oversight

Consumer Product Safety Commission: A More Active Role in Voluntary Standards Development Should Be Considered

Published by the Government Accountability Office on 2012-05-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office


GAO          Report to Congressional Committees




             CONSUMER
May 2012




             PRODUCT SAFETY
             COMMISSION

             A More Active Role in
             Voluntary Standards
             Development Should
             Be Considered




GAO-12-582
                                              May 2012

                                              CONSUMER PRODUCT SAFETY COMMISSION
                                              A More Active Role in Voluntary Standards
                                              Development Should Be Considered
Highlights of GAO-12-582 a report to
congressional committees




Why GAO Did This Study                        What GAO Found
Growing numbers of recalls in 2007            Although the Consumer Product Safety Commission (CPSC) enforces
and 2008, particularly of children’s          compliance with mandatory federal safety standards, it is also required by law to
products, focused increased attention         rely on voluntary safety standards when it determines that the standard
on CPSC. Consumer products can be             adequately addresses the product hazard and is likely to have substantial
subject to mandatory or voluntary             compliance. Voluntary standards—developed by industry, consumer, and
standards, or both. Questions have            government participants through a consensus process—cover many of the
been raised about the level of                thousands of types of products in CPSC’s jurisdiction. Compliance with voluntary
compliance with voluntary standards           standards is not routinely tracked, but it is generally considered to be high by
and CPSC’s ability to encourage
                                              industry participants. Compliance with these standards also depends on industry
compliance. The Consolidated
                                              and legal factors, such as retailer requirements to demonstrate proof of
Appropriations Act of 2012 directed
GAO to analyze manufacturers’
                                              compliance with voluntary safety standards and risk of liability in product liability
compliance with voluntary industry            lawsuits.
standards. This report evaluates (1)          Because voluntary standards do not have the force of law, CPSC cannot compel
what is known about the extent to             compliance with them. However, noncompliance with a voluntary standard can
which manufacturers comply with               inform a determination of a substantial product hazard by the CPSC that in turn
voluntary standards for consumer              can lead to CPSC enforcement actions. CPSC has exercised its expanded
products, (2) CPSC’s authority and            authority to place a product on the substantial product hazards list. Specifically, it
ability to require compliance with
                                              designated drawstrings from children’s upper outerwear and hair dryers without a
voluntary standards, and (3) the
                                              ground fault circuit interrupter as hazardous products, and Customs has seized
consequences for manufacturers that
fail to comply with voluntary standards.      violative items at ports. CPSC also participates in standard development
                                              activities with industry and consumer representatives and monitors select
To do this, GAO reviewed CPSC’s               voluntary standards. CPSC attends standard development meetings, supplies
statutory and regulatory authorities to       hazard and injury data and analysis, and provides input on draft standards.
encourage compliance with voluntary           However, CPSC’s regulation prohibits staff from voting on the final standards or
standards; reviewed agency                    from participating in any meeting that excludes other groups, such as media or
documents and literature on consumer          consumers. CPSC’s rationale for limiting involvement in standards development
product safety; analyzed data on              activity is to maintain its independence—such as not appearing to endorse a
CPSC corrective actions; and met with
                                              specific standard. Office of Management and Budget guidance gives agencies
representatives from national
                                              discretion to determine their level of participation in standard setting activities,
consumer, industry, legal, and
standard-setting organizations who            including full involvement in discussions, serving in leadership positions, and
have expertise in developing consumer         voting on standards. A January 2012 White House memorandum states that the
product safety standards.                     federal government may need to be actively engaged in standards development
                                              and implementation, including playing an active role in standard setting and
What GAO Recommends                           assuming leadership positions in Standard Development Organization
                                              committees. Committee participants GAO spoke to value CPSC’s input but
To strengthen the adequacy of
                                              generally agreed that CPSC should participate earlier and take a more active role
voluntary standards, CPSC should
review the policy for participating in        in standards development. These actions could enhance CPSC’s oversight, and
voluntary standards development               may strengthen voluntary standards.
activities and determine the feasibility      Manufacturers that fail to comply with voluntary standards can face
of assuming a more active, engaged            consequences when CPSC has determined that noncompliance poses a
role in developing voluntary standards.       significant risk of injury or death to consumers. CPSC can take corrective action
CPSC supported the recommendation.            against the manufacturer, including recalls, or take longer term action to ban the
                                              hazardous product. CPSC has focused much of its surveillance and compliance
                                              work on imported products. For fiscal years 2008 through 2011, 80 percent of
View GAO-12-582. For more information,
contact Alicia Puente Cackley at (202) 512-   CPSC recalls have been of imported products that may be subject to voluntary
8678 or cackleya@gao.gov.                     standards, highlighting challenges CPSC faces in helping to ensure the safety of
                                              consumer products.
                                                                                        United States Government Accountability Office
Contents


Letter                                                                                     1
               Background                                                                  3
               Standards Development Process, Industry Certification, and Legal
                 Factors Help Ensure Compliance with Voluntary Standards                   7
               While CPSC Cannot Legally Require Compliance with Voluntary
                 Standards, Industry Monitoring and Participation in Standards
                 Development Help Encourage Compliance                                   10
               CPSC Can Impose Corrective Actions When Noncompliance with
                 Voluntary Standards Presents a Substantial Product Hazard               20
               CPSC Databases Do Not Identify Products with Voluntary
                 Standards, but the Agency Collects Data That Could Help
                 Identify Patterns of Noncompliance                                      25
               Conclusions                                                               27
               Recommendation for Executive Action                                       28
               Agency Comments and Our Evaluation                                        28

Appendix I     Scope and Methodology                                                     30



Appendix II    Comments from the Consumer Product Safety Commission                      32



Appendix III   GAO Contact and Staff Acknowledgments                                     33



Tables
               Table 1: Number of Voluntary Standards Monitored and Code
                        Revisions Supported by CPSC Staff for fiscal years 2007
                        through 2012                                                     14
               Table 2: CPSC Recalls of Regulated and Unregulated Products for
                        fiscal years 2007 through 2011                                   22
               Table 3: CPSC Standards Activities and Recall Actions for Selected
                        Products for fiscal years 2007 through 2011                      23




               Page i                           GAO-12-582 Consumer Product Safety Commission
Abbreviations

ANSI                       American National Standards Institute
CPSA                       Consumer Product Safety Act
CPSC                       Consumer Product Safety Commission
CPSIA                      Consumer Product Safety Improvement Act
NIST                       National Institute of Standards and Technology
OMB                        Office of Management and Budget
SDO                        Standards Development Organization
UL                         Underwriters Laboratories, Inc.




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Page ii                                 GAO-12-582 Consumer Product Safety Commission
United States Government Accountability Office
Washington, DC 20548




                                   May 21, 2012

                                   The Honorable Richard Durbin
                                   Chairman
                                   The Honorable Jerry Moran
                                   Ranking Member
                                   Subcommittee on Financial Services and General Government
                                   Committee on Appropriations
                                   United States Senate

                                   The Honorable Jo Ann Emerson
                                   Chairwoman
                                   The Honorable José E. Serrano
                                   Ranking Member
                                   Subcommittee on Financial Services and General Government
                                   Committee on Appropriations
                                   House of Representatives

                                   Growing numbers of recalls in 2007 and 2008, particularly of toys and
                                   other children’s products, focused increased attention on the Consumer
                                   Product Safety Commission (CPSC). On August 14, 2008, the Consumer
                                   Product Safety Improvement Act (CPSIA) was enacted to reform CPSC
                                   and strengthen its authority to enforce consumer product safety
                                   standards. 1 Many safety standards covering consumer products are
                                   known as voluntary standards, developed by industry, consumer, and
                                   government representatives through a consensus process. Questions
                                   have been raised about the level of compliance with voluntary standards
                                   and CPSC’s ability to encourage compliance.

