A very busy day for the HTA

by Dan Marshall

Published November 03, 2009 @ 11:55AM PT

After a full year of efforts trying to save their small businesses from the mandates of the CPSIA, the Handmade Toy Alliance met two important milestones on October 30.

First, assisted by Senator Merkley (OR), the HTA met via video conference with CPSC commissioners Inez Tenenbaum and Robert Adler, an aide to Senator Dodd (CT), and a team of about a dozen CPSC staffers to discuss policy actions to protect small batch children's product manufacturers.

Second, the New York Times reported for the first time on the CPSIA's impact on small businesses. A little handmade wooden airplane even found itself on the front page. The report focused on the HTA's efforts to convince congress to amend the CPSIA.

“It was a very busy day,” said HTA secretary Jill Chuckas, owner of Crafty Baby (CT). “In the morning we got the chance to tell the CPSC what we need. And then in the evening I found myself quoted in the New York Times.”

During the morning CPSC meeting, Commissioner Adler expressed a desire to protect small manufacturers as much as possible within the constrains of the CPSIA. Speaking about the difficulty small business have affording the testing required by the law, he said “You're the folks who keep us awake at night.” He also reiterated that “The CPSC did not write this law.”

The meeting centered on nine requests the HTA submitted to the CPSC, the most important of which would stay enforcement of testing requirements for another year so that the CPSC can finalize rule-making on a host of important issues. “Our goal is not to create loopholes in the law for unsafe products,” said Dan Marshall of Peapods Natural Toys (MN) “We just want to save our small businesses.”

In the Times article, titled “Burden of Safety Law Imperils Small Toymakers”, Nancy Cowles of the consumer group Kids in Danger was quoted as opposing the HTA's efforts to reform the CPSIA, claiming that big industry players “are not above using the small crafters to reopen the legislation and get the changes they want.”

“This is the absurd logic that we've been hearing for a long time,” said HTA board member Rob Wilson of Challenge & Fun (MA). “We are not agents for big companies. We have been highly critical of Mattel and other multinationals for their role in shaping the CPSIA in their favor. What Cowles is basically saying is that handcrafters and small batch manufacturers are closing their businesses as a favor to Mattel.”

“If Kids in Danger and other consumer groups would just respond to our repeated requests for dialog, I'm sure we could reach an understanding that serves both our interests,” said Marshall. “If they could have listened to our morning meeting with the CPSC, they would understand our desire to fix this law without compromising safety. Unfortunately, they seem more interested in protecting the status quo.”

The HTA's next steps are to include more meetings with the CPSC, which will hopefully lead to policy actions and the clarification of a number of issues. The HTA is also offering to help the CPSC reach out to small batch manufacturers.

“Even though we feel very encouraged by the CPSC's willingness to work with us, we need to keep in mind that their hands are tied on many issues,” said Wilson. “We need Congress to pass a technical amendment to the CPSIA, and we need Senator Pryor to begin that process with an open hearing in his Senate commerce committee."

In other coverage of the day's events, Walter Olson reacted to the NYTimes article in his Overlawyered blog, writing:

Okay, so the Times was — well, not a day late and a dollar short, but more like 300 days late and many billions of dollars in overlooked costs short. Still, let’s be grateful: the paper’s news side has now implicitly rebuked the editorial side’s fantastic, ideologically blinkered dismissal of “needless fears that the law could injure smaller enterprises”. And the Times’s belated acknowledgment of the story can serve as permission for other sectors of the media dependent on Times coverage — including some magazines and network news departments — to acknowledge at last the legitimacy of the story and begin according serious attention to the continuing CPSIA calamity.

We feel compelled to agree--by our count, the NYTimes was scooped at least 426 times on this story. But, better late than never. Now, let's fix the CPSIA!

The Handmade Toy Alliance Requests CPSC Policy Actions to Save Small Businesses from the CPSIA

by Dan Marshall

Published October 30, 2009 @ 09:25AM PT

With February 10, 2010 fast approaching, the Handmade Toy Alliance has made a formal request to the CPSC for regulatory relief from the CPSIA through policy actions. We feel that these actions are absolutely necessary to save small batch childrens product manufacturing in the US.

Our fundamental belief is that the CPSIA focuses resources on processes rather than safety and needlessly hampers the Commission's ability to make product safety determinations based on risk. While we believe that only Congress can correct these issues, we have identified a number of areas where CPSC rulemaking based on common sense and risk analysis will prevent the needless destruction of hundreds of responsible small businesses.

