August 1, 2009, Singapore

Good Morning. As a representative of the United States Delegation and as the new Chairman of the Consumer Product Safety Commission, it is an honor to have been asked to address this APEC Regulator Dialogue on Toy Safety.

I am pleased to have been nominated by President Barack Obama to serve as the Chairman of one of the key U.S. safety agencies and a partner agency for most of you here in this room. My life’s work has been centered around the well-being of children – that continues to be my mission at CPSC, as I will work tirelessly to ensure the health and safety of our youngest consumers, children. Carter, thank you for your kind and generous introduction. CPSC will be working closely with the toy industry and other key stakeholders in our shared pursuit of functional and feasible testing and certification procedures for children’s toys. I would also like to thank Mr. Teo Nam Kuan for your leadership in coordinating the standards related dialogue in the APEC Singapore meetings. We will try to keep the momentum going on the work that you have been doing. These efforts certainly resonate with CPSC since APEC economies produce the vast majority of the toys imported to the United States.

As regulators, I believe that we should base our discussions here today on one over-arching premise: strong safety standards can save lives, especially the lives of children.

I note that the theme for APEC Singapore is “sustaining growth – connecting the region.” I think we all must agree that sustained growth and regional connectivity should be based on the best we have to offer our children.

To this end, I believe U.S. and International regulators must continue to work together to encourage the improvement of existing toy standards and the creation of any standards needed to address emerging toy hazards. This approach will ensure that from Asia to the Americas, children will be protected from:

• Small parts that can pose a choking hazard;
• Powerful magnets that can be swallowed and create a deadly blockage in the small intestines;
• Lead paint, lead in substrate, and other dangerous metals;
• Cords and strings that can pose strangulation hazards;
• Sharp points and projectiles;
• And dangerous chemicals.

All of these hazards to children are addressable and preventable.

The U.S. experience with safety standards has been that you get a great deal of product safety by relying on voluntary consensus standards coupled with regulatory authority to intervene quickly.

In fact, my agency’s statutes set a preference for voluntary standards over mandatory regulations. This places a lot of responsibility on industry.

Experience has shown that a toy made to strict performance specification based on mandatory or voluntary standards – and independently tested to ensure conformance, is more likely to be safe and of high quality.

Now let me step back and say that the industry’s record on safety is solid, and has improved since the summer of 2007 when so many toys had to be recalled. With 22 billion dollars worth of toys being imported annually from APEC economies into the United States, there have been about 20 toy recalls so far in 2009. That figure just past the midpoint of this year compares favorably to 2008, when there were more than 65 recalls by the end of the year. So the trend, as far as toy recalls goes, seems to be improving.

Yet, as I stand before you today, I recognize that the impact of the recalls from two years ago is being felt by the toy industry most intensely this year.

As I stated earlier, in the United States – as in some other economies – we rely primarily on voluntary standards as a first line of assurance that products are safe. Sometimes, the market either can’t or won’t provide that assurance, and when we have a market failure, governments need to step in.

In the aftermath of the dozens and dozens of lead painted toy recalls and the millions of magnetic toys that were recalled, a change to the U.S. regulatory system became inevitable.

In August of last year, the United States Congress looked at current production and supply chain practices and the level of conformity assurance for children’s products and found them lacking. So, the U.S. Congress passed the Consumer Product Safety Improvement Act (CPSIA).

This important child safety law creates a new paradigm for the creation of standards, regulations, and conformance assurances. It creates a new system that requires change – change by U.S. toy designers and importers and by foreign supply chain managers and testing lab operators.

The CPSIA required my agency to institute a mandatory third-party testing program for children’s products. We have done so with a view toward transparency and based on existing global standards. There is a list of over 170 accepted labs from around the world on the CPSC web site – many of them from APEC economies -- with more labs being added every week.

Rather than create a new accreditation program, CPSC looked at what was already recognized internationally and selected an approach that would be effective with the least burden to participants.

