CPSC to PPAI:Voluntary Standards are Not Optional. They’re the Minimum.

At a recent industry event, a top 40 supplier told me about a USB phone charger his company added to its line.  “The factory with the UL-compliant model was more expensive, so we decided to go elsewhere and buy a cheaper one,” he said. “With so many inexpensive adapters on the market, we didn’t feel that our customers would be willing to pay the higher price.”

Of all the product safety imperatives in the promotional products industry, none is more widely misunderstood than compliance with “voluntary” or “industry consensus” standards.  Most distributors and suppliers are either unaware of the critical importance of voluntary standards in the United States or under a misconception that compliance with voluntary safety standards is optional.  But the CPSC doesn’t agree.  Speaking at PPAI’s 2015 Product Responsibility Summit, Marc Schoem, Deputy Director, Office of Compliance and Field Operations for the U.S. Consumer Product Safety Commission (CPSC), said “The Commission expects all consumer products – including promotional products – to be fully compliant with applicable voluntary standards.”  Perhaps most surprising to the 190 attendees was Mr. Schoem’s follow-up opinion that voluntary standards often don’t go far enough and that CPSC generally regards voluntary standards as a minimum.

Standards Development – A Private Sector Process with Government Participation

Voluntary standards, developed by private sector participants, have provided the backbone of product safety in America for 100 years.  The American National Standards Institute (ANSI) – a non-governmental organization (NGO) – is responsible for overseeing and accrediting voluntary standards in the United States.  The individual standards are developed under the supervision of more than 200 standards development organizations such as ASTM International and Underwriters Laboratory (UL).  The U.S. Toy Safety Standard, F-963, well-known to our industry since Congress made it mandatory in the Consumer Product Safety Improvement Act (CPSIA), is an example of an ASTM standard developed by its F15 committee.  UL2054, the lithium-ion battery standard in the U.S., is an example of a UL standard.  Government regulators have long preferred to have industry police itself through voluntary standards, however, Congress took the additional step of memorializing that preference in The National Technology Transfer and Advancement Act of 1995 (NTTAA).  That legislation requires federal agencies to defer to standards developed by “voluntary consensus standards bodies” whenever possible and to participate in the process.  However, governmental participants on standards development committees do not normally have a vote.

How a Standard is Developed

To understand how a standard is developed, consider the genesis of ASTM’s new liquid laundry packet standard.  Soap manufacturers had developed a novel method of packaging liquid laundry detergent into convenient, individual-use packets.  While the attractive and colorful packets were an instant hit with consumers, they were mistaken by many children as candy.  Before long, hundreds of poisoning cases were reported at hospitals and poison control centers nationwide.  Responding to the surging incidents, CPSC sent a letter to ASTM asking that a committee be formed to develop a standard for laundry packets that would eliminate or minimize the danger. ASTM invited all interested parties – manufacturers, retailers, government regulators, consumer advocates, trade associations, technical experts, academics and others – to meet to discuss the hazard.  As a result, the Liquid Laundry Packet Subcommittee F15.71 was formed, a chair was selected and the challenging process of agreeing upon a comprehensive standard was begun.

Depending on their client’s or employer’s role in the stream of commerce, each of the participants on a standards development committee has priorities for what will ultimately be included or excluded from the standard.  Accordingly, the discussions can become protracted and contentious.  It took a full two years for the laundry packet subcommittee to work through issues including child-resistant packaging, candy-like graphics, and whether a foul-tasting coating could be added to the outside of the packets to deter ingestion.  It is up to the subcommittee chair to find common ground, build consensus and get the participants to agree on key elements.  Like any collaborative process, no participant is likely to get 100% of what he or she wants.  Even after a standard is developed and published, its development committee continues to meet periodically to evaluate injury data and consider whether that standard needs to be revised or updated.

The Alternative is Mandatory Regulation

U.S. reliance on voluntary standards is a major benefit to American business.  Consider the alternative.  Would you rather have regulators decide the mandatory requirements for your products without your input or interest in mind or would you prefer a consensus process where industry participants get a seat at the table in every stage of the process and have a vote in the final outcome?  The answer seems obvious but sometimes it has taken the threat of regulation to prod market leaders to agree on a restrictive standard.  In February 2015, when the liquid laundry packet subcommittee had not yet achieved consensus on a new standard, U.S. Senator Dick Durbin (D-IL) and U.S. Representative Jackie Speier (D-CA) lit a fire under the subcommittee by introducing a bill in Congress entitled The Detergent Poisoning and Child Safety Act requiring CPSC to set mandatory safety standards for liquid laundry packets.  But in September 2015, immediately after the ASTM’s laundry packet subcommittee reached consensus and published its new standard, these same legislators issued a press release commending the subcommittee for the new rules stating that “we will be monitoring their effectiveness and evaluating whether further action or legislation may be needed.”

A similar example occurred in September 2011, prompted by the CPSC.  Acting on a petition by four consumer advocacy groups to ban toy jewelry containing more than trace amounts of cadmium, CPSC directed its staff to begin drafting a notice of proposed rulemaking – the first step in developing a mandatory regulation – unless an effective voluntary standard could be developed on an expedited basis. As a result of this pressure, in just two months, an ASTM subcommittee published Standard Specification for Consumer Product Safety for Children’s Jewelry (ASTM F2923-11) and related provisions of the toy safety standard were revised the following month.  Six months later, after getting confirmation from CPSC staff that the new voluntary standard was adequate, and that there was substantial compliance with the voluntary standard, the Commission voted to withdraw its directive for a rulemaking.