The role of a federal agency is not just to enforce laws, but to give guidance to Congress. Our first request is for the CPSC to formally communicate to Congress that a technical amendment is needed to the CPSIA in order to correct its unintended consequences. Chief among these corrections would be to grant the CPSC discretion to apply risk analysis to the application of third party testing requirements and lead content limits.

We are also requesting a further one year stay of testing and certification requirements. We understand that the Commission will soon be issuing guidance on component testing rules under Section 102 of the CPSIA. However, these rules will arrive less than three months before the end of the current stay on February 10, 2010. This timeframe will provide little relief for manufacturers seeking to take advantage of component testing rules, who will need time to work with their component suppliers to assure upstream compliance.

Although the small batch community has already begun documenting CPSIA-compliant component suppliers (see cpsia-compliance.blogspot.com), without CPSC-issued regulations in place we have had little power to force suppliers to test and certify.

Third, we want the CPSC to consider the needs of small businesses when they issue rules regarding retesting requirements under Section 102(d)(2)(B) of the CPSIA. We understand that large toy manufacturers, represented by the Toy Industry Association (TIA), have been arguing for a tiered schedule for retesting. Their proposal would define three tiers of manufacturers based on whether their factories have obtained ISO-9001 ratings. Under this scheme, “Tier 1” factories would be allowed to test less frequently and under more favorable conditions while “Tier 3” would have to test more often under less favorable conditions.

While we can appreciate TIA's intention to reward higher volume factories that have demonstrated quality and safety control, their scheme is unfair and unworkable at the scale of small batch manufacturers. ISO-9001 certification can cost tens of thousands of dollars and is not applicable to home workshops and small domestic manufacturers.

We are therefore requesting that TIA's standards not be applied to our small businesses. Instead, we request a retesting schedule based on the number of items produced, not on any chronological time line. Retesting should be required every 10,000 units for small manufacturers, not every 15 months.

Fourth, many small toymakers are facing huge compliance costs because of required ASTM testing, which the CPSIA requires for all toys. We are asking the CPSC to issue an enforcement policy which would remove the threat of prosecution for small batch toymakers who are unable to afford ASTM testing. The products made by these manufacturers should still be required to meet ASTM requirements and the manufacturer shall be required to act in good faith

This would allow a company to deal with products based on volume. Small businesses will most likely be able to afford to test higher volume items, but they should still have an incentive to bring in niche, low volume items that meet ASTM but are not third party tested. This policy would be entirely justified based on risk analysis, since toys distributed in smaller quantities pose a smaller potential public health risk than mass market toys.

Although the Commission has issued exemptions from lead content and phthalate testing for many toys which are made from natural or other exempted materials, ASTM testing remains an insurmountable burden for many small toymakers. Even though ASTM testing is usually somewhat straightforward and simple to do, many testing labs have instituted minimum per-item testing fees of $300-$350, which largely negates any savings from natural material exemptions. Many of our members simply cannot afford to pay these fees and will be forced to cease operations without this relief. This issue not only affects handmade items, but also adaptive toys for children with disabilities, classroom supplies, and other low-volume specialty toy products

Fifth, we are asking the CPSC to issue a statement of enforcement policy that it will not prosecute makers of one-of-a-kind products for failure to test. Dozens of our member businesses earn their living by making custom products ranging from ceremonial Native American costumes to fabric dolls to hair bows. Testing these one-of-a-kind products is both physically and financially impossible.

And, we are asking the Commission to improve its education and outreach to small businesses by publishing a simplified explanation of testing requirements and ASTM toy standards, and by answering all of the questions posted on the site WhatIsTheCPSIA.com, where the small batch community has been attempting to share knowledge and interpret the requirements of the CPSIA.

We have also requested the CPSC to appoint an ombudsperson to help communicate with the small batch manufacturing community. Such an ombudsperson would serve to expedite answers to questions, give input to CPSC staff about policy decisions on behalf of small batch manufacturers, and work with organizations such as Etsy and the Handmade Toy Alliance to communicate with small batch manufacturers.

