Mallory [Duncan], thank you for that kind introduction and for the invitation to join all of you this afternoon.
This is my first time speaking to members of the Federation, and I appreciate the opportunity.
I’m sure I have enjoyed meals and purchased goods from a fair number of the three and half million stores that are connected to your association.
If you have attended or read any of my recent speeches, you know that I have expressed my appreciation to the retailers for stepping up to the plate in very positive ways.
Four retailers stepped up last year and voluntarily agreed to carry out a recall of the Nap Nanny infant recliner.
That was a pro-safety move, as there were 92 incident reports including five infant deaths associated with that product.
It has long been recognized that in the months leading up to the passage of the Consumer Product Safety Improvement Act, and certainly in the years thereafter, the retailers played a key role in protecting consumers from potentially dangerous consumer products.
- Retailers pushed their suppliers to manufacture and test children’s products to the 300 ppm lead content level, prior to the step down going into effect by law.
- Many retailers stepped up and showed that they cared about compliance and wanted to be proactive.
- Retailers also pushed their suppliers of toys and childcare products to manufacture and test to the 1,000 ppm level for six phthalates—ahead of the law going into effect.
Again, it was your proactive approach and respect for Congressional mandates that contributed to our success in implementing the law.
The association and many member companies submitted public comments over the years, as we promulgated rules related to toxic metals, testing, and certification.
It wasn’t easy for the Commission to complete all of those rules in such a short time, so we appreciated the insights from the retail sector on how best to implement the law.
We have come so far as an agency. And, I am very appreciative of the staff at CPSC who worked exceptionally hard during the past four years to complete almost all of the major rules related to the CPSIA.
We have such a great team.
We have made the CPSC of today a very different agency from when I first joined the Commission in 2009.
Today, we are stronger, we are more proactive, and we are better at protecting those who need us the most.
We are no longer operating in a state of crisis and reaction; instead, CPSC and many retailers are inspiring consumer confidence in the safety of the marketplace.
We are strengthening the product safety net and making the new rules work as intended.
We are shifting from a focus on implementation of new rules to a focus on enforcement of new requirements that greatly enhance child safety.
We are no longer the neglected CPSC of the past that had just 380 employees and inadequate testing facilities.
We have hired nearly 175 new employees in the past three years, and we are now an agency with more than 500 diverse employees.
Our ranks are filled with new faces and new ideas. Those new faces and new ideas to have taken us to new heights.
First, we proved that we could fulfill our mission to its fullest; and then we proved that we could fulfill our vision to make CPSC an agency of global prominence.
During my time with you today, I want to discuss three key areas:
- First, the accomplishments of CPSC during the past four years;
- Second, how we are transforming our role as a regulator;
- And finally, what lies ahead for the next Chairman of the U.S. Consumer Product Safety Commission.
During the past four years, we have emphasized that CPSC stands for safety—and we have the record to prove it.
- We created the world’s strongest crib safety standard and toy standard, and established the lowest lead limits in the world.
- Took aggressive action on the emerging chemical burn hazard resulting from children ingesting coin cell batteries, and managed very complex recalls of pool drain covers and gel fuel.
- Worked to make window coverings safer in homes with young children and the culture of football safer for young players on the football field.
- Conducted thousands of in-depth product investigations, online investigations, and inspections of warehouses and thrift stores.
- Opened our amazing National Product Testing and Evaluation Center, up in Rockville. I hope all of you have seen our video of the facility and get a chance to tour the facility someday.
- Opened our first foreign office in Beijing.
- We formed an Office of Education, Global Outreach, and Small Business Ombudsman to provide education and outreach activities to various domestic and international stakeholders. The companies you represent are among our most important stakeholders. This office is focused on you, along with manufacturers, resellers, and foreign governments.
- Developed the Risk Assessment Methodology (or “RAM”) pilot program at U.S. ports and became even more effective in conducting import surveillance. I will have more to say about this program, shortly.
- Launched the SaferProducts.gov database, which is CPSC’s most significant open government initiative.
- Carried out nearly 50 Congressionally mandated rulemaking activities in four years, which is a record that I do not believe will ever be topped at the agency.
- Hosted a Safety Academy, an ATV Summit, Chronic Hazard Advisory Panel meetings on soft plasticizers known as “phthalates,” and held dozens of open Commission meetings. Some of those Commission meetings were quite eventful.
- Developed and implemented a new Strategic Plan aimed at making us the recognized global leader in consumer product safety by 2016.