“Substantial compliance” is indeed a critical factor in the success or failure of a voluntary standard.  Lawmakers and regulators do not hesitate to take matters into their own hands by issuing mandatory regulations if they determine that voluntary standards are not working effectively to protect consumers. In the summer of 2007, millions of toys were recalled, many because they didn’t meet the ASTM voluntary toy standard.  An angry Congress responded by enacting the CPSIA which made the toy safety standard mandatory.  Voluntary standards can also be “incorporated by reference” into U.S. law which effectively does the same thing – makes a voluntary standard mandatory.  This is a common practice across government agencies.  The National Institute of Standards and Technology (nist.gov) maintains an online database of all voluntary standards that are incorporated by reference into federal regulations.[1]

Voluntary Standards, Mandatory Compliance

Don’t let the word “voluntary” fool you.  Voluntary standards can be enforced just like mandatory standards.  Even if a voluntary standard is not incorporated by reference into a federal law, agencies are able to use other statutory authority to enforce it.  UL 588 is the designation for the long-established voluntary Standard for Seasonal and Holiday Decorative Products.  In a June 2015 letter, CPSC warned that any products not meeting the three “readily observable safety characteristics” set forth in UL 588 – minimum wire size, sufficient strain relief and overcurrent protection – would be considered as having a “Substantial Product Hazard” under Section 15 of the Consumer Product Safety Act and either refused admittance into the United States or ordered to be recalled.

What About The Customer?

We’ve talked about how voluntary consensus standards are the backbone of product safety in the U.S. and about how serious our regulators are about compliance with these standards.  But what about our customers?  What level of safety do they expect?  What duty do we owe to them to ensure that the logoed products they give away to spread goodwill are safe and compliant with applicable standards?  To the supplier who decided not to carry the UL-compliant phone charger, would distributors still sell this product to their end-buyer customers if they knew it wasn’t compliant with the prevailing standard?  Would they care?  What if the supplier’s website was fully-transparent and said, “This model has not been tested to the UL standard because we didn’t think distributors would pay the higher price for a tested model.”  Would distributors still buy the product?  What about the distributor’s customers – the end-buyers whose names, logos and reputations are on the line with the products they give away?  Do you think these end-buyers are aware they are getting a cheaper, non-compliant model or do you think they expect that the promotional products they buy are compliant with all applicable safety standards?  What if an end-buyer gives away one of the non-compliant adapters and it causes a fire?  Who would blame whom?  What would be the distributor’s and end-buyer’s expectations?

Are Promotional Products Subject to Voluntary Standards?

There are many products in the promotional products industry covered by voluntary standards.  In addition to phone chargers and children’s jewelry previously discussed there are standards for products in most industry categories including apparel, drink ware, writing instruments and, of course, technology and electronic products.  Rechargeable lithium-ion mobile power banks present a challenging example of a wildly popular promotional item with potentially serious product safety risks.  Compliance for these products is more complicated than many because there is one voluntary standard for the lithium-ion cell, another for the assembled power bank and yet another for safe transportation of the assembled power bank.  Don’t overlook tech products that contain internal lithium-ion batteries as well, such as rechargeable Bluetooth speakers.  Unfortunately, many suppliers and distributors of these products do not have an understanding of these standards and many of the products on the market have not been tested to the applicable standards.

Best Practices: What Should Suppliers Do?

Suppliers should have a detailed, step-by-step risk assessment process for every product in their line.  Learning the voluntary standards that are applicable for each product is one of the most important steps of the risk assessment process.  Third-party testing labs can be a good resource for this information as are the websites of standards organizations like ANSI, ASTM and UL.  Concerning Mr. Schoem’s point about exceeding the minimum, each time you evaluate a new product, you should determine with your compliance and product development teams whether the voluntary standards applicable to that product go far enough.  Have the standards been updated to deal with current products, current technology and consumer behavior?  Have any new risks emerged?  What are other manufactures and suppliers doing with similar products, both inside and outside of our industry?  What are customers asking for and expecting?  Have there been any recent recalls for this category of product?  And don’t forget to consider foreseeable misuse of the product.  Informed by the insights you gain from investigating these issues, establish and document the specifications and standards you expect your product to meet.  Then, after your product is designed and manufactured, the next step is what standards developers call “conformance assessment.”  At the Product Responsibility Summit, Ken Boyce of UL said, “Without conformance assessment, voluntary standards are just good ideas.”  Conformance assessment includes all of the verification processes including self-testing, surveillance, inspection, certification, auditing, and third-party testing to ensure that the product meets your specifications and the standard.  One last note for your marketing team:  It’s very helpful for distributors if the supplier’s website and catalogs communicates the standards that the product complies with and where the distributor can obtain copies of the test reports.

Best Practices: What Should Distributors Do?

For distributors, don’t presume that a product is compliant just because a supplier is large, prominent or carries industry certifications.  Get to know the compliance people at each of your suppliers.  Ask lots of questions, particularly for high risk categories like consumer electronics, products to be used by children, food products, health care products and personal care products.  Are there any voluntary standards applicable to the product?  Does the supplier have current third-party testing and adequate documentation to confirm that the product complies?  Ask the same question of different suppliers and to a lab partner to be sure that you’re getting consistent and accurate answers.    Most important, don’t assume anything.  Your customers expect the products they buy will comply with all standards, whether or not it’s the law.  They are relying on you, your integrity and experience; don’t let them down.

[1] http://www.nist.gov/standardsgov/stnds-in-laws-policies-and-regs.cfm

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