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AHAM Product Safety and Liability Conference - Monday, October 12, 2009, Washington, D.C.

September 17, 2012

Wayne [Morris], thank you very much for that kind introduction. I really appreciated our meeting last month where we discussed AHAM’s mission and areas of common interest.

It is a pleasure to be joining all of you today at this Product Safety and Liability conference. Many of you in this room are on the front lines of ensuring that the products consumers use in their kitchen, laundry room, and bedroom are safe and work properly. I want you to know that I respect the work you do and use many of the products you make.

But, I am also here today to encourage you to engrain safety into the business practices and culture of your company. As safety managers, engineers and company leaders, you know your products best. I urge you to do everything you can to “build safety” into product specifications, manufacturing practices, and testing programs.

This is a message that I also delivered to product manufacturers and government regulators in Hong Kong, Singapore and Hanoi in August. And I will be reiterating this message again next week, when I travel to China to meet with our counterparts for the 3rd US-Sino Safety Summit.

By building safety into the design of a new wall oven, the manufacturing of a microwave, or the assembly of a heating and cooling unit, you will be preventing foreseeable risks to the consumer and lowering the chances of having to report to my agency.

Overall, I believe that my agency and the membership of AHAM are striving to reach a common goal: we all want consumers to have confidence and assurance that the home appliances they purchase are safe and of high quality. I’m here today to be your partner in this effort.

Now, let me step back and share with you what we have been doing at CPSC since I took over as Chairman to regain the confidence of consumers and the ways going forward that we can be partners.

I am pleased to report that the US Consumer Product Safety Commission is an agency on the rise. Our staffing levels are up, our budget is up, morale is higher, and we are reaching consumers with lifesaving information who had never heard of CPSC before.

Leading this small, but critically important agency is a privilege and a continuation of my life’s work. My desire to serve as Chairman was deeply influenced by my previous work as an elementary school teacher, a researcher dealing with consumer product safety issues in the South Carolina House of Representatives, and my service as South Carolina’s State Superintendent of Education from 1999 to 2007.

These experiences impacted the three priorities that I established for my tenure as Chairman, which are:

- expanding education and advocacy for consumers,

- creating a more open and accessible CPSC,

- and fair, but firm, enforcement of product safety laws.

In all of these areas, I am focused on doing my utmost to protect the health and safety of children and families – and have made this approach a key focus of the CPSC’s move to modernize and address new regulatory challenges.

Last year, Congress recognized the need to reinvigorate CPSC by passing the Consumer Product Safety Improvement Act (CPSIA). Among other things, the CPSIA gave CPSC substantial new enforcement authority, authorized increased staffing, increased public disclosure of emerging product safety issues, and provided new mandatory standards for children’s toys and juvenile products.

The CPSIA recognizes many of the challenges the agency has faced over the years – and demands that we rebuild the Commission to adapt to an era of consumer products that come from all over the world. The CPSIA also recognizes the need to take proactive measures to protect consumers from new and emerging hazards.

My top priority since assuming the Chair of the Commission has been meeting the statutory deadlines for rules and reports required by the CPSIA. Through the hard work of CPSC staff, 12 substantive rules and policy guidance documents have been released since I was sworn in on June 23.

In each of the rulemaking proceedings that we have worked on, I have directed CPSC staff to work closely with all impacted stakeholders. It is important to me to ensure that the rules we implement remain true to the statutory intent of the CPSIA, while also minimizing undue burdens on small businesses and other stakeholders.

I would now like to turn to our effort to rebuild CPSC’s internal business processes. CPSC’s information technology systems are truly the lifeblood of this agency. Sadly, these systems were neglected for far too long.

The result is a patchwork of systems that make it very difficult for CPSC staff to “connect the dots” between different incidents, identify patterns of defects, and respond quickly to emerging hazards.

This has led to a situation where CPSC is constantly in the position of reacting to events – rather than receiving new hazard information and proactively targeting harmful products before they flow into the stream of commerce.

Congress recognized the critical need for infrastructure modernization in the CPSIA. Congress directed the agency to upgrade its infrastructure and create a product incident database that is easily searchable by the public.

In response to that mandate, the agency is developing a single, integrated Risk Management System (RMS) and a public database that will allow greater access to consumer product safety information.

Now, I am fully aware of how concerned many of you in this room are about the public database. Let me assure all of you that you will have a say – your voices will be heard as we go about the process of constructing the database.

In fact, the Commissioners and I are expected to vote soon to formally announce that a series of public meetings on the database will be sponsored by CPSC starting in November. These open meetings and workshops will be a forum for AHAM members to share their thoughts in a constructive manner.

CPSC staff will work with the business community to establish an effective way to quickly share product incident reports that come in through the database when a particular company has been identified. And then we will need to develop an effective process to quickly receive comments from the identified company before posting a consumer’s report.

I have said this previously and I want to be clear with all of you - I support the creation of the database, as I believe it furthers the vision of creating a more transparent CPSC and a more informed consuming public.

This initial phase of creating a Risk Management System is only one component of CPSC’s overall effort to improve its infrastructure. CPSC continues to look at its business processes in order to identify improvements. Improvements that will provide the agency with the tools necessary for identification of emerging hazards, such as:

- using predictive data-mining technologies to analyze the increasing amount of information the agency receives,

- and identifying emerging hazards in real-time.

It is impossible to overstate the essential nature of these improvements and their ability to transform the way my agency receives, reviews, and acts on new and emerging threats.

By forming partnerships with industry and government entities to expand import surveillance and data exchanges and the use of new advanced information-management technologies, CPSC can take the truly proactive approaches necessary to protect public health and safety.

