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The Price of Safety 
By Daniel Walsh
December 2010

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Product-safety legislation has given U.S. businesses, including decorators, a challenge – and an opportunity – to ensure the safety of the goods they provide to consumers.

If you make, sell or decorate children's products, you might want to read this.

This February, the federal government will begin enforcing safety standards on the Consumer Product Safety Improvement Act (CPSIA). The law, passed in 2008, calls for stricter standards on lead content in children's products and requires testing to prove that products meet those standards. "It had very tough new requirements," says Rick Locker, an attorney representing various children's product groups, including the Toy Industry Association and Juvenile Products Manufacturers Association. "It's for products designed and intended primarily for children 12 and under." Producers and sellers of children's products must ensure that an independent laboratory tests each product to guarantee its lead content meets new federal standards, and all products must have labeling and documentation to support this. Penalties for noncompliance can run in the millions.

For those in the decorated-apparel industry, this law applies to a few things, but not everything. Most textiles are exempt, as the likelihood of them including lead is low. However, if that fabric is treated in a number of ways, such as screen printing, that exemption disappears. Using metallic threads or appliqué, zippers or fasteners also brings the law into play, so that means it could apply to decorators.

Embroiderers and other decorators can easily become educated about the law and its requirements. Among other concerns, decorators need to learn about using rhinestones, which contain lead, and purchasing certain types of apparel and accessories, which can have lead substrates found in fabric treatments. "We're very likely to see some price increases as a direct result of this legislation," says Deborah Jones, owner of MyEmbroideryMentor.com. "That's not necessarily saying it's a bad thing, because it provides safety – but at a cost."

This Law's Story

Naturally, the law wasn't passed with just the apparel industry in mind.

When Congress passed the CPSIA in 2008, Democrats had just retaken control of Congress two years earlier, and they reacted to six years of government deregulation by stepping up regulation in several sectors. During that same time period, product safety was at the forefront of a lot of people's minds. A spate of product recalls in 2007 included Chinese-made toys and other children's products that were found to have high levels of lead and other toxins in them. In addition, Chinese-made baby formula tainted with the industrial toxin melamine sickened more than 50,000 babies, killing at least four.

Scrutiny on consumer-safety regulators was already increasing when, in November 2007, the Washington Post reported that the last two chairpersons on the federal commission tasked with regulating consumer safety had taken dozens of trips at the expense of the companies they regulated. Six weeks after that report, the House of Representatives passed the CPSIA, which regulated the levels of toxic substances like lead and phthalates in children's products; the Senate followed three months later. Thus, the consumer product safety era in American business was born. "Congress was angry, and that anger came out in a bill that has enforced numerous responsibilities on an agency that wasn't prepared for it or staffed for it," says Rick Brenner, CEO of supplier Prime Line (asi/79530).

The law's impact has taken a while to sort out. Congress enacted broad directives, and the Consumer Product Safety Commission (CPSC) is still determining some of the rules. Just this past August, the CPSC finally released the criteria and process for labs to become federally accredited third-party testers of products and their components. A week later, the agency released its long-awaited definition of what qualifies as a children's product. Spanning 65 pages, the document summarized at the end, "… a children's product means a consumer product designed or intended primarily for children 12 years of age or younger." The CPSC enacted a stay that delayed enforcement from going into effect until Feb. 10, 2011, because not enough labs had been accredited to handle testing. Without another stay, the grace period will end that day. 

Apparel Limitations

This was supposed to be a law about toys. Baby formula. Lead. That's what many thought, particularly in the apparel industry, where most of the products are simply cloth. But it does apply, at least theoretically. Zippers can have lead. Buttons can be swallowed by a small child … theoretically.

Some embroiderers have responded by ruling out certain items they may have once used for decoration on children's clothing because of their content. "In the apparel industry, the biggest impact was no more bling," says Jennifer Taggart, an environmental and consumer products attorney who writes the blog, The Smart Mama.com. (See the "Decoration Safety" sidebar for the impact on apparel decoration techniques.) Barbara Dail is one of those embroiderers. The Creative Solution, a Yorba Linda, CA-based company that she co-owns, avoids rhinestones in products for young children. "Instead of decorating with rhinestones, which we can use for products for high-school kids, we have to use rhinestuds for the younger kids because of the lead content," Dail says. Her staff even goes so far as to avoid rhinestones with middle school-age children, Dail says. She simply doesn't want to take any chances.

With so much in the law left up to the CPSC to interpret, some firms simply chose to quit the kidswear business. "We had some customers whose children's lines were just a small part of their business, and they just said, 'We're not going to deal with it,' " says Mindy Anastos, a spokesperson for L.A. T Sportswear (asi/65948), which sells a popular line of children's clothing called Rabbit Skins. Other companies that were considering whether to start children's lines chose not to because CPSIA compliance seemed a hassle to comply with, she adds. The result has been some lost business for L.A. T, but Anastos says that hasn't stopped others from courting the children's apparel market. "Mostly other companies have stepped in to try to fill that void, so obviously we're trying to go after them," she says.

