At this hearing, the Committee will explore the state of the Consumer Product Safety Commission, examine reforms that are necessary to make the agency more effective to protect children and other consumers from dangerous and defective products, and seek comments on the proposed bill.
The Honorable Richard DurbinUnited States SenatorIllinois
Witness Panel 1
The Honorable Nancy A. NordActing ChairmanU.S. Consumer Product Safety CommissionTESTIMONY OF THE HONORABLE NANCY A. NORDACTING CHAIRMANU.S. CONSUMER PRODUCT SAFETY COMMISSIONbefore theSENATE SUBCOMMITTEE ON CONSUMER AFFAIRS, INSURANCE, AND AUTOMOTIVE SAFETYOCTOBER 4, 2007Mr. Chairman, and Members of the Committee:I appreciate the opportunity to testify today on S. 2045, legislation introduced by Chairmen Inouye and Pryor to modernize the statutes of the U.S. Consumer Product Safety Commission (CPSC). I want to thank the Committee for your interest in and support of the important safety mission of the CPSC. It has been a privilege to work this year with Chairman Pryor and Ranking Member Sununu and other Senators, and staff members, both at public hearings and in personal meetings, conversations and correspondence.Since its creation, CPSC’s governing statutes have made the agency unique among government regulatory agencies in numerous ways. Forty years ago, in 1967, the Congress created the National Commission on Product Safety, and after three years of work, the Commission reported its findings to Congress in 1970. Informed by the Commission’s findings, Congress proceeded to create the Consumer Product Safety Commission in 1972.No small amount of work went into the crafting of that original legislation. For example, the Senate Commerce Committee held ten days of public hearings; and in the House, the Interstate and Foreign Commerce Committee held thirteen days of hearings and ten executive sessions, including the joint sessions by the conference committee.Congress’s thoughtful deliberations, hard work and keen farsightedness resulted in the creation of an agency that has contributed substantially to the decline in the rates of death and injury related to the use of consumer products. We estimate that overall, injuries and deaths associated with the use of products under CPSC’s jurisdiction have declined by almost one-third since the agency’s inception. Some products have shown even more dramatic reductions, such as crib-related deaths that have declined by 89 percent over that time.
The blueprint that Congress used in building this agency has served the public well. I am proud of CPSC’s record of achievement and of the public service of the talented staff who have dedicated themselves to the agency’s safety mission over these past three and a half decades.In preparing for a hearing earlier this year, I came across a statement from 1972 by former Congressman Harley Staggers who was Chairman of the House Interstate and Foreign Commerce Committee when the CPSC was established. Chairman Staggers was on the floor of the House bringing forward the CPSC enacting legislation and he noted in his remarks: “The technological revolution and ever-increasing public demand for consumer products has produced over the last several years thousands of new products whose applications are not easily understood and whose use may pose potential for harm.”I was taken by the fact that this statement could be repeated today without sounding at all dated, and yet, there have obviously been very significant changes since 1972 in the way that consumer products are manufactured, marketed, bought and sold.Clearly, the dynamics of the marketplace have changed dramatically over these years. There are new technologies that have emerged, and continue to emerge, in creating and manufacturing products, such as nanotechnology which is addressed in the Chairman’s bill. Additionally, technology has changed the way that consumers shop and purchase goods and the way that the public receives information. Perhaps the most significant change is that most of America’s consumer products now come from overseas.So it is important to move forward in modernizing this agency, but it is also important to do so recognizing that the statutory foundation on which the agency was built is a fundamentally strong one. In moving forward, it is important to understand the rationale and common sense behind the original legislation and the subsequent reauthorizations that underpin the most effective product safety system in the world.The mission of the CPSC is to protect the public from unreasonable risks of injury and death associated with more than 15,000 types of consumer products under the agency’s jurisdiction. We fulfill this mission by enforcing our governing statutes, including the Consumer Product Safety Act (CPSA), the Federal Hazardous Substances Act (FHSA), the Flammable Fabrics Act (FFA), and the Poison Prevention Packaging Act (PPPA).
