report back to Congress if it needed additional authorities.  Senator John Thune noted that the agency has done nothing to implement measures to reduce costs in any meaningful way.  Senator Thune asked each nominee, upon confirmation, to provide the Senate Committee with their plans for implementing efforts to reduce testing costs. Senator Thune has given the nominees a real opportunity to show leadership and provide actual relief from the agency’s overly-expansive and costly testing approach—which does not provide consumers with additional safety but does add additional costs to the products they buy.

So as the two nominees craft their plans in response to Senator Thune’s request, will those plans reflect business as usual, with the agency doing only enough to make it appear that it is doing its legal duty but still managing to avoid any real change?  Or will those plans show a thoughtful and creative approach to fixing a problem that Congress and members of the public have identified but which the leadership of the agency, up to this point, has sought to minimize?

Another interesting exchange during the hearing dealt with procedures for issuing regulations.  While addressing the five-year delay in issuing rules for recreational off-road vehicles, the nominee for Chairman, Mr. Kaye, bemoaned the lack of “express” rulemaking authority in the Consumer Product Safety Act.  He attributed regulatory delays to the findings the agency has to make before issuing a final rule and the cost-benefit analysis that he said was “unique” to the CPSC (implying that such analysis was overly burdensome).  But Mr. Kaye did not identify which findings and what aspects of cost-benefit analysis are overly burdensome to the agency. Having that information would provide the basis for a good discussion on regulatory policy at the agency.

Section 9 of the CPSA (15 U.S.C. 2058) spells out how the agency must go about issuing product safety rules or bans. The law states that before the agency initiates rulemaking it must make some preliminary effort to assure itself that the rule is indeed needed.  Those efforts include:

  • a first-cut at describing the potential costs and benefits of the proposed rule;
  • a discussion of why any existing voluntary standard is not adequate; and
  • a description of reasonable alternatives to the rule and why those alternatives should not be considered.

But which of these points of analysis do those advocating for express rulemaking want to eliminate?  Do we really want federal agencies beginning the rulemaking process without doing initial homework in the form of some upfront analysis to assure the public that the proposed direction is correct? To my ears, the complaint that doing your homework is too hard rings hollow.

But perhaps it is the cost benefit analysis that must been done during the rulemaking process that is the problem for those complaining about burdens and advocating express rulemaking.  The law states that the analysis must include a description of the potential benefits and potential costs of the rule and a description of the alternatives to the rule that the commission considered, the costs and benefits of those alternatives and a description of why they were not chosen.  But the law merely states explicitly what necessarily should be included in any competent regulatory analysis.  Unless we are willing to agree that the feds are always right in their regulatory approach, would we not want any agency to gather, write down and then actually consider that information before regulating?

I suspect that the real problem for those advocating for express rulemaking is the law’s expectation that the data will be used to inform results–that the agency actually will use the data to tailor or perhaps even change its preferred regulatory approach.  The law tells the agency that it may not issue a rule unless it finds, among other things, that

  • the benefits of the rule bear a reasonable relationship to its costs; and
  • the rule imposes the least burdensome requirement to adequately address the risk.

In other words, if the agency’s preferred regulatory approach is not the most efficient way to address a risk, then Congress expects the agency to change its approach.

Here are a couple of follow-up questions to the nominees.  Do we want the agency to be able to regulate without regard to costs and benefits? Should not the agency have to change its preferred approach if the costs and benefits are not reasonably related?  Do we want the agency to impose requirements that are more burdensome than they need to be and do so out of ignorance because it did not bother to consider alternatives?  I submit that we do not.  And I believe that experience over the past four years illustrates the importance of these requirements. Several extremely costly and burdensome rules were put into effect without the analysis described above since the CPSIA did not require that analysis.  Indeed, PL 112-28 was passed because the testing rule, not subjected to that analysis, resulted in costs that are excessive.

Regulation is not and should not be easy.  If data shows the need for a rule, then the agency should roll up its sleeves and get to work, not complain about how hard it is and look for shortcuts.  It will be interesting to see if the new leadership is up for doing the hard work.

