December 10, 2008

Is CPSC's New Lead Regulation Going To Wipe Out The Baby Non-Industrial Complex Next February?

It figures, doesn't it? You wait decades for the Consumer Products Safety Commission to finally get some legislative spine, and what happens? Their brand new lead testing regulations drive every maker of children's products--except for Mattel and Dorel--out of business on February 10th, 2009. At least that's what I'm hearing.

Over the last couple of weeks, I've gotten urgent emails from all over, warning of dire consequences for everyone from wooden toymakers to etsy.com sellers to 50-year-old educational toy companies when stricter lead paint and lead content rules for children's products passed this summer as part of the Consumer Product Safety Improvement Act [CPSIA] take effect.

It's been hard to figure out what the real potential problem is. As with any new legislation, a lot of the devil is in the deep, deep details, the rulemaking stage where an agency like the CPSC translates Congress's language into day-to-day regulations. With the CPSIA, there are many definitions, exceptions and testing and certification procedures to be worked out, but that hasn't stopped the clock from ticking down toward Feb. 10th, when, uh, something lead-related takes effect.

For the shortest summary of the lead situation, Melanie Trottman's story in the Wall Street Journal is probably the best place to start. Nancy Kathleen Fasanella's Nov. 21 blog post, National Bankruptcy Day is a more impassioned call to action.

Now the CPSIA story's been picking up speed this week, as members of the hurriedly created Handmade Toy Alliance started letting their customers know, as did a few crafters and sellers on etsy.com--a marketplace which could theoretically be stripped bare of all products for kids 12 years old and under if the law is implemented as feared. Mothering Magazine picked up on it, and today, so did BoingBoing.

Basically, the February disaster is being caused by the CPSIA's newly expanded lead testing requirements, which cover all childrens products--all, clothes, toys, furniture, everything--be tested for lead, not just in paint, but in all accessible parts of a product. Clothing makers are saying that every color and pattern variation must be tested separately. Toy makers are not clear what constitutes an accessible part, and even the testing methodologies are not set yet. As a result of this uncertainty, the reported cost of each test varies from $150-500 for clothes to $1500-3000 for toys. [Of course, now I see the HTA has rounded that up to $4,000/toy.]

The thing is, for the lead testing, Cheryl Falvey, theCPSC's General Counsel, ruled a couple of months ago [pdf] that the Feb. 2009 CPSIA testing requirements would apply to all products sold from that date, not all products manufactured from that date. In other words, product in the pipeline and in transit and on shelves right now--to the extent it has not been tested and certified as lead-free by third parties--would be technically illegal on Feb. 2009. Never mind that the vast majority of it is presumably lead-free. [update: I didn't get this quite right, see the comments for an expert clarification]

Lawyers for some unnamed toy manufacturers presented what seems to me [and IANAL, of course] to be compelling and thorough arguments that the CPSIA lead testing rules were only intended to apply [pdf]--or at least, the court-recognized practice in such cases is to apply them--proactively, i.e., going forward, covering items manufactured after Feb. 10th.

What's crazy--or crazier, since this whole thing seems like a morass of uncertainty and conflicting interpretations of a confusing and even self-contradictory piece of legislation--is that the Falvey ruled exactly the opposite way on the CPSIA's provisions for phthalates. [pdf] That ruling prompted Senators Barbara Boxer and Diane Feinstein to issue angry statements denouncing "this Administration" and their "pathetic and transparent attempt to avoid enforcing this law."

Never mind that Falvey appears to be a Hillary Clinton supporter. Boxer & Feinstein have just a few more weeks to make political hay out of this mess before a president of their party inherits it. And unless something is done to clear it all up, it'll be the Obama adminstration who gets credit for National Bankruptcy Day.

Which seems like the inevitable result, since the CPSC as yet has no additional resources to decide implementation of CPSIA. According to a Hong Kong Trade Development Council summary of a CPSC public meeting in September, the agency said it did not receive any new funding or staff yet, it recognizes that CPSIA is "incredibly complex," and "CPSC also does not know full impact of the law." [emphasis added]

Sounds like a lot of fun, unless there happens to be a severe recession going on, manufacturers and retailers suffer from poor holiday sales, and then they face crushingly expensive new testing requirements. Oops.