Since being appointed to the Commission two years ago, and subsequently being named Acting Chairman last year, I have closely studied, enforced and directed the implementation of these statutes. Based on this working experience, earlier this year I submitted to Congress a comprehensive list of legislative proposals, the Product Recall, Information and Safety Modernization Act, or PRISM, that I believe will strengthen the Commission’s hand in enforcing our laws and protecting the American public from unsafe products.I am pleased to see a number of my proposals from PRISM included, and in some cases expanded, in the Chairman’s bill that we are discussing today. For example, the bill adds asset forfeiture as a potential criminal penalty under CPSC’s statutes and makes it unlawful to sell a recalled product after the public announcement that it has been recalled. Harmonization of CPSC’s statutes is another important element that is common to both of our proposals. When CPSC was created, the agency inherited the authorities of other existing agencies, and we need to make the various statutes that CPSC administers more consistent.I am also pleased to see in the Chairman’s bill my proposal to eliminate the requirement (but not the option) to do three-stage rulemaking, as opposed to two-stage rulemaking, which is what most other agencies use to promulgate their regulations. Implemented properly, this change would allow us to use three-part rulemaking for controversial and complex issues and issues that raise new matters while using two-part rulemaking for amendments to existing regulations and non-controversial technical rules (and I recommend Congressional direction to this effect). This change will make our regulatory process more streamlined, efficient and effective.While I have some questions about the implementation, resource requirements and potential outcomes of some sections of S. 2045, and I look forward to discussing some of those today, I do believe that many of the provisions in the legislation, many of which were drawn from my proposal, will enhance CPSC’s ability to accomplish its important safety mission.One particular provision of PRISM that is not in the bill, and that I would strongly encourage the Committee to consider as it continues its work on the legislation, is my proposal to clarify the enforceability of voluntary standards upon which the Commission has formally relied. Under existing law, the Commission is required to terminate a formal rulemaking to write a safety standard and “rely upon”, a voluntary standard under certain circumstances, and only after notice and comment to the public.The extent to which such a “relied upon” consensus standard is enforceable by the CPSC has been a subject of some debate in recent years. I have suggested that such standards are and should be enforceable as mandatory product safety rules, under appropriate circumstances, as set out in the Act.I believe that this interpretation of the CPSA would be an especially potent tool to use in dealing with unsafe imports. It would allow Customs and the CPSC the ability to stop these products at the port and refuse admission so that they are far less likely to reach store shelves or consumers hands.We have seen situations where consensus standards, complied with by much of industry, do a very good job of addressing a risk of injury. But if a foreign-manufactured product, which does not comply with such consensus standards, is imported into the United States, without this tool our enforcement option is to effect a recall. By clarifying the enforceability of relied upon voluntary standards, we would have a better ability to stop the import of unsafe products. I firmly believe that these changes would strengthen the Commission’s hand, and I hope that the Committee will take a close look at that as we move forward. For the record, I am submitting a briefing paper to the Committee further outlining this very important issue.While I believe many of the provision of the bill will be very helpful to the agency, there are several provisions that I flag as raising resource concerns, expanding our jurisdiction into non-safety areas, and being unintentionally counterproductive in helping us carry out our mission. I have a number of substantive recommendations in that regard and look forward to the opportunity to meet with committee staff this month to discuss them in-depth.With respect to resource concerns, while the Senate appropriations committee and the full House of Representatives have passed funding increases for the CPSC, the committees have also given the agency direction for the use of those funds. For example, the House-passed bill would increase CPSC’s funding by $4.1 million and recommends funding sufficient to maintain staff at a level of 420 FTEs. CPSC staff estimates that the cost of that would be $2,087,000. The committee also included $1,500,000 for information technology improvements. That would leave a balance of just over $500,000. (The bill approved by the Senate appropriations committee would provide an additional $3.2 million above the House measure.)The resource requirements of S. 2045 would require many times the discretionary amount left to us under the appropriations bills. For example, the requirement for five commissioners will increase the agency’s overhead by approximately $2 million, monies that could otherwise be spent on other safety-related enforcement or regulatory activities. As another example, implementation of the ban on lead in children’s products, one of eight rulemakings mandated in the bill, will require resources to be diverted away from existing enforcement and regulatory activities.To assist your deliberations, I have requested that our budget office analyze the bill to determine the resource implications and will provide that information to the Committee when it is available.With respect to expanding our jurisdiction into non-safety areas, I point to the provision in Section 16 making it a violation of our act to sell a counterfeit product whether or not the product is safe and to the provision requiring the CPSC to referee whistleblower disputes. Further, the regulatory system set up for certifying and auditing testing laboratories seems to duplicate many of the functions of existing government and private organizations.
