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EU-U.S. Regulatory Cooperation: Strides Made but More Should Be Done

Today the George Washington University Regulatory Studies Center released a significant report, “International Regulatory Cooperation:  Benefits, Limitations, and Best Practices.”  This report builds on earlier work done by the Center and examines opportunities to improve regulatory cooperation between the European Union and the United States.  The report is timely because negotiators from the U.S. and the EU this week are continuing their discussions to hammer out the Transatlantic Trade and Investment Partnership (TTIP) agreement.

The study examines the efforts of three federal agencies to foster regulatory cooperation, including a case study on the efforts of the CPSC, which I authored.   The case study builds on my experiences over an eight-plus year time span as a CPSC Commissioner, when I saw first-hand the need for collaborative efforts among jurisdictions internationally to address the issue of import safety. The study looks at the potential benefits of and the limits of and barriers to regulatory cooperation.  I also have made recommendations for changes that I believe would improve the agency’s ability to work with its foreign counterparts to improve safety.  The report identifies ways to reduce unnecessary regulatory divergences (and related wasteful regulatory costs) such as convergence on testing and standards, sharing of data and more active consideration of unnecessary differences when promulgating or reviewing regulations.

The CPSC has a good track record working with its foreign counterparts to enhance consumer safety. However, given the complexity of both consumer products and the global marketplace, consumer safety will demand even greater and more creative work among regulators but that work needs to minimize the unnecessary regulatory burdens that come from an unimaginative approach to regulation.

I would welcome feed-back to the recommendations made in this report.  Give me your comments here or at

The Leap Year Effect at the CPSC

Leap year occurs every four years when an additional day is added to the calendar—February 29.  This is a corrective measure to account for a lack of precision in the earth’s orbit around the sun.   According to old folk traditions, during a leap year, role reversals are common, upsetting the usual norms of behavior.  We saw two examples of the leap year effect in operation last week when the CPSC considered its 2016 operating plan.

During last week’s meeting, Commissioner Mohorovic proposed that the agency adopt an enforcement policy to eliminate a costly and burdensome p impacting the apparel and footwear industry but that could set a useful precedent for other industries as well.  The 2008 Consumer Product Safety Improvement Act requires that manufacturers and importers certify that their products comply with safety regulations.  One of those regulations deals with the flammability characteristics of fabrics used in apparel, sets out testing criteria to determine flammability and exempts from testing those fabrics that, because of their weight and material, inherently do not present the risk that the rule is concerned with.  As the agency rushed to quickly (and somewhat thoughtlessly) implement the requirements of the CPSIA, a majority of commissioners determined that apparel manufacturers needed to certify that exempt fabrics were, indeed, exempt from testing—in other words, they were required to certify that they did not need to test and certify.  Talk about circuitous logic!

But this overreach by the agency is costing the apparel industry—and consumers–$250 million each year in paperwork costs.  These costs have nothing to do with assuring the safety of consumers and are totally related to wasteful paperwork requirements.  Commissioner Mohorovic was able to convince his colleagues to reverse their earlier position and adopt an enforcement policy that abrogates this process of “certifying that you do not need to test and certify.”

In a similar example of good judgment trumping regulatory excessiveness, at last week’s meeting, Commissioner Buerkle convinced her colleagues to agree to direct staff to prepare a briefing package on the attributes of the California revised rule (known as TB-117) addressing the smoldering hazards associated with upholstered furniture.  The flammability hazards associated with upholstered furniture have been flummoxing the agency since it was created.  The agency exacerbated the problem by insisting that any rulemaking address every ignition source for upholstered furniture fires —not only the vast majority of fires that are caused by smoldering cigarettes, but also those caused by open flames such as lighters and candles. This insistence made the process of writing a rule that much more difficult.  And since the majority of fires are caused by smoldering cigarettes, the agency’s approach meant that the risk of upholstered furniture fires went unaddressed while the regulators pursued unrealistic and uneconomical solutions.  Given this dithering on the federal level, California took the practical step of writing a standard that applied to smoldering fires, which account for the vast majority of fires.

