Good morning everyone. I hope all of you made it into New York safely and that winter storm Nemo hasn't taken anything away from your Toy Fair experience.
I have been told that there is a rich history of snow storms striking New York City during the second week of February, so Nemo will only add to the history of this great fair.
This is actually my third time attending Toy Fair and I always love the energy and creativity that you feel the moment you step inside of the Javits Center.
It was back in 2009 that I first met a number of you, so it is nice to see familiar faces in the audience.
Carter, thank you for the invitation to speak this morning and for that kind introduction. From Bethesda to Hong Kong to New York City, I have really enjoyed working with you - and even being interviewed by you for Toy Fair TV.
I also want to recognize some special people from CPSC who have joined me today. Anu Connor is here. Anu is my Special Assistant and Senior Counsel, and she is doing fantastic job. Alex Filip and Nikki Fleming from the Office of Communications are here, as well as Neal Cohen, our Small Business Ombudsman, who will be presenting on the next panel.
One of the questions that I always ask my communications team during the holiday season is, what questions are reporters asking when it comes to toy safety?
Inevitably, the reporters want to know about the hot toys that are in trouble. Well, in recent holiday seasons, we have not had any toy recalls that created a frenzy of fear, like what happened in 2007 and 2008.
This is a good thing.
I want CPSC and I want the toy industry to be working proactively, and that can only happen when we're not operating in a state of crisis.
Now, this is not to say that there were not any toy recalls of note in 2012.
In late November, we had a recall of 17,000 children's riding toys, due to a problem with the design of the seat. There were four reports of incidents, including cuts to a child's mouth.
In December, we teamed up with Health Canada to announce a recall of a marble-sized water toy that can expand inside the body when ingested and cause a blockage in the small intestine.
The toys do not show up on an x-ray and require surgery to be removed.
An 8-month-old girl from Humble, Texas who ingested the toy suffered an intestinal obstruction and had to undergo surgery to have the product removed.
These are serious hazards. I spoke last year about the concept of "safety by design" and I want to re-emphasize the importance of anticipating use and misuse of your products.
The potential for a child to fall off of a toy, suffer an impact injury, or ingest a product are all factors that need to be accounted for in the design phase.
Overall, your industry continued to move in the right direction when we look at toy recalls last year. In fiscal year 2012, CPSC recalled 38 toys, only three of which involved a lead violation.
Toy recalls have continued to decline since 2008. There were 172 recalls in fiscal year 2008, 50 in 2009, 46 in 2010, and 34 in 2011.
Most of the recalls in 2012 were due to small parts, choking hazards, or sharp points - these are hazards that we unfortunately continue to see.
I am calling on manufacturers to do better in addressing the hazards during the design and production stages.
With all the creative and innovative minds, technologies and forces that exist in the toy industry, I am confident that where there is a will, there will be a way.
Ideally hazards will be anticipated and addressed before product entry into market.
This approach saves you capital, it saves us time, and it saves lives.
The danger posed by the ingestion of high powered magnets was at the forefront of our work last year - from administrative lawsuits to proposed rulemaking to recalls.
We know the difference between high powered magnetic desk sets and children's magnetic toys. The former is covered by no safety standard and the latter is covered by a F963 standard that requires encapsulation.
The creation of the magnet standard for children's toys was a big step forward in safety and complying with this standard should be a priority for all manufacturers and importers.
The danger to children who swallow multiple magnets is potentially life-threatening. There has been ongoing education of the industry, doctors, and parents, but all of you need to comply with the standard so that loose magnets stay out of the hands and mouths of children.
Phthalates is another important issue. I know TIA and its members had been concerned about inaccessible parts of toys and how those would be handled under the requirements of Section 108 of the Consumer Product Safety Improvement Act.
Well, Congress heard and responded to your concerns. With the passage of PL112-28 in 2011, Congress amended the CPSIA to clarify that the phthalates content limit of 1000 parts per million does not apply to inaccessible parts of toys or child care articles.
This brought the phthalates rule in line with the lead content rule.
And just last week, the Commissioners and I directed agency staff to publish final guidance in the Federal Register about this change to the law.
I would encourage all of you to log on to CPSC.gov and read the new guidance, so that you can see our definition of what is an inaccessible part.
I believe that all of you here this morning have a commitment to safety - safety in the products you make and sell and safety for your customers.
Unfortunately, there are toy importers out there who do not share the same mindset. They are profit-driven without regard to the safety of children, they skirt U.S. safety laws, change company names, and think they can get away with it.