With respect to provisions that make it more difficult to carry out our mission, I point, as examples, to the information disclosure provisions (which will make it more difficult to obtain the useful information we need to assess risks), the massive increase in penalties (which will induce companies to overwhelm us with uninvestigated consumer complaints), and the parens patriae provision (which will interfere with Commission investigatory and enforcement activities).As I noted earlier, the legislation that established the CPSC in 1972 was the result of a long, arduous and thoughtful process by Congress. In the enacting legislation, the authors envisioned that the talents and resources of the private sector would play an important role in assuring consumer product safety for the American public.By leveraging those talents and resources through the voluntary standards process, which is given preference in our governing statutes, experts and persons from industry, consumer advocacy organizations, and other interested parties are brought together to develop the effective safety standards that cover many of the 15,000 types of consumer products under the agency’s jurisdiction.Some have called this the “Summer of Recalls”, especially with regard to toys manufactured overseas. I understand the concerns of parents and caregivers. I want to assure them that this agency is aggressively policing the marketplace, and that is part of the reason that you are seeing these recalls. The CPSC is engaged in a multi-pronged approach that involves initiatives with the Chinese government and the private sector, including foreign manufacturers directly, and increased surveillance and enforcement activities at the borders and within the marketplace.These recalls make the case for some of the changes in CPSC’s governing statutes that we have proposed, but in amending these statutes, we should be careful not to undermine a system established by Congress over 30 years ago that has been extraordinarily effective in maintaining the safety of the vast majority of the hundreds of millions of products brought into American homes every year and in making our product safety system the envy of the rest of the world.
CPSC’s safety mission is never a completed task. It is an ongoing and continuously evolving process. We welcome the scrutiny and attention of Congress and commend the leadership of this Committee for recognizing the need for reauthorization. Our common goal is to make certain that the CPSC continues to represent the gold standard of consumer product safety. I look forward to working with you toward this objective on behalf of America’s families.
Mr. Thomas MooreNominated to be a CommissionerConsumer Product Safety CommissionWritten Statement ofCommissioner Thomas H. MooreSubmitted to theSubcommittee on Consumer Affairs, Insurance, and Automotive SafetySenate Committee on Commerce, Science, and TransportationOctober 4, 2007Mr. Chairman, Mr. Ranking member, and members of the Subcommittee, I appreciate the opportunity to appear before you today to provide testimony on S. 2045, legislation to reform and reauthorize the United States Consumer Product Safety Commission (CPSC). The Commission is charged by Congress with the critical responsibility of protecting the public against unreasonable risk of injury and death associated with consumer products. This is now, and has always been, a very crucial responsibility because, often without CPSC’s intervention, the consequences of exposure to the hazards associated with dangerous products may literally be of a life or death nature for individual consumers unknowingly in possession of unsafe consumer products.IS IT SAFE?The question that many American consumers will be asking during this holiday gift buying season is, “is it safe?” This year, the Commission has been involved in a large number of highly publicized recalls. Some of these recalled products were associated with long trusted domestic manufacturers and involved very popular products that could be found in the homes of millions of consumers. These recalls have shaken the confidence of the American consumer in the government’s present ability to protect them from unreasonable hazards associated with products produced in our current global marketplace.Today we find that increasing numbers of U.S. companies are either importing finished products or component parts made in other countries or establishing their own production plants outside of the U.S. In many, many cases, domestic companies have not exercised the same degree of control over these products as they would have if their products were being made in this country. This inability to have constant hands-on supervision has resulted in products entering this country that do not meet long established U.S. mandatory safety standards.In addition, the delicate balance that exists between mandatory product safety standards development and enforcement and voluntary product safety standards development and enforcement is not always completely understood by many foreign manufacturers who are involved in importing consumer products into this country’s stream of commerce. As a result, we are now keenly aware that inspection, testing, education and enforcement tools at the Commission’s disposal are glaringly insufficient to police our present globally affected consumer marketplace.Moreover, new and emerging technologies such as nanotechnology present unique challenges for the Commission. Given the many products already on the market using nanotechnology, from computer chips to Dockers pants, I do not think it will be too long before the agency is asked to assess the risks of nanotechnology use in some consumer product under our jurisdiction. At this point in time we would be hard-pressed to make such an assessment because we simply do not have the resources to do it.As you are