The Consumer Product Safety Commission Chairman Nancy A. Nord sets the record straight about the agency’s role in protecting consumers, seeking Congressional support and surviving the media scrutiny surrounding the product-recall debacle.

By Vitisia Paynich

In 2007, giants like Mattel and Fisher-Price spent much of the summer doing major damage control after millions of their toys manufactured in China were recalled. Retailers large and small scrambled to pull from store shelves products such as Polly Pocket play sets and Dora the Explorer toys laced with lead-based paint. Such recalls ignited a media firestorm that rattled the nerves of many toy execs, and had other industries asking themselves: Who will be next? News quickly spread about other product recalls, including contaminated pet food, tainted toothpaste and spoiled farm-raised seafood-all originating from manufacturing plants in China.

Outraged consumers demanded immediate answers. How could the U.S. government allow these unsafe products to enter the country? In Washington, the proverbial finger pointing was aimed directly at the Consumer Product Safety Commission (CPSC) and Chairman Nancy A. Nord. In September 2007, Nord and CPSC Commissioner Thomas Moore testified before a House subcommittee during a two-day hearing on child protection and toy safety. Congressional leaders asked the CPSC how lead-contaminated products made their way into the marketplace, as well as how the agency could do its job better. While both Nord, then acting chairman, and Moore acknowledged that the agency must accept blame for safety failures, along with the toy manufacturers, importers and retailers, they also urged lawmakers to pass legislation that would give the CPSC the needed resources to better protect consumers from product safety hazards.

“Our small agency has been ignored by the Congress and the public for way too long,” Nord said to the subcommittee.

Electronic Retailer spoke one on one with Chairman Nord to learn more about the CPSC, what role the industry plays in ensuring product safety for consumers, and how the agency is working with the Chinese government on quality control standards in their manufacturing facilities.

Electronic Retailer: First, many in our industry are unfamiliar with the CPSC’s work in protecting the public. Can you tell us a little about the Commission and the work you do?

Chairman Nancy A. Nord: The Consumer Product Safety Commission is an independent regulatory agency that was created by Congress in 1973. Our mission is to protect consumers from unreasonable risks of injuries from consumer products. We carry out that mission in several different ways. First, we encourage the development of voluntary safety standards by the manufacturing and product selling community. However, if we find that there is a risk that can’t be adequately addressed by a voluntary standard, we do issue mandatory safety standards. We also are an enforcement agency. If we find that there are products being sold out there that either violate our mandatory safety standards or that have a safety defect that could harm a consumer, we will require that the product seller recall that product. And in some instances, we do issue fines for violations of our statutes and, indeed, we can undertake criminal sanctions, as well. We also have a responsibility to educate product sellers and consumers about safety issues, and we’ve got staff here at the agency that spend a great deal of time researching safety issues, identifying and testing products and putting out safety alerts, as well as other publications that address safety tips.

ER: How big is the CPSC and whom does it report to?

Nord: As an independent federal regulatory agency, we ultimately report to the Congress. The Congress wrote our statutes, they created us and they are our ultimate bosses. Currently, we have approximately 400 people, but we are growing. Our budget has been increased, and we will be slowly increasing our numbers. But nevertheless, by federal standards, we are a small agency. We are, however, a very focused and dedicated agency. We have a staff that is made up of scientists, engineers and inspectors, [who] are all very dedicated to making sure that American consumers are safe. So, although we are small, we are very focused in what we do.

ER: What product categories are covered by the CPSC?

Nord: The Consumer Product Safety Commission has a very broad jurisdiction. We have jurisdiction over approximately 15,000 different product categories. And perhaps the easiest way to understand what we regulate is to understand what we don’t regulate. We don’t regulate food, drugs, cosmetics, tobacco, guns, cars, boats or planes. But we have jurisdiction over pretty much everything else consumers use in their day-to-day lives.

ER: Currently, what are the differences between a retailer’s obligations and a manufacturer’s obligations at the CPSC?

Nord: Basically, retailers’ and manufacturers’ obligations are pretty much the same. Both have an obligation to make sure that the products they’re selling are safe. Both have an obligation to make sure that the products that they’re selling are meeting all applicable U.S. safety standards, and both have an obligation to report to the agency when they learn that there’s a potential problem.

ER: What should electronic retailers report to the CPSC?

Nord: When a retailer learns about a complaint-or otherwise becomes aware of a product that they’re selling that could put a consumer at risk-they have an obligation to come to us and report that.

