CPSC Staff Critique of CPSIA Requirements

On March 20, 2009, CPSC Acting Chairman Nancy Nord provided Representative John Dingell with a detailed assessment and critique of CPSIA implementation requirements. In a politically-savvy move, Nord herself contributed only a cover letter to the memorandum which was prepared and signed by the most senior CPSC career staff. The assessment presents thorough and well-reasoned answers to specific inquiries made by Rep. Dingell on March 4, 2009.

The staff assessment provides a disturbing account of the inequities mandated under the law and the lack of discretion left to the agency to exercise its judgment regarding reasonable exemptions. I encourage anyone following this issue to read the letter yourself and for that reason I will not detail its contents here.
white board thoughtI will, however, offer this quote from the letter which I find poignant:

“A law like the CPSIA that outlaws sales of previously lawful products will, by its nature, hurt retailers more than manufacturers and hurt resellers even more than retailers (given the fact that products are typically in consumer’s hands for several years at the least before they reach second-hand stores). . . dealing with retroactivity across the board would be the most effective way to deal with the inequities presented by the current law . . .”

I quote this passage because it cuts to the fundamental issue impacting all stakeholders in the consumer products industry – who should bear the risk of unsafe products?

Last year the CPSIA was run ram shod through Congress after a groundswell of populist frenzy, fueled by myriad toy recalls during the 2007 holiday season, convinced lawmakers that consumers generally, and children particular, should not bear the risk of unsafe consumer products. As a result, CPSIA unequivocally shifts the risk to industry participants by arming CPSC with new enforcement mechanisms, including criminal and civil sanctions.

In addition to imposing penalties for unsafe products, the CPSIA adds a slew of new regulatory mandates aimed to ensure products are safe prior to entering the stream of commerce. Despite the laudable and truly banal goal of ensuring products are safe, the CPSIA achieves this by mandating that industry participants jump through several regulatory hoops and incur tremendous costs before products hit the market. The CPSC is charged with crafting and tending to those regulatory hoops.

Most troubling to me is that risk allocation defined in the CPSIA prohibits the CPSC from using common sense in its rulemaking. The CPSIA does not allow the agency to use any risk-benefit analysis to determine the prudence of adopting expensive and complex regulatory requirements to address de minimis risks. The March 20 staff memo makes a strong case that the CPSIA must be tempered and provides several concrete and reasonable steps toward that end.

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