Coming up next: a look at what might realistically be done about the CPSIA and its impact on juvenile product manufacturers of various sizes. And hey-ho, a look at what the industry trade groups, including the JPMA, the Toy Industry Association, and newcomers like the HTA are doing about CPSIA.

And after the jump, a few links of stuff that's been sitting in my browser for almost two weeks now while I waited for the JPMA to get return my calls and emails.

Early warnings:
Nov. 18: Vendors Urge Relaxed Lead-Safety Rule [wsj.com]
Nov. 21: National Bankruptcy Day [fashion-incubator.com]

Handmade Toy Alliance, organized in response to the CPSIA rulings [hta]

CPSC-hosted current roundup of CPSIA information [cpsc.gov], including:

  • A CPSIA FAQ--which has changed significantly since I first opened it a week ago, and yet there's no indication of when it was updated or what was changed. I guess if you thought you were in compliance a week ago, though, you might want to check again.
  • Information, submitted documents, and archived video from the CPSC's public hearing on the Sec. 101, the CPSIA's lead regulations, which was held Nov. 6.
  • a 101 lead faq (pdf) which appears to contradict the General Counsel's ruling on the manufactured after/sold after question; and
  • a presentation by Rick Locker, general counsel for the JPMA (PDF)

  • 25 Comments

    The lead faq do not contradict. The General Counsel stated that products that do not meet the lead content requirement CANNOT BE SOLD after Feb 10 regardless of when manufactured. this is because the CPSIA makes such products a banned haardous substance. This has nothing to do with testing or testing requirements.

    The FAQ have to do with a different requirement- the requirement that all products that are subject to a consumer product safety rule WHEN THEY ARE MANUFACTURED be certified to be in compliance with that safety rule because of a reasonable testing program.

    Thus, any products that exceed the lead limit (whether or not they have been tested for substrate lead at all) are BANNED as of Feb 10. Testing is really irrelevant. This would include a product manufactured on Feb 9 2009 or Feb 9 2008 or at any time.

    A product manufactured on Feb 9, 2009 however, is not subject to the substrate lead (lead content) rule AT THE TIME OF MANUFACTURE and thus does not require testing or certification that it meets that standard. A product manufactured on Feb 10 however is subject to that safety rule at the time of manufacture and thus has to be subjected to a "reasonable testing program".

    This is why I don't buy the argument on this issue from toy manufacturers. For items manufactured before Feb 10, they dont need to comply with any specific testing program- they just need to know whether their products have or are likely to have more than 600ppm of lead in them. For products manufactured on or after Feb 10, they do have to do testing, but they've known that was coming ever since the legislation passed (and prob before that) in July....

    Now whether or not the cost of all the compliance with the CPSIA standards generally will harm smaller companies/crafters much more than big biz- that I buy...

    Sorry to nit pick- but this is wrong also:

    product in the pipeline and in transit and on shelves right now--to the extent it has not been tested and certified as lead-free by third parties--would be technically illegal on Feb. 2009

    The third-party testing requirement does not go into effect until late summer- 60 days after the CPSC issues standards for accreditation of labs to test for substrate/content lead.

    maybe [probably?] I just can't make sense of what you're saying--or what the law and the GC are saying, for that matter--but I can't see how that's NOT a contradiction. Items made before Feb 9 2009 don't have to be tested and don't have to meet the lead substrate/content standard. But products that fail the Feb 10, 2009 lead content standard can't be sold after that date? Without testing everything on/by Feb. 10, aren't manufacturers then exposing themselves to the possibility that their product doesn't meet the lead content standard, whether because of accessibility, TBD exceptions, or testing methods used?

    Frankly, the issues that the large manufacturers appear to be asking about--inventory, testing methodology, accessibility of parts--are not such a concern for me, and you're right to a degree that they've had since last summer to prepare. But even so, the possibility that a poor holiday season could vastly inflate the untested, uncertified inventory they're stuck with is non-trivial, at least for them.

    The big mfr vs small/foreign mfr divide seems pretty stark, though, and it's something that was clear when the law was passed, but that got largely ignored, for the same reason all these little groups and companies and cottage industries are getting screwed now: they had no meaningful voice or presence or champion in the process, and they still don't. The major companies got their own testing facilities included under a "firewalled" provision, so they can actually continue with business as usual. It's the companies and individuals who don't do their own testing that are screwed.