                                   Voluntary standards are generally determined by standard-setting
                                   organizations, with input from government representatives and industry
                                   groups, and are also referred to as “consensus standards.” These
                                   voluntary standards do not have the force of law. Amendments in 1981 to
                                   the Consumer Product Safety Act (CPSA)—CPSC’s original authorizing
                                   legislation—directed CPSC to defer to voluntary standards rather than
                                   issue mandatory standards if it determines that the voluntary standard
                                   adequately addresses a potential product hazard and that there is likely to




                                   1
                                    Pub. L. No. 110-314, 122 Stat. 3016 (2008).




                                   Page 1                                 GAO-12-582 Consumer Product Safety Commission
be substantial compliance with it. 2 CPSC monitored or provided technical
support for 174 new, revised, or reaffirmed voluntary standards from fiscal
years 2007 through 2011, according to CPSC reports.

In the Consolidated Appropriations Act, 2012 Congress directed us to
analyze compliance with voluntary industry standards for consumer
products overseen by CPSC. 3 In this report, we evaluate (1) what is
known about the extent to which manufacturers comply with voluntary
standards for consumer products, including inexpensive imported
products; (2) CPSC’s authority and ability to require compliance with
voluntary standards; (3) the consequences for manufacturers that fail to
comply with voluntary standards; and (4) CPSC’s efforts to identify
patterns of noncompliance.

To address these objectives, we reviewed CPSC’s statutory and
regulatory authority to encourage compliance with voluntary standards.
We also reviewed CPSC’s standard operating procedures, performance
and accountability reports, budget documents, and our relevant prior
reports. We met with cognizant CPSC officials to discuss their authorities
and their ability to enforce them, including all of CPSC’s current
commissioners and the Chairman. 4 Additionally, we obtained and
analyzed data from CPSC’s compliance databases to identify (1) the
number of reported instances of noncompliance; (2) the number of times
these instances led to a corrective action; (3) the numbers of corrective
actions that resulted; (4) the number of product units recalled; and (5) the
type of standard, if any, that covered the product. We assessed the
reliability of these data by reviewing existing information about the data
and the system that produced them, and interviewing agency officials
knowledgeable about the data and related management controls. Based
on this assessment, we determined the data to be sufficiently reliable for
the purposes of this report. We interviewed the three standards


2
 Consumer Product Safety Amendments of 1981, Pub. L. No. 97-35, title XII-A, 95 Stat.
357, 703 (1981), amending 15 U.S.C. §§ 2056 and 2058.
3
 Consolidated Appropriations Act, 2012, Division C - Financial Services and General
Government Appropriations Act, 2012, Title V, Pub. L. No. 112-74, § 504, 125 Stat. 786,
908 (2011).
4
 The Consumer Product Safety Act established CPSC as an independent regulatory
commission. The act provides for the appointment by the President of five commissioners
for staggered 7-year terms. One of these commissioners is designated the Chairman, who
directs all the executive and administrative functions of the agency. See generally 15
U.S.C. § 2053. As of May 2012, CPSC was led by four commissioners.




Page 2                                  GAO-12-582 Consumer Product Safety Commission
             development organizations that coordinate the development of more than
             90 percent of voluntary standards developed with CPSC staff technical
             support. We obtained testimonial and documentary information from
             national consumer, industry, and legal organizations that have expertise
             in working on voluntary standards development for consumer products.
             See appendix I for additional information on our scope and methodology.

             We conducted this performance audit from January 2012 to May 2012 in
             accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe that
             the evidence obtained provides a reasonable basis for our findings and
             conclusions based on our audit objectives.


             CPSC was created in 1972 by the Consumer Product Safety Act to
Background   regulate certain consumer products and address those that pose an
             unreasonable risk of injury; assist consumers in using products safely;
             and promote research and investigation into product-related deaths,
             injuries, and illnesses. 5 According to CPSC, this jurisdiction covers
             thousands of manufacturers and types of consumer products. CPSC does
             not have jurisdiction over some categories of products, including
             automobiles and other on-road vehicles, tires, boats, alcohol, tobacco,
             firearms, food, drugs, cosmetics, medical devices, and pesticides. Other
             federal agencies—the National Highway Traffic Safety Administration,
             U.S. Coast Guard, Department of Justice, Department of Agriculture,
             Food and Drug Administration, and Environmental Protection Agency—
             have jurisdiction over these products.




             5
              Pub. L. No. 92-573, 86 Stat. 1207 (1972), codified, as amended, at 15 U.S.C. §§ 2051-
             2089. In addition to enacting the CPSC’s organic authorities, the Consumer Product
             Safety Act transferred to CPSC enforcement authority under four existing statutes: the
             Flammable Fabrics Act, 15 U.S.C. §§ 1191-1204, the Federal Hazardous Substances Act,
             15 U.S.C. §§ 1261-1278, the Poison Prevention Packaging Act, 15 U.S.C. §§ 1471-1477,
             and the Refrigerator Safety Act, 15 U.S.C. §§ 1211-1214. CPSC has also subsequently
             been charged with administering other safety statutes such as the Virginia Graeme Baker
             Pool and Spa Safety Act, 15 U.S.C. §§ 8001-8008, and the Children’s Gasoline Burn
             Prevention Act, 15 U.S.C. § 2056note. These statutes confer various regulatory and
             enforcement powers on CPSC with respect to the specialized areas that they cover,
             including in some cases authority to prescribe safety standards as well as labeling and
             packaging requirements.




             Page 3                                 GAO-12-582 Consumer Product Safety Commission
CPSC has jurisdiction over thousands of types of consumer products and
hazardous substances, many of which are subject to mandatory
regulations or voluntary standards, or both. 6 Mandatory standards are
federal rules set by statute or regulation that define the requirements
consumer products must meet. These standards establish performance
and labeling criteria that products must meet before they are
manufactured, imported, distributed, or sold in the United States. CPSC
may set a mandatory standard when it determines that a voluntary
standard would not eliminate or adequately reduce a risk of injury or finds
that substantial compliance with a voluntary standard would be unlikely. 7
The Commission also may impose a mandatory ban of a hazardous
product when it determines that no feasible consumer product safety
standard adequately would protect the public from an unreasonable risk
of injury. 8 In some cases, Congress has enacted a specific statutory
requirement for CPSC to create a mandatory standard, or convert a
voluntary standard to a mandatory standard. For instance, CPSIA
mandated the conversion of voluntary standards for durable infant and
toddler products, all-terrain vehicles, and children’s toys to mandatory
standards. 9 Mandatory standards and bans are enforceable by CPSC,
allowing the agency to stop imported products that do not meet federal
requirements at ports and seek civil or criminal penalties for violations of
the mandatory standards or bans. Approximately 200 products are
currently regulated and subject to mandatory standards, including
automated garage door openers, fireworks, and children’s cribs.

Many consumer products under CPSC’s jurisdiction, including smoke
alarms, candles, and portable generators, are subject to voluntary
standards. 10 More than 700 standards development organizations (SDO)



6
 CPSC officials said that certain products are covered by both mandatory and voluntary
standards. In these cases, certain features of a product may be covered by a mandatory
standard, while other features are subject to a voluntary standard. For example, safety
features for bicycle brakes, frames, pedals, and tires are stipulated by a mandatory safety
standard, while specifications for serial numbers to facilitate recalls and identification of
stolen property fall under a voluntary standard.
7
 15 U.S.C. § 2056.
8
 15 U.S.C. § 2057.
9
 15 U.S.C. §§ 2056a, 2056b, and 2089.
10
 According to CPSC, prior to the passage of CPSIA, the ratio of voluntary standards to
mandatory standards was 10 to 1.




