CPSIA Update: AP Interview with Tenenbaum, a Few Reactions

By July 21, 2009Economy, Regulations

The Associated Press sells its interview with Consumer Product Safety Commission Chairman Inez Tenenbaum today with a headline, “Product safety chief puts industry on notice.” That’s not quite, “reads industry the riot act,” but it’s enough to make a manufacturer pay attention.

But then the interview includes statements like Tenenbaum reacting to the increased penalties that go into effect August 14, saying, “Those, if the circumstances warrant it and the facts support it, will be used by the CPSC to make sure that people comply with that law.”

She also says, “I plan to enforce the CPSIA,” adding, “we will follow the statute.”

Well, gee. What would one expect her to say? “The law is bad, and we’re going to engage in regulatory nullification.”

The AP provides some nice mug shots but no link to the transcript, so we can’t really say how tough of a line the Chairman was actually taking.  It would have been good to take, if not a tough line, than a clear line with Congress by stating: The CPSIA is flawed, it’s having a harmful effect, and Congress really should do something to fix it.

But regulators, and new regulators in particular, are often reluctant to specify statutory fixes. And the CPSC’s appropriations bill isn’t done yet, either, so you can understand restraint.

Two comments we welcome in the interview, one about the upcoming product complaint database: “Tenenbaum said all complaints would be screened to ensure they’re legitimate.” Considering the death sentence a false complaint could amount to against a business, that’s good news.

And, “The agency plans to open its first overseas office, in China. Tenenbaum said a small staff would be based at the U.S. embassy there and would help educate Chinese officials about product standards.” That’s a good use of resources.

One AP paraphrase that gives us pause is this: “Tenenbaum said the industry has had adequate time to prepare for the new requirements.” Really?

She appeared to be responding to a specific question about the lower 300 ppm lead limits. Industry has indeed “prepared”, in many cases by removing completely safe products from the marketplace. To the extent that “industry” includes home-based businesses, then some are closing.

Let’s return to Commissioner Nancy Nord’s citing of the effects of the ban on decorative crystals and glass beads:

  • A major retail chain attributed a $6.5 million loss in the first quarter to the lack of an exclusion for crystals; $200,000 of jewelry that complies with Proposition 65 in California nevertheless was pulled by another manufacturer;
  • About 2 million jewelry pieces from a different manufacturer are being returned, the loss estimated to reach millions of dollars;
  • A retailer reported $700,000 in testing costs for crystals;
  • Substantial drop in sales reported by companies who have substituted plastic for crystal products, and
  • Examples of job losses: a small children’s jewelry manufacturer with 50 employees anticipates closing down because of this law; several companies are preparing to reduce their workforce by 1/3 because of the CPSIA.

Well, you could call those examples of industry adjusting.

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