Daniel Walsh

(Published in the October 2010 issue of Wearables magazine.)

Product-safety legislation has ushered in confusion and difficulty for businesses across the country. Apparel too is feeling the impact.

This law has a story.

When Congress passed the Consumer Product Safety Improvement Act (CPSIA) in 2008, democrats had just retaken control of Congress two years earlier, and they reacted to six years of government deregulation by stepping up regulation in a variety of sectors. During that same time period, product safety was at the forefront of a lot of people’s minds.

A spate of product recalls in 2007 included Chinese-made toys and other children’s products that were found to have high levels of lead and other toxins in them. In addition, Chinese-made baby formula tainted with the industrial toxin melamine sickened more than 50,000 babies, killing at least four. Scrutiny on consumer-safety regulators was already increasing when, in November 2007, the Washington Post reported that the last two chairpersons of the federal commission tasked with regulating consumer safety had taken dozens of trips at the expense of the companies they regulated. Critics decried this as an ethical misstep repeated over and over again.

Congress responded. Six weeks after that report, the House of Representatives passed the CPSIA, which regulated the levels of toxic substances like lead and phthalates in children’s products; the Senate followed three months later. The consumer product safety era in American business was born. “Congress was angry, and that anger came out in a bill that has enforced numerous responsibilities on an agency that wasn’t prepared for it or staffed for it,” says Rick Brenner, CEO of Prime Line, a Connecticut-based supplier.

The law’s messy impact has taken longer to sort out than it did to move the law through the legislative process. Congress enacted some broad directives, and the Consumer Product Safety Commission (CPSC) is still determining some of the rules. Just this past August, the CPSC finally released the criteria and process for labs to become federally accredited third-party testers of products and their components. A week later, the agency released its long-awaited definition of what qualifies as a children’s product. Spanning 65 pages, the Aug. 25 document summarized at the end, “… a children’s product means a consumer product designed or intended primarily for children 12 years of age or younger.” It took more than two years after the law went into effect to clarify that key fact.

It’s been that kind of path for companies and consumers dealing with a law many say is murky, convoluted and overreaching. But it’s a law they need to deal with whether they want to or not.

Apparel Limitations

This was supposed to be a law about toys. Baby formula. Lead. That’s what many thought, particularly in the apparel industry, where most of the product is simply cloth. “Talk to a lot of apparel companies, and they look at it as though it doesn’t apply to us,” says Brent Stone, executive director of operations for the Quality Certification Alliance (QCA), a nonprofit accrediting organization for the promotional products industry. But it does apply, at least theoretically. Zippers can have lead. Buttons can be swallowed by a small child – theoretically.

Some embroiderers have responded by ruling out certain items they may have once used for decoration on children’s clothing because of their content. “In the apparel industry, I think the biggest impact was no more bling,” says Jennifer Taggart, an environmental and consumer products attorney who writes the blog, The SmartMama.com. (See the “Decoration Safety” sidebar for the impact on apparel decoration techniques.)

With so much in the law left up to the CPSC to interpret, some firms simply chose to quit the kid’s clothing business. “We had some customers who had some children lines where it was just a small part of their business, and they just said, ‘We’re not going to deal with it,’ ” says Mindy Anastos, a spokeswoman for L.A. T Sportswear, which sells a popular children’s line of clothes called Rabbit Skins. Other companies that were considering whether to start children’s lines chose not to because CPSIA compliance seemed a hassle to comply with, Anastos adds. The result has been some lost business for L.A. T, but Anastos says that hasn’t stopped others from courting the children’s apparel market. “Mostly other companies have stepped in to try to fill that void, so obviously we’re trying to go after them,” she says.

At L.A. T, company leaders have simply built the costs of compliance into their estimates. Short-term, the impact was significant because it took time and up-front costs to do what’s necessary to comply, Anastos says. But long-term, it’s viewed as a minor impact to the company. L.A. T has tried to get ahead of the regulations by initiating testing for lead, phthalates and other toxins early enough to ensure that everything meets federal standards. “The law says there’s no mandatory test, but everything must meet the standards,” Anastos says. “In our mind, we want to make sure that L.A. T products meet the standard. A lot of people are nervous about the law, so we want to do all the things we need to do to put their minds at ease. I think a lot of people felt overwhelmed by the regulations, the interpretation. I think now people have settled back. They realize the reality of the situation where the law is here to stay, so people are working on complying.”