Page 4                                    GAO-12-582 Consumer Product Safety Commission
develop most voluntary standards used in the United States, including
safety standards. SDOs include private-sector professional and technical
organizations, trade associations, and research and testing entities.
According to CPSC, three SDOs—Underwriters Laboratories, Inc. (UL);
ASTM International; and the American National Standards Institute
(ANSI)—coordinate the development of more than 90 percent of
voluntary standards developed with CPSC staff technical support.
Participants in the standards development process include
representatives from government agencies, manufacturers, consumers,
retailers, testing laboratories, technical experts, and other interested
parties. In general, most SDOs operate by principles that govern the
voluntary standards process, such as openness, balance, consideration
of views and objections, consensus vote, and the right to appeal. The
process of developing consensus standards is designed to be
transparent, with written procedures covering each step. Participation in
the standard development process is intended to be voluntary. Standards
developed by an SDO are considered the property of the SDO. CPSC
officials told us that once a standard is published and copyrighted,
members of the public and government agencies generally must
purchase them.

The National Institute of Standards and Technology (NIST), the federal
agency that coordinates standard activities, maintains a database of
standards that have been incorporated by reference into federal
regulations. NIST also has online search tools that members of the public
may use to locate other standards—including voluntary standards not
incorporated by reference into federal regulations—but according to
agency officials, the agency does not collect or maintain voluntary
standards.

CPSC’s voluntary standards activities are overseen by a Voluntary
Standards Coordinator, appointed by the Commission’s Executive
Director. The coordinator is the senior agency official responsible for
managing the Commission’s voluntary standards program. One of the
coordinator’s main duties is to prepare and submit to the Commission a
semiannual summary of staff’s voluntary standards activities. Duties also
include providing advice and recommendations for the development of
new voluntary standards or the revision of existing voluntary standards, in
conjunction with CPSC management. The coordinator also proposes
policies and guidelines concerning voluntary standards activities, reviews
associated public comments, and prepares recommended policies for
approval by the Commission. The coordinator works with SDOs, and
recommends and trains CPSC staff to serve as technical experts to those
organizations. Further, the coordinator is the liaison to industry


Page 5                           GAO-12-582 Consumer Product Safety Commission
associations, other government agencies, and any other group interested
in voluntary standards.

CPSC’s Office of Compliance and Field Operations, currently with 166
staff, has primary responsibility for helping ensure compliance with
product safety standards. Its activities include enforcing mandatory
standards and reporting requirements, investigating product hazards, and
determining corrective actions (such as recalls) for manufacturers not in
compliance with safety standards. 11 CPSC also has an Office of Import
Surveillance and Inspection that coordinates enforcement efforts with
U.S. Customs and Border Protection to help ensure import compliance
with safety standards. CPSC has investigators stationed at some ports of
entry to assist in surveillance activities. In a past report, we made
recommendations to strengthen CPSC’s ability to target unsafe consumer
products, especially imported products. 12 We recommended that CPSC
work to educate foreign manufacturers about U.S. product safety
standards and best practices, including the importance of complying with
voluntary standards. CPSC concurred with our recommendation. The
2011-2016 Strategic Plan states that CPSC has been seeking to create
and strengthen partnerships with domestic and international stakeholders,
including foreign regulators and manufacturers, to improve product safety
throughout the supply chain. Also, CPSC’s Office of Education, Global
Outreach, and Small Business Ombudsman has separately developed
and issued plans for addressing consumer product safety on a country-
specific and regional basis.




11
  The Office of Compliance and Field Operations conducted formal voluntary standards
compliance programs until 2002, when it transferred the function to CPSC’s Office of
Hazard Identification and Reduction.
12
 See GAO, Consumer Safety: Better Information and Planning Would Strengthen
CPSC’s Oversight of Imported Products, GAO-09-803 (Washington, D.C.: Aug. 14, 2009).




Page 6                                GAO-12-582 Consumer Product Safety Commission
                          Industry representatives and consumer groups we spoke to said that
Standards                 compliance with voluntary standards developed through the consensus
Development Process,      process is generally considered to be high, although they do not track
                          compliance. Some representatives and consumer groups said that it can
Industry Certification,   reach 90 percent for some standards. However, consumer product safety
and Legal Factors         experts suggested that standards for some products have lower
                          compliance, especially commonly low-priced items, products primarily
Help Ensure               sold over the Internet or by nonconventional retailers, products made by a
Compliance with           large number of manufacturers, or products primarily manufactured
                          overseas. For instance, cigarette lighters manufactured overseas and
Voluntary Standards       sold at low prices in the United States have been found to be
                          noncompliant with voluntary standards.


Standards Developed       Consumer product safety experts we spoke to generally said that industry
through a Consensus       prefers voluntary to mandatory standards. They noted the voluntary
                          standard development process is faster than mandatory rulemaking, and
Process with Open         allows the industry a greater level of input. According to CPSC, the time
Participation Generally   required for mandatory rulemaking varies depending on the complexity of
Gain High Compliance      the product or of the rule requirements, the severity of the hazard, and
                          other agency priorities, among other factors. 13 For example, a legal expert
                          told us that a mandatory rulemaking for cigarette lighters took 10 years
                          from the decision to take action to final rule. CPSC also has been
                          considering a mandatory rule to address the risk of fire associated with
                          ignitions of upholstered furniture since 1972. Generally, the flexible
                          process for developing voluntary standards is considered to facilitate
                          revisions to the standards. Working through SDOs, interested parties
                          have been able to revise existing standards to respond in a timely manner
                          to emerging hazards or risks. According to two legal experts, a
                          disadvantage of mandatory standards is that revision or repeal can be
                          difficult. One expert also told us that because mandatory standards set
                          fixed requirements for product safety, the rules can stifle product
                          development and innovation.

                          Industry participants told us that advantages of the voluntary standards
                          process include open participation and proceedings by consensus, which


                          13
                            Interested parties generally have 60 days to comment on an Advance Notice of
                          Proposed Rulemaking (ANPR) and 75 days to comment on a Notice of Proposed
                          Rulemaking. CPSIA contains some provisions designed to shorten the timeframe for
                          rulemaking, such as making an ANPR optional, though it may be issued when the CPSC
                          deems it a necessary part of rulemaking.




                          Page 7                               GAO-12-582 Consumer Product Safety Commission
                            can help ensure compliance with the resulting standards. Other industry
                            representatives said that they also invest considerable time and
                            resources in writing standards, which raises the likelihood of compliance.

                            Factors that affect compliance for some manufacturers include discerning
                            and accessing applicable standards. Some consumer product safety
                            experts told us that some small businesses and foreign manufacturers
                            are not aware of applicable standards for their products. CPSC has
                            responded by extending greater outreach to these businesses through
                            the agency’s Office of Education, Global Outreach, and Small Business
                            Ombudsman. The office coordinates with, and provides education and
                            outreach activities to, various domestic and international stakeholders,
                            including manufacturers, retailers, resellers, small businesses, and
                            foreign governments. Among its responsibilities, the office works with
                            foreign governments and regulatory bodies to help them increase their
                            capacity to develop voluntary and mandatory product safety standards
                            and plans to develop information and guidance tailored specifically to
                            small batch manufacturers. Staff from this office plan to update the CPSC
                            web page to assist small businesses in learning about their obligations
                            under CPSIA, by informing them about voluntary standards, and
                            encouraging them to comply. CPSC also plans to conduct two extended
                            training exchanges with foreign partners, including developing country
                            officials, to increase foreign regulatory agencies’ understanding of CPSC
                            procedures and policies and help ensure that CPSC safety standards are
                            met for U.S.-bound exports.