As I stated earlier, education and advocacy is also a top priority of mine. I believe that notices about recalls and other hazards are only effective when all impacted consumers actually hear about them and respond to our alerts.

Through network television appearances and newspaper interviews, I have worked to reach millions of families with information about dangerous cribs, bassinets, and window blinds. These are products that have killed young children, and we are working tirelessly to inform parents and caregivers about recalled products that need to be removed from homes or repaired to keep kids safe.

We also launched an exciting new social media campaign last month, called “CPSC 2.0.” The initiative is modeled after the White House’s use of social media and I want everyone is this room to sign up today to receive our tweets.

In all seriousness, please check out our OnSafety blog, our new YouTube channel, the great photos of CPSC on FlickR (`flicker`), our streaming recall news on our widget, and our OnSafety page on Twitter.

These platforms provide a low cost, highly effective and creative way to reach millions of families who have never heard of CPSC before. Once you see the YouTube video we posted about furniture and television tipovers, you’ll be hooked.

Now, AHAM members also have an important role to play when it comes to consumer outreach in two ways: 1) education campaigns and 2) recalls.

I would like to recognize and commend the work that your president Joe McGuire and communications director Jill Notini do in getting the word out about the energy efficient appliance rebate program and “Cash for Refrigerators” and Smart Grid.

Over the next few weeks, CPSC and AHAM will be teaming up on a cooking safety campaign for November. This is an important partnership since kitchen related fires lead to more deaths than any part of the house.

As for recalls, it goes without saying that AHAM members have been involved in some very high profile corrective action programs. Your products tend to have a high utility value to consumers and therefore consumers react strongly when a defect or safety problem is identified.

During my time as Chairman, I hope none of you have any recalls to announce with CPSC….but if you do….please understand that I believe in clear and impactful communication to the consumer. I want press releases and in-store posters that motivate consumers to act immediately and not risk further harm in aftermath of the recall.

It is also important that your processes be airtight when it comes to the corrective action program. You and I and our customer service departments will all hear it from consumers if they have to wait months for a repair, if the repairman fails to show, and if the repair doesn’t correct the problem.

At the same time, many of you deserve recognition and praise for the efforts you make to directly notify consumers about a recall. Those paid ads, product registration cards, and direct calls go a long way to ensuring that a consumer does not continue to use a recalled product, simply because they never knew.

I will be looking for ways during my tenure as Chairman to recognize and highlight companies who go above and beyond in their pursuit of safety.

Since oversees factories are used by many AHAM members, I would like to spend a few minutes discussing import safety. From 1998 to 2007, the value of consumer products imported into the United States increased over 100 percent. During that time period, imports from China nearly quadrupled – and now constitute over 40 percent of all imported consumer goods.

The General Accounting Office recently released a study that analyzed the agency’s efforts to police imports, and prevent the entry of unsafe products into the U.S. market.

In the report, the GAO found that increased agency staffing at ports, combined with revised information sharing agreements with U.S. Customs and Border Protection (CBP) would allow the agency to better detect faulty products before they enter the country – not after they enter the stream of commerce.

I agree with these recommendations and directed Commission staff to update agreements with CBP to allow better information sharing. In fact, CPSC is about to gain access to CBP’s Automated Targeting System (ATS), which contains advance manifest information for shipments entering the United States.

CPSC will soon have an employee stationed at CBP’s Commercial Targeting Analysis Center (CTAC), gaining real-time advance cargo manifest information. This will allow other CPSC staff to make cargo risk assessments as shipments arrive, not after they leave port areas. The work we are conducting at US ports and with CBP is part of an overall strategy to expand our reach and move closer to the source of non-compliant or dangerous consumer products.

This means having a presence internationally.

Since assuming the Chair of the Commission, I have made a number of efforts to reach out to foreign governments and manufacturers to inform them of new federal regulations, and to emphasize this agency’s commitment to ensuring the safety of imported consumer products.

In late July and early August, I traveled to Asia to meet with industry and government leaders in Hong Kong and Vietnam to discuss the CPSC’s new priorities. I gave a keynote speech at the APEC Conference in Singapore, where I stressed the importance of foreign manufacturer compliance with the CPSIA, mandatory and voluntary safety standards.

I also stated that there is a clear connection between trade and safety.

The goal of the upcoming Summit in China is to bring dialogue between the two agencies to a new level, emphasizing the need for commitment to a more comprehensive approach to product safety.

With input from U.S. and Chinese stakeholders, CPSC and AQSIQ – our counterpart agency in Beijing - will identify and discuss measures to ensure that U.S. importers and Chinese suppliers establish a systemic approach to preventing and detecting safety hazards in consumer products. This approach must span from product design, through the manufacturing process, and to ultimate use of the product by the consumer.

In addition to overarching policy discussions, the Summit agenda will include topical discussions toys, lead in children’s products, all terrain vehicles (ATVs), lighters, fireworks, and drywall.

I would ask all of you, in your travels overseas, to contribute to the U.S. government’s import safety initiative. Make sure your foreign manufacturing plants and suppliers understand and comply with U.S. safety standards and requirements. We are all in this effort together.

Let me close this afternoon, by once again thanking Wayne, Joe and all of the good people at AHAM. I’m so glad I could join you today and give you a sense of the incredible pace at which we are working at CPSC.

CPSC staff includes some of the hardest working and most dedicated people in the federal government and through their efforts we are turning the corner and heading in a new direction.

A direction that will keep children safe in and around their homes and give parents and consumers confidence that the products they see on store shelves meet the best standards in the world and have been independently tested.

We want consumers to know and believe that CPSC Stands For Safety.

Thank you for inviting me here today and I look forward to answering a few of your questions.

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