D. Fenton, executive director of compliance at QCA, says part of the reason some apparel companies don’t feel the law applies to them is they didn’t need a law to force compliance. “It doesn’t apply because they’re largely complying on their own,” Fenton says. “There were voluntary standards to meet the customers’ demands.”

The Promotional Products Conundrum

Picture this: A black backpack is imported to the U.S. Upon arrival, it’s blank, with no design on it. A company could imprint it with a police department’s logo so the department could give the backpacks to its officers. Or, the company could imprint it with a Hannah Montana logo. “When it comes into the country as a blank, unimprinted bag, it’s not a children’s product,” Brenner says. “Depending on what I imprint upon it, it becomes a children’s product.” Some, like Brenner, say the item is no more or less safe if it has an adult’s or child’s design upon it. Their thinking is if the bag – or toy or other product – has unsafe levels of lead in it, it should be deemed unsafe regardless.

But the law was not designed that way.

No one knows just how much consideration was given to the promotional products industry when the legislation was drafted. “Our industry flies under the radar of most regulators,” Stone says. On the surface, perhaps it seemed simple that baby formula and toys were for kids, regardless. But a pen becomes a children’s product once you put a child’s design upon it. The fact that any of Prime Line’s products could become a children’s item means the company tests every single product that comes in, regardless of whether it’s supposedly been tested previously or not by the original manufacturer. Brenner says he doesn’t want to take any chances.

The wait for the definition of a children’s product had left many worried about just how far the CPSC would go in its interpretation. In the end, things stayed simple and straightforward – except for all those gray areas.

Criticism All Around

Anne Northup missed her chance to vote on the CPSIA when the former republican congresswoman was swept out of Congress by the democratic tide in the 2006 congressional elections. Four years later, she looks at the law from the angle of someone now tasked with interpreting it as a member of the newly expanded five-member CPSC board. She says she sees the need for some regulation, but she thinks the law is poorly designed, setting arbitrary limits without being able to determine potential risks. “Certainly there’s a danger there,” Northup says. “Lead for young children is serious. If it’s absorbed, it can cause serious problems. The law, unfortunately, does not allow CPSC to evaluate whether there’s a risk.” If there’s lead in the product – or one of several other components, such as phthalates (a plasticizer) – it has to meet the standards, even if some say there’s no apparent danger. “The law did not give us a lot of leeway to make a risk analysis, and I’m surprised we have not taken steps to offer more flexibility,” Northup says. She worries the law will put some companies out of business.

Some say the lack of flexibility is unreasonably costing them money. Rick Woldenberg, chairman of Illinois-based Learning Resources Inc. (LRI), wrote the CPSC with formal comment on a regulation proposal, dubbing it “The End of (Business) Life As We Know It.” The parentheses are his. “He anticipates this to cost us about $15 million annually, and that’s just the amount of additional time and testing needed to comply,” says Larry Lynn, the compliance and quality director at LRI, which produces educational toys and other products. The company increased its oversight team from two to six for LRI and a sister company, which combined have about 180 employees. “In 25 years, we’ve had one recall, for 130 parts, for which we actually recovered every single component,” Lynn says. “Now here we’ve taken what’s always worked and turned it into this $15 million operation to prove what we’ve always known. We’re not trying to escape responsibility. We’re just trying to do it in a reasonable manner that doesn’t make you go broke.”

Others say the law doesn’t go far enough. “I view it as being rather tepid,” says Tom Myers, CEO of apparel supplier Broder Bros. He says producing safe products is part of business, and companies need to design systems that ensure that. His company had already done so, long before the CPSIA passed, because his customers demanded it. “We have standards which are higher than CPSIA standards,” he says. “People who buy from us include Federated Stores and Walmart. They already have a higher level of sensitivity to issues like this than the promotional products industry.”

