Mr. Chairman and members of the Committee, I’m Frederick Locker, General Counsel to the Toy Industry Association and Juvenile Products Manufacturers Association, not-for-profit trade Association members of the Council of Manufacturing Associations of the National Association of Manufacturers (NAM), and a member of the NAM CPSC Coalition. Thank you for providing me the opportunity to testify on the reauthorization of the U.S. Consumer Product Safety Commission (“Commission”). Our Coalition represents approximately 65 consumer product manufacturers and manufacturing associations. It has functioned for many decades as a forum to address common issues related to the operation of the Commission and policies initiated pursuant to the Consumer Product Safety Act and related sister acts. The mission of the Coalition is to promote product safety policy in a fair, balanced and effective manner. The Coalition does not involve itself in pending product specific regulatory or adjudicative matters.  Similar to the other witnesses on this panel, we support the important and essential mission of the Commission.

 

            CPSC’s mission is to protect children and families against an unreasonable risk of injury and death from more than 15,000 types of consumer products from a wide range of product hazards.  Their work is vital in that it addresses consumer product hazards through a framework of mandatory product safety standards; engagement in the voluntary or consensus standard-setting process; compilation of consumer injury data; issuance of safety guidelines; implementation of information and education programs in an effort to proactively avoid injuries; and product recalls and corrective actions when necessary.  The agency is operating on a relatively modest budget, with a request of $63,250,000 for fiscal year 2008.  We believe that their budget request should be granted with increases earmarked for retention of staff, upgrades to their testing laboratory and support of increased coordination with other countries regarding harmonization of standards with better inspection and enforcement coordination.

 

With respect to reauthorization of the Commission, we ask this Committee to act thoughtfully in any review of a regulatory structure that has served the American public well for the more than 30 years. In these exceedingly difficult economic times a vibrant healthy manufacturing sector is critical to our nation’s prosperity.  U.S. manufacturers in the consumer product industry presently face increasing global competition that is more intense than ever before. In such an economic environment, U.S. manufacturers should not be disadvantaged by an unnecessarily intrusive and inefficient domestic regulatory regime.[1]

 

 

            The Commission works well with and understands the needs of manufacturers, retailers and the consumers. Whenever appropriate, they have encouraged voluntary collaborative actions among stakeholders to address safety requirements. During the past decade, they have worked cooperatively with industry to conduct more than 5,000 recalls and needed to resort to litigation to compel recalls only several times.  In 2006, CPSC completed 471 product recalls involving nearly 124 million product units that either violated mandatory standards or presented a potential risk of injury to the public and negotiated civil penalties of approximately $2.3 million.  In addition, the CPSC compliance staff has continued to refine its Retailer Reporting Model implemented in 2005 and used by two of the nation’s largest retailers.  This provides additional trending complaint data for evaluation by the staff, which supplements manufacturer and consumer reporting.  With shrinking resources, leveraged collaborative action is preferable to mandatory regulations provided it can be implemented in a timely fashion and adequately addresses an unreasonable risk of injury.[2]  

 

            Today’s U.S. economy is consumer-driven.  An enormous number and variety of consumer products are designed, manufactured, imported and sold in the United States. With that in mind, industry, standards organizations and internal safety requirements developed in cooperation with manufacturers result in some of the best hazard-based standards that ensure that    American consumers may be comfortably secure in the safe use of their consumer products. Many companies also increasingly recognize the value of taking responsible corrective action to address patterns of injuries or misuse that may indicate a problem with their product. This accounts for the vast majority of product recalls conducted in cooperation with the Commission. Of course, there are still occasions where the Commission justifiably acts to remove unsafe products from the marketplace and to set standards where private standards either do not exist or are clearly inadequate. Consumer product manufacturers are committed to working with the Commission to achieve these objectives. We have consistently supported Commission efforts, along with the U.S. Customs Service, to monitor imported products to ensure that they meet mandatory federal safety standards. We recognize that this has been an efficient leveraging of resources to enhance enforcement related to product imports. In addition, we note that the Commission has played an increasingly significant role in educating consumers about safety concerns and practices.