Some Retailers and          Although not legally mandated for voluntary standards, some retailers
Industry Associations       require a certification mark or other proof of compliance from
                            manufacturers before they will agree to sell their product in stores. 14 For
Require Proof of            instance, according to a legal expert, specialty retailers who sell gas
Compliance with Voluntary   fireplaces require proof of adherence to a new standard, which is being
Safety Standards to Sell    revised to address a safety hazard, for glass panels for the front of gas
Consumer Products           fireplaces. For many products, consumers and retailers expect that they
                            meet a minimum safety standard, such as a voluntary standard. Some
                            retailers conduct their own product safety programs, often certifying



                            14
                              A certification mark is used on the goods and services to provide a visible guarantee
                            that those goods and services meet standards set by the owner of the certification mark.
                            UL, owner of one of the most commonly-seen certification marks, certifies that consumer
                            products comply with safety standards.




                            Page 8                                  GAO-12-582 Consumer Product Safety Commission
                            compliance with safety standards through testing at third-party labs, to
                            better ensure the safety of products sold in their stores.

                            In addition, some industry associations have programs to certify
                            compliance with voluntary standards applicable to their members’
                            products. 15 Entities found not to be in compliance with applicable
                            standards could lose the right to bear the association’s certification mark.
                            Industry associations that have certification programs include the furniture
                            industry and children’s products manufacturers. One furniture association
                            provides hang tags to members who have paid to certify their
                            conformance with the industry-developed standards, primarily addressing
                            fire hazards. A group representing children’s products manufacturers has
                            implemented a lab testing and inspection process to certify members’
                            compliance with applicable standards. Manufacturers contract with the
                            industry group to receive certification that their products, such as cribs,
                            strollers, and baby walkers, comply with standards.


Certain Industries Prefer   Although industry representatives and legal experts we spoke to said that
Mandatory Standards to      manufacturers largely prefer voluntary over mandatory standards, they
                            also told us that certain industries have sought mandatory standards. Two
Ensure a Level Playing      reasons were cited for an industry’s preference for mandatory standards:
Field and Preempt State     first, to level competition across an industry sector, especially where
Laws                        some manufacturers were not complying with the voluntary standard to
                            which the rest of the industry agreed; and second, to preempt divergent
                            state laws. 16 The Lighter Association, a group representing cigarette
                            lighter manufacturers, petitioned CPSC in 2001 to adopt the prevailing
                            voluntary standard for lighters as a mandatory standard. The association
                            cited widespread noncompliance with the voluntary standard, especially
                            for lighters imported from China. Although CPSC has not as yet
                            promulgated a general rule for mechanical requirements for cigarette
                            lighter safety, it had adopted a regulation requiring child-resistant
                            mechanisms for disposable lighters in 1994. A legal expert who has
                            worked with the arts and creative materials industry told us that the
                            industry sought to convert the industry’s voluntary standard, developed


                            15
                              Provisions of CPSIA impose certification requirements for imported products that are
                            subject to mandatory safety rules under statutes enforced by CPSC as well as third-party
                            lab testing for products subject to children’s product safety rules. 15 U.S.C. § 2063.
                            16
                              Mandatory safety standards under the CPSA generally preempt state and local
                            standards dealing with the same product risks unless they are identical to the federal
                            requirements. See 15 U.S.C. § 2075.




                            Page 9                                   GAO-12-582 Consumer Product Safety Commission
                              with input from consumers and product users, to a mandatory standard to
                              preempt differing laws in at least seven individual states.


Risk of Potential Liability   Potential liability in product liability lawsuits for noncompliance with
in Product Liability          voluntary standards is another factor that affects compliance. Consumer
                              product safety experts also told us that the risk of incurring reputational
Lawsuits Helps Ensure         and financial costs associated with product liability lawsuits provides an
Industry Compliance with      incentive for manufacturers to comply with voluntary standards. Courts
Voluntary Safety Standards    generally consider noncompliance with a voluntary standard as relevant
                              evidence to establish a product defect or to prove a case of negligence.
                              By the same token, if litigants can show compliance with applicable
                              voluntary standards, the compliance may provide evidence of lack of a
                              product defect or negligence. However, evidence of compliance usually is
                              not sufficient on its own to negate liability. 17


                              CPSC cannot compel compliance with voluntary standards. However,
While CPSC Cannot             according to CPSC officials, the agency has requested that U.S. Customs
Legally Require               and Border Protection seize at the ports defective products that are
                              subject to voluntary standards and that constitute a substantial product
Compliance with               hazard. CPSC also participates in voluntary standard development
Voluntary Standards,          activities, although their effectiveness is limited by constrained resources
                              and a restrictive meetings policy. While consumer product safety experts
Industry Monitoring           value CPSC’s input, they generally agree that earlier and more active
and Participation in          participation could increase CPSC’s efficiency and effectiveness in
                              developing standards.
Standards
Development Help
Encourage
Compliance




                              17
                                Compliance or noncompliance with mandatory governmental standards likewise is
                              relevant in product liability litigation and generally carries even greater weight than a
                              voluntary standard.




                              Page 10                                   GAO-12-582 Consumer Product Safety Commission
Though Voluntary            Since voluntary standards do not have the force of law, the Commission
Standards Do Not Have the   cannot compel compliance with them. Noncompliance with a voluntary
                            standard, however, can inform a determination of a substantial product
Force of Law, CPSC Is       hazard by the CPSC. The CPSA defines a substantial product hazard as
Using Expanded Legal        a failure to comply with an applicable consumer product safety rule, which
Authority to Seize          creates a substantial risk of injury to the public; or a product defect, which
                            (because of the pattern of defect, the number of defective products
Defective Products
                            distributed in commerce, the severity of the risk, or otherwise) creates a
                            substantial risk of injury to the public. 18 If the CPSC finds that a product
                            presents a substantial product hazard, it can lead to an enforcement
                            action, such as a public notice or recall. Consequences for
                            noncompliance with voluntary standards that amount to a substantial
                            product hazard are discussed in the next section of this report.

                            We found that CPSC does not routinely track broad product compliance
                            with voluntary standards. Although they have internal guidance for
                            monitoring compliance with voluntary standards, CPSC officials said that
                            the agency has not conducted a formal program to test for product
                            conformance with voluntary standards since 2002. The agency cited
                            limited resources and competing priorities, including Congressional
                            mandates and monitoring mandatory standards, as reasons for not doing
                            so. According to CPSC officials, following the enactment of CPSIA in
                            2008, the agency reallocated resources from voluntary standards
                            activities towards meeting mandatory rulemaking deadlines required in
                            the act.

                            With the enactment of CPSIA in 2008, CPSC was granted expanded legal
                            authority relative to certain voluntary standards under section 15(j) of the
                            Consumer Product Safety Act to create a substantial product hazard list. 19
                            It allows the Commission to issue a rule for any consumer product or
                            class of products identifying certain characteristics whose presence or
                            absence must be deemed a substantial product hazard. CPSC must
                            determine that the characteristics are readily observable and that the
                            hazard has been addressed by voluntary standards. CPSC must also
                            determine that voluntary standards have been effective in reducing the



                            18
                              15 U.S.C. § 2064(a). Product safety rules for this purpose include mandatory safety
                            standards and product bans under CPSA as well as similar standards and bans under
                            other laws enforced by CPSC.
                            19
                              15 U.S.C. § 2064(j), added by section 223(a) of the Consumer Product Safety
                            Improvement Act of 2008, Public Law 110-314, 122 Stat. 3068.