Déjà Vu All Over Again

Yesterday the CPSC held an all-day meeting to again address ways to reduce the costs of third party testing.  Recall that three years ago, in Public Law 112-28, Congress told the agency of its concern that testing costs were imposing an undue burden and directed the agency to identify and implement opportunities to reduce that burden.  Over the past three years, the agency has asked for public comment on opportunities to reduce testing costs three, or is it four, times (but who’s counting).

Yesterday’s meeting focused on whether the agency should make “determinations” that certain substances do not and cannot contain phthalates and the various heavy metals listed in the toy standard, ASTM F-963. This inquiry is patterned after the action the agency took in 2009 when it determined that certain substances, such as natural fibers and untreated wood for example, did not and could not contain lead and so therefore there was no need to test for it.

Perhaps the agency will determine that the same substances that are exempt from lead testing should also be exempted from testing for phthalates and heavy metals.  If it does, then perhaps that action will provide a bit of relief for those companies that have been engaged in such useless testing.

But I have two questions for the agency:

(1)  What took you so long to reach such an obvious conclusion?

(2)  What more are you going to do to carry out Congress’ mandate or do you plan to stop there?

The agency was able to make its lead testing determinations very quickly and with a minimum of regulatory gyrations.  It has taken the current agency three years to even make an inquiry into questions that should have been very easy to answer.  What may come out of this exercise is very minimal relief with maximum patting oneself on the back for reducing testing costs.   I do hope the agency proves me wrong.

 

What’s Wrong With This Picture?

[I]ndependent regulatory agencies should consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them. . .”.  President Barack Obama, Executive Order 13579, July 2011.

 

mattress on fireA small announcement in the March 17 Federal Register noted that the CPSC would be collecting information on compliance with the mattress flammability standard that deals with fires caused by smoldering cigarettes, 16 CFR 1632. Why would anyone notice or care?

For those who took President Obama at his word when he announced his executive order, this is just another reminder of how one agency, the CPSC, in its push to regulate, has chosen to ignore basic principles of good government.  Here’s the back story.

Years ago, the CPSC promulgated a safety standard for mattresses addressing the risk of fires caused by smoldering cigarettes.  The test in the standard consisted of laying several of the hottest burning commercially available cigarettes—unfiltered Pall Mall’s—on a mattress and measuring char length after a prescribed time.

In 2006, the agency issued another safety rule addressing the risk of mattress fires caused by small open flames from such things as candles, lighters and matches, 16 CFR 1633.  The test for that standard consists of holding two propane burners to the mattress and measuring the time it takes the mattress to ignite.  This test is a much more rigorous test than that required by the earlier cigarette smoldering test.

For several years now, I have been asking the question why require two separate tests when it is likely that one will suffice to measure the flammability characteristics of mattresses.  It is unlikely that a mattress could pass the open flame test but fail the cigarette smolder test. The agency now has sufficient experience with the more rigorous open flame standard to determine whether the cigarette smoldering standard is really needed.  Would it not be a new and interesting experience to see the CPSC consider actually repealing a standard as being unneeded?

A perversely amusing aspect of this question is the fact that the unfiltered Pall Mall cigarettes required to be used for the testing were phased out by the manufacturer several years ago.  Further, all 50 states now prohibit the sale of any cigarettes other than reduced ignition propensity (RIP) cigarettes—those that go out if the smoker does not continually puff on them.  The CPSC’s reaction to these developments was not to question the need for the underlying regulation but instead to use public funds to develop a new test cigarette.  This new government-developed cigarette is available for purchase from the National Institute for Standards and Technology.

Where does all this leave us?  The CPSC continues to enforce a standard that on its face does not comport with what is happening in the real world.  Mattress manufacturers are forced to buy cigarettes that no one will ever smoke to perform a test that may well be irrelevant. The consumer pays the cost of excessive testing.  And the CPSC, rather than asking the important question of whether this regulation is even needed, instead issues a Federal Register notice telling us about its plans for enforcing it.  Does anyone else see something wrong with this picture?


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