    And given the breadth of the law, both in terms of the products and materials and the testing/certification/mfr info requirements, I'm not ready to concede that everyone who ends up being affected by this law knows or knew about it. I think it's obvious all those little woodcarvers with their beeswax and natural pigments never thought they'd have to pay two seconds' attention to any lead regulation, since they never got near the stuff. Ditto the companies importing from countries wtih stricter regulatory regimes.

    Sorry, you're right. There's testing and certification required in Feb. 2009, but not 3rd party. Not that that's any help for a mfr who relies on 3rd party testing to begin with. And even the mfrs who test themselves, all they have to do is submit their training materials to the CPSC and get certified as a "firewalled," i.e., independent tester.

    From the lead faq (pdf):

    ...The lead content limits for all children's products go into effect February 10, 2009 (600 ppm) and will be lowered again on August 14, 2009 (300 ppm).

    Q: What certifications are required for children's products that are tested for lead content?

    Children's products manufactured after February 10, 2009, when the lead limit may not exceed 600 ppm, will need a general conformity certification based on a test of teh product or a reasonable testing program for products after that date. Children's products manufactured after August 14, 2009, when the lead limite may not exceed 300 ppm, will have to be certified based on third-party testing of the product by accredited third party laboratories after that date.

    QUOTE: Items made before Feb 9 2009 don't have to be tested and don't have to meet the lead substrate/content standard. But products that fail the Feb 10, 2009 lead content standard can't be sold after that date? Without testing everything on/by Feb. 10, aren't manufacturers then exposing themselves to the possibility that their product doesn't meet the lead content standard, whether because of accessibility, TBD exceptions, or testing methods used?

    Ah, maybe I can explain it differently? products made on/before Feb 9 that are sold on or after Feb 10 DO need to meet the lead content standard. they just dont need to meet any specific testing standard and dont need to be certified as compliant. So "testing methods used" are irrelevant- either the product has more than 600ppm in a component or it doesnt. (ot be fair, accessibility issues are an amiguity and concern) But your figurine guy who is reasonably certain that there's no lead in his product can still sell his figures made on or before feb 9 even without ANY testing and still be in compliance. So can the company importing from a country with stricter regimes- the testing that that company has to do to comply with that regime is more than sufficient. Now if woodcutter guy makes a figure on or after feb 10, he needs to certify based on a testing program that the product meets the standard. Yes, that sucks. The company importing from the stricter country is also fine, though, because they can use the tests they use to make sure they comply with the foreign regs as the basis for their certification.

    I dont believe that everyone knew that this would/will apply to them. Believe me- I spend about 8+ hours a day counseling people on this law and what it means. Primarily big companies- small companies/individual folks dont have the luxury of affording to hire my firm. That also sucks.

    I think the worst of this will be felt by small companies and individuals. And as a buyer of wood, handmade, toys, and small shop cloth diapers for my kids, I am really disturbed by that.

    As reasonable as it sounds, I guess I have a hard time seeing companies of any real size making decisions based on "reasonable certainty" that they're lead-compliant. I can't see them taking the risk.

    So the big guys end up grumbling, but fine as long as they don't go bankrupt; the one-man woodshops and crafters just buy organic whatever and go rogue; so it's really the small-to-medium-sized companies--plus the foreign specialty companies--who are too big to ignore the law and too small to afford to comply who are going to get screwed. And all these small people are to scattered or overwhelmed or clueless or fatalistic to organize anywhere, so any changes that could help them won't even be considered? This does suck.

    Thanks so much for your support of small industry Greg.

    Yes, I am one of the owners of a small/mid size baby consumer products co.

    Unfortunately most of us will be spending all of our time using any profit we have and any time we have, to concentrate on this testing.

    This means holding back new product, design and innovation. Sucks for us! And some will go out of biz, yes, it's sad.

    This is what happens every time we collectively say, "the government should do something about ___________." As an owner of a small manufacturing business I agree with the comments above. When the government decides to address a legitimate concern such as safety, health, environment, etc., it ends up hurting small business. The largest companies gain additional advantage utilizing their teams of lawyers and lobbyist to influence and react to regulations that cripple the little guy.

    The lead thing isn't a big deal for us- we were required to test for lead before, and have never found any.