aware, CPSC’s last authorization expired in 1992 and, although we have visited the process of reauthorization on a couple of occasions, our statutes have not been significantly revised since 1990. However, it is exceedingly obvious that the marketplace for consumer products has changed dramatically since that time.I must acknowledge that both the House and the Senate were moving in the direction of modernizing the Commission well before the publicity surrounding recalled products under our jurisdiction began earlier this year. We know that these reauthorization proceedings can be an exceedingly intensive undertaking for the CPSC, but I welcome this reauthorization process in both the House and the Senate because I believe it presents a unique and much needed opportunity for all of us to focus on the Commission’s present and future agenda.Senator Pryor’s legislation, which is the subject of this hearing today, takes a giant step– more like a giant leap--in the direction of giving the Commission the tools that it needs to become the enforcement force that it should be in today’s consumer marketplace. From this point in my statement, I will go through the legislation, section by section, and express my views on its affect on how a future Commission would operate given the passage of such a provision.SECTION BY SECTIONSection 3: ReauthorizationSection (a) – Reauthorization levelsI support this incremental approach to increasing our budget and staff. Since we require a yearly increase of about three to four percent to keep current with increases in salaries, rents and other operating costs, yearly increases in the range of 10 to 15 percent would, in my mind, provide the Commission with a good growth pattern. This growth pattern would also allow the Commission to do a yearly assessment of where the areas of need most exist at the Commission therefore allowing the Commission to address its needs in light of the current consumer product safety problems.Section (b) – Lab Modernization fundingI support providing this level of funding to modernize our testing facilities. Given that we are the federal agency designated to protect consumers from product hazards and that our laboratory testing plays a key role in making hazard determinations, I think that the state of our lab should concern everyone. The Lab Modernization Feasibility Study, completed jointly with GSA in 2005, formed the basis for a capital project submitted to OMB by GSA as part of their FY 2007 budget. However, other national priorities precluded the project from being funded. It was estimated back in 2005, that the cost to truly modernize our lab, if we were to stay on the current site, would be somewhere around thirty million dollars. Forty million over two years would expand our capabilities plus give us new equipment and a physical plant that is both energy efficient and an effective use of space.Section (c) – Funding for nanotechnology researchI support funding for research in this emerging hazard area as I have indicated above.Section 4: PersonnelSection (a) – Professional StaffI support bringing the level of fulltime personnel employed by the Commission to a minimum of 500 by the beginning of FY 2013. In fact, it is my hope that by 2013 we would be beyond the 500 FTE level. In a three-year period, the Commission staff level has been reduced from a funded level of 471 FTEs in FY 2005 to a proposed level of 401 FTEs for FY 2008. I would hope that we could get well above that level of employment in the five years contemplated in this legislation.Section (b) – Professional Career PathI support incentives to attract highly qualified professionals to the Commission and to keep them there. Over time we hope to be able to train replacements for the many experienced employees that have left the Commission during the last few years but the experience that we have lost will take years to recover.Section (c) – Change of Employment Status by Political AppointeesI support this provision which would provide a mechanism for the Commission to discourage the practice of unnecessarily placing political employees into career positions.Section (d) – Personnel in Immediate Office of CommissionersI support this provision which would prevent alliances from being formed by a majority of Commissioners to affect staffing in any Commissioner’s immediate office. I do understand that in times where the whole Commission is being reduced, Commissioner’s immediate offices should also be a part of reduction considerations but any decision about reductions in immediate offices should be something agreed upon by all Commissioners.Section 5: Full Commission Requirement; Interim QuorumSection (a) – Number of CommissionersI support restoring the Commission to its full 5 member complement. It is my experience that the current 3 member structure usually only allows for one alliance to be formed – by the majority political party at the Commission. With only 3 Commissioners, the Chair assumes greater significance than our statute contemplates. The “executive and administrative functions,” which should be the only authority that sets the Chair apart from his colleagues have morphed into control over policy matters. Now the Chair only has to secure one vote—that of his fellow party member—to control the Commission. If the Chair had to secure two votes, his ability to have unchecked say over policy matters would be lessened. Also, when you have an agency with five members, the Sunshine Act does not hamper the normal dialogue that should go on in an agency because any member can still talk to any other member about agency business. But where you have only three Commissioners, the result is that no Commissioner should ever talk to another Commissioner about any matter of substance pending before the Commission except in an open meeting after public notice because two members constitute