Commissioner Buerkle’s proposal asking the staff to analyze the California regulation is a good first step in moving the agency toward a realistic and, hopefully, more timely effort to address this important issue.  After close to 40 years of analysis, it is time that the agency brought this rulemaking to a sensible resolution.  I hope that Commissioner Buerkle’s proposal has given the CPSC staff the latitude to accomplish this objective—one which advances consumer safety in a practice way.

Isn’t it too bad that leap year comes only every four years.

“Means are Inconsequential; Only the Ends Matter”

History is replete with examples of bad things that happen when good people, with good motives, act to achieve an end without regard to the means used.  The CPSC’s letter last week to sellers of self-balancing scooters (most of us call them hover boards) brings squarely to mind that Machiavellian notion about ends justifying means.

The agency’s action came in the form of a letter from the acting director of compliance to sellers of hover boards telling them that their products should comply with the newly-released UL voluntary safety standard addressing the risk of fire associated with some of these products. Those products that do not comply with this voluntary standard will be considered by agency staff “to be defective and . . .may present a substantial product hazard,“  thereby triggering the reporting and recall provisions of §15 of the Consumer Product Safety Act and related penalty provisions.  While this may perhaps be a good safety result, the statute sets out a path for achieving this result and that path involves a bit more by way of due process than just issuing a decree to make it so, as seems to have been done here.  That path forward is set out in §9(b) of the Act and instructs the agency on how to rely on voluntary standards to address an established safety risk.

Few would argue against the need to address the safety issues associated with hover boards that have been highlighted in recent months.  And the CPSC is to be praised for its desire to investigate and fashion an across-the-board solution as opposed to its unfortunate recent tendency to regulate class-wide hazards by recall or retailer intimidation.  But no matter how laudable the motives of the agency may be, short-circuiting the statute is never good practice by a regulator.  Yet, in a striking example of ends justifying means, this is exactly what the agency has done.

9(b) of the Act sets out a process for the agency to use when it wishes to rely on voluntary standards to address safety hazards. That process requires the agency to collect and consider public comments before making a final decision to rely on a standard written by a voluntary standards organization. Once the agency uses this process to rely on a voluntary standard, the reporting and related enforcement provisions of §15(b) apply.  This process has rarely been used by the agency.  Why this is true is inexplicable to me. However, its use would have allowed the agency to quickly put in place a regulatory mechanism to address the risks associated with these products in a way that was consistent with the statute and that respected the due process considerations central to good regulatory practice.  Aside from being the right thing to do, it would also bolster the agency’s enforcement position in the (unlikely) event its actions are ever challenged. Instead, the agency acted by fiat to achieve the result §9(b) contemplates without bothering to follow the statute.

Some may argue that these products are so dangerous that the agency needed to act quickly and just could not be bothered to follow the law.  But again, the statute contemplates this type of imminent hazard situation and instructs the agency on the path to follow in such circumstances, a path that also includes due process protections. The statute was written to balance the public’s legitimate safety concerns with the public’s need for procedural protections to assure a just and fair result.  Hop-scotching over the statute, no matter the reason, is not something the federal government should do.

Take a Look at the CPSC’s Regulatory Robot

Last week the CPSC’s Office of Small Business Ombudsman unveiled a new tool to help businesses marketing new consumer products navigate the complex CPSC regulatory landscape.  This useful new tool is called the Regulatory Robot.

The program asks small businesses making new products a series of guided interview questions, and, based on the answers, produces a downloadable report with links to product safety regulations that apply to the product.  The report also provides important information on labeling, certification, and testing requirements.

While small businesses should find this resource especially useful, all businesses should check it out since the agency’s rules have become increasingly complex, especially in the last six or seven years.  However, as the terms and conditions of the program make very clear, users cannot rely on the accuracy of the Regulatory Robot and are cautioned to seek counsel on how and which regulations apply to specific products.

The Regulatory Robot is a good effort to help businesses try to comply with the confusing and overly-complex regulations that the agency has issued in the last few years.  A better effort, however, would be to simplify the underlying regulations.  That is what Congress asked the agency to do in 2011.  So far, the agency has worked hard to avoid doing what Congress asked.

Cleaning the Attic

Last week during its meeting, the CPSC amended its operating plan to direct agency staff to prepare a plan for retrospective review of its regulations to assure that rules that need to be updated, streamlined, changed or repealed receive such action.  The Commission’s action deserves both notice and praise.