    A bigger deal for us is the CARB formaldehyde rule coming into effect at about the same time, and the phthalate rules. The CARB one is problematic not because of the formaldehyde limits (there has been similar compliant board available for the European market for years), but because the law requires the panel maker to get certified by CARB. And there are a million little panel manufacturers all over Asia trying to get certified at the same time. A simpler and equally effective rule would have been to require the use of E1 panels on product sold in California, but then CARB couldn't justify the continued existence its massive bureaucracy. Instead we get the same end result, but with much more expense for everyone involved.

    The phthalate rules are causing problems because phthalates are in almost everything, including just about every furniture finish manufactured today, anywhere. And none of those suppliers are ready.

    Also, that sell through grace period might have sounded good on paper, but in practice, no major retailer wants to get stuck with this stuff. They are all requiring earlier adoption of these standards. And in some cases they want the supplier to share in the liability if they have non-compliant product on the shelves after the effective date.

    Problem: "could theoretically be stripped bare of all products for kids 12 years old and under."

    Solution: Buy my shape sorter. It's for ages 13-year-old and up. I also sell a very nice rattle for ages 13-years-old and up.

    As a result of this law the consumer will see fewer color and style choices on the shelves for toy items -because of the rules requiring every color and style of a toy to be tested. No manufacturer already worried about his bottom line is going to continue offering 4 styles or colors of a toy when one will do as it will cost him 4 times as much in testing. Say goodbye to that hot pink bicycle. Boring blue will have to do.

    Only one color? You mean you won't be able to sell me a "girl" bicycle and a "boy" bicycle? Horrors!

    And I could see consumers griping because the cost of their products are going to go up, but if every toy manufacturer has to do this, why exactly would this be more arduous for small companies than large?

    Now if you're saying that companies that sell "premium" wood products based upon an unverified consumer belief that these toys are more "natural" and "safe" might have their premium knocked out (and might have their toys proven unsafe), then yes I think this law might put some toy manufacturers out of business.

    The reason its so expensive for a small company is the big guys have these massive QC and legal departments set up to do the testing etc...Small co's cant afford to have a dedicated person doing this. They can barely fund their co's and bring out products. Product testing through companies like BV and INtertech is the only way to do it and its a fortune. 1000's of dollars a shot.

    This legislation does not just affect toys. Testing is required for virtually ANY product intended for use for children under the age of 12; toys, books, learning aids, furniture, strollers, carriers, clothing, etc.

    As a mother of a 4-year old I want my daughter to have safe toys and not be exposed to toxins. However the legislation as it stands makes no sense and mandates redundant 3rd-party unit testing.

    I am also a small business owner and the legislation as it stands will most likely put me out of business or at the very least cause me to no longer make my product, made to order boutique childrens clothing. It does not matter that I use blank 100% cotton shirts that have documented lead free content and flammability testing. It does not matter that I use 100% cotton fabric and can get information from the manufacturer certifying its content. This legislation proposes third party testing (there are 14 certified labs in the US total) for every component on a FINISHED product even if you have documentation showing all the components are safe. Oh, and the testing is per batch - how is that possible when each batch is each order?!? I am not against the testing of my products. I know they are lead free and safe. There is no way for me to comply with the legislation as it stands.

    Thanks for publicizing this! May I also suggest visiting the War Room for up to the minute updates and focused activism? http://tinyurl.com/5fhzbd

    Consumers can write their all of their legislators in one fell swoop here: http://tinyurl.com/5hloos

    Again, thank you!
    "Nancy" Fasanella :)

    d'oh, sorry Kathleen. I guess I had Nancy Nord on the brain. no offense.

    Heather nailed it just right. I use 100% cotton blanks (some adult items up to 10% polyester or spandex, which might need to change) for my tie dye, I use dyes that are lead-free AND bond chemically to the fiber and WILL NOT leach out (unlike RIT dyes, for example), and I can have product information sheets available to anyone who wants me to prove it. But under this new law, as it stands, I'm responsible for testing the finished garment anyway.

    The nature of tie-dye the way I do it is that it's a "batch" of one item; I do my pieces individually, often custom ordered, one at a time (sometimes two), and VERY rarely two shirts of the same size, style, AND colorset. There's no way I can plunk down the funds for testing one of my single-size batches instead of spreading out the cost over and inventory of hundreds, or even thousands, the way big-box stores can.