The base line requirements for a lab to participate in our third-party testing program is accreditation to ISO 17025 – the laboratory management and competency requirements – and accreditation for the specific testing scope, by an accrediting body that is a signatory to the ILAC mutual recognition agreement.

Congress put in place additional safeguards for manufacturer-owned labs and labs owned or controlled in whole or in part by a government – but they, too, must meet the baseline requirements I have described.

The CPSIA is also decisive in its ban on phthalates. The U.S. Congress mandated that 3 types of phthalates would be permanently banned, and 3 others would be temporarily banned, while being studied further.

For the 3 phthalates that were banned permanently, toys for children 12 and under are prohibited from having more than .1 percent phthalates. This rule went into effect on February 10 and retailers in the United States must comply with it. In an effort to provide limited relief to manufacturers and importers, however, the CPSC granted a stay of enforcement until February 10, 2010 from the testing and certification requirement.

While there may have been controversy surrounding the phthalates ban that does not make compliance optional. It should not come as a surprise to toy companies and importers in the U.S. market supply chain that CPSC will enforce all requirements of the phthalates limits starting on February 10, 2010.

We will do everything in our power to bring clarity to which products are impacted by the law, establish testing protocols, and work to accredit a sufficient number of testing labs in APEC economies and around the world. Next, I would like to discuss lead. As the CPSIA was being formulated last year, my CPSC colleague commissioner Nancy Nord delivered a clear message to the International Toy Fair in New York City, a message which I would like to echo today: “get the lead out.” This is an informal expression in the United States, but it is represents the thinking and intent of the U.S. Congress through the passage of the CPSIA.

On February 10 of this year, the CPSIA instituted the first mandatory requirement for lead content in children’s toys and products in the U.S. at 600 parts per million, the total lead standard matched a 30 year old lead paint standard that was also set at 600 parts per million.

But….much will change again two weeks from today.

On August 14, the lead paint on toys limit drops to 90 parts per million. And the total lead limit in substrates drops to 300 parts per million. These will be some of the most stringent limits in the world.

CPSC is aware that changes such as this need to be communicated quickly and clearly to suppliers. I hope that my regulator colleagues in this room will help us get the word out to toy industry suppliers in your economies. On our end, we will continue to put timely information on our web site – in English and other languages -- for their reference. And we will shortly institute a series of web based interactive training seminars that will provide practical information for industry as it seeks to comply with U.S. requirements.

As with the phthalates limits, the lead content limits have a one year stay on enforcement of testing and certification. This stay will expire on February 10, 2010, and CPSC will surely enforce all requirements at that time.

It is very important to note that the testing and certification requirements for lead paint are actively in place for U.S. manufacturers and importers.

Regarding lead in products, we have been facing the classic regulator’s dilemma in some cases. Lead has been widely used in many metals to ensure the structural integrity of the material. If you remove the lead - which can act as a neurotoxin in the bodies of children - you have to answer the question about the structural safety of the product or the safety of the metal used to replace the lead.

As we work together toward lead-free toys, I look forward to learning from fellow regulators what metals are being used as alternatives in toys and other children’s products, and what standards are in place or being considered in other economies.

The third major rule that went into place on February 10, 2009, is at the heart of our dialogue today. The CPSIA mandated that the long-standing, comprehensive set of voluntary global toy standards used in the U.S. and some other economies – known as ASTM F963 – became mandatory. That is, they are now specified in our regulations.

F963 has provisions that cover cord lengths on toys, magnets, noise levels, entrapment hazards, cadmium levels, and many other standards. The work of the ASTM International committees will continue and will contribute to future updates and improvements to the standard. The members of ASTM are global experts in toy safety, and CPSC will continue to engage, consult and coordinate with them.