Well, I have a message for these rogue companies: law enforcement, homeland security, and CPSC are going to catch you. We are working together at the ports and in the marketplace, and we will not allow children's safety to be sacrificed for profits.
Just last week, five individuals and five corporations were charged in an indictment unsealed in federal court in Brooklyn for allegedly importing hazardous and counterfeit toys from China. This indictment made national news.
The individuals were arrested and charged with crimes relating to importing hazardous toys in violation of the Consumer Product Safety Act and bearing copyright-infringing images and counterfeit trademarks.
According to the indictment, the defendants' companies had children's toys seized from shipping containers entering the United States from China on 33 separate occasions. 33 times.
Seventeen of the 33 seizures were of violative toys - toys prohibited from import and distribution because of excessive lead content, excessive phthalate levels, small parts that presented choking, aspiration or ingestion hazards, and easily accessible battery compartments.
Our country has some of the strongest toy standards and lowest lead limits in the world, and CPSC is committed to enforcing these child safety requirements, so that the bad actors do not overshadow the good actors.
When it comes to toy safety, we must be "all in." And the CPSC under my watch certainly is.
No doubt that many of you here today are, too.
During the remainder of my time this morning, I would like to focus on three additional topics:
First, our import surveillance program and risk assessment methodology pilot project;
Second, the continuous testing rule that went into effect last week;
And third, giving you an update on my safety priorities for 2013.
Let's start with import surveillance and CPSC's efforts to stand guard on behalf of consumers at the water's edge.
Carol Cave, our Director of Import Surveillance, and her team have done a great job of using state of the art technology, skilled staff, and the priceless assistance of Customs and Border Protection to build a strong line of defense at the ports.
Our partnership with CBP is truly priceless. And I am proud that CPSC was one of the first agencies to sign an agreement with CBP to collocate at their Commercial Targeting and Analysis Center.
By working arm-in-arm on the frontlines, we have stopped violative and dangerous toys, children's products, extension cords, and jewelry from ever being sold in U.S. stores.
Having near real-time information from CBP about incoming shipments allows us to be smarter with our inspection regime and achieve a higher detection rate of violative products.
At the same time, we are trying to facilitate the flow of legitimate trade.
In recent years, our outstanding staff at the ports has achieved a violation rate above 50 percent of samples that we have tested. We are striving to stay above 50 percent and we are creating a new performance goal to increase the effectiveness of our targeting efforts.
As many of you may know, we are now issuing quarterly press releases identifying foreign manufacturers and U.S. importers who had products stopped at import due to a mandatory standard violation.
We recently announced that in the third quarter of fiscal year 2012, CPSC and CBP investigators stopped nearly three million units of violative products at the ports.
Toys and children's products made up the bulk of products stopped by CPSC investigators and CBP officers in the third quarter.
Products with levels of lead paint and lead content exceeding federal limits topped the group and were followed by those with phthalate levels in excess of federal limits.
I am concerned with the number of lead and phthalates violations we are still seeing at the ports.
Toys and other articles with small parts that present a choking hazard for children younger than 3 years old rounded out the top three products stopped.
During the past four years, at least 2,400 different toys and children's products, making up more than two million individual units, have been stopped because of the presence of safety hazards or violation of federal standards.
Importers of toys need to do better - and I know that you can do better.
Having quality assurance and quality control in spec designs and production and working with reputable manufacturers, testing labs, and importers are all keys to importing compliant toys.
I would also encourage TIA members to participate in the Importer Self-Assessment/Product Safety program, as another way to assist in facilitating legitimate trade.
Now, our import surveillance program has only scratched the surface of its potential. So, I want to talk about my vision of the future of the program with all of you.
American consumers run a higher risk of injury and death, and domestic manufacturers are at a competitive disadvantage due, in part, to imported products that do not comply with federal safety standards or intellectual property laws.
The criminal case out of Brooklyn that I mentioned earlier is a perfect example of this problem.
Each day in 2011, nearly $1.8 billion worth of products under CPSC's jurisdiction entered the U.S. from 800,000 importers at 327 U.S. ports. And nearly 80 percent of the product recalls in the United States involve an imported product.
The lack of resources available for CPSC to conduct import surveillance is just not acceptable from my point of view. It is not acceptable for industry and it is not acceptable for CPSC.
To monitor consumer product import compliance, currently, CPSC has only 20 federal inspectors collocated at 15 major ports. This represents .057 percent of the number of FDA inspectors located around the country and we have a mission equal in size.
We need more resources to do more inspections.