Four years ago, President Obama, in Executive Order 13610, asked independent agencies like the CPSC to undertake such a review of its rules.  In response, in 2012, the agency came up with a plan that fell far short of the President’s objective of building a regulatory culture that included, as a central tenant, a meaningful regulatory look back.  At the time, I expressed my concern that this 2012 plan was a fig leaf pretending to count for something larger.  So why is what the Commission adopted last week different from that adopted in 2012?

First, in the 2015 plan, the Commission recognizes the need to formalize and institutionalize retrospective review and imbue the process with appropriate staff resources to assure a meaningful and independent process.  Second, the Commission also recognizes important factors that qualify rules for review, including not only the rule’s utility in saving lives and reducing injuries but also how it contributes to cumulative burdens, imposes unnecessary international differences and imposes economic and paperwork burdens on those regulated that could be alleviated.  Finally, the plan asks staff to consider ways to appropriately plan for retrospective review when regulations are being initially drafted.  If such a review is anticipated when the rule is first adopted, then it is likely that the rule will actually be reviewed and the needed data will be available to facilitate such a process.

The Administrative Conference of the United States, which looks at issues inherent in the regulatory process, has recognized the value of a robust retrospective review process and has made valuable recommendations for best practices for such reviews.  As ACUS points out:

Without a high-level commitment, any regulatory lookback initiative runs the risk of devolving into an exercise of pro forma compliance.  This might not be an inevitable outcome, however.  If the relevant agency officials, including both those conducting retrospective reviews and those drafting new rules, come to view regulation as an ongoing process whereby agency officials recognize the uncertainty inherent in the policymaking exercise and continually reexamine their regulations in light of new information and evolving circumstances, a durable commitment can emerge. Regulatory review should not only be a backward-looking exercise; rather, it should be present from the beginning as part of an on-going culture of evaluation and iterative improvement.  Planning for reevaluation and regulatory improvement (including defining how success will be measured and how the data necessary for this measurement will be collected) should be considered an integral part of the development process for appropriate rules.

When the agency developed its 2012 plan, it was like a less-than-enthusiastic effort to clean the attic in an old house.  Lots of dust was raised but little substance was accomplished.  That is why I objected to it.  The current Commissioners have given the green light to a different outcome. The CPSC staff drafting the review plan should consider using the ACUS recommendations as the foundation for a review effort that will mark the CPSC as a leader in drafting safety regulations that are well-founded, practical and have long-term vibrancy and relevance.

Note to CPSC: You Really Dropped a Stitch Here!

I am a knitter.  Knitting teaches patience and is a great way to pass time on an airplane.  While traveling, I missed a recent CPSC recall and am thankful to my friendclip-art-knitting-981445 Lenore Skenazy, the author of the blog Free Range Kids, for bringing to my attention important information about a silent killer—yarn.  Since she said it better than I could, the following is from her blog post:

Gracious me! This brand of yarn can unravel! Have you ever heard of such a thing? It’s just too scary! How irresponsible can a yarn maker be? No wonder the Consumer Product Safety Commission just issued this dire warning:

Name of Product: Bernat Tizzy Yarn

Hazard: In finished knit or crochet items, the yarn can unravel or snag and form a loop, posing an entanglement hazard to young children.

Incidents/Injuries: Bernat has received two reports of children becoming entangled from unraveling or snagging yarn blankets. No injuries have been reported.

Remedy: Consumers should immediately stop using the yarn or finished yarn projects, keep them out of the reach of young children, and contact Bernat for a full refund.

Remember! Children are only safe near items that can never unravel or make a loop. Kindly avoid all necklaces, ponytails, jumbo rubber bands, snakes, shoelaces, licorice whips, octopi, thread, phone cords, scarves, kites, jump ropes, taffy (long form), fishing line, string cheese, and, of course, marionettes. – L.

What is the agency thinking?  While unraveling yarn may be a quality problem (for the company to address with unhappy customers), turning a quality problem into a safety issue takes the agency way outside its mandate.

In an earlier post I addressed my concern that silly recalls can serve to make consumers stop listening.  This certainly qualifies as a silly recall. Consumer safety is not advanced by such a result.  However, if the agency persists in pushing its mandate so that product quality problems are viewed as safety issues warranting a recall, what unravels is any predictable definition of a safety hazard and then safety becomes what the agency says it is at any given time. Now that is a snag folks should be worried about.

