National Association Of Manufacturers


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2009 GHTA Conference Presentation

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National Association Of Manufacturers

  1. 1. Consumer Product Safety Regulation – GHTA The National Association of Manufacturers 1331 Pennsylvania Avenue, Suite 600 Washington, DC 20004-1790 (202) 637-3000
  2. 2. The NAM Mission The NAM‘s mission is to advocate on behalf of its members to enhance the competitiveness of manufacturers by shaping a legislative and regulatory environment conducive to U.S. economic growth and to increase understanding among policymakers, the media and the general public about the vital role of manufacturing in America‘s economic and national security for today and in the future. • The NAM is the leading advocate of a pro-growth, pro-manufacturing agenda. • The NAM is a partner in reinforcing the legislative and regulatory activities of its member firms. • The NAM is a primary source for information on manufacturers‘ contributions to innovation and productivity.
  3. 3. What Is the NAM? • The NAM is the largest multi-industrial trade association, with 11,000 companies of all sizes as members; • The NAM represents 12 million manufacturing employees; • The NAM includes 350 trade associations in its membership; • Member companies of the NAM are responsible for 85 percent of U.S. manufacturing output; • The NAM represents every industrial sector; • The NAM is composed of members from all 50 states; and • The NAM hosts the CPSC Coalition – the leading coalition of manufacturers, distributors, and retailers committed to ensuring safe consumer products and reasonable regulation
  4. 4. Size Breakdown of NAM-Member Companies
  5. 5. Challenges Regulatory Compliance Costs • Since 2000, costs related to compliance with government regulations have increased 10.2 percent annually. • Compliance with environmental, economic, workplace and tax rule and regulations cost American manufacturers $162 billion annually. • The average annual regulatory compliance cost per manufacturing employee is currently $10,175. This is considerably higher compared to firms in other sectors of the economy, which average $5,633 per employee. • The cost per employee for small firms (meaning fewer than 20 employees) was $21,919 or 118 percent higher than the cost per employee for medium- sized firms (defined as 20–499 employees). And it was 150 percent higher than the $8,748 cost per employee for large firms (defined as 500 or more employees). The federal government also imposes over 9.3 billion hours of paperwork on the public each year.
  6. 6. Product Safety
  7. 7. Product Safety
  8. 8. Why should you care about the CPSIA? • Higher Fines and Penalties • New testing requirements for children‘s products • New certification requirements for all consumer products subject to CPSC rules, bans or standards • Product tracking label requirements • Product Safety Database • State Attorneys General Enforcement • 2/10/2010 – End of stays of enforcement
  9. 9. Tougher Penalties • Civil penalties increased from a maximum of $5,000 per incident to $100,00 per incident • Total civil penalty maximum increases from $1.25 million to $15 million • Criminal penalties of up to 5 years in prison for a knowing and willful violation • Enhanced liability for directors, officers and agents (previously required notice of noncompliance before liability existed) • Penalties include forfeiture of assets associated with the violation
  10. 10. What is a children‘s product? CHILDREN‘S PRODUCT.—The term ‗children‘s product‘ means a consumer product designed or intended primarily for children 12 years of age or younger. Relevant Factors: • A statement by a manufacturer about the intended use of such product, including a label on such product if such statement is reasonable. • Whether the product is represented in its packaging, display, promotion, or advertising as appropriate for use by children 12 or younger. • Whether the product is commonly recognized by consumers as being intended for use by a child 12 years of age or younger. • The Age Determination Guidelines issued by the CPSC
  11. 11. What is a children‘s product? (cont‘d) • Items that are as likely to be used by adults as by children are general purpose not children's items. • Price point and marketing of an item can suggest that it is intended for both adults and children, meaning it is not a child's item. • Colors, decorations and embellishments do not necessarily make the item a child's product. • Application of a school's name does not necessarily make it a child's product. • Application of a cartoon character does not necessarily make it a child's product. • Occasionally marketing an item for school use does not convert a general purpose item into a children's product.
