Saturday, September 12, 2009

What You Gonna Do When The Law Comes Down On You?

YOUR GOVERNMENT AT WORKCongress playing with toymakers' livelihoodsSmall businesses struggle to comply with testing while big companies get a pass
Posted: September 09, 200912:45 pm Eastern
By Chelsea Schilling© 2009 WorldNetDaily
After a government regulation had thousands of retailers, thrift stores and small businesses worried they would be forced to permanently close their doors and destroy their merchandise due to strict lead and phthalate testing requirements, toymakers and children's product manufacturers are urging Congress to consider the legislation's "unintended consequences" on small businesses

As WND reported in January, Congress passed the Consumer Product Safety Improvement Act of 2008, or HR 4040, a retroactive rule mandating that all items sold for use by children under 12 must be tested by an independent party for lead and phthalates, which are chemicals used to make plastics more pliable. President George Bush signed it into law on Aug. 14, 2008.
Under the law, all untested items, regardless of lead content, are to be declared "banned hazardous products.'' The CPSC determined the law applies to every children's item on shelves, not just to items made beginning Feb. 10.
Under the measure, new children's products with more than 600 ppm total lead cannot lawfully be sold in the United States on or after Feb. 10, 2009, even if they were manufactured before that date. The total lead limit dropped to 300 ppm on Aug. 14, 2009. Also, products manufactured on or after that date cannot be sold if they contain more than 0.1% of certain phthalates.
Some small toy businesses say lead testing alone costs more than $4,000 per item – a price some say only large companies like Mattel and Fisher Price can afford to pay.
In his article titled, "Mattel gets a hall pass," Dan Marshall of Change.org wrote that while Mattel has recalled 12.7 million toys for safety hazards or lead paint, the company's stock has done quite well since Feb. 10, 2009, the date when many of the provisions of the Consumer Product Safety Improvement Act, or CPSIA, came into effect:

The CPSIA is said to have been passed by Congress largely in response to Mattel's recalls, and Mattel supported the law.

According to Consumer Reports, Mattel was given special permission in August to oversee its own product testing rather than depending on expensive independent labs.
Meanwhile, small businesses struggle and face elimination because they cannot afford to pay the high costs of lead and phthalate testing.
"The only people who can do that now are the ones who actually put this scare into effect and actually caused the problem," Amy Evan's, owner of Baby's Boutique in Chico, Calif., told CBS' KHSL.
Shelsie Hall told California's KXTV News 10 she makes hair bows and jewelry for children and sells them online to support her family.
She said she believes her small business is threatened by the measure because those products must be tested.
"[M]y items sell for $4 to $10 and I make a lot of different things. So I couldn't just test one; I would have to test every item," she said.
One blogger who identifies herself as "Tina" has a home-based business making and selling cloth diapers online. She said a U.S. lab quoted a price of $75 to test each component of her diapers.
"I have at least two different fabrics, thread, snaps and elastic in a diaper," she wrote. "$375 to test each different combination of fabrics/snaps/thread/size combinations? That is insane."
She continued, "I am but one of many micro-manufacturers who will be forced to give up the American dream of owning my own business because of this legislation."

Many feared the regulations could force thousands of businesses – especially smaller ones that cannot afford the cost of lead testing – to throw away truckloads of children's clothing, books, toys, furniture and other children's items and even force them to close their doors.
Now the Handmade Toy Alliance, or HTA, a grassroots group of 382 small toymakers, children's product manufacturers and independent retailers, is reporting "severe financial hardship" for small businesses that cannot afford to comply with the new regulations.
"To date, some businesses have discontinued their children's lines or have closed altogether," an HTA memo states. "Libraries are sequestering children's books printed prior to 1985. Thrift stores have removed children's products from their shelves. Several European toy manufacturers and storefronts have removed inventory intended for children 12 and under, including replacement parts. Without common sense changes to the CPSIA, the tragic result will in fact not be increased product safety, but the closing of small businesses that were already providing safe products."
The House Subcommittee on Commerce, Trade, and Consumer Protection held a hearing today called "Consumer Product Safety Commission Oversight: Current Issues and a Vision for the Future." Rep. Henry Waxman, D-Calif., committee chairman, called only one witness to testify at the hearing: Chairwoman Inez Tenenbaum, head of the Consumer Product Safety Commission.
"Handmade Toy Alliance members are frustrated that no one representing the unintended consequences of the CPSIA on small businesses has been invited to testify," the HTA declared in a statement.
The HTA is urging Congress to revise the act to include: 1) component-based testing, so suppliers may provide children's product manufacturers with certification of compliance and eliminate additional expensive testing on each individual unit; 2) exemptions from testing for materials known not to contain lead or phthalates; 3) harmonized European and U.S. standards to avoid redundant testing requirements; 4) exemptions from permanent batch labeling of products for small businesses with small batch runs; 5) reevaluation of retroactivity requirements.
"Fixing the CPSIA now before any more law-abiding and well-intentioned small companies are forced out of business will preserve the integrity of the original legislation, prevent political backlash and refocus the efforts of the CPSC to fulfill the law's original purpose," the HTA urged.
HTA members wrote a letter to Waxman and ranking committee members dated Sept. 4 warning that Tenenbaum cannot properly represent small businesses affected by the legislation and urging the committee to allow the group to explain why a technical correction must be made to the act.
"Our businesses have been burdened by a law designed to fix a problem created by irresponsible multi-national corporations such as Mattel," the letter states. The small manufacturers, crafters, and retailers represented by our alliance have impeccable safety records, yet we are burdened by excessive compliance costs while Mattel has once again been trusted to police itself."
It continues: "Now is the time for Congress to hear the voices of small business. Now is the time to show that laws can be written for the common good, not just the interests of large, well-connected corporations. Now is the time to invite small businesses, including a representative of our alliance, to speak truth to Congress about how the CPSIA is devastating our business and our livelihoods."

1 comment:

Vernon Malcolm said...

With today's computer machined steel stude technology, a new building is cheaper and better than renovations. The only reason one engages in atomistic, sheflish small business is to avoid following the rules. Even Milton Friedman showed that small business creating jobs is unprovable because of survival bias (J Eco Lit, Vol. 30, No. 4, pp. 2129-2132). In today's complex New Industrial State (J K Galbraith), you do a better job if you are a large contractor because you have all kinds of compliance controls in place and access to superior information than if you are on you own.