a quorum.Section (b) – Temporary QuorumWhen there are only three Commissioners on the Commission, in times where there is a vacancy on the Commission, two Commissioners, if not of the same party, should always constitute a quorum for transacting Commission business. I certainly understand that this might tend to lessen the pressure on the President to fill a vacancy but as long as there are only three Commissioners, the chance of losing the ability to operate as a Commission will exist. It has happened on three separate occasions since 2001.Section 6: Submission of Copy of Certain Document to CongressI support this provision. Congress used to get a copy of our budget submission to the Office of Management and Budget (OMB). Several years ago, in an effort to cut down on the reports it was receiving, Congress indicated it no longer wanted to see those budget submissions. OMB has since made these budget submissions confidential so they no longer can be made public by the agency. I think that Congress (and the public) should be able to fully review the agency’s original budget request to the administration as it makes final funding decisions with regard to the agency.Section 7: Public Disclosure of InformationI think that this provision of the legislation strikes a good balance between the need for the public to have expeditious and accurate information about potentially hazardous products and the legitimate desire of companies to protect themselves from the possible disclosure of confidential or inaccurate information about them or their products. I know that some argue that being able to provide information to the Commission and having it kept secret from the public somehow encourages fuller disclosure by companies than there would be otherwise. However, companies are required, by law, to report certain information to the Commission and to respond truthfully and completely to our information requests. Companies can keep certain information out of the public eye by appropriately identifying information such as trade secrets, which they want kept confidential, and the Commission can use the law enforcement exception to the Freedom of Information Act, if it feels withholding certain information is necessary.Section 8: RulemakingI support this provision which gives the Commission the option of streamlining the regulatory process in the Consumer Product Safety Act and the Federal Hazardous Substances Act when the Commission feels that a shorter process may be appropriate. One example of such an occasion might be where the Commission believes an adequate voluntary standard exists (based upon active staff participation in the development of the standard) that addresses a real risk of injury but which is not being adequately complied with and where the enforcement powers that come with a mandatory standard could significantly increase the compliance rate.Giving the Commission the option to go straight to a notice of proposed rulemaking in such a case as this makes sense and would be a reasonable application of such an option. Another example where the Commission might decide to streamline the process is in a rulemaking where the Commission is proposing amendments to a current regulation that do not change the overall thrust of the regulation.Section 9: Prohibition on Stockpiling under other Commission-Enforced StatutesI agree with this provision which adds the anti-stockpiling provision of the Consumer Product Safety Act to all of the other statutes which the Commission administers.Section 10: Third Party Certification of Children’s ProductsI support this provision which requires independent third-party testing and certification of children’s products, as defined, which are subject to a consumer product safety standard under the CPSA or a ban under the CPSA or any other Act administered by the Commission. This provision will give the Commission additional enforcement powers to identify and stop violative children’s products from entering this country and authority to penalize those who fail to comply with its requirements.The Commission will also have the ability to prescribe by rule the qualifications of the certifying parties, criteria for which a certificate can be issued, as well as requirements for periodic audits of testing laboratories.Section 11: Tracking Labels for Durable Products for ChildrenI support this provision. Identifying the exact product to be recalled can sometimes present a problem. We have been involved several times in situations where we have initiated a recall and then, based upon subsequent information, had to expand that recall. I agree that the burden should be on the manufacturer/importer/distributor to make sure that children’s products or other products are clearly marked and distinguished so that problem products can be readily sourced and identified by the manufacturer, the Commission staff and by consumers who may have the product in their homes.Section 12: Substantial Product Hazard Reporting RequirementI agree with explicitly extending the reporting requirements of Section 15 (b) of the CPSA to all of the other statutes that we administer.Section 13: Corrective Action Plans (Mandatory)I support giving the Commission the authority to decide what remedy a company must take to adequately protect the public when the company has refused to do a satisfactory voluntary recall. Some companies have used our inability to require a particular remedy in a mandatory recall setting as leverage in structuring their voluntary recall response. The current system, which allows the company to select the recall remedy, is one reason why the Commission has so rarely used its mandatory recall authority.With regard to the language in new subsection 3(C), depending upon the remedy chosen for the action plan, there may or may not be a product still being distributed in the market that was subject