1. Views expressed in this presentation are those of the staff and do not necessarily represent the views of the Commission Product Safety Compliance for Beginners  Overview of the CPSC  The Investigation Process  Section 15 Substantial Hazard Investigations  Industry Responsibilities  Product Recalls  Voluntary Reporting Program Organization of American States Pan American Health Organization March 1 st 2011

2.  Overview of the CPSC  The Office of Compliance and Field Operations and the Investigation Process  Section 15 Substantial Hazard Investigations  Industry Responsibilities  Product Recalls  Voluntary Reporting Program Today’s Agenda!

3. CPSC is an independent agency created to protect the public from unreasonable risks of injury associated with consumer products Five Commissioners appointed by the President for multi-year terms with confirmation by the Senate

4. Where is the U.S. Consumer Product Safety Commission located? Headquarters, Bethesda, MD Lab Facilities, Gaithersburg, MD

5. Commissioners Inez Tenenbaum Chairman Thomas MooreNancy A. NordCommissioner Anne NorthupRobert AdlerCommissioner The President appoints one Commissioner as the Chairman, who acts as Principal Executive Officer

6. Commission Authority   Consumer Product Safety Act   Consumer Product Safety Improvement Act   Federal Hazardous Substances Act   Poison Prevention Packaging Act   Flammable Fabrics Act   Refrigerator Safety Act   Virginia Graeme Baker Pool and Spa Act   Children’s Gasoline Burn Prevention Act

7. What is a Consumer Product?   Jurisdiction over some 15,000 different consumer products under the Consumer Product Safety Act   Excludes some products covered by other federal agencies such as (some shared jurisdiction): Cars and related equipment (NHTSA) Food, drugs, medical devices, cosmetics (FDA) Firearms (BATF) Airplanes (FAA) Boats (Coast Guard) Pesticides (EPA)

8. The Problem   35,000 Deaths   32,700,000 Injuries   $800,000,000,000 in Societal Costs   15,000 Different Types of Consumer Products Estimated annual losses associated with consumer products

9. CPSC Organizational Chart* Commissioner Moore Chairman Tenenbaum Commissioner Nord Office of the Executive Director Office of the General Counsel Office of Compliance and Field Operations Office of Hazard Identification and Reduction Directorate for Economic Analysis Directorate for Engineering Sciences Directorate for Epidemiology Directorate for Health Sciences Directorate for Laboratory Sciences * abbreviated Office of Public Affairs International Programs & Intergovernmental Affairs Commissioner Northup Commissioner Adler

10. Office of Hazard Identification and Reduction   Economic Analysis   Engineering Sciences   Epidemiology   Health Sciences   Laboratory Sciences Incident/injury trends Hazard analysis Data collection Development of mandatory standards Development and monitoring voluntary standards

11. EXHR Staffing   Scientists – Chemists – Microbiologists   Physiologists   Psychologists   Economists   Engineers   Fire science   Metallurgy   Mechanical   Textile   Electrical   Epidemiologists   Statisticians - Analysts

12. Office of Information and Public Affairs   Publicizes safety and recall information through: press releases safety alerts press conferences video news releases media interviews Social media   Responds to media inquiries   Develops safety outreach programs in support of Commission strategic goals

13.  Overview of the CPSC  The Office of Compliance and Field Operations and the Investigation Process  Section 15 Substantial Hazard Investigations  Industry Responsibilities  Product Recalls  Voluntary Reporting Program Today’s Agenda!

14. Office of Compliance and Field Operations  Enforce mandatory standards and reporting requirements  Investigate product hazards and make preliminary determinations, seeking corrective actions as necessary  Coordinate enforcement efforts with U.S. Customs and Border Protection and other governmental agencies  Develop guidance and help firms comply with the law

15. Four Types of Safety Concerns Product fails to comply with a mandatory safety standard or ban Product fails to comply with voluntary standards relied upon by the Commission Product contains a defect which could create a “substantial product hazard” Product creates an “unreasonable risk”

16.   Compliance Officers   Field Investigators in over 48 locations around the U.S. Responsible for investigating product incidents Inspections of manufacturers, importers, distributors and retailers Sample collections Import Surveillance/Port Surveillance Staff includes:

17. Office of Compliance and Field Operations

20. Field Investigative Staff Locations

21. How does the CPSC Compliance Investigation process work?  Field investigation conducted  Compliance initiates contact with the firm  Epidemiology conducts data search  Engineering performs testing (both failure mode testing and performance testing)  Preliminary Determination Made (not Fast Track cases)  Negotiate Recall  Notification to Consumers

23. Reported Incidents and Injuries

24. In-Depth Investigations

25. 2Slide 1Slide 1

26. Surveillance Activities  Retail Surveillance  Import Surveillance  Internet Surveillance

27. Retail Surveillance   Compliance Office issues program plan for regulated products   Some plans involve State government officials (for example, pharmacy inspections)   Field investigators collected over 4800 samples in Fiscal Year 2009   Recall effectiveness checks

28. *Totals now include Import Surveillance Division

29. Import Surveillance   Full-time coverage at major ports   Commercial Target Analysis Center (CTAC)   Targeted import inspections

30. Live view, ship traffic 021210

32. Recalls By Product Origin

33. Recognizing these challenges, CPSC established the Office of International Programs and Intergovernmental Affairs:  Established in 2004  Provides comprehensive and coordinated product safety direction with other countries in the area of product safety standards development and implementation at the international, federal, state and local levels

34. Internet Surveillance   Compliance staff check for conformity of regulated products being sold on the world wide web   Staff check for recalled products being sold at various auction sites   Staff check for availability of products and purchases suspect products

35. Internet Surveillance Activities 2007 - Present

36. CPSC’s Internet Surveillance Unit needs your help!   This week, we are announcing a new email address where our partners in state and local government and others interested in consumer product safety can report internet- related concerns:   Recalled products being advertised or sold   Labeling requirements   Banned products   Email your concerns to: websafety@cpsc.govwebsafety@cpsc.gov CPSC’s Internet Surveillance Unit investigators will follow-upon all reports.

37.  Overview of the CPSC  The Office of Compliance and Field Operations and the Investigation Process  Section 15 Substantial Hazard Investigations  Industry Responsibilities  Product Recalls  Voluntary Reporting Program Today’s Agenda!

38. Case Defect Theory Failure of A Standard Overview of the Compliance Process No Action Stop Sale Remove the Product From the Market Possible Civil/ Criminal Penalties No Legal Action

39. Compliance Investigations   Preliminary Investigation- based on information raising safety concerns about a product – may or may not seek information from manufacturer   If concerns remain after PI or if more serious concerns warrant immediate action, the Compliance Officer will open a case. CPSC will seek more information from manufacturer by letter or visit   Investigations culminate in a Preliminary Determination (PD), either with notice to firm or decision to close the investigation

40. Overview of the Section 15 Defect/Hazard Process Section 15 Report/ Sample PI/CA Case Preliminary Determination Contains Defect Action Against the Product No Action Against the Product Evaluation by Expert staff Engineering, Human Factors, Health Sciences

41. Identifying Defect/Hazard   Pattern of Defect   Identification of defect, flaw, error, design, engineering, quality control, labeling, use, assembly, etc   Number of Defective Products   Distributed into commerce   Severity of Risk   Severity of injury   Likelihood injury will occur   Vulnerable population affected

42. Preliminary Determination (“PD”)   Section 15 report or investigation launches a staff investigation as to whether a defect exists and if so whether it creates a “substantial product hazard”   Usually involves a “product safety assessment” by CPSC technical staff and collection of injury data from the firm and from CPSC Epidemiology staff   The process culminates in a “preliminary determination” by a senior Compliance official   Staff will request a recall if and only if it determines there is a substantial product hazard

43. Violations / Prohibited Acts   The Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA) make it unlawful to:   Manufacture, distribute or import any product that does not comply with a mandatory standard ( CPSA & FHSA);   Fail to report information as required by section 15(b) (CPSA);   Fail to report choking incidents (CPSA); and   Fail to report under Section 37 of the CPSA.   Sell a recalled product   Export a recalled product for sale

44. Penalties   Any person who knowingly commits a violation is subject to a civil penalty. The CPSIA increased the civil penalty caps from $5,000 to $100,000 per individual violation, and from $1,250,000 to $15,000,000 for aggregate violations.   Criminal penalties (including felony conviction and imprisonment) are also possible for willful violations

