New attention focused on strengthening CPSC
By Heath E. Combs -- Furniture Today, December 16, 2007
Washington — Soon after this summer's spate of imported product recalls, a spotlight focused on the U.S. agency responsible for regulating those goods, the Consumer Product Safety Commission.
Proponents of reform said the agency was under-funded and short on staff at a time when the influx of imports was making its job more important.
Some of the backers of reform were surprising. Toymakers affected by recalls supported greater regulation. In the Bush administration, Health and Human Services Secretary Michael Leavitt called for greater visibility of subcontractors abroad and more quality control to ensure import product safety.
In Congress, two bills offer differing plans for CPSC reform, Senate Bill 2045 and House Resolution 4040.
For fiscal 2008, which ends next Sept. 30, the proposed CPSC budget is $63.5 million for a staff of 401 people. The Senate bill would gradually increase the agency's annual budget to $140 million and its staff to 500 by 2013. The House bill would boost the budget to $100 million by 2011.
Both bills seek greater accountability from manufacturers and importers, such as identification of subcontractors and third-party certification for children's products. The Senate bill would enhance the CPSC's authority to order corrective action by the manufacturers of recalled products, while the House bill takes a less punitive stance toward the recall process.
The Senate bill has drawn opposition from the International Sleep Products Assn. Bill Garber, ISPA vice president of government relations, said the Senate version would increase manufacturers' costs and discourage cooperation between industry and government.
Garber also said that neither bill has a comprehensive strategy to address imports, the primary culprit for many of the recent product recalls. He also maintains that many provisions have less to do with product safety and more with creating litigation opportunities for plaintiffs' lawyers.
Indeed, few of the provisions in either bill address import safety. Besides provisions in both measures that require identification of manufacturers and subcontractors if requested by the CPSC, and increased civil penalties, the bills are largely void of import-specific actions.
ISPA strongly objects to a provision in the Senate bill that would allow state attorneys general to supersede federal standards in litigation, suing manufacturers even if they are in compliance with the federal rules.
He also said the Senate bill would provide a "jackpot incentive" for disgruntled employees to take action against their companies, which "has very little to do with product safety."
Garber said the House bill, meanwhile, "sticks to the core issues, and provides resources, such as additional CPSC staff, which will go a long way to addressing the current problems. The bill allows the CPSC to better conduct investigations and activities and it enjoys bipartisan support. Our objection has been the extraneous provisions that benefit trial lawyers and we speak out against that."
The attorneys general provision also concerns the American Home Furnishings Alliance, representing furniture manufacturers and importers, said Russ Batson, vice president of governmental affairs.
The provision could complicate national distribution if states supported differing standards, Batson said. Keeping current federal preemption standards in place would keep litigation from piling up, he said.
"Congress understood the realities of product distribution chains back in 1972 when it weighted the scales in favor of national safety standards," he said.
The Senate bill also would raise the cap on fines the CPSC can impose from the current $1.85 million to $100 million, which both ISPA and AHFA consider excessive. The House bill has a $10 million cap, which Batson called more reasonable.
Proponents of the larger maximum fines argue that the higher amount would prevent companies from viewing the risk of getting caught as simply a cost of doing business. But Batson said an excessive fine could make companies fight recalls with litigation or delay the resolution of cases.
The Senate bill proposes that an importer must be bonded to ensure that it can pay for any necessary recalls, including the costs of holding goods at ports and of destroying product.
Concerns that led to that provision may stem partly from a recall this summer by importer Foreign Tire Sales of Union, N.J. The company said it didn't have enough money to recall hundreds of thousands of potentially defective Chinese tires and requested government help. The Wall Street Journal later reported that Foreign Tire Sales executives waited more than two years to pass on their suspicions about problems with the tires, even after its manufacturer in China admitted it had sent a defective product.
Batson said much of the discussion on reforming the CPSC revolves around how to better leverage government resources already in place through greater interagency cooperation.
Already removed from the Senate bill was a section that would have required a final ruling on upholstery flammability by small open flames or cigarettes by June 1, 2008. Batson said environmental advocates are adamantly opposed to greater use of chemical flame retardants, and expressed concern that such a timetable would compel CPSC to adopt recommendations that rely on such chemicals.
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