While a one-year stay of enforcement from testing and certification to F963 compliance is in place, CPSC staff is working hard to develop testing protocols and accreditation rules for the regulatory implementation of each part of F963. On February 10, 2010, when the stay of enforcement is lifted, domestic manufacturers, importers, and their suppliers will be expected to comply. With the vast majority of toys consumed in the United States being imported from APEC economies, my agency fully recognizes that we live in a global marketplace.

I am increasingly convinced that we regulators must increase our cooperation if we truly want to serve the consumers who are paying our salaries. The days are gone when one of our economies can afford to create new safety regulations that are unique to our jurisdiction without regard to how they interact with those in other jurisdictions.

Don’t misunderstand me. Each of us has a primary responsibility to own jurisdiction, and sometimes situations warrant differences due to cultural, economic, and other considerations. So, I certainly am not rejecting sovereignty – in fact, I am all for it. But I do want to challenge us – and I include my agency in this challenge – to move, wherever possible, toward solutions that have global currency and that foster a high level of safety.

In implementing the CPSIA, CPSC has reached out to other regulators, to industry, consumer groups, and other stakeholders. For example, the tracking label provision that goes into effect this month has been the subject of both a national and internationally coordinated call for comments from stakeholders.

CPSC held a public meeting to solicit input, and CPSC staff has been instrumental in the planning for an international regulators conference on tracking label policy to be held in Stockholm on September 10th. This event is sponsored by the International Consumer Product Safety Caucus and is open to all product safety regulators.

As many of you understand from your own experience as regulators, these kinds of efforts have been aimed at trying to get the best possible approach in our implementing regulations. At a minimum, solicitation of public comment before we put regulations into place is a requirement of the U.S. Administrative Procedure Act and it is consistent with our World Trade Organization obligations. But more importantly, it is smart regulatory practice.

My regulatory philosophy embraces open dialogue, information sharing with all stakeholders, and a commitment to finding mutual interests. When a law has been passed by U.S. legislators or a new regulation has been established by CPSC, however, it becomes the law of the land. As CPSC’s chief regulator, I will ensure that our requirements are enforced vigorously and fairly.

Enforcement is actually one of my three top priorities as Chairman, along with government transparency and consumer education and advocacy.

While there is much to be done in the supply chain – and that’s the part of our work that we’re here to discuss today – regulators have a responsibility to be responsive to the issues consumers face as they go about their day-to-day lives. CPSC will do more in this area during my tenure over the next four years.

A consumer’s concern about being able to identify a recalled product is directly connected to the supply chain challenges of marking production batches.

A parent’s desire to pick a toy that has a good track record for safety is directly connected to a manufacturer’s responsibility to do market surveillance of injuries related to its own products. So I believe the work to be done on the supply chain and on the consumer side is complementary.

I also believe in finding common sense solutions to difficult problems. This can be seen in guidance CPSC recently gave to U.S. companies who will have to put tracking labels on all toys and children’s products, starting in two weeks. If you are interested, you can find this guidance on our website.

If we return to the APEC Singapore theme of sustaining growth and connecting the region, we must not fail to talk about trade and the connection between trade and toy safety. As I stated earlier, I support solutions, whether in standards, testing, or other tools, that have global currency and that foster a high level of safety.

The global recession has hit Asian markets hard and I recognize that as my agency implements the CPSIA, international coordination in establishing new requirements can help the toy industry stay competitive in a world of international trade.

In addition to looking forward, there is also some reason to look at the past. The International Council of Toy Industries has announced an initiative to increase the harmonization of existing toy regulations by harmonizing their voluntary reference standards.

This is a worthwhile project if it results in less confusion and safer toys. And if industry will lead by doing the necessary work with the voluntary standards bodies, and if it can gain the confidence of consumer advocates, I am confident that regulators will pay close attention.

One of the lessons learned in the U.S. following the wave of toy recalls in 2007, is that trade and safety become inter-related when consumers, their advocates, and elected representatives feel that U.S. importers are paying more attention to price than safety. I believe we need to recognize the connection between trade and safety.

