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When Competing Policies Collide

Published September 17, 2013 Lead , Retailers 1 Comment

It is a basic premise of business that good managers do not allow short-range tactics, taken in response to immediate contingencies, to derail long-range strategies. This principle came to mind when I read a story in this week’s BNA Product Safety and Liability Reporter. The story discussed efforts by Wal-Mart Stores Inc. to put in place initiatives to reduce the environmental impact of the products it makes and sells. The story made clear that these efforts by Wal-Mart, and lauded by environmental activists, will be felt throughout the supply chain.

What especially caught my eye was the following portion of the story:

“Wal-Mart’s other environmentally friendly initiatives include:

• working with suppliers to increase the use of recycled content and to make packaging more recyclable. . .”

When I read this, I could not help but think back to the CPSC’s decision back in 2011 mandating the lead content of children’s products not be above 100 parts per million. You will recall that Congress set the limit at 300 ppm but allowed us to lower it to 100 ppm unless that level was not technologically feasible. The Commission decided to require the lower level even though this would drive many manufacturers to substitute more expensive materials in their products and even though our staff could not point to specific safety benefits (higher costs and consumer choice were certainly not factors in our thinking, of course).

However, more to the point, the staff specifically stated that, at the 100 ppm level, recycled materials would not be able to be used in children’s products and that virgin materials would need to be substituted. This is not because recycled materials do not necessarily meet the 100 ppm level, but because the testing we also require would not be predictive of what was actually in the product. In other words, because recycled materials, by their nature, are not necessarily consistent throughout, something could test at 90 ppm in one spot (passing our standard) but test at 120 ppm in another (failing our standard).

It is so unfortunate that the agency made no effort to try to reconcile the competing public policies—public health and environmental sustainability–at work here. It would not have been hard for us to keep a lead content ceiling in place that was appropriately protective of health and still accommodate the government-wide policy to increase our use of recyclables. Exceptions for certain products that must and should be made out of virgin materials could easily have been integrated into such a policy. The commission clearly had, and has, the authority to do this, but in its regulatory exuberance, short-term reactive thinking trumped long-term creative problem solving.

So, kudos to Wal-Mart and other companies for their efforts to find environmentally friendly ways to make and sell products. It’s too bad that we have put up an unnecessary hurdle to that effort. Instead we could have come up with a solution that would have reconciled the important public policies of health and environmental stewardship. I wish we would have at least tried.

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.

The Song That Never Ends

Published November 21, 2011 Certification , Children's Products , Component Testing , Consumer Product Safety , CPSC , CPSIA , Lead , Small Business , Testing Leave a Comment

If you’re a close watcher of the CPSC Commissioner’s Statements page (and, really, who isn’t?) you may have noticed that my good friend and colleague Commissioner Adler and I have had another round on our perpetual motion statement ride. Back when we took the vote on our lead standard, we got a glimpse of this dynamic, as Commissioner Adler waited a couple weeks after the vote and my written statement explaining my vote, then issued a statement of his own, directly attempting to rebut the arguments I made in my statement. He has done the same thing with respect to the recently-issued Testing Rule. We are now on our third round of statements responding to each other.

As I have pointed out, I believe that the purpose of a commissioner’s written statement is to explain why a commissioner voted in a particular way. If we use our statements as vehicles to respond to arguments made in other written statements, then the commissioner who writes last has the last word. By using statements to explain ourselves, rather than directly to rebut others, we can guarantee that we do not find ourselves where we are now, trapped on a spinning merry-go-round.

Commissioner Adler does not share this view. In his most recent addition to the dialogue, he explained his rationale. He views these statements as an opportunity for “robust discussion and debate on the critical policy issues that come up before the Commission.” Discussion and debate are wonderful things, but, with all due respect, the time for them is before a vote. That way, the discussion actually has a chance to shape the policy issues. Statement after statement after the fact provides no such opportunity. It risks becoming repetitive very quickly with the potential for descending into the petty.

The astute reader will no doubt be asking why I have responded to Commissioner Adler’s statements—both the Supplemental and the Further Supplemental—if I believe the entire exercise is such a misuse of the forum. The answer is simple: Unilateral disarmament may be noble, but it looks the same as surrender. If I don’t respond to Commissioner Adler’s arguments, no matter how fallacious they are, it will appear that I have conceded them. That is not so, and it would be inconsistent with my public policy role to allow such a misconception to exist.

That reality—that a Commissioner cannot let the conversation be one-sided, even if she feels it is hopelessly misplaced—is precisely why the CPSC statement format works best when it is kept to an explanation of the author’s perspective and decision. If we all stick to that approach, we give the public a clear, concise view of the arguments surrounding each CPSC action (or inaction) and an opportunity to provide informed comment on future debates on similar issues. If just one of us abandons this approach, we will all be inevitably sucked into a potentially endless exchange that leaves the reader confused, annoyed, or both.

