How much lead is in the doggie in the window?

Came across an interesting consumer product issue.  Here’s a news report about a grandmother complaining that a product she wanted to purchase had the following warning on its: “Warning: Contains lead.  May be harmful if eaten or chewed.  May generate dust containing lead.

Why did the manufacturer place that warning on a label?  Most likely, it was a decision made to ensure that the product would meet the varying lead level and labeling requirements among our 50 states.  For instance, Illinois has its own Lead Poisoning Prevention Act.  Here is it is, in part, and look for the very familiar warning at the bottom:

Children's products. Effective January 1, 2010, no person, firm, or corporation shall sell, have, offer for sale, or transfer the items listed in this Section that contain a total lead content in any component part of the item that is more than 0.004% (40 parts per million) but less than 0.06% (600 parts per million) by total weight or a lower standard for lead content as may be established by federal or State law or regulation unless that item bears a warning statement that indicates that at least one component part of the item contains lead. The warning statement for items covered under this subsection (b) shall contain at least the following: "WARNING: CONTAINS LEAD. MAY BE HARMFUL IF EATEN OR CHEWED. MAY GENERATE DUST CONTAINING LEAD."

So, it would appear the the manufacturer was attempting to navigate the straits between the federal and state testing and labeling requirements for lead in children’s toys.

The news station took the offending plush dog toy to the Consumer Product Safety Commission (CPSC) where it took samples from its ears, arms, feet and belly.  The little doggie passed all the federal tests…indeed, “if the dog’s fur contains lead, our test found it’s so minuscule it’s below reportable levels.”

And, for all of this, the news report has the retailer apologizing for selling the plush toy, and for selling others where the warning was covered up with adhesive label to correct the “mislabeling.”

Of course,  the final word goes to the grandmother.  “Things should be lead-free, period.”  And, they can be in her home, if she’d like.  The next time she picks up a toy that says “contains lead” and that meets federal but not state requirements, she can leave the little doggie on the shelf.  After all, warnings should help us make decisions, not news.

Your compliance program and human trafficking…

Now is the time for the compliance professionals at large retailers and manufacturers to start planning ahead for the January 1, 2012, effective date of the California Transparency in Supply Chains Act of 2010 (the Act). This Act relates to human trafficking in the supply chain and requires every retail seller and manufacturer doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for goods they offer for sale.  The Act does not apply to smaller retailers and manufacturers having less than $100 million in annual worldwide gross receipts (but is something, nevertheless, for them to consider).

The US Department of Labor released a report in September 2009 that named 122 goods from 58 countries that were believe to have been produced through forced labor or child labor in violation of international standards.  The Act recognizes that consumers and businesses are inadvertently promoting and sanctioning these crimes through the purchase of goods and products in the supply chain.  So, the Act endeavors to ensure transparency between large retailers and manufacturers with consumers by providing detailed information regarding efforts to eradicate slavery and human trafficking from their supply chains, and to educate consumers on how to purchase goods from companies that responsibly manage their supply chains to prevent slavery and human trafficking.  Implicit in this is that California residents and corporations will choose to buy only from companies that comply with the Act.

Large manufacturers and retailers will be required to post on their homepage Internet Websites a “conspicuous and easily understood link” to the necessary disclosures. In general, and at a minimum, large retail sellers and manufacturers will need to:

  • evaluate and verify risks in their product supply chains to exposure to trafficking and slavery, and whether this verification was conducted by a third party;
  • audit suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains, and whether the audits are conducted by an independent, unannounced auditor;
  • require direct suppliers to certify that the materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business;
  • maintain internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking; and,
  • provide training, on mitigating risks within the supply chain to human trafficking and slavery, to company employees and management who have direct responsibility for supply chain management.

The Act emphasizes that consumers need to access this information in their buying decisions. The Act does not currently have a fine or other penalty associated with it, but does provide for enforcement through the Attorney General for unspecified injunctive relief — so there is a big bat out there.