The Consumer Product Safety Improvement Act directed us to create a Risk Assessment Methodology - commonly known as the RAM - to identify imported products that are most likely to be violative.
In turn, we created a pilot RAM targeting system that integrates data from CPSC's internal systems with data collected by CBP and turned over to us.
The RAM pilot is aimed at early detection and targeting of high risk products and repeat offenders.
The result, if we were to achieve the full potential of program, would be CPSC being able to electronically analyze 100 percent of incoming import line entries designated as high priority.
Now, in the current budget environment, it may be a challenge to achieve this result; but, I believe American families want CPSC to be proactive in keeping dangerous products out of their homes and that means inspecting more products at the ports than we do now.
Although we are still operating this limited proof of concept, a recently completed study by our Office of Import Surveillance demonstrated that the pilot RAM system was effective - effective in identifying violative and hazardous consumer products at ports of entry.
By also identifying low risk importers and manufacturers who supply consistently compliant products - which could include many of you in this room - CPSC can allow them reduced review at importation and facilitate the flow of legitimate trade.
This can result in a reduction in port processing time and a savings of costs. Preliminary results indicate that 90 percent of shipments were reviewed and released on the same day.
Let me repeat that: 90 percent of the shipments were reviewed and released on the same day.
The number of samples obtained from 100 entries examined more than doubled, while maintaining the same percentage of violations.
This increase in productivity is a direct result of the visibility that the RAM provides to investigators performing risk-based targeting.
In addition to providing details about the types of products and companies involved, the RAM analyzes each shipment's risk, based on criteria we developed.
We have indicated in a report to Congress that we may seek greater funding support to expand the implementation of the RAM program.
I have just shared a lot of numbers and concepts with you, so let me take a moment to give you some real world success stories from the pilot.
In San Francisco, investigators targeted and examined a shipment of hair dryers. The hair dryers lacked the required shock protection plug. This is a violation that increases the risk of serious injury or death when the product is used near water. The hair dryers were seized by CBP.
In Newark, CPSC investigators identified a shipment of cigarette lighters from a company that did not have a model number submission with CPSC - a requirement under the federal safety standard. The shipment was ultimately exported from the U.S.
The pilot program has also identified several Intellectual Property Rights violations that have been referred to CBP for action.
In Savannah, investigators targeted and examined a shipment of jewelry. While the shipment was compliant with CPSC regulations, the exam revealed items containing the U.S. Marine Corps Emblem. The importer did not have the authority to use the emblem, and the products were seized.
This program is clearly intended to catch the bad offenders and incentivize the good actors.
I hope over the course of this year, CPSC can work with TIA to secure your support for this risk-based approach to import surveillance.
Next, I would like to take a moment to acknowledge a very important safety milestone - February 8th. Last Thursday, CPSC's periodic testing rule went into effect.
Since I arrived at CPSC - which was less than a year after passage of CPSIA - we have worked diligently to implement the world's toughest lead limits and increase our enforcement of product safety standards at the nation's ports.
Even with all that progress, February 8th ushered in what many consider the capstone of the Consumer Product Safety Improvement Act of 2008 - that is, periodic independent, third-party testing of toys and other children's products.
In 2008, this nation stood at the crossroads of children's product safety - behind us was the "year of the recall" and millions of shocked and disappointed moms and dads and grandparents.
We had two choices.
Retain the failed children's product safety framework of the past that only caught and recalled dangerous children's products after they were already in the hands of millions of toddlers and young children, or create a new safety scheme designed to help ensure the safety of children's products when they are manufactured and before they are in the hands of children.
Parents want - and expect - that the products they purchase for their children have been third party tested for safety before entering the country.
The need for the independent testing of children's products periodically during the manufacturing process to help ensure continued compliance is not only a good manufacturing practice - but, it is an absolute necessity for safety.
My guess is that many, if not all, of your members have already been doing this kind of testing for a long time.
As we have all learned, without periodic independent testing, there is much greater risk - as was seen during the "Summer of Recalls" in 2007 - that something dangerous will go unnoticed during what is usually a complex manufacturing process.
Recently, Al Kaufman communicated with association members about the safety value of this requirement, in advance of the rule going into effect.
As Al stated last month, CPSC's "final rulemaking incorporates many of the toy industry's comments, including a request for flexibility in determining an appropriate quality control program. The toy industry has long been supportive of third party testing..."
Thank you, Al for educating TIA members about the new requirements and for your decades-long commitment to product safety.
With the rule in effect, I am pleased to say that periodic testing fulfills two promises - a promise that Congress made to parents and a promise that CPSC made to children, when under my leadership we adopted these third-party testing requirements.