I love Lambchop, but The Song That Never Ends is best sung on children’s television, not by the leadership of a Federal agency.

Regulatory Malpractice

Published October 19, 2011 Children's Products , Component Testing , Congress , Consumer Product Safety , CPSC , CPSIA , Jobs , Lead , Risk Analysis , Small Business , Testing 1 Comment

In a decision that surprised few, the CPSC voted today to ignore common sense and regulatory conscience. We witnessed a majority putting its last grasp of political power ahead of doing what was right.

In 2008, Congress required that we put in place a rule telling the regulated community how to test and certify that the products they make meet the relevant standards. The deadline Congress imposed has long since passed, but we all agreed that the details of the rule proved much harder to write than its basic idea did. Staff put much time and effort into a rule with some solid pieces that I could support. Then the majority, all behind closed doors, summarily dismissed these changes and determined they knew better than our experts. I cannot support their changes, and I cannot ignore their tactics.

The way the majority has handled this rule is, in my opinion, regulatory malpractice. They ultimately didn’t listen to staff, they really didn’t listen to Congress, they didn’t sincerely listen to the regulated community, and they certainly didn’t listen to their fellow Commissioners. All parties pointed in the direction of re-proposal so that we could hear and learn from public comment on the significantly changed rule and the new law surrounding it. Instead, the majority seemingly pushed this through because they soon would not be a majority.

Their reckless disregard for the value of public input in writing regulations is stunning. Other agencies have sought extra public comment when proposals or facts changed. Here, we had a new law change the framework supporting a rule, and, still the majority said we will listen to public comment only after we vote out the thing the public will be commenting on.

The majority is quick to suggest that seeking re-proposal is seeking delay. That’s pure fiction. I offered an amendment to re-propose this rule in light of the statutory changes Congress made, to make the rule better and more likely to stand up in court. Under my proposal, the rule still would have taken effect within the same timeframe as the rule passed today. The majority had a chance to get this done better and faster. Instead, they blew it.

My heart aches for any family who has lost a child due to a faulty consumer product. The pain they feel can never be dismissed or diminished. That pain, however, cannot justify irrational decision-making or misuse of power.

There’s an old lawyer adage: When you have the law on your side, pound the law; when you have the facts on your side, pound the facts; when you have neither the law nor the facts on your side, pound the table. The table-pounding by my colleagues today speaks for itself.

This arrogant dismissal of input from both peers and the public on such an important vote betrays the public trust we bear to implement statutes fairly, openly, and responsibly.

Major Rule, Major Costs

Published October 18, 2011 Children's Products , Congress , Consumer Product Safety , CPSC , CPSIA , Lead , Small Business , Testing 1 Comment

For those of you who aren’t experts in the field of administrative law, when an agency issues a significant new rule, it has to do what’s called a Regulatory Flexibility Act analysis, also known as “Reg Flex”. That’s not Calisthenics for Commissioners (though that’s not a bad idea). It’s a report that examines the impact a new rule will have on the economy, and specifically on small businesses.

The Reg Flex analysis for the testing rule we will vote on tomorrow looked at the costs of this rule, especially on small businesses. Here is some of what our staff is telling us:

This rule “will have a significant impact on all firms” making children’s products. For example, the staff estimates that for large firms, increased testing costs will be approximately 1.2% of revenues. For small firms, testing costs as a percent of revenues could be expected to increase to a staggering 11.7%.
The rule will have this financial impact on all manufacturers and importers of children’s products. While we do not have a good handle on precisely how many firms this may be, it will be in the hundreds of thousands of firms.
The testing rule “could be a barrier that inhibits new firms from entering . . . the market.”
Impacted companies may “forgo or delay implementing improvement to products’ design or manufacturing processes in order to avoid the costs of third party testing.”
Firms may be able to mitigate “the adverse impacts if they are able to raise their prices to cover their costs.”
“The impact is expected to be disproportionate on small and low-volume manufacturers.”

At a recent briefing on this rule, one of my colleagues suggested that we already have done everything we can to reduce the costs of this rule. What I believe he was saying is that we have done everything three Commissioners are willing to do to reduce the rule’s cost. There are a number of things we could actually do to bring down the testing costs imposed by this rule. Some of those things are even suggested in the Reg Flex analysis. And we could still have a robust testing rule to address safety concerns.

We know that this rule will burden our economy. Our staff says so. Because Congress was concerned about the high costs of testing, it recently told us to seek out ways to reduce the testing costs in this rule. Therefore, before issuing this rule, we should do as Congress asked and look at ways to reduce the costs of testing consistent with assuring compliance with our safety standards.

Unfortunately, politics often trumps good policy here at the CPSC, so tomorrow we will issue a final testing rule and then look for ways to reduce costs of the rule we are issuing. Talk about putting the cart before the horse! And this approach certainly raises the question of how sincere the effort to reduce costs will be.