45. Penalty Investigations   Compliance Officer recommends for or against Legal Staff investigation when corrective action is accepted; Fast Track cases are also reviewed   Legal Staff sends letter announcing decision to open investigation and seeking information   If appropriate, Legal Staff sends “show cause” letter inviting settlement offer   Legal Staff recommends settlement or referral

46. Restrictions on CPSC Information Disclosure   CPSC cannot disclose trade secrets   CPSC generally cannot associate a consumer product with a manufacturer or private labeler without giving 15 days prior notice to that firm; the CPSC can shorten that period   CPSC must take reasonable steps to assure that information about specific consumer products is fair and accurate   CPSC generally cannot disclose information reported under § 15 unless and until the Commission accepts a corrective action plan. See 15 USC 2055(b)(5).

47.  Overview of the CPSC  The Office of Compliance and Field Operations and the Investigation Process  Section 15 Substantial Hazard Investigations Industry Responsibilities  Industry Responsibilities  Product Recalls  Voluntary Reporting Program Today’s Agenda!

48. Reporting Obligations   Section 15 of the Consumer Product Safety Act (CPSA)   Manufacturers (Including Component Manufacturers)   Importers   Distributors   Retailers   Section 37 of the CPSA  )  Manufacturers – three lawsuits in specified two year periods (1/1/07-12/31/08) (1/1/09-12/31/10)   Section 102 (CSPA) – choking hazards   Manufacturers   Importers   Distributors   Retailers

49. Low Reporting Threshold for Product Defect Reports  Report is required if a firm obtains information which “reasonably supports the conclusion” that product “contains a defect which could create a substantial product hazard”  The reporting requirement applies more broadly than the Commission’s authority to order corrective actions

50. How Quickly Is Section 15(b) Report Required?  Firm must report “immediately” once information “reasonably supports the conclusion” that a safety issue exists  “immediately” means within 24 hours, but firms may conduct “reasonably expeditious” investigation  Investigations should not usually exceed ten working days https://www.cpsc.gov/cgibin/sec15.aspx

51. Section 15 Reporting Trends

52. Disposition of Section 15 Reports

53. Lawsuit Reporting Requirement  Section 37 of the Consumer Product Safety Act imposes a separate reporting requirement relating to lawsuits  Manufacturers must report if they settle or lose three cases involving death or grievous injury caused by a particular model of a consumer product within any two-year period beginning on January 1 of odd-numbered years

54. Reporting of Choking Incidents Section 102 CSPA and 16 C.F.R. Part 1117   Firms must report to CPSC if a child:   choked on a marble, latex balloon, small ball, or small part (in a toy or game)   And the child (any age): died; suffered serious injury; ceased breathing for any length of time; or was treated by a medical professional. see 16 C.F.R. § 1117 for what and how to report incidents.

55. The Role of Voluntary Standards When Reporting  A product that does not comply with all applicable “voluntary” safety standards may be considered a “substantial product hazard” for that reason alone.  CPSC staff regularly seeks corrective actions in cases involving products that fail to comply with voluntary standards or meet a voluntary standard that does not address the risk identified  A product that complies with all applicable standards is not immune from recall

56. Generic Defect Determinations  Baby Walkers  Baby Walkers (ASTM F-977) Enforcement document dated December 2005 - walkers without the stair protection are considered to contain a defect under the FHSA. See www.cpsc/Businfo  Drawstrings See  Drawstrings Enforcement document dated May 2006 - children’s upper outerwear (ASTM 1816) that contain drawstrings are considered to contain a defect under the FHSA. There should not be drawstrings in the hood (sizes 2T to 12) or bottom (sizes 2T to 16) See www.cpsc/Businfowww.cpsc/Businfo   New Section 15j - Commission may specify, by rule, characteristics whose existence or absence shall be deemed a substantial product hazard

57. What To Monitor   Returns from distribution chain   Parts Orders   Consumer complaints, claims, lawsuits/FEEDBACK   Life testing   Quality Assurance / Product Improvement   Material Changes   Retailer Reports/Retailer Feedback   Incidents from CPSC Injury Clearinghouse

58. Reporting Do’s and Don'ts  Don’t assume that an incident without injury means there’s no problem  Do evaluate product failures to determine what could have occurred in worst case  Don’t wait to finish exhaustive investigation before telling CPSC  Don’t assume that the problem will go away by itself