                            Page 11                                 GAO-12-582 Consumer Product Safety Commission
risk of injury from the products and there is substantial compliance with
the voluntary standards. When CPSC publishes a rule making such
determinations, the products involved are subject to all of the
enforcement consequences that apply to a substantial product hazard. 20
Among other actions, the product must be refused admission into the
United States. CPSC works cooperatively with Customs and Border
Protection staff at ports of entry to detect and seize defective products.
Agency officials stated that, to date, CPSC has twice exercised authority
under section 15(j) to identify products containing substantial product
hazards: children’s upper outerwear containing drawstrings, because of
risk of strangulation; and hand-supported hair dryers without integral
immersion protection, due to risk of electric shock.

We spoke with legal experts to discuss their views on the CPSC’s
expanded authority to declare substantial product hazards. Two legal
experts told us that exercising the authority essentially converts a
voluntary standard to a mandatory one without undergoing the
established rulemaking procedures. According to one expert, the
expanded authority gives the CPSC the ability to use the voluntary
standards that were intended to address design and performance issues
to create a mechanism for seizure of defective products at the ports,
without putting the burden of proving a substantial product hazard on the
CPSC. Another product safety expert also said that the expanded
authority will not substantially enhance CPSC’s enforcement capability
because inspectors must have the ability to readily observe the hazard at
the port of entry. Some hazards are not readily observable and require
testing for compliance, such as lead content. CPSC told us that while the
section 15(j) authority allows them to respond more quickly to substantial
product hazards, not enough time has passed to assess the effect this
authority will have on helping ensure compliance with voluntary
standards.




20
  Section 15(j) provides that rules issued under that authority are subject to judicial review
in the same manner as mandatory safety rules. Such rules may be affirmed only if CPSC’s
determinations are supported by substantial evidence. 15 U.S.C. § 2060(c).




Page 12                                   GAO-12-582 Consumer Product Safety Commission
CPSC Participates in          CPSC staff participate in the voluntary standard development process by
Standards Development         providing expert advice, technical assistance, and information based on
                              data analyses of the numbers of and causes of deaths, injuries, or
Activities, but Its           incidents associated with the product. According to CPSC, it supplies the
Effectiveness is Limited by   standard-setting bodies with epidemiological and health science data,
Resource Constraints and      including extrapolated injury and death data from hospitals; death
                              certificates associated with products causing the death where available;
a Restrictive Meetings
                              anecdotal data; and incident reports from SaferProducts.gov. 21 CPSC
Policy                        officials said that support of voluntary standards development can be
                              moderate or intensive. They told us that a moderate level of support
                              would include reading the minutes of subcommittee meetings and
                              monitoring the proceedings. More intensive support may consist of
                              conducting and presenting CPSC research, performing lab tests, and
                              writing draft language for the standard.

                              CPSC officials told us that in developing voluntary standards, CPSC
                              interacts primarily with ASTM International for children, juvenile, toddler,
                              and infant products; ANSI for products such as bicycles and garage door
                              operators; and UL for electrical products. CPSC staff told us they have a
                              representative who serves as a nonvoting member on the board at ANSI
                              and on ANSI’s accrediting council. 22 According to ANSI representatives,
                              CPSC staff participate in discussions related to accrediting and
                              maintaining procedures for international standards. Representatives from
                              UL told us that CPSC staff participate in UL’s Consumer Advisory
                              Council, which convenes at least once a year to discuss products and
                              standards.

                              According to CPSC officials, the agency has recommended 31 products
                              for SDO standards review, development, or revision for fiscal years 2007
                              through 2011. In fiscal year 2011, CPSC staff report that they provided
                              technical support and contributed to the completion of work on 37 new,
                              revised, or reaffirmed voluntary standards, while they provided technical



                              21
                                 SaferProducts.gov is a database maintained by CPSC. Through a web portal,
                              consumers and others meeting statutory requirements may submit reports of harm or the
                              risk of harm from products and can search for information on products reported to be
                              unsafe that they own or may be considering for purchase. See 15 U.S.C. § 2055a.
                              22
                                ANSI’s role in standards development differs from that of SDOs. ANSI serves as
                              administrator and coordinator of the U.S. private sector, voluntary standardization system.
                              ANSI also accredits U.S. standards developers using criteria based on international
                              requirements. SDOs accredited by ANSI include ASTM International, UL, and the National
                              Fire Protection Association.




                              Page 13                                 GAO-12-582 Consumer Product Safety Commission
support or monitored the development of 60 voluntary safety standards.
These standards addressed hazards associated with cradles and
bassinets, children’s play yards, portable generators, and garage door
openers, among other products. According to CPSC’s Operating Plan, the
agency plans to monitor 68 voluntary standards in fiscal year 2012,
including standards addressing tip-over hazards of kitchen ranges,
cadmium levels in children’s jewelry, strangulation risk posed by window
blind cords, and sulfur emissions in drywall (see table 1).

Table 1: Voluntary Standards and Code Revisions Supported by CPSC Staff for
Fiscal Years 2007 through 2012

                                                                                               2012
                                          2007      2008     2009     2010      2011      (planned)
    Number of standards/code                66         74       39      61         60             68
    revisions supported
    Number of CPSC voluntary                26         25       22      30         29         24-27
                             a
    standard project managers
Source: CPSC.

a
 CPSC officials told us that employees may be involved with more than one voluntary standard and
their level of involvement can vary significantly. The numbers reflect those employees who are project
managers/contacts. They may be supported by other CPSC technical staff in specific areas such as
engineering sciences, human factors, health sciences, and laboratory sciences.


CPSC officials told us that voluntary standards monitoring activity
decreased substantially after the enactment of CPSIA because of
reallocation of resources to meet the act’s requirements. The number of
standards selected for monitoring was at a 5-year low in fiscal year 2009;
however, the number of voluntary standards selected for monitoring has
increased in the past 3 fiscal years and is expected to continue at current
levels in the near future. CPSC officials said that staff recommendations
based on criteria, such as death and injury data, available resources, and
exposure of vulnerable populations to hazards, guide the selection of
standards to monitor. They told us that staff consider where participation
in voluntary standard setting could help reduce unreasonable risk of injury
posed by a product. Management considers and approves or rejects the
staff recommendations based on Commission priorities and available
resources. Staff approved recommendations are then sent to the
Commission for final approval. According to CPSC’s Operating Plan and
Performance Budget, the agency plans one recommendation to voluntary
standards or revisions to code organizations for fiscal year 2012. The
Operating Plan also includes plans for two new data analysis or technical
review activities on carbon monoxide alarms and enhanced smoke
alarms. Additionally, 10 activities related to nanotechnology in consumer



Page 14                                      GAO-12-582 Consumer Product Safety Commission
products are planned for fiscal year 2012. 23 These activities will identify
the potential release of nanoparticles from selected consumer products
and determine the potential health effects from such exposure, which may
lead to CPSC participation in voluntary standards development, according
to CPSC officials. 24

CPSC officials said that the level of support provided by CPSC to
standards development and monitoring is dependent on available
resources. One CPSC staff member is assigned to each standard as a
project manager responsible for monitoring committee activity and draft
revisions. According to CPSC officials, the 68 standards to be monitored
in fiscal year 2012 represent the limit the agency can handle given current
resource and staff levels. For example, about 25 staff are responsible for
monitoring the activities related to these standards. Sixty-eight standards
is a small fraction of standards developed for consumer products. For
instance, ASTM International has developed more than 12,000 standards
while UL maintained more than 1,400 as of 2011. These standards cover
many types of products, not exclusively consumer products.