In nine months, many large corporations will need to ensure compliance with this California law.  What should you consider doing now if you’re not already prepared? Here are a few thoughts — certainly not an exhaustive list nor in any particular order:

  • If you don’t have a written policy concerning slavery and human trafficking in the supply chain, now is the time to write one.  Consider this policy for its applicable internal and external uses (including use with suppliers as well as dissemination to consumers, investors, etc.);
  • Determine whether any corporate supply contracts need to be revised to reflect new policy compliance;
  • Analyze your corporate exposure — what do you really know about the supply chain, how far do you drill down to get the real picture, and how much further do you need to drill?;
  • Develop a training program;
  • Consider whether your corporation will need third parties (such as certification organizations, accounting and auditing firms) to assist developing compliance programs or in enforcement or auditing; and
  • Ensure your corporate board is apprised of compliance to this new law.

Some corporations have already built their corporate social responsibility policies looking toward compliance with the international SA 8000 standard and, in particular its requirements concerning child labor, forced and compulsory labor, and human trafficking.  This standard is published by Social Accountability International (SAI), a global standard-setting non-governmental human rights organization.  For those looking toward certification to SA 8000, Social Accountability Accreditation Services (SAAS), a spin-off of SAI, provides this.  SAAS provides a complete list of “Accredited Certification Bodies” (namely third party organizations) who can perform the auditing work to achieve certification.  Of course,most of these organizations can also perform work to your company’s own specification outside the SAI/SAAS certification process.

So, don’t forget, the California Transparency in Supply Chains Act of 2010 will be effective on January 1, 2012 — use the time wisely!  

February 2011 Update of CPSIA Requirements and Stays of Enforcement

The Consumer Product Safety Commission posted a nifty chart online today with regard to enforcement of the CPSIA.  By Rule, Standard or Ban, and by product category, you can determine the whether a non-children’s product requires a General Conformity Certificate, or if a Children’s Product Certificate is required based on Third Party Testing. A useful tool from the CPSC.

SaferProducts.gov has a soft launch. There’s still time to prepare.

Are you ready for SaferProducts.gov? This website is in the Soft Launch phase and accepting reports starting today. The website will contain the “Publicly Available Consumer Product Safety Information Database (Database)” collected by the U.S. Consumer Product Safety Commission (CPSC). The good news is that the CPSC will be testing the Database functionality first before it makes Reports available to the public for search and review.

This is but a brief reprieve for manufacturers and retailers as the Database will be disclosed when SaferProducts.gov is officially launched in March, 2011. SaferProducts.gov was developed by the CPSC to fulfill Section 6A of the Consumer Product Safety Act (CPSA), as amended by the Consumer Product Safety Improvement Act of 2008 (CPSIA). Through this website consumers and other Database users will be able to submit “reports of harm” (Reports, with a capital R!) describing a (perceived) harm or risk of harm related to the use of a consumer product. Other users will be able to search and review these reports, or add their own Report, if they’d like.

Manufacturers, importers, and private labelers will have an opportunity to comment on the Reports that identify them and their products, and may choose to comment in the Database in response.

There is a lot of controversy associated with the Database that can be explored further. Yet, for now, businesses need to know that the CPSC is encouraging you to register an account on the new Business Portal. By registering, you will be able to receive electronic notice of Reports and you can work with the online commenting feature. More importantly, you can test your internal procedures now.

The Business Portal also allows for online submission of a claim that the Report contains materially inaccurate and/or confidential information. Signing up for an account during the Soft Launch may be the best good time to experiment with the site and determine how it works. At the least, you’ll want to consider how the Database will affect your company and identify the appropriate internal and/or external resources to monitor Reports involving your products and who should be authorized to respond to them.

Not to be cynical, but…competitors who wish to log complaints against other manufacturers and products, or lawyers representing plaintiffs in products liability claims, are best off waiting until the official launch because the CPSC has confirmed that it will not disclose the information entered into the Database (from consumers or businesses) before the official launch.