59. (“Recalls”) Corrective Actions (“Recalls”)   If the Commission makes a “substantial product hazard” determination, it may order the manufacturer, distributor or retailer to notify the public of the problem and/or to take corrective action   A suitable remedy consisting of either a refund, credit, free replacement product or free repair should be provided.   Guidelines and Requirements for Mandatory Recall Notices, FINAL RULE, January 21, 2010

60. Voluntary Recalls by Fiscal Year

61. Regulated vs. Defective Product Recalls

62. Recalls by Source

63. Fast Track Recalls Fast Track Recall Program   Initiated August 1997   Eliminates staff “preliminary determination” of hazard   Acceptable consumer level recall within 20 working days of report   Reduces technical analysis (focus on notification and remedy   Does not preclude review for reporting obligations   Over 200 million products in more than 2000 recalls

64.   Recall is a generic term, and can involve requirement for firm to:   repair product   replace product   refund purchase price of product What exactly is a recall?

65. Implementing a Product Safety Recall   Stop Production Redesign/Repair/Disposal   Stop Distribution Replace/Repair/Disposal   Stop Retail Sales Replace/Repair/Disposal   Consumer Notification Replace/Repair/Refund Incentives/Disposal

66. Recall Notification for Consumers   Joint press release   clear/concise/informative   Social Media   Face Book/You Tube/Twitter/Blog   Video news release   broadcast version of written release   over 50% of population receive news through broadcast media

67. 2/15/10

68. Recall Notification – Recall Posters   Retailer responsibility to display   Display in several conspicuous and visible locations of the store   Minimum 120 days (Some States 180 days)   Poster reviewed and approved by CPSC staff   Large enough to be seen   Contrasting colors   Post display until date

70. Recall Notification – Manufacturer and Retailer Web Sites   Prominent display of recall button on home page   Update frequently   On line registration for recalls

71. Mannttra Recall

72. Implementing A Recall   Coordination with Retailers   Early notification   Lock out sales at register   Isolate stock   Post notices on website   Display Recall Posters   Identify consumer purchasers through credit card sales, extended warranty sales, other contact within company

73. Toll Free Number and Web Site Registration   Script Review   Sufficient Incoming Lines   Recorded/Automated   Live Operator Access   Sufficient Bandwidth to handle online registration by many

74. Direct Consumer Notification   Product Registration Cards   Email Contact   Replacement Parts   Calls to 800 Number   Accessory Product Purchases   Extended Warranty Purchasers  Requirements for Consumer Registration of Durable Infant or Toddler Product; Correction to Final Rule, February 1, 2010

75. Consumer Incentives  Bounty/Reward  Cash/Gift/Certificate  Postage-paid Shipping Label or Package  Free or Substantial Contribution Towards Accessory Products

76. Monitor Recall Implementation   Provide timely, clear and accurate notification to distribution chain prior to recall announcement   Ensure distribution chain takes appropriate action to return recalled products   Label corrected products to avoid future confusion   Segregate returned products

77. Disposition of Recalled Products Quarantine recalled products Advise disposal method Notify CPSC at : recalledproductdisposal@cpsc.gov recalledproductdisposal@cpsc.gov CPSC verification of destruction/disposal of returned products Assure third-party contractors are following program Independent verification of third party

78. CPSC will also Monitor   Monthly progress reports – focus on post-recall injuries   Conduct Recall Verification Inspection at recalling company   Execute Recall Checks at points of sale Conducted by CPSC and/or State Investigators   Internet Surveillance Unit will continue to identify any sale of recalled products   Report sale of on-line recalled products to: websafety@cpsc.gov

79. Avoiding Product Recalls   Meet Federal Standards   Meet Voluntary Standards   Over Design Products   Test, Test, Test   Monitor Product Use   Evaluate Complaints, Inquiries, Injuries, Customer Feedback   Respond to Retailer Notifications   Report Safety Issues

80. Avoiding Product Recalls – Purchasing from Suppliers   Make sure any offshore supplier knows exactly which standards need to be met for your purposes   Itemize any mandatory standards that apply   Specify consensus standards and other safety requirements   If you think the manufacturer knows your expectations for safety without your specific input, you are in for a rude awakening