ER: If a retailer reports a problem, will there be a fine?

Nord: To the contrary, it’s when the retailer fails to report to the agency that the fine could be levied. There is a specific provision in their statute that says: if you do not report to us, that is a violation of our statutes. In meeting their obligation to report, a retailer should contact the agency immediately upon learning of a potential problem. And, we interpret the word “immediately” to mean 24 hours. A very simple rule of thumb for your readers is that when in doubt, report-because retailers won’t be penalized for contacting the agency with their concerns. It’s only when they don’t report will they be penalized.

ER: When a product is recalled, generally, how long does that retailer or manufacturer have to rectify the problem?

Nord: When a product is recalled, the retailer should not be selling the product at all and the recall does not expire. If we recall a particular model of a particular product, then we want that model off the shelves and out of consumers’ hands.

ER: Last year, the headlines were filled with product recall news. First, how did you survive the media scrutiny and the criticism of Congressional leaders; and second, can you tell us more about what you learned during the process?

Nord: First, we welcome media scrutiny to our agency. But, one of the frustrations that we have is when we recall a product, we want to make sure product sellers and consumers know that there is a safety issue and that they should stop using the product. So, it is very frustrating to us when we issue a recall and we don’t get appropriate media attention to our recalls. During this past fall, it became very clear to us that neither the media nor the Congress really understood very well what our agency does. And, I think there was an [assumption] in the media-and frankly also in the Congress-that our agency pretests and pre-certifies products before they go onto store shelves and that is very far from the truth. We do not have that authority. Congress has never given that us that authority and we do not do that. We certainly test and inspect products as they are coming in from overseas, for example, but we do it in a focused way when we are looking for a specific problem. We do market surveillance, obviously, but again, we do that when we are looking for a specific problem. I think there was an expectation in the media-and hence, in the public-that we have some sort of pre-market clearance authority, which we do not have. There was much inaccurate reporting about the agency and that was a great source of frustration for us, because it got in the way of us getting our safety story out there. How did I personally survive it? You have to do your job and keep face with the employees of the agency and with American consumers. And if you do that, then you are doing your job and that’s the important thing. So that’s what we tried to do.

ER: Is the CPSC working with the Chinese government on improving quality control conditions in its manufacturing facilities? If so, what policies are being enacted?

Nord: Yes, most definitely. We have noticed a real change in where products are being sourced and with that change, as you would expect, many of our recalled products were manufactured overseas, specifically in China. So, we really had to go to the source to address the problem and that meant going to China. In 2004, this agency began a program to try to address safety concerns with the Chinese. That program started with the signing of a memorandum of understanding between the CPSC and our counterpart agency in China. We’ve had a number of ongoing activities and those activities culminated in the signing this past September of concrete agreements with the Chinese government-whereby they agreed to undertake a number of activities for specific product categories [that we saw had] the most difficulty. Those product categories were toys, fireworks, electrical products and cigarette lighters. In all four of those categories, the Chinese government agreed to undertake those specific activities, and we are working very closely to monitor that they are living up to their agreements. The other thing that the Chinese government agreed to do was to address the whole issue of lead paint. And again, we are working with them very closely to make sure that they are living up to their commitments.

ER: Of course, many in our industry outsource the manufacturing of their products to China, while retailers may sell products that they might not realize were manufactured overseas. In your opinion, is it their obligation to ensure that these Chinese manufacturing companies are adhering to consumer safety guidelines?

Nord: Absolutely it is their obligation both under the law and because it’s the right thing to do. Your product sellers (retailers) need to make sure they know who is manufacturing their products and where they’re being made. They need to get assurances from those manufacturers that safety has been considered in the manufacturing process and that quality control procedures are in place to assure that their products are manufactured properly and safely in the first place. Also, they need to know that those manufacturers are willing to certify to that. Product sellers [and retailers] do have that obligation to take responsibility for what is being sold.

ER: In an August Wall Street Journal article, it was reported that you had sent a letter to members of Congress, asking them to help modernize the Commission. According to agency spokeswoman Julie Vallese, “the CPSC is seeking 21st-century tools for 21st-century problems.” With regard to support from Capitol Hill, what exactly needs to be done to enable the CPSC to do its job more efficiently?