Finally this morning, I would like to share with you my safety priorities for the year ahead - beyond those that involve juvenile products.
We at CPSC are continuing to strive to solidify our place as the global leader in consumer product safety. And many of the talented employees are working on safety initiatives aimed at making our agency even more proactive in 2013.
The safety agenda I would like share with all of you will guide CPSC in the months and years ahead. It is an agenda that fully advances consumer protection.
High on the agenda are a series of projects that, once completed, have the potential to save hundreds of lives and prevent thousands of injuries each year.
I'm referring to:
- The creation of an upholstered furniture flammability standard that promotes the use of barrier technology, does not require the use of flame retardant chemicals, and can prevent deaths and injuries caused by upholstered furniture fires
- Next, is carbon monoxide. CO is the invisible killer. Exciting research was recently completed by CPSC staff, the University of Alabama, and NIST on a gas generator engine that emits lower levels of CO and increases escape time. I want to see this research be turned into real world innovation that gets incorporated into generators for consumers. The potential to save lives is there; now, we need the know-how and will of the industry to make it happen.
- Another is window coverings. I will continue to speak out and encourage families with young children to go cordless with the blinds and shades in their homes. When it comes to child safety, going cordless is the position of this Commission, it is the position of the consumer advocates, and it is the position of the industry's education council. Consumers should know that they can walk into major box retailers and specialty stores today and find cordless options and blinds and shades with inaccessible cords. I believe that the innovators - many of whom I met last year - will chart the future of that industry.
- Two other products are ATVs and ROVs. Staff is working on separate rulemaking projects, but both of these off-road vehicles are involved in far too many incidents each year that result in deaths and life-altering injuries. We will continue to work to make these products safer and educate riders and families about the risks they pose.
- Safer play in youth sports and reducing brain injuries are also high on my list. I initiated a great program last year with the NFL and others in the football safety community to accelerate the much needed safety culture change in that sport. It was inspiring being with NFL Commissioner Roger Goodell and youth football players in Akron, Ohio, during the Hall of Fame weekend, to celebrate the kickoff of this program last year. The program provides helmet assistance to economically disadvantaged youth teams, but only if they agree to specific steps that support player brain safety. This has been a great example of the power of public-private collaborations, and I am looking forward to the program's growth and expanding reach this year and in future years. Safer play is smarter play - it is also the future of youth sports, I believe.
- And finally, establishing mandatory safety standards for juvenile products. In looking back at the past 3 ½ years, I am proud of the work we have done to fulfill the mandate of Section 104 of the CPSIA. Bath seats, baby walkers, full size and non-full size cribs, toddler beds, and portable bed rails are all covered by strong mandatory standards. Thanks to Danny's Law, a mandatory standard for play yards is going into effect this month. And CPSC staff is working on final rule briefing packages on bassinets and cradles, bedside sleepers, and hand held infant carriers. This year and in coming years, agency staff will also be working on strollers, soft carriers, infant slings, bouncers, and updating existing standards.
As you can see, this is a robust agenda that is aimed at making 2013 even more successful than 2012.
CPSC continues to be in a leadership position, and I believe we are making a strong contribution to the state of product safety around the world.
We are wisely and efficiently employing our limited resources not just for short-term gains, but to create a sustainable product safety system.
A system built to last.
A system built to last through education, compliance, and enforcement of the CPSIA requirements.
A system built to last by creating a regulatory approach that strives for more robust injury prevention rather than mere detection and reaction.
I predict that the year 2013 will be another successful year, especially if everyone rallies around the approach of being "Proactive for Prevention."
I know that each of you is up to the challenge, because you already have a corporate and an association mission that puts the safety and well-being of consumers first.
At CPSC, we are proud that this is a time when parents and grandparents can go shopping and know that many of the toys they see have been independently tested.
This is a time when consumers have unprecedented access to safety information at the tips of their fingers.
This is a time when foreign regulators and foreign manufacturers understand the toy requirements established in the United States, and know that there are consequences for not following our safety rules.
This is a time when the American consumer is being well represented by their government and is being better protected by a global system of safety that is getting stronger.
Together, we are building a product safety system that is built to last so that future generations of children and other consumers have an even greater level of safety.
I hope the rest of Toy Fair goes really well for all you. And I hope that you will stay to hear CPSC's Small Business Ombudsman Neal Cohen give an outstanding presentation on third party testing.
Thank you once again to the leadership at TIA for the invitation to speak this morning and I'm looking forward to walking the showroom floor.