CPSC’s relationship with SDOs is outlined in CPSC regulations. 25 CPSC
policy sets criteria for deciding on CPSC’s involvement in voluntary
standards activities. The criteria include:

•     the likelihood the voluntary standard will eliminate or adequately
      reduce the risk of injury addressed,

•     the likelihood that there will be substantial and timely compliance with
      the voluntary standard,

•     the likelihood that the voluntary standard will be developed within a
      reasonable period of time,




23
  Nanotechnology relies on the ability to design, manipulate, and manufacture materials at
the nanoscale. Nanoscale refers to materials on the order of one billionth of a meter.
24
  In the area of human health, scientists believe some characteristics of nanoscale
particles could produce both positive and negative consequences. For example,
nanoscale silver is highly effective as an antibacterial agent. However, some scientists
believe that carbon nanotubes exhibit properties similar to asbestos fibers and may
become lodged in organs harming humans and animals.
25
    16 C.F.R Part 1031.




Page 15                                  GAO-12-582 Consumer Product Safety Commission
•    openness to all interested parties,

•    establishment of procedures to provide for meaningful participation in
     the development of standards by representatives of a variety of
     interested parties, and

•    due process procedures.

CPSC’s regulation guides the extent and form of CPSC staff involvement
in voluntary standards organizations. Staff may attend standards
development meetings, take an active part in the discussions, and
provide data and explanatory material, but CPSC’s regulation prohibits
staff from voting on the standards or from holding leadership positions in
standards development committees. Except in extraordinary
circumstances and with the approval of the Executive Director, they
cannot become involved in standards development meetings that are not
open to the public (including members of the media) for attendance and
observation. 26 This may include technical subcommittees largely
comprised of industry representatives. The regulation also states that
active involvement in standards development activity must not be done in
a manner that might present an appearance of preferential treatment for
one organization or group or put CPSC’s impartiality at risk.

CPSC has authority to revise its regulations pertaining to voluntary
standards activities. The first regulation concerning involvement in
standards development was issued in 1978, and revised in 1989 and
again in 2006. According to CPSC, its regulation is similar to the Office of
Management and Budget’s (OMB) Circular No. A-119 (Revised), which
provides guidance for agencies participating in voluntary consensus
standards bodies. 27 However, in our review of CPSC’s regulation, we
found the agency interpreted its level of participation more strictly than
OMB guidance for such activities as voting on standards and taking
leadership positions. CPSC’s rationale for limiting involvement in
standards development activity, as described in its regulation, is to
maintain its independence—such as not appearing to endorse a specific


26
  UL and ASTM International told us that they maintain an ANSI-accredited voluntary
standards development process, which includes openness to any interested party.
27
  Office of Management and Budget, Federal Participation in the Development and Use of
Voluntary Consensus Standards and in Conformity Assessment Activities, Circular A-119
(revised). (Washington, DC: February 10, 1998.)




Page 16                                GAO-12-582 Consumer Product Safety Commission
                             standard. OMB guidance states that agency representatives should
                             participate actively and on an equal basis with other members, including
                             full involvement in discussions, technical debates, registering of opinions,
                             and if selected, serving in leadership positions. According to OMB
                             guidance, agency representatives may vote at each stage of the
                             standards development process unless prohibited by law or their
                             agencies. A January White House memorandum further outlines
                             principles for federal government engagement in standards activities,
                             especially where statute, regulation, or administration policy identifies a
                             national priority. Specifically, it states that the federal government may
                             need to be actively engaged or play a convening role to accelerate
                             standards development in standard setting and implementation, including
                             supporting leadership positions for federal agency staff in SDO
                             committees.


Consumer Product Safety      CPSC, consumer groups, and industry officials with whom we spoke
Experts Value CPSC’s         generally viewed CPSC’s participation in voluntary standards
                             development activities favorably. Consumer groups and other consumer
Input, but Also Called For   product safety experts told us that CPSIA has strengthened CPSC’s
Earlier and More Active      authority, effectiveness, and level of influence at SDOs. They also told us
CPSC Participation           that the industry now knows that if they do not develop an adequate
                             voluntary standard, CPSC will make a mandatory standard for those
                             products specified by CPSIA. According to consumer representatives who
                             have participated in the process, the dynamic has changed: prior to
                             CPSIA, CPSC’s input was ignored or voted down. With their new
                             authority, CPSC is more active and their input is incorporated a great deal
                             more, resulting in stronger and more protective outcomes, especially for
                             durable goods for infants. Consumer group representatives also told us
                             that CPSC’s involvement in standards development has been effective for
                             helping ensure consumer participation, especially since the passage of
                             CPSIA. In one instance, a consumer group had concerns about the
                             standards development process for window blind cords because of what it
                             thought was a lack of transparency, limited access to information, and
                             lack of consideration of its views, after they were excluded from
                             participating in a technical subcommittee. CPSC appealed directly to
                             industry groups to open the process, and consumer groups eventually
                             were allowed to participate in the window blinds standard development.

                             CPSC officials told us that staff’s effectiveness in standards development
                             partially depends on their own persuasiveness and the direction given
                             from top management. Management recommends and approves staff to
                             participate in standards development activity based on their ability to
                             listen, negotiation skills, analytical proficiency, and level of technical and


                             Page 17                            GAO-12-582 Consumer Product Safety Commission
scientific expertise. Staff also receive training from the Voluntary
Standards Coordinator to prepare for SDO meetings. According to CPSC
officials, staff selected to participate in standards development activities
may seek further advice and training from the Voluntary Standards
Coordinator and other colleagues as needed.

While consumer product safety experts we spoke to said that CPSC has
good working relationships with the SDOs, some added that the agency
could take a more active role in standards development activities.
Voluntary standard committee participants told us that they value CPSC’s
contributions during standards development, one group especially valued
its incident data and analysis, and another appreciated the agency’s
ability to help ensure an inclusive process. One industry official told us
that they work collaboratively with CPSC; for example, they receive data
from the CPSC in the process of developing voluntary standards for
particular products. In one case, CPSC had identified, through its incident
data, a laceration hazard resulting from a certain design of high chair with
two hooks on the back. CPSC communicated this information to industry
representatives, and it was incorporated into the voluntary standard
process for the product. Another industry stakeholder told us that CPSC
is viewed as a valuable partner in stronger standard development. By
simply being present at voluntary standards development meetings,
CPSC shows the industry that it is monitoring their activities.

Other consumer product safety experts said that CPSC’s participation in
committees could be more active and its position on the draft standards
better articulated. Because of limitations stemming from CPSC’s
regulation governing staff participation in standards development activity,
the resulting standard may not fully reflect the CPSC staff input and the
standard development process can be delayed. According to some
consumer product safety experts, CPSC staff are restrained and act
largely as observers at standard development committee meetings.
Others said that, at times, CPSC staff does not challenge the adequacy of
the standards. For example, although CPSC converted the voluntary
standard for all-terrain vehicles to a mandatory standard in 2009, as
required by CPSIA, in the view of some experts, all-terrain vehicles
remain covered by a weak standard. In public statements regarding the
all-terrain vehicle standard, one CPSC commissioner said that the recent
update to the standard, while not diminishing the safety of the product,
remains a low threshold for federal safety standards. Our analysis of
CPSC public recall notices showed that there have been 36 recalls of all-




Page 18                           GAO-12-582 Consumer Product Safety Commission
terrain vehicles involving 15 companies for fiscal years 2007 through
2011. 28 Manufacturers have recalled all-terrain vehicles for reasons such
as a risk of a crash caused by pieces of the main suspension breaking off
and a risk of loss of vehicle control due to faulty speed controls. Recall
notices do not indicate if the hazards posed by the product are covered
by voluntary or mandatory standards. In discussions with consumer
product safety experts, they said that if CPSC challenged the adequacy of
the standards more frequently this would send a signal to industry that the
agency was committed to obtaining a high level of safety in voluntary
standards.