Nord: We did send up to the Congress this past summer a request for changes in our statutes-specifically, I asked for approximately 40 different amendments to be made to our statutes. They covered a whole range of things, but I did ask for an increase in our ability to impose penalties. Right now, we can impose penalties up to $1.825 million; I asked that to be increased to $10 million. I asked for a specific prohibition in our statute, making it illegal to sell a recalled product. Once we recall a product, I wanted to make it a violation of the law to sell that product. I wanted to increase some of our other penalty authorities, and I wanted an explicit authority to require that product manufacturers certify that the products they are selling meet all applicable safety standards. That gives you just a flavor of the kinds of things that I was asking for.

ER: Many in the industry are following the CPSC legislation on Capitol Hill. Can you give us your thoughts?

Nord: I’m pleased that the House has now passed CPSC modernization legislation. In that legislation, they addressed many of the systemic issues that I identified in my proposal to the Hill. They also identified a number of areas where they wanted us to give increased attention, specifically in the area of children’s products and regulations for [those] products. On the Senate side, the Senate has had more difficulty in crafting legislation, but they are working diligently to do that. They have other provisions in there and I’m hopeful that the ultimate legislation that comes out of this process will give us the tools that we had requested and that we need. I do think, however, that as the Congress gives us other directions, they must make sure that those directions are realistic; that they actually aid consumer safety; and that they don’t impose more burdens on us than what we can realistically undertake at our current resource level.

ER: Other than the CPSC website, what other ways can retailers learn more about the CPSC?

Nord: First of all, the website is an excellent way to learn about what the Commission is doing. We are one of the most transparent agencies in the federal government. And we put most everything we are doing up on our website-down to research reports and all sorts of things. It is a wealth of information for those who care to know more about us. I would also encourage the industry to work with its associations to make sure that they have a product safety component built into their conferences and to their activities. Product safety is something that is everyone’s responsibility, and everyone has to share in making sure that it happens. So, retailers really do need to learn more about us.

ER: If you had one piece of advice for electronic retailers in helping protect the consumer marketplace, what would it be?

Nord: I think the best advice I could give your readers is to know precisely what it is you are selling, who made it, where it was made and what kinds of safety considerations went into the manufacturing process. Is the manufacturer willing to certify that the products that are being supplied to retailers meet applicable safety standards? At the end of the day, I think that your retailers need to put themselves in the place of a consumer. Is this a product that I want to buy for my family? For my children? If so, what reasonable assurances can be given that safety was built into the manufacturing process?

 

The Consumer Product Safety Commission Chairman Nancy A. Nord sets the record straight about the agency’s role in protecting consumers, seeking Congressional support and surviving the media scrutiny surrounding the product-recall debacle.

By Vitisia Paynich

In 2007, giants like Mattel and Fisher-Price spent much of the summer doing major damage control after millions of their toys manufactured in China were recalled. Retailers large and small scrambled to pull from store shelves products such as Polly Pocket play sets and Dora the Explorer toys laced with lead-based paint. Such recalls ignited a media firestorm that rattled the nerves of many toy execs, and had other industries asking themselves: Who will be next? News quickly spread about other product recalls, including contaminated pet food, tainted toothpaste and spoiled farm-raised seafood-all originating from manufacturing plants in China.

Outraged consumers demanded immediate answers. How could the U.S. government allow these unsafe products to enter the country? In Washington, the proverbial finger pointing was aimed directly at the Consumer Product Safety Commission (CPSC) and Chairman Nancy A. Nord. In September 2007, Nord and CPSC Commissioner Thomas Moore testified before a House subcommittee during a two-day hearing on child protection and toy safety. Congressional leaders asked the CPSC how lead-contaminated products made their way into the marketplace, as well as how the agency could do its job better. While both Nord, then acting chairman, and Moore acknowledged that the agency must accept blame for safety failures, along with the toy manufacturers, importers and retailers, they also urged lawmakers to pass legislation that would give the CPSC the needed resources to better protect consumers from product safety hazards.

“Our small agency has been ignored by the Congress and the public for way too long,” Nord said to the subcommittee.

Electronic Retailer spoke one on one with Chairman Nord to learn more about the CPSC, what role the industry plays in ensuring product safety for consumers, and how the agency is working with the Chinese government on quality control standards in their manufacturing facilities.

Electronic Retailer: First, many in our industry are unfamiliar with the CPSC’s work in protecting the public.Can you tell us a little about the Commission and the work you do?