 

            U.S. Industry has made no secret of its discomfort with certain past Commission practices, policies and procedures over the years. We have expressed concern in the past when cooperation with industry was minimized while a public-relations campaign to tarnish a company was launched in the media. We have objected in the past to proposed mandates when education, research and innovative private initiatives were not encouraged or leveraged. We have expressed concern when due process has not been accorded companies.

 

            We have also lauded the Commissions efforts at affording public comment, of all interested parties without predisposition on important matters. We appreciate the Commission hearings and outreach workshops to improve recall efficiency. This affords experts from a variety of disciplines to share information. In particular we have noted and applaud the Commission’s growing emphasis on sound hazard research and data, including its focus on more rigorous risk-benefit analyses, as the basis for regulatory action. We note that they employ capable high-level and well-experienced Epidemiologists, Toxicologists, Physiologists, Chemists, Engineers, Statisticians, and Economists to inform their decision-making. They have performed well in OMB assessments of their overall regulatory policies.

                        

            Along those lines, we believe that there are ways to make the Commission more effective and at the same time more efficient. As I noted, in these difficult economic times complexities and confusion in the regulatory process are an unnecessary burden on consumer product companies. Allow me to share a few proposals on ways the Commission can increase its effectiveness in protecting consumers while minimizing burdens on the manufacturing sector of this country.

 

 

            First, we support dynamic new partnerships between stakeholders and the Commission to promote safety and safe consumer practices. Consumer information and education does not substitute for the essential responsibility of manufacturers to provide safe products, but it can help with a large percentage of accidents due to improper or irresponsible conduct or lack of supervision of minors. The Commission is fully authorized to embark on such programs, but encouragement from Congress should be provided.[3]

 

            Second, we are supportive of the Commission’s involvement in private standards activities as authorized in the current statute. These standards are the bulwark of our national and even international safety system, and the Commission plays an important role in providing comments and proposals.[4]  However, we believe the Commission needs to better manage and supervise its internal process, particularly staff input to standards organizations, to ensure an opportunity for public comment and to prevent proposals which lack technical merit or otherwise cannot be justified as federal standards.  This is why we support the Commission’s stated strategic goal to improve the quality of CPSC’s data collection through 2009 by improving the accuracy, consistency and completeness of the data.  For an agency such as the CPSC, it is essential to maintain and use accurate data as a valuable tool to allocate staff time and resources to address emerging real world hazards.

 

            Third, there is a need for better guidance and education from the Commission on the implementation of the Section 15 Substantial Product Hazard Reporting provisions. Manufacturers with defective products that could create substantial product hazards are obliged to report to the Commission and, if needed, to take corrective action including recalls. However, the law and implementing regulations are vague and ambiguous. It is difficult for manufacturers, especially small businesses, to determine when reporting and corrective action is necessary. Likewise, it is difficult for them to comprehend how the penalty for the failure to report in a timely fashion is justified by the agency. We support the Commission’s efforts to clarify guidance on reporting and penalty computation by issuance of guidelines, which were subject to prior publication, comment and review prior to adoption.[5]

 

            Fourth, in a global economy, we note the importance of the agency’s international engagement to ensure greater import compliance with U.S. safety standards and harmonization of standards to promote export opportunities for American businesses and the elimination of non-tariff trade barriers.  CPSC has entered into Memorandums of Understanding (MOU) with a number of foreign governments to provide for a greater exchange of information regarding consumer product safety.  We note by the end of 2008, CPSC expects to have MOUs with 17 countries.  These activities are becoming increasingly important in helping to ensure consistent hazard-based, harmonized global safety standards.

 

            Finally, we believe that the existing authority granted to the Commission under the Consumer Product Safety Act and related Acts, together with existing implementing regulations, are sufficient for the CPSC to execute its mission in an effective manner.  The CPSC does not lack the requisite authority to implement fully its congressional mandate “to protect the public against unreasonable risks of injury associated with consumer products.”  However, it requires greater resources to implement such authority.

 

            Thank you for providing me the opportunity to testify. The Commission is an important agency and we fully support its mission. It can and should, have the funding and resources it needs to effectively function and we look forward to working with the Commission and the Committee to this end.

 

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