  12. 12. Lead Ban and Third-Party Testing  Children‘s products are treated as a banned hazardous substance if they contain more than 300ppm lead.  Third-party testing required for children‘s products for compliance with new lead content limits, lead paint limits, crib standards, small parts rules, children‘s metal jewelry rules, baby bouncers, walkers, and jumpers, and all other children‘s product safety rules once labs are accredited to test to the new standards.  Exceptions for ―inaccessible parts,‖ certain electronic devices, materials determined by the Commission not to contain lead or products or materials determined not to result in the absorption of any lead or any other adverse impact on public health or safety
  13. 13. Exclusion Process Commission has reviewed several requests for exclusion and has denied exclusions for: • Crystal, Glass Beads, CZ and Rhinestones • Brass • Youth model ATV‘s • Children‘s Bicycles • Pens DENIED!
  14. 14. Product Safety Certification ‗(1) GENERAL CONFORMITY CERTIFICATION- Except as provided in paragraphs (2) and (3), every manufacturer of a product which is subject to a consumer product safety rule under this Act or similar rule, ban, standard, or regulation under any other Act enforced by the Commission and which is imported for consumption or warehousing or distributed in commerce (and the private labeler of such product if such product bears a private label) shall issue a certificate which— ‗(A) shall certify, based on a test of each product or upon a reasonable testing program, that such product complies with all rules, bans, standards, or regulations applicable to the product under this Act or any other Act enforced by the Commission; and ‗(B) shall specify each such rule, ban, standard, or regulation applicable to the product.‘. .
  15. 15. Product Safety Certification 3) AVAILABILITY OF CERTIFICATES- Every certificate required under this section shall accompany the applicable product or shipment of products covered by the same certificate and a copy of the certificate shall be furnished to each distributor or retailer of the product. Upon request, the manufacturer or private labeler issuing the certificate shall furnish a copy of the certificate to the Commission.
  16. 16. Reasonable Testing Program 1. Product specs which describe the product and rules/bans/standards that it must comply with; 2. Certification tests which prove the product can meet those standards; 3. A production testing plan that includes reasonable intervals for testing; 4. Remedial action plans for when a sample product fails a test, and 5. Documentation of the reasonable testing program and how it was implemented
  17. 17. Product Tracking Labels The manufacturer of a children‘s product shall place permanent, distinguishing marks on the product and its packaging, to the extent practicable, that will enable— (A) the manufacturer to ascertain the location and date of production of the product, cohort information (including the batch, run number, or other identifying characteristic), and any other information determined by the manufacturer to facilitate ascertaining the specific source of the product by reference to those marks; and (B) the ultimate purchaser to ascertain the manufacturer or private labeler, location and date of production of the product, and cohort information (including the batch, run number, or other identifying characteristic).
  18. 18. Database In the next twelve to fifteen months the CPSC must deploy an online searchable database of reports of harm relating to consumer products regulated by the Commission from consumers, state and local government, health care professionals, child service providers, and public safety entities Manufacturers will be given an opportunity to see complaints and respond within a 5 day window before the complaint is made publicly available No system or verification protocol has been designed to ensure the accuracy of information submitted to the database
  19. 19. End of Stays of Enforcement 2/10/2010 – Stay of Enforcement on testing and certification of products subject to lead limits. Still illegal to manufacture, sell or distribute in commerce products that do not meet the standards. Exceptions to the stay included painted children‘s products which must meet the 90ppm standard and children‘s metal jewelry. State Attorneys General not subject to CPSC enforcement discretion.
  20. 20. Component Testing Awaiting a final rule on the ability of manufacturers or assemblers or finished product distributors or private labelers to rely on certifications of compliant components coupled with exempted materials to be relieved of obligations to test under the law Requirements do not automatically move up the supply chain. Still unanswered questions about liability. How comfortable should you be about supplier certifications? Manufacturer definition is ―domestic manufacturer or importer.‖