We also feel that CPSC-approved third-party testing labs require more transparency and oversight. We are requesting that the Commission require that all CPSC-certified labs, as a condition of their certification, abandon their per-item minimum fees and post itemized per-test costs so that small manufacturers can easily compare testing services. Our members have found the process of obtaining quotes from testing labs to be extremely arduous and time consuming. And, third party testing firms have been less than forthright about their fees, often quoting for tests which the CPSC does not require. These independent operators need more oversight from the CPSC to ensure that they are treating small businesses fairly.

Finally, we would like the CPSC to implement an education strategy for consumers. Media attention in the wake of mass market toy recalls has improperly skewed the public's understanding the primary sources of lead poisoning, which remain lead in house paint, dirt near highly-traveled roads, and workplace exposure. Lead awareness campaigns from the 1970s and 80s have now been forgotten by today's parents even though the same problems persist. The CPSC should take steps to re-educate the public about the highest-risk sources of lead exposure.

We feel that these actions, if adopted by the CPSC, would save hundreds of small American businesses whose companies had nothing to do with the recalls of 2007. Hopefully, the CPSC will respond favorably to our requests. Someday, perhaps, we will also have the chance to tell Congress directly about the effects the CPSIA is having on our businesses.

photo: Plush Dollhouse by Abbydid.

CPSC's ruling on CPSIA Component-Based Testing Long Overdue

by Dan Marshall

Published October 08, 2009 @ 09:52PM PT

On January 30, 2009, the CPSC stopped accepting comments on third-party testing of component parts under Section 102 of the CPSIA with a promise that guidance would be issued soon.

Nine months later, we are still waiting for them to issue rules that would allow component testing. With only 4 months left until third party testing becomes mandatory for all children's products, this delay is becoming less and less acceptable.

The Handmade Toy Alliance sent comments on component testing to the CPSC on December 30, 2008. We told the CPSC, "The use of component testing would allow many of us to remain in business, while adhering to the current regulations outlined in the CPSIA." Ten months later, we have still not received a reply.

Why is component testing important? Consider the lowly zipper. Without component testing, every pillow, pair of pants, dress, or kid's purse that uses a given style of zipper would have to test every zipper tooth, stop, and pull on every finished SKU. That's right--the same zipper under current CPSC guidance must be tested over and over by different manufacturers, once for every finished product type in which it is used.

With component testing, the zipper manufacturer can test and certify that the zipper meets lead content limits so that everyone who makes something with that zipper won't have to pay to test it again. The savings to small businesses are exponential.

Also, component testing would force CPSIA compliance upstream in the product supply chain, which would improve the safety of finished products for all consumer goods, not just CPSIA-regulated children's products. Manufacturers of paint, varnish, snaps, zippers, polyurethane laminate, hinges, screws, and velcro will all have an economic incentive to test and certify their materials.

Even consumer groups and Congressional leaders who fight against a technical amendment of the CPSIA have argued that component-based testing would solve many of the CPSIA's "implementation issues". Indeed, on January 16, 2009, CPSIA authors Henry Waxman, Bobby Rush, John D. Rockefeller and Mark Pryor wrote to the CPSC:

We encourage the Commission to move more quickly in consideration of [component testing]...The Commission must provide clearer guidance on this issue, and it must do so with greater speed than it has exhibited thus far. We do not believe that reaching a decision by August 2009 represents a sufficiently timely resolution of this issue.

And yet, here we are in October 2009 with no ruling on component testing in sight.

At this point, even if component testing were allowed as of tomorrow morning, it will be too late for many small businesses. The 2/10/10 deadline for third party testing is fast approaching and manufacturers are already buying materials now that they will still be using to make products after that deadline. Even though small-batch manufacturers have been working together to create a directory of CPSIA-Compliant materials, without CPSC-issued regulations we have little power to force suppliers to test and certify. Why would a zipper company spend money to test its zippers if the law doesn't justify it?

So, how can a useful component-based testing regulation be put in place in less than four months?

It can't.

The CPSC has stated that they do not plan to extend the one year stay of enforcement on testing requirements beyond 2/10/10. But, because of their lack of action on component-based testing, the only fair and workable solution will be to grant a further extension of the stay.

Common sense delayed is common sense denied.

Understanding the True Costs of CPSIA Testing Requirements

by Dan Marshall

Published October 01, 2009 @ 11:00AM PT

This is what we would have said to Rep. Waxman's House Commerce Committee CPSIA hearing

by Dan Marshall

Published September 10, 2009 @ 09:17PM PT

The following is what Jill Chuckas, Secretary of the Handmade Toy Alliance and owner of Crafty Baby in Connecticut, would have said today to Representative Waxman's Commerce Committee if she had been allowed to testify.