CPSC issues decision to extend an existing “stay of enforcement” on total lead content in children’s products.

The CPSC announced its decision to extend the existing stay of enforcement on testing and certifications of the total lead content in children’s products (except for metal components of children’s metal jewelry) until September 14, 2011, at which time the stay of enforcement will expire.  The action taken today also pertains to lead content in Youth Motorized Recreational Vehicles and Bicycles and Related Products.

This is in addition to the current stay of enforcement on testing and certification for children’s products by third party conformity assessment bodies (known in plain English as laboratories) that also includes testing of children’s toys and child care articles for banned phthalates , and testing of children’s toys for compliance with mandatory toy safety standards (ASTM F-963). These stays do not terminate on September 14, 2011 and will continue until the CPSC publishes the notices of requirements for laboratory accreditation.

Finally, please note we’re talking here about a “stay of enforcement.”  The Lead Content limit  (Section 101 of the CPSIA) will be required to go down to 100 ppm on August 14, 2011, unless the CPSC determines that it is not technologically feasible to have this lower limit. It just won’t be enforced.  How’s that for a nice safe harbor?

And, for those who enjoy controversy, the CPSC published today the Public Comments concerning the technological feasibility of 100 ppm for Lead Content.  Some people say “can do.”  Some say “can’t do.”  Some say “must do.”  And some say “that the 100 ppm standard is entirely arbitrary and will save no lives and will preserve no IQ points.” (That would be Richard Woldenberg, Chairman Learning Resources, Inc.)

The future?  There will most likely be some exclusions to the 100ppm limit but not as many as manufacturers believe are necessary or appropriate.

Out of Davos…


It’s Davos week – the World Economic Forum Annual Meeting 2011. So, what’s on the docket this year?  According to interviews reported by the Financial Times, there will a focus on a “two-speed world economy” – a growing economy dominated by emerging markets (China, India, Brazil and Russia) with less in the advanced economies. Optimism, tinged with risks — the eurozone, inflation and commodities.

Of the 2,500 official delegates this year, it is reported that 1,400 are CEOs and other senior business executives.  Gillian Tett, writing for the FT, wrote an interesting article today about “Lonely CEOs flee hostile world for self-help group.” That’s a nice headline and she does write of CEOs as a lonely group needing support and hedging their social network. Yet, her article touches on much meatier subjects, such as “social inequality” being the issue delegates most want to debate, “CEOs are ineasily aware that hostility towards elites is rising.” “The future of the euro, for the Chinese-US relationship, Iran, Korea and commodity prices will all be hot topics.”  Looking forward to watching Davos 2011 develop.

Something NFP board members need to know about insolvency…

It’s not unusual for not for profit board members to fail to scrutinize the financials. This isn’t good.  There are likely several reasons why this routinely happen.  After all, many NFP directors:

  • are not compensated for their work;
  • see their primary responsibility on the board as attracting new members, helping to seek more contributions and making a contribution for an annual event/dinner;
  • look to the president, executive director, treasurer and/or management of the NFP to ensure that all is going well; and
  • sit on a large board which tends to diffuse a sense of personal responsibility.

Unfortunately, for a variety of reasons (not the least of which is this challenging economy), NFPs do become insolvent, even when the NFP directors are scrutinizing the financials.  Janet Kleinfelter’s posting in The Watchdog yesterday raised the interesting issue of whether anyone cares about the bankrupt NFP.  Ms. Kleinfelter works in the Tennessee attorney general’s charity unit and she tells the story of a NFP where all the board members “washed their hands” of the organization once it was no longer financially viable.

Ms. Kleinfelter reminds all that “legally the board is required to dissolve the nonprofit, but when it fails to do so, that responsibility falls to the regulators and that courts.”  And when that happens, she reminds us, directors may incur personal liability.  Read her fine article for more details.

And, if you serve on the board, just remember, the best thing you can do for a NFP organization is to keep your eyes on the finances.