Chairman Nancy A. Nord: The Consumer Product Safety Commission is an independent regulatory agency that was created by Congress in 1973. Our mission is to protect consumers from unreasonable risks of injuries from consumer products. We carry out that mission in several different ways. First, we encourage the development of voluntary safety standards by the manufacturing and product selling community. However, if we find that there is a risk that can’t be adequately addressed by a voluntary standard, we do issue mandatory safety standards. We also are an enforcement agency. If we find that there are products being sold out there that either violate our mandatory safety standards or that have a safety defect that could harm a consumer, we will require that the product seller recall that product. And in some instances, we do issue fines for violations of our statutes and, indeed, we can undertake criminal sanctions, as well. We also have a responsibility to educate product sellers and consumers about safety issues, and we’ve got staff here at the agency that spend a great deal of time researching safety issues, identifying and testing products and putting out safety alerts, as well as other publications that address safety tips.

ER: How big is the CPSC and whom does it report to?

Nord: As an independent federal regulatory agency, we ultimately report to the Congress. The Congress wrote our statutes, they created us and they are our ultimate bosses. Currently, we have approximately 400 people, but we are growing. Our budget has been increased, and we will be slowly increasing our numbers. But nevertheless, by federal standards, we are a small agency. We are, however, a very focused and dedicated agency. We have a staff that is made up of scientists, engineers and inspectors, [who] are all very dedicated to making sure that American consumers are safe. So, although we are small, we are very focused in what we do.

ER: What product categories are covered by the CPSC?

Nord: The Consumer Product Safety Commission has a very broad jurisdiction. We have jurisdiction over approximately 15,000 different product categories. And perhaps the easiest way to understand what we regulate is to understand what we don’t regulate. We don’t regulate food, drugs, cosmetics, tobacco, guns, cars, boats or planes. But we have jurisdiction over pretty much everything else consumers use in their day-to-day lives.

ER: Currently, what are the differences between a retailer’s obligations and a manufacturer’s obligations at the CPSC?

Nord: Basically, retailers’ and manufacturers’ obligations are pretty much the same. Both have an obligation to make sure that the products they’re selling are safe. Both have an obligation to make sure that the products that they’re selling are meeting all applicable U.S. safety standards, and both have an obligation to report to the agency when they learn that there’s a potential problem.

ER: What should electronic retailers report to the CPSC?

Nord: When a retailer learns about a complaint-or otherwise becomes aware of a product that they’re selling that could put a consumer at risk-they have an obligation to come to us and report that.

ER: If a retailer reports a problem, will there be a fine?

Nord: To the contrary, it’s when the retailer fails to report to the agency that the fine could be levied. There is a specific provision in their statute that says: if you do not report to us, that is a violation of our statutes. In meeting their obligation to report, a retailer should contact the agency immediately upon learning of a potential problem. And, we interpret the word “immediately” to mean 24 hours. A very simple rule of thumb for your readers is that when in doubt, report-because retailers won’t be penalized for contacting the agency with their concerns. It’s only when they don’t report will they be penalized.

ER: When a product is recalled, generally, how long does that retailer or manufacturer have to rectify the problem?

Nord: When a product is recalled, the retailer should not be selling the product at all and the recall does not expire. If we recall a particular model of a particular product, then we want that model off the shelves and out of consumers’ hands.

ER: Last year, the headlines were filled with product recall news. First, how did you survive the media scrutiny and the criticism of Congressional leaders; and second, can you tell us more about what you learned during the process?

Nord: First, we welcome media scrutiny to our agency. But, one of the frustrations that we have is when we recall a product, we want to make sure product sellers and consumers know that there is a safety issue and that they should stop using the product. So, it is very frustrating to us when we issue a recall and we don’t get appropriate media attention to our recalls. During this past fall, it became very clear to us that neither the media nor the Congress really understood very well what our agency does. And, I think there was an [assumption] in the media-and frankly also in the Congress-that our agency pretests and pre-certifies products before they go onto store shelves and that is very far from the truth. We do not have that authority. Congress has never given that us that authority and we do not do that. We certainly test and inspect products as they are coming in from overseas, for example, but we do it in a focused way when we are looking for a specific problem. We do market surveillance, obviously, but again, we do that when we are looking for a specific problem. I think there was an expectation in the media-and hence, in the public-that we have some sort of pre-market clearance authority, which we do not have. There was much inaccurate reporting about the agency and that was a great source of frustration for us, because it got in the way of us getting our safety story out there. How did I personally survive it? You have to do your job and keep face with the employees of the agency and with American consumers. And if you do that, then you are doing your job and that’s the important thing. So that’s what we tried to do.

ER: Is the CPSC working with the Chinese government on improving quality control conditions in its manufacturing facilities? If so, what policies are being enacted?