- Staked our presence on multiple social media platforms and revamped our website.
- And, developed a minority outreach team and created a first-of-its-kind drowning prevention campaign.
Working together, we have made remarkable progress in recent years and positive change has taken hold. Lives have no doubt been saved and injuries prevented.
Next, I would like to transition to some of the key areas that have accelerated our evolution into a firmer, but fairer regulator.
Leading off is our import surveillance program.
As President Obama has stated on many occasions, manufacturing opportunities and retail sales are on the rise.
Any company—domestic or foreign—seeking to do business in our marketplace should adhere to the same performance standards.
I believe that American businesses deserve a level playing field, because it is companies that you run and work with that are creating jobs and driving our economy.
Members of Congress had a similar vision when they passed the CPSIA into law.
The CPSIA directed us to create the Risk Assessment Methodology—commonly known as the RAM—to identify imported products that are most likely to be violative.
We followed this mandate and 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.
If we were to achieve the full potential of the program, CPSC would be able to electronically analyze 100 percent of incoming import line entries designated as high priority.
Exporters who do not achieve safety at the source have been put on notice that they face a CPSC that is increasingly standing guard on the front lines.
As part of our RAM pilot program, well-trained port and field investigators are using state-of-the-art technology to detect and detain violative imports—from toys to fireworks to lighters to mattresses.
Our port investigators are now standing arm-in-arm with inspectors from Customs and Border Protection (CBP).
CBP is an excellent partner, and we are proud to be collocated with them at the Commercial Targeting and Analysis Center in Washington and at select ports from coast to coast.
Working together, CPSC and CBP staff prevented more than four million units of violative and hazardous imports from ending up on store shelves during the last fiscal year.
But, as great a job as our import investigators do, we should not be limited to just 20 people working at select ports.
We at CPSC cannot fight a fair fight with just 20 people to screen $700 billion worth of consumer products imports annually—$340 billion that come from China.
The more eyes we have on incoming shipments and the more hands we have on potentially violative samples, the safer American consumers will be, and the more level the playing field will be for compliant trade.
Our pilot RAM program is proving to be a great success, but the lack of resources available for CPSC to conduct expanded import surveillance is just not acceptable from my point of view. It is not acceptable for industry, and it is not acceptable for CPSC.
CPSC’s presence at the ports represents about 0.05 percent of the number of FDA inspectors located at ports around the country, and we have a mandate equal in size.
We need more resources to do more inspections.
In the current budget environment, however, obtaining funding for this type of safety and trade effort is a challenge.
But, I believe American families want the CPSC to be proactive in keeping dangerous products out of their homes, and compliant trade wants a level playing field against unscrupulous suppliers. That means inspecting significantly more products at the ports than we do now.
Although we are still operating the RAM pilot, 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.
These measures mean shorter port processing times and related cost savings to industry. 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. Sounds good to me, and I bet that sounds good to you.
Based on the early successes of the RAM pilot program, and the fact that all of our stakeholders stand to benefit from this project, I have made it one of our top priorities to obtain full funding for the RAM program.
The RAM is a winning approach to ensure a level playing field for the trade and for ensuring that the products on your shelves comply with the law.
I think this a “win-win-win”—for the Commission, for retailers, and for consumers.
As many of you know, one of the key requirements for importers of certain children’s products is having a certificate—a certificate attesting to the fact that their product truly was independently tested to a CPSC standard.
CPSC and the retail industry have led the way in emphasizing the importance of independent product testing.
The independent, third party testing requirements of the CPSIA were the capstone of the law.
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, dads, and grandparents.
We had two choices.
Retain the failed children's product safety framework of the past. A framework 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.
Your customers 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 of your suppliers have already been doing this kind of testing for a long time—because your company made it a requirement.
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.
With the rule in effect, I am pleased to say that periodic, third party 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 independent safety testing requirements.
[PAUSE]
Let’s talk for a few minutes about enforcement.
You may have seen the recently publicized case where the president of an import company was sentenced to 22 months in federal prison for importing children’s products, including toys, which violated CPSC and other laws. The toys – of Disney and Marvel characters and Major League Baseball players – contained lead and small parts that violated our standards and also violated counterfeiting statutes.
This criminal prosecution is another example of our effective working partnership with CBP.
Although we do not frequently pursue criminal sanctions, this case sends a message that those who willfully and repeatedly violate CPSC provisions could face significant consequences.
Also on the enforcement front, as might be expected, we are seeing more cases where the increased civil penalty provisions of CPSIA apply.