Myers remembers very clearly the discovery of melamine in some baby formula just two years ago. If a company would do that to meet a quote, he says, it’s not unreasonable for federal regulators and companies to want to make sure it doesn’t happen again. He recalled dealing with a Chinese company once that had agreed to allow inspection of its factory. The inspectors showed up a few days early and were told they had picked the wrong day. “We said, we have to be able to inspect it whenever we want, not give you time to unchain the orphans,” Myers says.

What’s Next

The CPSC has initiated a stay on the children’s product testing regulations taking effect until the criteria for third-party testers is finalized. By November 19, three months from the date of the release of the third-party testers’ criteria, it will likely be complete.

So the question is, what’s next. “If you had a hands-off, arm’s-length approach to manufacturing, that’s no longer an option,” Fenton says. Companies like Broder have initiated means of tracking an item’s path from manufacture to sale, and the necessary tests are in place. “You need to be able to control your supply chain,” Stone says.

Some companies are “looking for a ‘get out of jail free card,’ ” Stone remarks, instead of embracing compliance. They need to accept that there is no escape from a law that’s not going away, certainly not during an election year. Beyond that, Myers says, a client deserves to know beyond a shadow of a doubt that a product is safe. “It’s stuff people should be doing anyhow,” Myers says. “I think people should be doing more of this.”

Sidebar

Decoration Safety

The Consumer Product Safety Improvement Act (CPSIA) has had a clear impact on distributors and decorators when it comes to apparel imprints.

Under the rules, rhinestones and crystals are now basically off-limits for children’s products because their lead content is too high to meet federal standards. Some distributors and decorators are using plastic replicas to do the job in their place. Environmental and consumer-products lawyer Jennifer Taggart says she had one client who lost $30,000 worth of inventory when the new rules went into effect, essentially nixing the sale of hats with rhinestones to the young girls for whom they were designed.

Embroidery falls under the category of textiles, says D. Fenton of the Quality Certification Alliance. Different threads are treated in different ways. Natural fibers such as cotton, silk, wool, hemp, flax and linen need not be tested. “Depending on the fiber content, embroidery should be exempt,” he says.

Inks must be certified as lead-free and should not contain phthalates, Fenton says. Inks in the CMYK ink scale – cyan, magenta, yellow and key, or black – have been shown to be lead-free, Taggart says. Other color prints are not, and typically require third-party testing before they’re used in screen printing. Plastisol content must be no higher than the limit for lead in paints and coatings (plastisol is found in some screen-printing inks, though not water-based inks).

Sidebar

The CPSIA: A Primer

Manufacturers, suppliers and distributors based in the U.S. are responsible for compliance with the Consumer Product Safety Improvement Act (CPSIA). Here are some of the basics you need to know.

Penalties: The law carries penalties from $5,000 to $100,000 per violation, such a failure to report possible product hazards to the Consumer Product Safety Commission (CPSC) in a timely fashion. Criminal penalties are increased to up to five years. Also, the CPSC must approve any solution to a recall.

Testing: Affected manufacturers must provide a “General Conformity Certificate” stating that the product complies with federal safety rules. It must list the date and location of manufacturing and testing, contact information for obtaining records to back this up, and each relevant rule and standard.

Lead: Children’s products can’t have more than 300 parts per million of lead. The general limit was scheduled to drop to 100 ppm on August 14, 2011, but the CPSC could decide that limit isn’t feasible. The lead content limit for paints and coatings is 90 ppm.

Third-party testing: Beginning February 10, 2011, manufacturers must test all children’s products at an accredited independent testing lab and issue a certificate based on the testing that indicates the product meets all CPSC standards. A list of accredited testers can be viewed online at http://www.cpsc.gov/cgi-bin/labsearch. (Many companies are already testing.) This tenet had been stayed until the CPSC resolved the definition of a children’s product and requirements for testers, both of which were determined in August. The CPSC held a comment period in September for the third-party requirements, and the standards won’t be finalized until after the comment period has concluded.

For more information, visit http://www.cpsc.gov/about/cpsia/cpsia.html.