September 10, 2009

My name is Jill Chuckas and I own a small hand crafted children’s accessories business called Crafty Baby (www.craftybaby.com). In December, when I learned that the CPSIA would indeed affect my business, I joined and quickly took on a leadership role within the Handmade Toy Alliance. Currently, I am on the executive board and hold the position of Secretary. Our grass roots alliance of almost 400 businesses, represent children’s product artisans, small batch manufacturers and retailers of children’s products throughout the country. Today, I am here to share not only my story, but the stories of all the members of the Handmade Toy Alliance.

As a hand crafted artist, I am involved in every aspect of my business – from production to sales, advertising and marketing to accounts receivable. When the toy recalls began, my business increased. People were seeking out hand crafted and made in the USA products in droves. When Congress first spoke of this “toy safety” legislation, I applauded their efforts along with the rest of the country. In December of 2008, though, I read the fine print. I, along with many others, quickly realized that this law, meant to regulate the companies that had betrayed the countries trust, would effectively put me out of business in less than a year. Not because my products are unsafe, but because I simply can not afford the cost prohibitive, redundant testing protocol that this law stipulates.

The biggest obstacle to compliance for our membership is the third party testing protocol. The companies represented by the Handmade Toy Alliance are very small – many have only one or two employees, if that. Many are operated out of homes and are a supplement to the family income. All are run out of a love for children, and a desire to share products that are an alternative to the mass produced items that invade our society. Some strive to become larger – possibly employing 5-10 people – but most like being small and having personal relationships with their customers. Jill Courtright of Auntie Jill’s Shop (VT), recently shared with me the joy she was having in working with a four year old to design a stuffed animal just for him. Under the CPSIA, she would not be able to do this work because the cost of third party testing this one stuffed animal would be 10 times as much as what she would sell it for (as well as being a destructive test). At sixty five, Linda Moore Kurth, owner of Whimsmoore, LLC (WA), had finally realized her twenty five year long dream of having a children’s toy, gift and book site that invites children’s imaginations out to play. Although she had her product line tested using XRF scan technology and is confident that her products are safe for children and meet the standards of the CPSIA, this is not sufficient for her to prove compliance. She is wrestling with the reality, like so many of us within the Handmade Toy Alliance, that she may have to close the doors to her business.

A major issue within the CPSIA, as we see it, is the lack of flexibility within the law to employ risk assessment and alternative forms of testing to prove compliance. Our members agree with the original intent of the law – to provide our nation’s children with safe products. In doing so, compliance needs to be geared at products as a whole – looking at the parts used to put together a product. The reality is that many of our members use raw materials from the same supplier, whether it be fabric, wood, ASTM certified non toxic paint, finished Onesies, snaps, zippers or so on (and have compliance certificates from those suppliers), to make their finished products. Good sense would dictate that if these items were tested prior to being sourced to our members, than why should the materials be tested again? At the very most, using a technology already employed by the CPSC, such as an XRF hand held scanner, would seem highly appropriate. Yet, the CPSIA does not allow for this common sense approach to proving compliance.

Another obstacle for many of our members – particularly retail store owners and importers – is the lack of harmonization with European Union standards. The European Union has long had stronger safety standards than the US and toys entering our market stream have certification of passing these standards. Yet the CPSIA does not allow for this testing to be accepted as proof of compliance. For that reason, many beautifully hand crafted toys and products from Europe have

been pulled from the US market. These products are completely compliant with the levels set forth within the CPSIA, but because the testing protocol in the EU tests for soluble lead (or ingestible lead) rather than total lead content, the testing is deemed invalid. Science has shown us that soluble lead is of greater concern than total lead content, but the CPSIA does not lend itself to this implementation of risk assessment. Handmade Toy Alliance member Jonathan Green of Jonathan Green & Co. (NJ) who specialize in German products shared with me, that now, many store owners, including his, will no longer be able to supply customers with products from their native Northern European countries that express and maintain their ethnic heritage.