As a result, civil penalty amounts are increasing.
Firms need to adjust their expectations in light of these higher civil penalty limits.
In addition to seeking higher civil penalties as authorized by CPSIA, in appropriate circumstances, the Commission also is looking to firms to take affirmative remedial actions to enhance compliance with consumer safety requirements.
In these circumstances, we have asked firms to contractually commit to these remedial actions in our settlement agreements.
For example, several recent settlement agreements included provisions addressing compliance programs and internal controls that relate to CPSC legal requirements.
Depending on the facts and circumstances of a particular situation, other types of remedial actions may be appropriate, and may be included in settlement agreements to further protect consumers.
In this day and age, there is no good reason for your suppliers not to have effective internal controls and compliance programs. They should be doing everything they can up front so they are not putting you in the position of being the face of a recall with your customers.
Administrative litigation is another enforcement tool that we recently have employed when parties could not come to a resolution—which is rare.
One example is the recently-announced settlement in the Nap Nanny infant recliner lawsuit, which resulted in protections for a very vulnerable population—infants. If you have not seen this recall, please go to our website at cpsc.gov and look for it. It is against the law to sell any of the Nap Nanny products subject to the recall.
Another area of attention is an area of our statutes governing information dissemination that is known as Section 6(b) of the Consumer Product Safety Act.
Consistent with my office’s emphasis on transparency, openness and efficiency, the Commission has directed CPSC staff to present for Commission consideration updates to the 6(b) rules.
The focus of staff’s work is expected to include:
- Eliminating unnecessary burdens;
- Enhancing transparency; and
- Improving agency efficiency and cost effectiveness, while adhering to the statutory 6(b) requirements.
- Areas to be addressed by the staff more specifically include:
- Taking advantage of new technology. Communications were very different in 1983 when the rule was initially adopted.
- Staff is expected to consider updates to reflect advances in technology—for instance, to make notices more efficient and cost-effective.
- Agency efficiency. Based on the agency’s experience with administering the current 6(b) rule, staff is expected to consider streamlining the regulation to eliminate unnecessary administrative burdens and backlogs.
- Staff also has been directed to make certain that information submitted in Section 15 reports continues to be protected as required by the existing statutory provisions.
The final topic, I would like to discuss is what lies ahead for the next Chairman of the agency.
I believe in the saying, “You should not over stay your welcome.” I still believe that one should not over stay ones welcome in any venue—professionally or personally.
So, as I announced in February, I have asked President Obama not to renominate me, when my term ends.
I plan to stay on as Chairman, however, until my successor is nominated by the President and confirmed by the Senate, so that I can be sure that this great agency is in safe hands.
So many qualified, deserving people have wanted to serve in President Obama's administration—and he chose me.
For the rest of my life, I will be grateful to President Obama for nominating me Chairman of the CPSC and for giving me the opportunity to serve in his administration.
It has been my great privilege to serve as Chairman, and the best part of my experience has been working with the many talented, dedicated professionals at the agency—and with great associations and companies, like the NRF and its members.
There is still so much more that I want to accomplish during my remaining months. This is why I am here today. And, this is why I will be speaking at the Safe Kids Worldwide Injury Prevention conference on Friday.
We still have many projects that are ongoing and can save many lives. Every day, I work with CPSC staff to move these projects forward.
They include:
- developing technology for portable gas generators that will give consumers more time to escape from a carbon monoxide poisoning incident;
- improving the safety of off-road recreational vehicles;
- and creating a mandatory flammability standard for upholstered furniture.
In addition to these staff projects, I believe that there are three areas that my office has shown leadership on, which the next Chairman can build upon. These three areas are:
- a new paradigm for working with voluntary, consensus standards organizations to collaboratively and quickly address a hazard;
- taking safety to the source and emphasizing the compliance by foreign manufacturers with U.S. safety rules; and
- using education and outreach to help consumers understand the benefits of our new rules and to help businesses successfully comply with our rules.
It is remarkable what we have accomplished at CPSC during the past four years. And, I believe that even more achievements and advances in product safety are on the horizon.
CPSC has become more proactive and less reactive. We have been committed to giving industry predictability, while also achieving consumer protection.
We have made a positive impact from the point of manufacture to major U.S. ports of entry to the domestic marketplace.
Let’s continue to work together to give consumers even more confidence in the marketplace, even more confidence in the goods for sale your stores, and create even safer homes for the next generation of consumers.
Once again, thank you for the opportunity to join you this afternoon and I hope our paths cross again.