Seeking the Promise in Compromise

In an especially insightful column this past week, political analyst Michael Gerson noted that often policy-making is as much about methods as it isimages about outcomes. The manner in which things get resolved can often leave them unresolved or at least leave them festering.   He, of course, was talking about the dynamics between the President and the Congress and the brewing ideological storm looming on the horizon about to be seeded to the saturation point by aggressive use of executive orders. Yet, as I read his column, I could not help but wonder what would happen if, in one small corner of government, public servants actually worked hard and honestly to seek compromise rather than steamroll through an ideological result because they can.  Of course I was thinking about the CPSC.  Oh, how naïve of me.

After four years when little effort was made to accommodate differing views in order to reach consensus, new leadership and a roster of four out of five commissioners new to the agency offered the potential for real change. And an early effort by Chairman Kaye and Commissioner Mohorovic gave hope to the notion that perhaps that new territory—the elusive middle ground—could be profitably explored.  Kaye and Mohorovic were both asked by Senator Thune during their confirmation hearing for concrete plans to reduce testing costs and burdens currently being imposed by the agency, and the two put their heads together and came up with a joint response to the Senator.  Up to this point, the Commission has done nothing except talk about how hard it is to do anything—neatly forgetting that when it put the testing rules in place that are now driving those costs, its own economists told it that the costs of those rules would be unsustainable for many businesses.  Even when asked by Congress to address these costs, the Commission’s activities have consisted of foot-dragging tactics cloaked in enough bureaucratic jargon to make even the most cynical panjandrum shake his head in wonder.

Chairman Kaye and Commissioner Mohorovic, however, did come up with three specific additional recommendations that, if implemented, actually might reduce the testing burdens now being imposed by the Commission.  Admittedly, what the two proposed is still quite modest—thin gruel but still some nutrition.  Yet I cannot help but think that if each had written an individual letter, those letters would have been quite different—one more expansive and one less so.  The point is that, presumably, the two were able to accommodate their differing views to get to a consensus.   (But since nothing substantive has been done to drive forward the ideas articulated in the letter, it remains to be seen whether they are merely words on paper, like the rest of the agency’s burden reduction efforts, or whether there is anything real behind them.)

My hope in thinking that perhaps a new effort at consensus building was alive and well at the CPSC was dashed a couple of weeks ago when the agency voted to propose a rule to regulate recreational off-road vehicles (ROV’s). The agency and the industry have been working on safety issues associated with ROV’s for many years. These issues are perhaps the most complex that the agency has ever been presented with and, hence, are not easily resolved.  The industry has developed and recently revised a voluntary standard even as the agency staff worked to write a proposed mandatory standard.  When the proposed standard was made public shortly before the Commission was scheduled to vote on whether to issue it for public comment, the industry engineers met with the staff to discuss various technical issues presented by the draft, an effort which staff agreed was productive. Rather than make further attempts to work through these technical issues, three Commissioners chose to vote to issue the notice of proposed rulemaking. The result was a 3 to 2 vote, along party lines, to issue a proposed rule that is probably not the best work product the agency could have put out.  An amendment to delay the vote by 90 days to give the technical experts the opportunity to work through the issues raised was defeated, again along party lines.

If the leadership of the agency was serious about trying to compromise, then agreeing to this amendment would have been a no-brainer.  If issues could have been resolved, or at least clarified, in that 90 day period, then efficiencies would have been gained. If not, then the industry’s hand would have been called.  Either way, no one can make a credible argument that a rulemaking this complex and potentially lengthy would be so delayed as to jeopardize safety.  A controversial issue would have been diffused, the dissenting commissioners would perhaps have a harder time voting against the NPR; complex technical issues may have been clarified with a resulting better proposed rule—all around a win-win.

Finding consensus and reaching a compromise is very hard work.  If you are in the minority, sometimes achieving small wins may not feel as satisfying as keeping to your principles.  Yet small wins can still be wins.  But when you are in the majority, compromise means that you have to be willing to try to reach common ground even your vote count says you do not need to and when the temptation to jump on the steamroller is strong.  As we are seeing, finding the promise in compromise is not an easy thing to do.

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