At L.A. T, company leaders have simply built the costs of compliance into their estimates. Short-term, the impact was significant because it took time and up-front costs to do what's necessary to comply, Anastos says. But long-term, it's viewed as a minor impact to the company. L.A. T has tried to get ahead of the regulations by initiating testing for lead, phthalates and other toxins early enough to ensure that everything meets federal standards.

"The law says there's no mandatory test, but everything must meet the standards," Anastos says. "In our mind, we want to make sure that L.A. T products meet the standard. A lot of people are nervous about the law, so we want to do all the things we need to do to put their minds at ease. I think a lot of people felt overwhelmed by the regulations, the interpretation. Now, people have settled back. They realize the reality of the situation where the law is here to stay, so people are working on complying."

The Imprinted-Products Conundrum

Picture this: A black backpack is imported to the U.S. Upon arrival, it's blank, with no design on it. A company could imprint it with a police department's logo so the department could give the backpacks to its officers. Or, the company could imprint it with a Hannah Montana logo. "When it comes into the country as a blank, unimprinted bag, it's not a children's product," Brenner says. "Depending on what I imprint upon it, it becomes a children's product." Some, like Brenner, say the item is no more or less safe if it has an adult's or child's design upon it. Their thinking is if the bag ­ or toy or other product ­ has unsafe levels of lead in it, it should be deemed unsafe regardless.

But the law wasn't designed that way. "Our industry flies under the radar of most regulators," Stone says. On the surface, perhaps it seemed simple that baby formula and toys were for kids, regardless. But a pen becomes a children's product once you put a child's design upon it. The fact that any of Prime Line's products could become a children's item means the company tests every single product that comes in, regardless of whether or not it's supposedly been tested previously by the original manufacturer.

Brenner says he doesn't want to take any chances. 

Criticism All Around

Anne Northup missed her chance to vote on the CPSIA when the former Republican congresswoman was swept out of Congress by the Democratic tide in the 2006 congressional elections. Four years later, she looks at the law from the angle of someone now tasked with interpreting it, as a member of the newly expanded five-member CPSC board. She says she sees the need for some regulation, but she thinks the law is poorly designed, setting arbitrary limits without being able to determine potential risks.

"Certainly there's a danger there," Northup says. "Lead for young children is serious. If it's absorbed, it can cause serious problems. The law, unfortunately, doesn't allow CPSC to evaluate whether there's a risk." If there's lead in the product ­ or one of several other components, such as phthalates (a plasticizer) ­ it has to meet the standards, even if some say there's no apparent danger. "The law did not give us a lot of leeway to make a risk analysis, and I'm surprised we have not taken steps to offer more flexibility," Northup says. She worries the law will put some companies out of business.

Some say the lack of flexibility is costing them money. Rick Woldenberg, chairman of Illinois-based Learning Resources Inc. (LRI), wrote the CPSC with formal comment on a regulation proposal, dubbing it "The End of (Business) Life As We Know It." The parentheses are his. He anticipates this to cost us about $15 million annually, and that's just the amount of additional time and testing needed to comply," says Larry Lynn, the compliance and quality director at LRI, which produces educational toys and other products. The company increased its oversight team from two to six for LRI and a sister company, which combined have about 180 employees. "In 25 years, we've had one recall, for 130 parts, for which we actually recovered every single component," Lynn says. "Now here we've taken what's always worked and turned it into this $15 million operation to prove what we've always known. We're not trying to escape responsibility. We're just trying to do it in a reasonable manner that doesn't make you go broke."

Others say the law doesn't go far enough. "I view it as being rather tepid," says Tom Myers, CEO of apparel supplier Broder Bros. Co. (asi/42090). He says producing safe products is part of business, and companies need to design systems that ensure that. His company had already done so, long before the CPSIA passed, because his customers demanded it. "We have standards which are higher than CPSIA standards," he says. "People who buy from us include Federated Stores and Walmart. They already have a higher level of sensitivity to issues like this than the promotional products industry."

Myers remembers very clearly the discovery of melamine in some baby formula just two years ago. If a company would do that to meet a quote, he says, it's not unreasonable for federal regulators and companies to want to make sure it doesn't happen again. He recalls dealing with one Chinese company that had agreed to allow inspection of its factory. The inspectors showed up a few days early and were told they had picked the wrong day. "We said, we have to be able to inspect it whenever we want, not give you time to unchain the orphans," Myers says. 

What's Next for Decorators

The CPSC has initiated a stay on the children's product testing regulations taking effect until the criteria for third-party testers is finalized. At press time, it was set for completion by November 19, three months from the date of the release of the third-party testers' criteria.

So the question is, what's next. Companies like Broder have initiated means of tracking an item's path from manufacture to sale, and the necessary tests are in place. "You need to be able to control your supply chain," Stone says.

Some companies are "looking for a 'get out of jail free card,' " Stone says, instead of embracing compliance. They need to accept that there's no escape from a law that's not going away, certainly not during an election year.

Beyond that, Myers says, a client deserves to know beyond a shadow of a doubt that a product is safe. "It's stuff people should be doing anyhow," he says. "People should be doing more of this." .

Daniel Walsh is a staff writer for Stitches. Contact: dwalsh@asicentral.com

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