While we all agree on the goal of child product safety, I am convinced we can achieve that without incurring the staggering costs identified by our staff.

Solid Floor or Trap Door

Published October 17, 2011 Certification , Children's Products , Component Testing , Consumer Product Safety , CPSC , CPSIA , Lead , Small Business , Testing 1 Comment

Government shouldn’t be in the trap door business. The idea is to let people know what the law is, so that we have the moral ground to penalize violations. I’m worried the CPSC’s looming testing and certification rule has at least one giant trap door built in, and it creates opportunities for abuse.

Along with initial and material change testing by an independent third party testing lab, this rule tells manufacturers to third-party test each product periodically for as long as it’s sold. What worries me is how we’ve structured the periodic testing.

Our rule tells manufacturers to third-party test at least once a year, or once every two years if they have production testing, or once every three years if they have their own lab certified by ISO. That sounds simple enough, but we’ve left a trap door.

Those intervals are ceilings, but the rule doesn’t have a floor. Manufacturers may have to test much more often than what is outlined above, but we’re going to put all the risk on them for making the right judgment call. What the rule actually says is that products need to be tested often enough to give a “high degree of assurance” of compliance, and then it gives ten factors – all of them judgment calls – we think manufacturers should consider.

This creates a situation where a well-intentioned manufacturer could set an interval it thinks is appropriate based on our factors. Then, when we step in to investigate an issue, we get to decide on our own with the benefit of 20/20 hindsight if that was good enough, with no limits on our discretion.

The obvious uncertainty that means for manufacturers is bad enough, but, worse, it’s an avenue for abuse. When a manufacturer – again, trying to do things the right way – is negotiating with us the remedies for a problem, including monetary penalties, we could stack on extra “violations” for its failure to read our minds accurately on the testing interval.

My colleagues have told me my fears aren’t real, and there’s no way we would use our rule like this. If that’s the case, why write it this way at all? Why not just make it clear: If you don’t do production testing and don’t have an ISO-certified lab and you third-party test at least once a year, you’re fine; if not, you’re in violation of this aspect of the rule. Period. No mind reading. No guessing games. No trap doors. Just a clear rule and clear enforcement, the way it’s supposed to be.

Majority’s Plan: Ram it through while we can

Published September 9, 2011 Certification , Children's Products , Component Testing , Congress , Consumer Product Safety , CPSC , CPSIA , Jobs , Lead , Risk Analysis , Small Business , Testing 2 Comments

The past three days in this blog I have discussed my disagreements with the three-member majority on the Commission about the pending testing and certification rule they plan to ram through in October.

The proposed rule applies a one-size-fits-all approach to third-party testing that is guaranteed to be a misfit rather than requiring third-party testing where it is the most necessary (i.e., where the risk is highest);
The proposal needlessly sets detailed definitions of a “reasonable testing program” in regulatory stone; and
The voluntary component part testing rule—which holds the promise of actually lowering costs and for which work was completed some time ago—has been needlessly held back while we work on the testing rule.

I also question the insistence on rushing this flawed product through. H.R. 2715, passed just weeks ago, expressly instructed us to consider the costs of our testing rules and get public feedback on how to mitigate those costs while still ensuring the safety of children’s products. It would make sense to get that information before we issue the rule, but the three-member majority doesn’t want to do that. I have to ask: If we don’t have time to get it right the first time, when are we going to have time to fix it?

Congress addressed another problem that I had with our proposed testing rule. The CPSIA required companies to submit “random” samples of their products for testing, but didn’t define the term “random.” It would have been good for the Commission to interpret “random” to mean that manufacturers couldn’t rig the game by choosing “golden samples” they knew would comply.

Our proposal, however, did not take that plain-language approach. It read “random” in a much more technical, complicated sense that might have meant lots of money for statisticians but little or no safety benefits beyond those of a common-sense reading.

In H.R. 2715, Congress resolved this dispute. The new law makes clear that Congress intended to prevent the cherry picking of samples by striking the word “random” and replacing it with “representative.” We could have done this by interpretation, but we chose to let others clean up our mess after the fact. Sound familiar?

So:

Congress has expressly informed us that the majority was mistaken on at least one key aspect of the testing rule.
The new law re-shapes the landscape to require us to look at ways to reduce costs.
The proposed testing rule has serious flaws that will make it more burdensome than it has to be and less effective than it could be.

Given all this, prudence indicates the path forward. We should take a few moments to re-examine what we’re trying to accomplish and how we’re trying to accomplish it. If we do that openly and sincerely, we will arrive at a better product.

Instead, because three members of the Commission want to do all they can while they still have their majority, they are poised to foist a misguided, misconceived, and likely expensive regulation on an already fragile economy. All with the promise that sometime in the future it could be fixed. Man up and fix it now.