If 2007 was the Year of the Recall, 2008 was the Year of Regulation. This past year, some of the nation’s biggest industries pushed for new federal regulations to cope with consumer concerns about product safety — breaking from a tendency to block regulatory measures. They got what they wanted. This August, the U.S. enacted the Consumer Product Safety Improvement Act of 2008 (CPSIA), one of the most comprehensive overhauls of consumer-product safety regulations since the 1970s. The Act aims to provide “new safety safeguards that emphasize resources, accountability, disclosure and testing…from the factory floor to the store shelves.” What does this mean for those of us in the manufacturing world? First, it means that there are new hoops to jump through. Second, it means that it’s really important to jump through these hoops – because the CPSIA provides for increased civil and criminal penalties for those who fail to abide by the new regulations.
Clearly, familiarizing yourself with the CPSIA and its implications is essential. Some suggestions on how to go about this:
- * Sandler Travis, one of the leading law firms focused on trade, provides a very nice overview of the new requirements. Visit their site, and click on the link entitled “New Mandatory CPSC Import Documentation Requirements Effective November 12.” At the bottom of the summary, you’ll also find the names of a few different lawyers you can call to get more info.
- * The big inspection agencies are very focused on the CPSIA and can provide a lot of helpful information. SGS has a bunch of web-based seminars; check out the schedule here. You’ll see that there’s a seminar on toy safety tomorrow (Wednesday, 10/29) at 1 pm Eastern.
- * And, if you’re feeling really ambitious, you can read the entire CPSIA. (Have fun.)
What’s Panjiva’s take on efforts to improve the safety of consumer products through regulation? Some thoughts:
First, there’s no doubt that more needs to be done to improve the safety of consumer products. Last year, we advised President Bush’s Working Group on Import Safety that much more could be done with existing resources. Specifically, the government could be using data it’s already collecting to more effectively focus inspection resources on goods that are potentially unsafe.
But there’s more to the story than just using data to effectively allocate scarce government inspection resources – undoubtedly, new regulations were needed to protect American consumers and the businesses that will fail in the absence of consumer confidence in product safety. The CPSIA would seem to be a step in the right direction then. Nevertheless, there are some in the business community who worry the CPSIA will simply create another set of bureaucratic hurdles that increase the cost of doing business, without actually helping consumers and the businesses that sell to them.
So will the CPSIA succeed in protecting consumers or simply create more bureaucracy? At this point, it’s hard to know – because much depends on implementation. Our take is that the CPSIA will succeed if those implementing it put particular emphasis on two concepts: harmonization and transparency. More on this in future posts.