to the recall. The subcommittee might want to consider amending the language along the following lines: “…the manufacturer, retailer or distributor shall take whatever remedial action, including ceasing further distribution in commerce of the product to which the action plan applies, as the Commission shall order.”Section 14: Identification of Entities in the Supply ChainI support this provision. It puts everyone in the supply chain on notice that they need to know who they are dealing with, no matter how long that chain is. In the event of a recall or other investigation by the Commission, such information can be essential in getting accurate, timely information to consumers.Section 15: Repeat Violators-ImportersI support this provision. While individual importers are not licensed, and in fact, anyone can go online and get an identification number and instantly become an importer, importer brokers, who most importers use, are licensed. Our staff has identified brokers they consider to be bad actors whose importers routinely bring in violative products, and who take advantage of our limited port presence to steer importers with noncomplying products to ports where they are less likely to be inspected.I was shocked to read in the recent report to the President by the Interagency Working Group on Import Safety that there are over 825,000 importers. I do not know how many different people/entities that number actually represents since one person can have an unlimited number of import registration numbers, but even if only ten percent of them handle consumer products, that still presents our agency with a daunting responsibility in terms of educating and policing that community. Focusing on the brokers may be a more manageable task.Section 16: Sale and Exportation of Violative and Recalled ProductsSection (a)—Sale of recalled products.I support this provision. This will make retailers, in particular, more vigilant in checking their shelves to make sure recalled products are promptly removed and will help stop the sale of recalled items over the internet, a problem which has increased in recent years. This also expands the prohibited acts section of the CPSA to cover any of the rules or bans issued by the Commission under our other statutes.Section (b)—Export of recalled products.I have raised the issue of our export policy because I believe it is time to have a discussion about whether that policy still serves our national interest. I purposely refrained from suggesting any “fix” because I think there needs to be a broad reexamination of the role this country now plays in the world marketplace. If we want other countries to protect our consumers here in the U.S. through their export policies, then perhaps we should be more willing to protect their consumers through our own export policy. It has been twenty-five years since this was last debated and it is fitting that any discussion be in the Congress, as Congress established our current policy.This provision gives the Commission broad authority to prevent the export of a product that violates one of our mandatory rules or bans, or has been recalled, or has been declared an imminent hazard under the CPSA. On its face I think this is good policy although it would be much simpler for the Commission to enforce if the law stated that the Commission would only allow export of those products if it received notification from the receiving country that it would accept the product.There are U.S. manufacturers who make products for export that meet the standards of the receiving country but that do not comply with the comparable U.S. mandatory standard. A policy that required the receiving country to evidence its acceptance of the product would not interfere with legitimate trade between willing trading partners.I see no impediment to applying such a requirement that we receive positive notice from the receiving country before allowing exportation of recalled unregulated products. This would eliminate the need for the phrase “would have been subject to mandatory corrective action under this or another Act enforced by the Commission if voluntary corrective action had not been taken by the manufacturer.” It could be difficult for the Commission to develop industry guidance on such a phrase. The staff does now, on occasion, negotiate a non-export provision with a company as part of a voluntary recall of an unregulated product. This legislative change would provide staff with the clear authority to deny the exportation of recalled unregulated products as part of the corrective action plan unless the receiving country indicated their willingness to receive the product. I also support making the export provisions of the Flammable Fabrics Act consistent with the export policy in our other statutes.The current export policy was written in a different era when we were a major exporter. Now we are largely on the receiving end and our consumers do not know who to trust anymore when they are buying a product. Changing our policy to one that requires the consent of the receiving country to export a product that we would not sell to our own citizens puts us in a better position to be able to more successfully demand that products coming into our own country from abroad meet our own safety standards.Section (c)—False Certification of Compliance with Testing Laboratory StandardsI support this provision which will give us another tool to penalize makers and importers of recalled products that purport to meet nationally recognized standards, but which intentionally do not. Counterfeiting is big business and we should make it a costly mistake to make unsafe products under the false auspices of a respected entity such as the Underwriters Laboratories.Section (d)—Misrepresentation of Information in InvestigationI support this provision. Occasionally manufacturers, in an attempt to