Nord: Yes, most definitely. We have noticed a real change in where products are being sourced and with that change, as you would expect, many of our recalled products were manufactured overseas, specifically in China. So, we really had to go to the source to address the problem and that meant going to China. In 2004, this agency began a program to try to address safety concerns with the Chinese. That program started with the signing of a memorandum of understanding between the CPSC and our counterpart agency in China. We’ve had a number of ongoing activities and those activities culminated in the signing this past September of concrete agreements with the Chinese government-whereby they agreed to undertake a number of activities for specific product categories [that we saw had] the most difficulty. Those product categories were toys, fireworks, electrical products and cigarette lighters. In all four of those categories, the Chinese government agreed to undertake those specific activities, and we are working very closely to monitor that they are living up to their agreements. The other thing that the Chinese government agreed to do was to address the whole issue of lead paint. And again, we are working with them very closely to make sure that they are living up to their commitments.

ER: Of course, many in our industry outsource the manufacturing of their products to China, while retailers may sell products that they might not realize were manufactured overseas. In your opinion, is it their obligation to ensure that these Chinese manufacturing companies are adhering to consumer safety guidelines?

Nord: Absolutely it is their obligation both under the law and because it’s the right thing to do. Your product sellers (retailers) need to make sure they know who is manufacturing their products and where they’re being made. They need to get assurances from those manufacturers that safety has been considered in the manufacturing process and that quality control procedures are in place to assure that their products are manufactured properly and safely in the first place. Also, they need to know that those manufacturers are willing to certify to that. Product sellers [and retailers] do have that obligation to take responsibility for what is being sold.

ER: In an August Wall Street Journal article, it was reported that you had sent a letter to members of Congress, asking them to help modernize the Commission. According to agency spokeswoman Julie Vallese, “the CPSC is seeking 21st-century tools for 21st-century problems.” With regard to support from Capitol Hill, what exactly needs to be done to enable the CPSC to do its job more efficiently?

Nord: We did send up to the Congress this past summer a request for changes in our statutes-specifically, I asked for approximately 40 different amendments to be made to our statutes. They covered a whole range of things, but I did ask for an increase in our ability to impose penalties. Right now, we can impose penalties up to $1.825 million; I asked that to be increased to $10 million. I asked for a specific prohibition in our statute, making it illegal to sell a recalled product. Once we recall a product, I wanted to make it a violation of the law to sell that product. I wanted to increase some of our other penalty authorities, and I wanted an explicit authority to require that product manufacturers certify that the products they are selling meet all applicable safety standards. That gives you just a flavor of the kinds of things that I was asking for.

ER: Many in the industry are following the CPSC legislation on Capitol Hill. Can you give us your thoughts?

Nord: I’m pleased that the House has now passed CPSC modernization legislation. In that legislation, they addressed many of the systemic issues that I identified in my proposal to the Hill. They also identified a number of areas where they wanted us to give increased attention, specifically in the area of children’s products and regulations for [those] products. On the Senate side, the Senate has had more difficulty in crafting legislation, but they are working diligently to do that. They have other provisions in there and I’m hopeful that the ultimate legislation that comes out of this process will give us the tools that we had requested and that we need. I do think, however, that as the Congress gives us other directions, they must make sure that those directions are realistic; that they actually aid consumer safety; and that they don’t impose more burdens on us than what we can realistically undertake at our current resource level.

ER: Other than the CPSC website, what other ways can retailers learn more about the CPSC?

Nord: First of all, the website is an excellent way to learn about what the Commission is doing. We are one of the most transparent agencies in the federal government. And we put most everything we are doing up on our website-down to research reports and all sorts of things. It is a wealth of information for those who care to know more about us. I would also encourage the industry to work with its associations to make sure that they have a product safety component built into their conferences and to their activities. Product safety is something that is everyone’s responsibility, and everyone has to share in making sure that it happens. So, retailers really do need to learn more about us.

ER: If you had one piece of advice for electronic retailers in helping protect the consumer marketplace, what would it be?

Nord: I think the best advice I could give your readers is to know precisely what it is you are selling, who made it, where it was made and what kinds of safety considerations went into the manufacturing process. Is the manufacturer willing to certify that the products that are being supplied to retailers meet applicable safety standards? At the end of the day, I think that your retailers need to put themselves in the place of a consumer. Is this a product that I want to buy for my family? For my children? If so, what reasonable assurances can be given that safety was built into the manufacturing process?