    Business is already slow because of the economy, but the sales I do make help pay the bills here. If not amended, not only am I out of business, but stuck with any merchandise and undyed blanks that I won't be legally able to sell without certification - not going to happen. I'm "only" a hobbyist; if I were doing this on a larger scale, the impact for my family would be huge, and for many small crafters it WILL be. :-(

    If I'm already using lead-free and phthalate-free materials and have certification on those, then saddling me with the additional financial burden of testing is not reasonable.

    And don't even get me started on the law's requirement that EACH ITEM has to have tracking and product information on it; in effect, that means I'll need a separate SKU for EACH and EVERY one of my items. This will ultimately take me more time than actually tie-dyeing a garment in the first place - but at least the financial cost isn't as onerous.

    Hmm, Deb, you might look at the differing standards/requirements for products where pigments fuse with the surface; I remember in Rick Locker's presentation, there was much discussion of processes like anodizing and enameling, where the pigment fuses with the surface, and how they're only subject to surface lead testing, not substrate testing.

    Also, i have to imagine that there is already testing for the blanks, and some kind of hazmat testing/certification for the dyes. It seems absolutely insane that proving you have certified lead-free components is not sufficient. So this sounds like it would be some of the first/most obvious thing to get fixed. Or the easiest to decide to run the risk and ignore.

    Does anyone know how CPSIA and the CPSC lead ruling will affect consignment and thrift stores that sell children's items? How about garage and yards sales? Does this mean individuals (yard sale) can sell "banned hazardous substances" but businesses (consignment/thrift) cannot?

    It will have a devastating affect on consignment and thrift shops. I own a children's resale store and as the law stands, it will be illegal to sell anything that has not been tested and certified to meet the new lead standards on Feb 10th. That is EVERY SINGLE PIECE of merchandise in my store. These items were considered safe and legal to sell on Feb 9th, and because they are not certified, will be illegal overnight. It will all end up in landfills. Not only bad for the economy, but WORSE for the environment.

    To add insult to injury, products currently being tested and certified today to meet the new standards do not have to start being labeled as such until August of NEXT YEAR, so we wouldn't even be able to tell if new items are legal if we tried. That leaves our businesses at a halt until things labeled and sold in August 2009 start circulating into the secondary market, which will take even more time.

    The law says "any person" and does not just apply to businesses selling so it includes ebay, garage sales and craigslisters.

    I beg you to write to your congressman and ask them to make changes to this very poorly written law. To find your congressman, go to www.congress.org

    In theory, yes. In practice, everyone will just keep buying and selling old stuff as they did before.

    Did the transportation system grind to a halt when no-driving-with-cellphones laws went into effect? CPSC has been powerless with no ability or resources to enforce its regs for 35 years. The idea that, six wks from now, the they'll start closing down ebay and thrift stores is completely unrealistic.

    And while this doomsday scenario's ability to motivate citizens and politicians to fix the CPSIA is tempting, it's no way to fix the legislation/regulation's problems. Remember, it was the 2007 hysteria over lead toys that precipitated this apparently unconsidered problem. There's gotta be a better, more constructive way to fix the first strengthening of product safety legislation in 30 years.

    "AJ | December 12, 2008 3:20 PM | Reply
    Problem: "could theoretically be stripped bare of all products for kids 12 years old and under."

    Solution: Buy my shape sorter. It's for ages 13-year-old and up. I also sell a very nice rattle for ages 13-years-old and up."

    AJ - unfortunately, this type of disclaimer will not work - believe me, I've already thought of it. The law states anything that is reasonably understood to be for a child 12 or under.

    MY HEAD IS ABOUT TO EXPLODE. Can someone please give me some answers to some questions I have??

    1) Can I do my own testing with a rented XRF gun and ship before February 10, 2009?
    2) Do I need to submit a GCC to the CPSC for each style of my clothing (currently 48 styles)?
    3) If I can do my own testing, when is the deadline to start using 3rd parties for the testing?

    Thank you in advance for your help.

    Thanks for bringing attention to this. Please announce to your readership about the APRIL 1st rally and congressional briefing in DC. See www.amendthecpsia.com for more details.

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