Wednesday, September 23, 2009

The Dark(er) Side of the CPSIA

We have been complaining for almost a year about the excessive and unnecessary costs imposed on small businesses by the Consumer Product Safety Improvement Act (CPSIA). That's a bad enough problem, but we also believe that the CPSIA will undermine children's product safety overall if it isn't changed quickly to provide regulatory flexibility based on risk analysis.

Since the Consumer Product Safety Commission's (CPSC) inception in the 1970's, it has regulated safety by performing risk analysis to identify which products require the closest attention and oversight. This approach enabled the CPSC to target their limited resources to where they would do the most good.

The CPSIA changed all that. By mandating that every children's product must be tested before sale, the CPSC's focus has changed from identifying and eliminating risk to policing compliance with testing and labeling requirements.

Michael Brown, a partner in the law firm of Brown & Gidding, wrote in the ADK Project Resource Group's new Managing Product Recalls Guide about the CPSC's new mission under the CPSIA:

"The CPSIA has added several new tasks [to the CPSC], many of which most charitably can be described as marginal in the overall pursuit of product safety that will divert staff and financial resources from more important safety issues. For example, if the agency were to attempt to rigorously enforce the new lead restrictions in children’s products that the CPSIA imposes, that effort itself could consume most of the agency’s resources even though, by and large, the restrictions contribute little to the safety of children."
This is an argument we have been making for a long while. As parents and consumers, we are very concerned that the CPSIA is actually detracting from the CPSC's ability to prevent harm. When we created our list of improvements we'd like to see in the CPSIA and our Seeds of Change Document, our intent was to make the law workable both for small manufacturers and the CPSC. Without these changes, we fear that a whole new wave of unintended consequences will emerge in the form of unsafe products that may have been duly tested but were nonetheless hazardous due to a hitherto unknown design issues or an unanticipated pattern of use and abuse. The CPSC was once in a position to respond to these types of issues, but not under the CPSIA.

A perfect example is the bath seat, which posed a hazard when babies were left unattended, a danger that had nothing to do with how well designed or tested the seat was. The pre-CPSIA CPSC was able to recognize this hazard and mount a public education campaign to combat it.

Furthermore, the CPSIA provides a disincentive for manufacturers to improve the safety of their products. Toy manufacturer and CPSIA activist Rick Woldenberg has described how the CPSIA will work against improving safety by requiring a new round of tests each time a product is changed:
"It is another irony of this rule that by formalizing the requirement to retest when you change components, you actually provide a negative incentive to become more efficient or more safe. There is no incentive to change factories if you save less than the new testing costs...In addition, the law punishes companies for improving their products by imposing a testing penalty on any change. Thus, your incentive to change a product to, for example, make it better or safer is greatly reduced - you will pay (literally) for your good deed."
This is a critical concern. The children's product industry has always been rich with innovation and the best manufacturers are constantly improving their products as they learn from consumers what works and what doesn't. When a federal law actually interferes with this process, that law needs to be changed.

Of course, a lot of innovation comes not from larger established companies, but from tiny businesses like our members who figure out how to make a better mousetrap. To destroy folks like us because of the sins of Mattel doesn't improve safety, it just stifles creativity and innovation.

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