reduce the cost of a recall, will try to limit the number of products affected by it. Then, when injuries occur with the same product, but in a production run not covered by the initial recall, the Commission is forced to expand the scope of the recall to cover those additional products. We seem to be seeing more of these situations lately. This provision would make companies pay closer attention to correctly identifying the scope of their products included in the recall and give us one more tool to keep companies honest in their dealings with the Commission.Section 17: PenaltiesSection (a)—Civil PenaltiesI support this increase in the maximum amount of civil penalties that may be assessed for violations of our statutes. While I had initially supported having no civil penalty cap at all, I think the amount specified by this bill is sufficient to prevent even the largest companies from viewing the risk of getting caught violating our statutes as merely a cost of doing business.Our negotiating room would no longer be so limited that it would be difficult for the agency to make, and for industry to see, meaningful distinctions in our assessments of civil penalty amounts among the types and circumstances of the violations involved. As a practical matter, the staff and the Commission would still be guided by the circumstances of each violation but would no longer be constrained by an upper limit that often results in penalties lower than the staff would like to assess. In addition, with such an increase the agency could immediately begin to look at assessing penalties for all violations of section 19 and not focus, as we have almost exclusively, on failure to report, a situation that I believe has resulted from a maximum penalty amount set too low to accommodate multiple violations.I support making the penalty amounts the same in all of our statutes. I also support the provision that makes it clear that the Commission may consider other factors in deciding the amount to assess for a civil penalty in addition to those specified in our statute.Section (b)--Criminal PenaltiesI support removing the requirement in the CPSA that there has to be a notice of noncompliance received by the company from the Commission before a criminal penalty can be imposed for a violation of section 19. This has been an impediment to the Justice Department’s ability to pursue criminal sanctions on the agency’s behalf.The two-tier criminal penalty system laid out in the bill is similar to one that the Justice Department has indicated we should have and since they actually prosecute our criminal cases, I would bow to their assessment that they think such a system is needed. It might be helpful if the bill provided some guidance as to the meaning of “knowing” and “willful” in the criminal penalty provisions.I also support the two-tier system in the FHSA. I do note that while it increases the penalties, it does add a “knowing” requirement to the first tier offenses that does not currently exist. Given the increase in the penalty amount, and the desirability of harmonizing the criminal penalties with that of the CPSA, that may be an appropriate change.I do not know why there are no criminal penalties under the Flammable Fabrics Act, but considering that children’s sleepwear, mattresses, and upholstered furniture are regulated (or may potentially be regulated) under this statute, Congress might want to consider including the same criminal sanctions in that statute as are contained in the CPSA and the FHSA.I also support having the additional criminal penalty of requiring a company to forfeit any assets associated with a violation of our statutes. All of these provisions will greatly strengthen the agency’s hand in criminal cases and put real teeth in our enforcement abilities.Section 18: PreemptionI believe the Commission went astray went it decided in 2006, after years of not offering an interpretation of the preemption language in the Flammable Fabrics Act, to use the new Mattress Flammability Standard to interpret that statute to prevent certain civil court actions. I would hope any court looking at this sudden and unnecessary change in Commission policy would ignore it, but I would have much preferred if the Commission had not attempted to sway the courts with its own interpretation in the first place. It is up to Congress to decide what the preemptive effects of our statutes should be and I leave it to Congress to decide whether all of our statutes should contain the explicit non-preemption language contained in section 25(a) of the CPSA that makes it clear that CPSC rules and other orders “do not relieve any person from liability at common law or under State statutory law to any other person.”Section 19: Information Sharing with Federal, State, Local and Foreign Government.I support this provision for information sharing. The Commission would have to be judicious in its distribution of material to others and vigilant in making sure that information provided by it or given to it is not disclosed inappropriately. Information given by the agency to an entity who inappropriately disclosed it, should nullify any agreement to share information with that entity in the future.Section 20: Bond authorityI support this provision to require a measure of financial security from those who seek to distribute or sell products in our country and whose products may subsequently be recalled or seized at their port of entry for failure to comply with a mandatory standard. This may be particularly helpful in the case of certain importers who have little financial stake in the transaction they are facilitating.Section 21: Enforcement by State Attorneys GeneralGiven the Commission’s historically small resources for litigation, having fifty additional legal teams to enforce the provisions of our statutes could be of tremendous benefit. However, the