81. Recalled Toys Found in Stores New York will push legislation forcing retailers to remove recalled products from store shelves; August 17, 2007 Recalled Toys in Stores Chicago Tribune, June 28, 2007 New Jersey Finds Recalled Toys in Nine Stores November 27, 2007 Recalled Toys Found on Central Ohio Shelves November 14, 2007 Recalled Toys Resold on Internet Auction Sites; Study stays The Associated Press, August 21, 2007 Senate Democrats Take Aim At Dangerous Toys Connecticut would become ninth state to pass Children’s Product Safety Act—banning the sale of recalled products and toys Huffman Introduces Bill to Protect Consumers from Unsafe Products Sacramento, CA; In addition to requiring the removal of recalled toys and other recalled consumer products from the marketplace, the bill disposal. Why Avoid Recalls? Toyota chief Toyoda vs. U.S. Congress over recalls, pedals, safety and testifying Toyota faces massive legal liability Congress to hold hearing on peanut butter recall

82. CPSC Procedures for Joint Recalls  Initial contact made with Health Canada to confirm joint recall and company agreement to share information between HC and CPSC  Periodic updates between company, HC, and CPSC to determine case status and time frames  Draft press releases shared to ensure accuracy and consistency of language (Joint Header)  Date of release coordinated between HC, CPSC, and the company  Links placed on both HC and CPSC websites

83. Joint Health Canada - US CPSC Recall postings As of Feb 2010, 25 Joint HC-CPSC recalls have been posted Features:  Agency Seal on header, banner indicate joint recall, Media contacts for both agencies (on CPSC site)  Numbers of product sold in each country, injuries and incidents reported in each country, web links to each others' websites (on BOTH sites)  Advantages: greater exposure in both countries in more languages (Spanish, French), reduction in burden and delays in negotiating + posting, synchronized time of posting with common message

84. Criteria for Cooperative Recalls CPSC-HC:  Product sold in both countries  Corrective measures and customer support extended to customers in both countries  Timing works for CPSC, HC & Company  Have agreement from company to share all information with both jurisdictions early in the process  Recall is conducted voluntarily

85. Retailer Reporting Model   Notification to CPSC and supplier (Allows reporting of incidents, with simple coding of hazards and flags for priority cases)   Requires parallel notice to suppliers   (usually manufacturers)   Removes threat of penalties for actually reported   CPSC actions

86. Benefits of the Model Benefits of the Reporting Model   Major new source of early warning info   Quicker identification of emerging hazards   CPSC staff gains insight into nature of the information flowing to retailers   Hazard coding engages retailer staff   Suppliers confront problems sooner   Emphasis on hazards and corrective actions rather than civil penalties

87. Growth of Voluntary Reporting Program Volume

88. Retailer Reporting Program Participants   Wal-Mart   Sears Holding (Sears/Kmart)   Amazon.com   Target   Home Depot Working with two manufacturers on modified version of the Retailer Reporting Model

89. Avoiding Problems with CPSC Know and Comply Mandatory and Voluntary Standards Be Sure Foreign Supplier Knows & Complies Conduct Appropriate Tests before, during and after distribution Report if you learn about a safety problem When in doubt - CALL

90. Importer Responsibilities   Basic Responsibility   Safety Consciousness   Specifications   Mandatory and Voluntary Certification   Testing   Market Surveillance   Reporting   Corrective Action

91. Industry Guidance  www.cpsc.gov  “Business” section of website  www.recalls.gov  Monitor CPSC Activities through:  Frequently Visiting CPSC Web Site  Recall Announcement Subscriptions  Public Calendar Subscriptions  CPSC Electronic Reading Room Inquiries  CPSC Clearinghouse Letters  Seminar Attendance (Trade Shows/ICPHSO  Seminar Attendance (Trade Shows/ICPHSO) Future – CPSC Public Data Base

92. Contact Information Marc J. Schoem Marc J. Schoem  301-504-7520- work  240-638-6955 – after hours cell   mschoem@cpsc.gov mschoem@cpsc.gov Dennis Blasius Dennis Blasius  262-650-1216  202-595-4619 – after hours cell   dblasius@cpsc.gov dblasius@cpsc.gov Views expressed in this presentation are those of the staff and do not necessarily Views expressed in this presentation are those of the staff and do not necessarily represent the views of the Commission represent the views of the Commission