Capitol Comments

Rash Of Product Recalls Could Impact Industry

By Peter Mayberry and Jessica Franken | October 9, 2009

dramatic changes expected for Consumer Product Safety Comission

Unless you have been living under a rock during most of 2007, you probably heard the news reports of one recall after another involving various consumer and food products from China. First there was tainted pet food believed to have sickened thousands of cats and dogs in the U.S. and abroad. Then it was toxic toothpaste said to contain chemicals found in automobile antifreeze. Then it was contaminated catfish, defective tires, faulty curling irons and hair dryers and more. Then things went from bad to worse when the U.S. Consumer Product Safety Commission (CPSC) announced it was recalling almost a million children's toys that were found to contain lead.

Not surprisingly, the media coverage and ensuing public outcry prompted a wave of activity on Capitol Hill. Congressional lawmakers responded with the requisite press conferences, hearings and a bevy of legislative proposals—some of which narrowed in on specific products like swimming pools and gasoline cans, while others sought macro-level reforms of the agencies tasked with regulating these products.

Of all the legislative proposals offered to date, however, a bill introduced in September by Sen. Mark Pryor (D-AR),the CPSC Reform Act of 2007 (S 2045), has garnered the lion's share of attention. One of the more comprehensive measures out there, Sen. Pryor's bill seeks to increase CPSC's funding, staffing and authority in response to concerns that systemic weaknesses have hindered the agency's ability to fulfill its mandate.

Given the broad implications this piece of legislation could have on the entire consumer product industry, this article will review some of the bill's key provisions and consider its prospects moving forward.

CPSC Reform Act of 2007

S 2045 contains a number of provisions designed to specifically address the safety of 'children's products', which it defines as those intended to be used by children under seven. If enacted, for instance, this legislation would ban the direct use of lead in all children's products whether the lead is accessible to children or not. It would also lower thresholds for trace amounts of lead in children's jewelry to no more than 0.02 percent by weight of children's jewelry, and no more than 0.04 percent for all other children's products.

The CPSC Reform Act would also require companies to test imported products and have an independent third party certify that imports meet consumer product safety standards and do not contain hazardous substances. Manufacturers would also be expected to label all children's products with tracking information for consumers to use in the event of a recall.

The legislation also focuses on correcting structural flaws within CPSC. Indeed, critics have argued that a shrinking budget and staff have limited the agency's ability to protect consumers at a time when increasing imports from countries that have less stringent regulatory regimes (like China) make its watchdog role all the more important. In a September press release, Sen. Pryor noted that the number of CPSC employees has fallen from 900 when it was first created in the 1970s to 420 employees in 2007.

According to the senator, S 2045 would address these issues by authorizing additional funding to boost staff levels, improve antiquated testing facilities and increase CPSC agents at U.S. ports of entry. It would also authorize an additional $1 million in 2008 and 2009 to research safety issues related to use of nanotechnology in consumer products.

The bill would mandate an increase in the number of commissioners from three to five to prevent future absences of quorum. The provision was included because CPSC was unable to conduct official business for more than eight months earlier this year due to a lack of a quorum following the resignation of former chairman Harold Stratton.

The bill also looks to expand the agency's enforcement abilities by dramatically increasing civil and criminal penalties. Under S 2045, civil fines would go from $5000 per violation, with a cap of $1.25 million, to $250,000 per violation, with a cap of $100 million. Criminal penalties for those who knowingly violate consumer product safety laws, in the meantime, would go from one year to five years in jail. The bill would also allow state attorneys general to bring civil actions on behalf of their residents, and create new "whistleblower" incentives, such that employees of manufacturers and/or importers who report violations will be able to collect 15-25% of any civil penalty collected from an errant company.

The bill also limits federal preemption, noting that federal consumer product safety standards promulgated after the date of the bill's enactment would not preempt state or local laws. Of interest to nonwovens industry members, the bill also specifically reverses federal preemption language included in the preamble of CPSC's 2006 Mattress Flammability Standard (an obstacle that has prevented states from setting different mattress flammability rules). 

S 2045 also contains new limits on existing confidentiality protections for companies that report potential product safety problems, and authorizes CPSC to require that companies post a bond or surety to cover the costs of potential product recalls.

Looking Ahead

The Consumer Federation of American and similar organizations have hailed the legislation, saying it would give the agency the tools it "needs to protect consumers from unsafe products." But the National Association of Manufacturers (NAM) and others disagree, saying that S 2045 contains "burdensome and troubling provisions which would detract from CPSC's mission, significantly add to the litigiousness of our society and undermine the critical open relationship between CPSC and industry."

As far as next steps forward, the Bureau of National Affairs recently reported that some Senate aides expect S 2045 to come up for consideration in the Senate as early as Thanksgiving. But even if that does not happen, lawmakers on the other side of Capitol Hill in the U.S. House of Representatives have made it clear they are more than prepared to take up product safety reforms as an issue.

In late September, for instance, Reps. Rosa DeLauro (D-CT) and Diana DeGette (D-CO) introduced HR 3691—the Safety Assurance for Every (SAFE) Consumer Product Act of 2007—that contains many of the same provisions found in the Pryor bill. Reps. Bobby Rush (D-IL) and John Dingell (D-MI) have said they are planning to offer an even more sweeping piece of CPSC reform legislation by the end of October.

So, one way or another, there is an outstanding chance that Congress will act on a CPSC re-organization bill in the coming months, and that the bill will likely be somewhat broad in scope. Just how broad, however, and just how onerous to manufacturers are two issues that are still unknown. As any bill on these issues moves through Congress, however, staff from INDA, Association of the Nonwoven Fabrics Industry, will be monitoring its provisions and seeking to identify any industry concerns.

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