Commission needs to retain control over the interpretation of its statutes for enforcement purposes and would not want to spend significant resources intervening in cases to assure this result. The subcommittee might consider whether it is possible to require the State Attorneys General to consult with the General Counsel of the Commission prior to filing a lawsuit and condition the filing of the suit upon the consent (or non-objection) of the Commission. This would allow us to head off misguided lawsuits and lessen the need for the Commission to intervene in these proceedings.Section 22: Whistleblower Protection for Manufacturers’ EmployeesThe bounty provision of this section is intriguing. On occasion, employees of companies have provided information to the Commission that has proven useful in pursuing actions against their companies for violations of our statutes. Encouraging employees with this type of information to come forward, and then protecting them when they do, could act as one more deterrent to companies who put profit ahead of safety. However, the protection side of the equation would be difficult for our agency to administer. Each case would require an examination of the facts in the particular situation and an understanding of the personnel system and rules in the employee’s company as well as the history of the interactions between the employee and the company. These are not the types of cases in which CPSC lawyers are typically involved and I am not at all sure that having the Commission become so intimately engaged in the inner workings of a company’s employment practices would be appropriate. If the subcommittee wants to provide protection to employees in these situations, it may want to look at another venue for these employee complaint determinations, such as the Department of Labor.Section 23: Ban on Children’s Products Containing Lead and Amendment of the Lead Paint RuleI support this provision. I am pleased to see that this bill gives teeth to the Commission’s 1998 guidance statement to industry urging them to remove lead from children’s products. The response from the Congress, the media, and from parents to the recent spate of recalls makes it clear that consumers will not tolerate their children being exposed to lead in children’s products. The bill provides a ceiling for lead in these products, but gives the Commission the authority to set that ceiling even lower. It also lowers the amount of lead allowed in paint or other surface coatings on children’s products. It is my understanding that the majority of American paint manufacturers already meet this extremely low level of 90 parts per million, so this change reflects a standard of care most members of our industry already meet and it should similarly be attainable by paint manufacturers in other parts of the world who send their products to the United States.Section 24: Cost-Benefit Analysis under the Poison Prevention Packaging ActI support this provision as I believe it clarifies the intention of an earlier Congress not to require a cost-benefit analysis in a statute that seeks to reduce children’s poisoning deaths by requiring certain substances to be in child-resistant packaging. The cost of child-resistant packaging adds pennies to the cost of a product. This is a small price to pay to help keep our children safe. This Act has worked well and it should not be weakened by allowing OMB to pressure CPSC to read language into the statute that does not exist.Section 25: Completion of Upholstered Furniture RulemakingI appreciate the subcommittee’s frustration with the slow pace of this rulemaking, although I think certain developments, such as the Commission’s work in the mattress rulemaking, have added greatly to our understanding of the fire dynamics of upholstered furniture and have changed the way our staff is looking at this problem for the better. I do think it is time for the Commission to issue a proposed rule based on the staff’s extensive work and let all parties have their say.CONCLUSIONI think that the comprehensive legislation package introduced by Senator Mark Pryor, with Commerce Committee Chairman Senator Daniel Inouye as original cosponsor, and with Senator Richard Durbin and Senator Amy Klobuchar as cosponsors, will severely test the will of Congress to provide the Commission with the necessary tools it needs to be an effective force in protecting consumers from product safety hazards. Many of the provisions come from recommendations submitted by myself and Acting Chairman Nord.However, I think that it is very important that in whatever we do collectively--through efforts at the Administration level, Congress and the Commission--to address the most recent problems facing the Commission, we must send a clear, unequivocal message to manufacturers, importers and retailers who bring and offer for sale in this country products which present a substantial product hazard or that do not comply with a U.S. product safety standard: That message should be that, “your actions are unacceptable and you will be held accountable.” The Commission must have the sufficient resources, the adequate authority and the internal willingness to deliver that message with no hesitation. The Pryor legislation goes very far in providing the first two variables in the equation for an effective enforcement authority. The Commission must supply the rest.
Witness Panel 2
Mr. Ed MierzwinskiFederal Consumer Program DirectorU.S. Public Interest Research Group, Federation of State PIRGs
Mr. Travis PlunkettLegislative DirectorConsumer Federation of America
Alan KornDirector of Public Policy & General CounselSafe Kids Worldwide
Mr. Al ThompsonVice PresidentGlobal Supply Chain Policy Retail Industry Leaders Association
Mr. Joseph M. McGuirePresidentAssociation of Home Appliance Manufacturers on behalf of the National Association of Manufacturers