Some industry representatives emphasized that they wanted CPSC’s
more active and earlier participation in standards development. They said
that they would benefit from more information about CPSC’s views on
specific provisions of a standard, such as certain performance
requirements, level of risk tolerance, or aspects of a product CPSC
wanted changed. Some industry representatives said that if the agency’s
position on a standard were more apparent from the outset, the process
would be faster and more efficient, which could result in stronger
standards. One industry representative also noted that more active and
earlier participation would allow CPSC to consider unforeseen business
consequences of their proposed revisions to standards earlier in the
process. For instance, according to this industry representative a revised
standard for child bed rails was delayed by CPSC proposing costly
revisions after the standard had already been approved by SDO
participants. 29




28
  CPSIA has mandated the conversion of standards for all-terrain vehicles from voluntary
to mandatory. 15 U.S.C. § 2089.
29
  The standard was approved by SDO participants in October 2010. CPSC proposed
changes in January 2011 to address a hazard. In April 2011, a draft standard identical to
CPSC recommendations received negative votes from other participants and discussions
continued to address the disagreement. The standard that was finalized in February 2012
reflected all points of view.




Page 19                                 GAO-12-582 Consumer Product Safety Commission
                       Manufacturers can face consequences ranging from civil monetary
CPSC Can Impose        penalties to the reputational and financial losses associated with
Corrective Actions     corrective action if their products fail to comply with voluntary standards
                       and if they present a substantial product hazard. Corrective actions
When Noncompliance     include recalls, which encompass refunds, replacements, or repairs.
with Voluntary         CPSC may also sue to prevent distribution or sale of a product pending
                       completion of a recall proceeding. Although voluntary standards do not
Standards Presents a   have the force of law, manufacturers are legally required to report
Substantial Product    substantial product hazards to CPSC. 30 Every manufacturer of a
                       consumer product must inform the Commission if they obtain information
Hazard                 that reasonably supports the conclusion that the product contains a defect
                       that could create a substantial product hazard. 31 Such a report may
                       include information the manufacturer obtained about a product outside
                       the United States if it is relevant to products sold or distributed in the
                       United States. 32 Manufacturers that knowingly fail to report potential
                       substantial product hazards could be subject to civil or criminal penalties.
                       In 2011, CPSC negotiated out-of-court settlements in which five
                       companies agreed to pay $3.26 million in civil penalties related to their
                       failure to report substantial product hazards to the agency.

                       Although failure to meet a voluntary standard alone is not sufficient for
                       CPSC to take action against a company—because voluntary standards
                       are not enforceable by law—CPSC’s analysis of the evidence of
                       noncompliance and determination that the product could pose a
                       substantial product hazard can lead to corrective action. According to
                       CPSC’s interpretive regulations, compliance or noncompliance with
                       applicable voluntary standards may be a factor in determining whether a
                       substantial product hazard exists. 33 To determine if corrective action is
                       needed, CPSC staff review incident reports on a daily basis and forward
                       them to appropriate integrated teams for extensive analysis. CPSC
                       integrated teams comprise subject matter experts such as engineers,


                       30
                          Manufacturers must also notify the Commission immediately if they obtain information
                       which reasonably supports the conclusion that a product distributed in commerce (1) fails
                       to comply with a voluntary standard upon which the Commission has relied under the
                       CPSA, (2) fails to meet a consumer product safety standard or banning regulation under
                       the CPSA or another law enforced by the Commission, or (3) creates an unreasonable
                       risk of serious injury or death. 15 U.S.C. § 2064(b).
                       31
                        15 U.S.C. § 2064(b).
                       32
                        16 C.F.R. § 1115.12(f).
                       33
                        16 C.F.R. § 1115.6.




                       Page 20                                 GAO-12-582 Consumer Product Safety Commission
human factors experts, health scientists, statisticians from the Office of
Hazard Identification and Reduction, and compliance officers from the
Office of Compliance. The teams then assess the reports for hazard type,
whether the incident affected vulnerable populations, and the severity of
injury. CPSC also collects data on injuries and deaths for products under
its jurisdiction, and staff conduct investigations on specific injury cases to
gain better knowledge of how the product was involved. Based on
analysis of these data, the integrated teams decide if further action would
be warranted, such as additional monitoring of the situation, an in-depth
investigation, or a product safety assessment. In our discussions with
CPSC officials, they told us that the agency decides on further actions
based on other agency priorities, resources, and the level of risk that a
product poses. Once CPSC has identified a hazardous product, the
agency will take action to remove the product from the market. If a recall
is necessary, CPSC staff negotiates with the responsible company to
seek a voluntary recall, if appropriate.

Manufacturers that report product defects propose a remedy that must be
deemed acceptable to CPSC staff. This often involves the product’s
recall, which consists of the purchase price refund, repair, or replacement
of the product. CPSC considers whether the plan adequately addresses
the risk of injury presented by the product. For example, if the
manufacturer’s proposed solution was to repair its product, CPSC
engineers would test the repair to determine if it addressed the hazard
adequately. Similarly, if the proposed solution was a refund, CPSC
officials would evaluate the refund process to determine if it would cause
undue burden to the consumer. CPSC takes steps to ensure that recalled
products are not reintroduced in the market through second-hand stores
by monitoring the internet and through market surveillance programs.
Table 2 contains information about CPSC’s recall activities for fiscal years
2007 through 2011 for products covered by mandatory standards and
those that are unregulated.




Page 21                            GAO-12-582 Consumer Product Safety Commission
Table 2: CPSC Recalls of Regulated and Unregulated Products for Fiscal Years
2007 through 2011

                                    Number of recalls                      Number of recalls of
    Fiscal year                 of regulated products                     unregulated products
    2011                                               30                                      383
    2010                                               60                                      416
    2009                                               46                                      452
    2008                                              169                                      449
    2007                                               92                                      385
           a
    Total                                             397                                    2,085
Source: CPSC.

a
 These recalls were tabulated from CPSC data for regulated and unregulated products. Unregulated
products may include those covered by voluntary standards. According to CPSC officials, recalls of
unregulated products are not necessarily associated with violations of voluntary standards; on some
occasions the recall could be associated with issues in manufacturing or assembly of the product.


In our review of CPSC documents, the agency focused much of its
surveillance and compliance work on imported products. According to
CPSC, approximately 80 percent of recalls from 2008 through 2011 have
been of imported products. The agency’s Office of Import Surveillance
and Inspection has primary responsibility for product surveillance at ports
of entry in cooperation with other appropriate federal agencies. U.S.
Customs and Border Protection notifies CPSC and other regulatory
agencies with import safety responsibilities of the arrival of imported
products and provides information about those products. CPSC identifies
potentially unsafe products and requests that U.S. Customs and Border
Protection set them aside for CPSC examination. Once samples are
delivered to or taken by CPSC for examination, CPSC may detain the
shipment pending further examination and testing, conditionally release
the shipment to the importer’s premises pending examination and testing,
or release the shipment to the importer outright. Compliance investigators
examine the sample to determine whether it (1) complies with the relevant
mandatory standard or standards; (2) is accompanied by a certification of
compliance with relevant product safety standard that is supported by
testing, in some cases by a third party, (3) is or has been determined to
be an imminently hazardous product; (4) has a product defect that
presents a substantial product hazard; or (5) is produced by a
manufacturer who failed to comply with CPSC inspection and




Page 22                                      GAO-12-582 Consumer Product Safety Commission
                                          recordkeeping requirements. 34 According to a CPSC notice, from October
                                          1, 2011, to December 1, 2011, officials identified about 240 noncompliant
                                          products at ports of entry, including defective hair dryers, lamps, and
                                          holiday lights.