Free and open trade, a core principle of APEC, remains a cornerstone of foreign relations in the United States. The safety rules for imported products are the same as for domestic products. The testing requirements are the same for a product whether it is made in Chicago or Shanghai. But the CPSIA changed the rules of engagement when it comes to the presumption that a child’s product is safe without supporting evidence.

Within this new paradigm, my job as head of the CPSC is to ensure that product safety is as high a priority as fostering trade – and there need be no conflict between the two as long as product safety is sufficiently factored into fostering trade. And that’s why we’re all here, after all.

All of us who are product safety regulators are working hard to restore consumer confidence in the marketplace. I can think of no better way than by ensuring that toys manufactured for the children in our economies meet all of the new safety requirements of our jurisdictions.

I believe if we pursue the highest common denominator when it comes to safety, the return on investment will pay dividends for the safety of children around the world.

One concept that I hope we can find common ground on through our dialogue and discussions today, tomorrow, and over the coming months is “building safety into toys and children’s products.”

This is a valuable concept that was often communicated by former CPSC Chairmen Hal Stratton and Nancy Nord. I share the belief that anticipating how a toy can be used – what we call foreseeable use and misuse – is key to designing safeguards into the manufacturing process. It is important to build best practices into the manufacturing process to ensure these safeguards remain in place.

For example, if a toy has magnetic pieces that are tiny enough to be swallowed and so strong that they can connect through internal tissue, then the design concept must protect against the magnets separating from their enclosure. Designing safety into that magnetic product must equal encapsulation, so they magnets do not come loose.

The consequences of not building safety into a product, especially in an environment where there are no performance standards, can be grave. In the case of the Magnetix building set toy that was recalled, there was one death, and we had dozens of serious open chest surgeries before the product was redesigned to maximize safety.

By attending conferences such as this and sharing past experiences with fellow regulators, we all can learn from each other and prevent future hazards from arising.

Properly “building safety into the product” can only be effective if it is maintained throughout the supply chain. The Mattel, Fisher-Price, and RC2 experiences shined a light on how far out some supply chains reached and what the consequences could be if quality control grew distant at the outer links of the chain.

Recent experience has been instructive, I think, for all of us. At CPSC we thought that the actions of the Chinese government to close noncompliant factories, and the simultaneous efforts by major Chinese toy makers to institute more rigorous product testing of raw materials, components, and finished products were a positive sign. China has also published a set of best practices guidelines for ensuring product safety in the manufacturing chain, which we applaud as an important step.

But regulators have been forced to recognize that voluntary action will only take us so far. For the U.S. market, the CPSIA essentially moved the emphasis on safety and conformance with standards as far up the supply chain as possible. Over the next few weeks and months, CPSC will have tough decisions to make as to our confidence that manufacturing supply chains are meeting new accountability requirements.

Whether and how the commission might approve component testing for toys and other children’s products may hinge largely on the ability of suppliers to know of, and comply with, new safety regulations, in order to help ensure that final products can be certified and sold in the United States.

This is another area about which I look forward to having a dialogue with all of you to gain new insights as my safety agency tackles this important part of implementing the CPSIA.

Let me close my remarks this morning, by thanking APEC for allowing me an opportunity to meet all of you and share my thoughts on the challenges we face together as product – and specifically – toy safety regulators.

I will surely learn a great deal from spending time with you considering how vast the expertise is among this conference’s participants. During my tenure as chairman of the consumer product safety commission, I believe that if we can work together, the safety of children at play with toys will go up, and deaths and injuries will decline in all of our economies.

This expectation is based on the need for toy manufacturers, importers and distributors to meet more stringent performance requirements, strengthen quality control far up the supply chain, and send final products through enhanced conformance assessment programs. The road ahead will not be an easy one to travel, but once we reach our destination the safety of children and confidence of consumers will be better than ever before.

Thank you.