The three commissioners of the Consumer Product Safety Commission issued statements upon the unanimous adoption of guidance for industry in following the Consumer Product Safety Improvement Act’s requirements for permanent tracking labels. Here is the document.

We’ll comment after reading the actual guidance and promised FAQ, once they’re posted.
UPDATE (12:08 p.m.): Here’s the guidance.

The supporters of the expanded regulatory state at OMB Watch take note of Congressional efforts to increase funding for the Consumer Product Safety Commission, above and beyond the increases asked for by President Obama. The post, “Congress Looks to Boost CPSC Funding above Obama Request,” reports that while President Obama asked for $107 million for the CPSC in FY 2010, the Senate Appropriations Committee has approved $115 million, and the House Appropriations Committee supported $111.3 million.

The National Association of Manufacturers supported increased funding for the CPSC included in last year’s Consumer Product Safety Improvement Act, and the agency could surely use additional staff and resources. The CPSC has yet to issue guidance for the law’s requirement for product tracking labels, which goes into effect August 14. Labeling nearly every product meant for children with a permanent tracking label is a huge undertaking, but the CPSC’s lack of guidance has left industry working in the dark. (Commissioner Nancy Nord last Friday promised guidance soon. We’re waiting.)

But we suspect the push for even more spending is really an effort by some in Congress to change the subject. A overwhelming bipartisan majority last year passed the Consumer Product Safety Improvement Act, which is has wreaked havoc on everything from ATVs to thrift stores to retailers of dance outfits to the ballpoint pen industry to home-based businesses making baby booties or all-natural wooden toys. It’s put people out of business. (See this, this and this.)

Rather than acknowledge the harm that the CPSIA has caused, Congress’ self-appointed protectors of the consumers prefer to spend more money so they can say, “Safety comes first, and we’re giving the CPSC the tools it needs to implement the law.”

It’s deflection. What we need is not more aggressive implementation of a bad law, but a better law.

In light of the arrival of new CPSC Chairman Inez Tenenbaum, the National Association of Manufacturers and the CPSC Coalition have submitted another request for an emergency, one-year stay of enforcement of Section 103 of the Consumer Product Safety Improvement Act (CPSIA) which requires a new tracking label for children’s products made on or after August 14, 2009.

A request was first made on March 24, 2009, but on May 13 the two-member Consumer Product Safety Commission split one/one on the emergency stay. (Commissioner Nord voted yes, Commissioner Moore no.)

From the CPSC Coalition letter (copy here):

The Section 103 tracking labels provision is a novel manufacturing requirement in the United States and has raised legitimate questions about implementation, feasibility and the breadth of application. The lack of guidance or implementing rules has created an unconscionable dilemma for industry. Taking action now will provide the Commission, industry, and other product safety stakeholders time to work together to develop an orderly approach to this new requirement, maximizing the prospects for a tracking label system to be both useful and cost-effective for all stakeholders and minimizing the possibility of yet another economic crisis.

In Chairman Tenenbaum’s confirmation hearing testimony, she emphasized the importance of guidance in making sure the CPSIA worked effectively. But right there is nothing to guide manufacturers or retailers in implementing the tracking label requirements. Even if the CPSC produces the greatest guidance ever drafted within the next month, it will be impossible for business to put into place.

Chairman Tenenbaum can demonstrate her belief in the value and seriousness of CPSC guidance by voting to provide the necessary time, a one-year stay.

Rick Woldenberg, chairman of Learning Resources, Inc., an Illinois-based educational toy manufacturer, is a leading organizer of the grassroots efforts calling for reform of the Consumer Product Safety Improvement Act. As head of the Alliance for Children’s Product Safety, he reacted to the CPSC’s 1-1 decision to not grant a stay of enforcement of new tracking label requirements. From the news release, noting Commissioner Thomas Moore’s vote against the petition from the NAM CPSC Coalition.

We are deeply disappointed in Commissioner’s Moore vote to deny the petition. His vote will result in more chaos for manufacturers and retailers from this law - particularly for small businesses - who are already reeling from a difficult recession. The leaders of Congress should take note that Acting Chair Nord, in voting to approve the petition, showed the flexibility and leadership that had been urged in letters by Senator Mark Pryor (Chairman of the Senate Subcommittee on Consumer Affairs), and other Members of Congress. It is time for these same Members of Congress to write and urge Commissioner Moore to do the same.

Because of a deluge of conflicting priorities caused by the CPSIA, the CPSC has yet to issue rules for implementing the label requirement that will take effect in three months, leaving little time for manufacturers to prepare. Even when the new rules are released, tracking labels will create practical problems for small businesses. Processing labels is expensive and adds significantly to the complexity of small production runs. In addition, some products have more than one source or are assembled from components made at different times. Small businesses are throwing up their hands over this new burden.

It is time for Congress to fix this law, which has caused massive economic damage because of its overly broad definition of children’s products, its unrealistic deadlines and its retroactive bans on the sale of existing inventory.

The NAM’s release is here, “NAM Says CPSC Decision Denying State of Labeling Rule Fosters Confusion and Uncertainty.”

The Consumer Product Safety Commission voted 1-1 Wednesday to deny a petition from the National Association of Manufacturers and the CPSC Coalition for an emergency one-year stay in enforcement from the new tracking label mandate included in the immoderate Consumer Product Safety Improvement Act (CPSIA). The labeling requirements are set to quick in August 14, and they will be a nightmare to implement. Or an impossibility. Or an impossible nightmare.

From the petition:

Even if the Commission were to publish guidance on this new provision today, there would still be insufficient time for companies to implement this provision properly. Changes in product processes, including changes in labeling requirements for packaging and products, usually take at least a year in many sectors in order to ensure smooth execution. This process must begin at the design phase of the product, well before production takes place. Implementation of the new tracking label provision will necessitate legal reviews, compliance clearance, and training of supply chain partners. Moreover, many companies are already now ordering, planning, and costing production of goods that will be made in fall 2009 or later, meaning they are already making guesses about how the new labeling provision will be implemented. Should those guesses prove to be wrong when the Commission publishes guidance shortly before the August 14, 2009 implementation date, companies will have to scramble to rework labeling and packaging at significant cost. Electronic databases may need to be developed and tested to facilitate effective tracking, another aspect that will require significant time and resources in many industries.

And in yet another example of the CPSIA being disconnected from reality, the labeling requirements could apply to things like small toys, art materials or children’s jewelry.

This is actually a case where a stay of enforcement (see below) makes sense, because there’s not going to be a lot of legal liability or potential alternate enforcement if the CPSC allows a delay. Acting Chairman Nancy Nord voted yes, but Commissioner Thomas Moore voted no — apparently thinking that guidance could be written by August 14.

This is the first time the commissioners have split on votes about enforcement of the CPSIA. To which we say, FIX THE LAW.

For more on problems posed by the tracking label requirements, see the presentations from the CPSC sponsored forum held Tuesday in Washington.