All of our members have expressed frustration in the lack of flexibility and use of risk assessment within the law itself. We recognize that in the last few months, a number of rulings have been issued by the CPSC that have brought some relief to our members. We also recognize that more rulings are soon to be issued that may bring additional relief. Although we are happy to see common sense implementation of the CPSIA by the CPSC, we continue to feel strongly that change needs to come directly from the law itself. As we have seen on numerous other occasions, rulings by regulatory agencies can be overturned. The very fabric of the law allows for litigation, and little “wiggle” room in interpretation. The Handmade Toy Alliance has put forth documents we call “Seeds of Change” that highlights our suggestions for common sense changes within the CPSIA. We urge the committee to consider these suggestions in a technical amendment to the CPSIA.

Thank you for the committee’s willingness to open the CPSIA up for discussion in the House of Representatives.

Best Regards,

Jill Chuckas
Owner, Designer
Secretary, Handmade Toy Alliance
www.craftybaby.com
www.handmadetoyalliance.org

HTA to the House Commerce Committee: Hear us out!

by Dan Marshall

Published September 04, 2009 @ 08:55AM PT

September 4, 2009

House Energy and Commerce Committee
2322A Rayburn House Office Building
Washington, DC 20515

Re: Format of the House Subcommittee on Commerce, Trade, and Consumer Protection Hearing, “Consumer Product Safety Commission Oversight: Current Issues and a Vision for the Future”, scheduled for Thursday, September 10

Dear Chairmen and Ranking Members:

We are writing in regard to the subcommittee hearing set for September 10, 2009, the first Commerce Committee hearing on consumer product safety since the CPSIA was passed over a year ago. We are very disappointed to learn that the committee will not be taking this opportunity to hear from any small businesses affected by the CPSIA. Indeed, we have learned that CPSC Chair Tenenbaum will be the only person invited to testify.

While we have full faith in the abilities of Ms. Tenenbaum and believe she is working to apply common sense interpretations to the CPSIA, we do not believe that the she can represent the full scope of the CPSIA's impact on responsible American small businesses. Nor do we believe that the unintended consequences of the CPSIA can be solved through the CPSC's rulemaking. A technical correction is required, and we would like the opportunity to tell your committee why.

Our businesses have been burdened by a law designed to fix a problem created by irresponsible multi-national corporations such as Mattel. The small manufacturers, crafters, and retailers represented by our alliance have impeccable safety records, yet we are burdened by excessive compliance costs while Mattel has once again been trusted to police itself.

Now is the time for Congress to hear the voices of small businesses. Now is the time to show that laws can be written for the common good, not just for the interests of large, well-connected corporations such as Mattel. Now is the time to invite small businesses, including a representative of our alliance, to speak truth to Congress about how the CPSIA is devastating our businesses and our livelihoods.

As parents, consumers and small business owners, we all believe that children’s products should be free of toxins and safe for our children. We are in business due to our sincere desire to put forth quality products. Unfortunately, the CPSIA has made this endeavor much more difficult than it should be.

Please, help us fix the CPSIA. Help us continue to provide unique clothes and playthings for America's children. Please, invite us to testify.

Respectfully,

The Handmade Toy Alliance

Contact information and a listing of all 382 business members of the Handmade Toy Alliance is available at http://www.handmadetoyalliance.org/members-of-the-handmade-toy-alliance

savehandmadetoys@gmail.com

www.handmadetoyalliance.org.

Mattel gets a hall pass

by Dan Marshall

Published August 11, 2009 @ 11:09PM PT

Without drawing any conclusions, here's a few facts about Mattel, the world's largest toy company:

• Since 2007, Mattel has recalled 12.7 million toys for safety hazards or lead paint.
• In 2009, Mattel agreed to pay fines to the CPSC totaling $2.3 million and about another $12.5 million in settlements to several states for these safety violations. By contrast, Mattel's advertising expenditure in 2008 was $719 million and its total sales were $5.9 billion.
• In August 2008, The Consumer Product Safety Improvement Act (CPSIA) was passed by Congress, largely in response to Mattel's recalls. Mattel supported the law.
• Since February 10, 2009, the date when many of the provisions of the CPSIA came into effect, here's what Mattel's stock price has done:

• In July 2009, Mattel reported better than expected quarterly profits.
• And, in August 2009, Mattel was the first company granted permission by the CPSC to operate "firewalled" in-house testing facilities instead of paying third party laboratories for performing required toy safety testing.  Consumer Reports wrote of this development, "This is just another example of the fox guarding the hen house."
• Meanwhile, almost every other children's product manufacturer continues to try to figure out how to survive the double-whammy of the CPSIA and an economic downturn.