                                          Table 3 illustrates standards activities and recall actions for selected
                                          products for fiscal years 2007 through 2011. Some products are covered
                                          by both mandatory and voluntary standards, which may address different
                                          aspects of the product features. For example, all-terrain vehicles, cribs,
                                          infant bath seats, infant walkers, and cigarette lighters are subject to both
                                          mandatory and voluntary standards.

Table 3: CPSC Standards Activities and Recall Actions for Selected Products for Fiscal Years 2007 through 2011
                                                                        a
Product                         CPSC standards activities as of 2011                      Corrective actions, 2007-2011
All-terrain vehicles            Mandatory standard, amended November 2008;                36 recalls involving
                                effective date: April 2009.                               15 companies
                                Voluntary standard last revised December 2010.
                                CPSC is completing rulemaking, per P.L. 112-28, and
                                will monitor product through planned field enforcement
                                programs.
Candles                         Six ASTM International voluntary standards relating to    45 recalls involving 35 companies
                                candles and candle products. Last revision for three
                                standards, 2009; last revision for two standards, 2007;
                                last revision for one standard, 2005.
                                CPSC continues to work with ASTM International in
                                developing standards for candle products.
Cribs                           Mandatory standards, December 2010 (last update);         56 recalls involving 37 companies
                                effective date June 28, 2011.
                                Voluntary standards last revised 2011.
                                CPSC issued final rules regarding crib standards and
                                will continue to monitor this product area.
Extension cords (power cords)   Voluntary standard related to cord sets and flexible      5 recalls involving 5 companies
                                cords and cables, October 2008.




                                          34
                                             An imminently hazardous consumer product presents imminent and unreasonable risk
                                          of death, serious illness, or severe personal injury. 15 U.S.C § 2061(a). CPSC states that
                                          it has not used its authority to refuse admission of an imminently hazardous consumer
                                          product because it requires filing an action in U.S. District Court, which is a resource-
                                          intensive process. Instead, CPSC states that it works cooperatively with the manufacturer
                                          to remove the product from the market, which can include seizure and detention of
                                          products at the port by Customs and Border Protection, if necessary.




                                          Page 23                                  GAO-12-582 Consumer Product Safety Commission
                                                                            a
Product                  CPSC standards activities as of 2011                                   Corrective actions, 2007-2011
                                                                                                                    b
Infant bath seats        Mandatory standard, 2010 (last update).                                No corrective actions
                         Voluntary standard last revised 2011.
                         CPSC issued final rule in 2010 and will continue to
                         monitor this product through planned field enforcement
                         programs.
Infant walkers           Mandatory standard, 2010.                                              3 recalls involving 3 companies
                         Voluntary standard, last revised June 2011.
                         CPSC issued final rule in 2010 and will continue to
                         monitor this product through planned field enforcement
                         programs.
Cigarette lighters       Mandatory standard for child resistance, 1994.                         3 recalls involving 3 companies
                         Advance Notice of Proposed Rulemaking for
                         mechanical malfunction, 2008 (no decision on
                         proceeding).
                         Voluntary standard for mechanical malfunction, most
                         recent edition of voluntary standard is 2010.
                         Utility lighters voluntary standard 2010.
                                                                                                                                  c
Portable generators      Advance Notice of Proposed Rulemaking, 2006.                           5 recalls involving 5 companies
                         Voluntary standard, last revised 2011.
                         CPSC is conducting technical work related to carbon
                         monoxide emissions from portable generators.
Space/electric heaters   Voluntary standard, July 2007.                                         13 recalls involving 11 companies
                         CPSC staff is participating in voluntary standard
                         activities for portable and fixed-position electric heaters
                         under UL Standards Technical Panel 1042 to address
                         fires associated with electric heaters.
Window blinds            Voluntary standard, March 2009.                           41 recalls involving 38 companies
                         CPSC is participating in voluntary standard activities to
                         address strangulation hazards associated with cords on
                         window covering products manufactured under the
                         existing standards.
                                   Source: GAO analysis of data from SaferProducts.gov.


                                   Note: Some of these recalls included items sold at discount stores, retail liquidators, or dollar stores,
                                   but often this information may not be known unless that specific store initiates the recall.
                                   a
                                    CPSC continues to participate in standards activities for these products. Through April 2012, there
                                   have been updates to standards for some of these products.
                                   b
                                       CPSC issued a Safety Alert involving one company.
                                   c
                                    There are no recalls involving generators and a carbon monoxide hazard, which is the focus of
                                   current CPSC standards work.




                                   Page 24                                                GAO-12-582 Consumer Product Safety Commission
                        CPSC has no tracking mechanism specific to voluntary standards in its
CPSC Databases Do       compliance database, but the agency can identify patterns of
Not Identify Products   noncompliance and address safety hazards. CPSC tracks reports of
                        noncompliance with mandatory standards and identifies potential product
with Voluntary          hazards. CPSC has two internal databases for tracking noncompliance
Standards, but the      one for regulated products (products subject to mandatory standards) and
                        the other for products that could pose a substantial product hazard (either
Agency Collects Data    unregulated products or products subject to voluntary standards). 35 In
That Could Help         discussions with CPSC officials, they told us that there is no field in the
                        databases to indicate whether a product is covered by one of the
Identify Patterns of    thousands of existing voluntary standards. However, they noted that they
Noncompliance           have internal policies for tracking compliance with voluntary standards.
                        According to agency officials, CPSC’s policy states that when staff has
                        determined that noncompliance with voluntary standards amounting to a
                        substantial product hazard has occurred, staff should create a file with a
                        case number to track this issue. The case number is an internal tracking
                        number that does not correspond to the unique identifier assigned by
                        SDOs and cannot be linked to a voluntary standard. 36 However, agency
                        officials said that if CPSC finds that the product poses a substantial
                        product hazard and staff determine that the voluntary standard is
                        inadequate or that no standard exists, they refer the case to the voluntary
                        standards coordinator to address through standard setting activities.

                        CPSC’s compliance databases for both the regulated products and
                        substantial hazard (section 15) products are case management systems.
                        According to CPSC officials, more than 50,000 distinct firm names are in
                        the databases. CPSC can classify incidents by manufacturer, retailer,
                        distributer, and country of origin. In some cases a foreign company may
                        have a U.S. agent or representative, making it difficult for CPSC’s
                        database to discern whether the reporting company is foreign or
                        domestic. In addition, CPSC assigns more than 800 different product and
                        product category codes to help track case files. CPSC’s case files track
                        information about the firm, the product, the type of noncompliance, and
                        other relevant information. The agency also tracks correspondence with


                        35
                          Section 15(a)(2) of the CPSA, 15 U.S.C. § 2064(a)(2) provides that a product not
                        covered by a mandatory rule presents a substantial product hazard if it has a defect
                        which, because of various factors, creates a substantial risk of injury to the public.
                        36
                          CPSIA directed CPSC to upgrade and improve its information technology systems. Pub.
                        L. No. 110-314, § 212(b), 122 Stat. 3052. In its March 2012 Operating Plan and
                        Performance Budget, CPSC indicated that it has been creating a single data source to
                        help provide linkages across CPSC data systems.




                        Page 25                                  GAO-12-582 Consumer Product Safety Commission
the manufacturer, distributor, retailers, and public about the case, as well
as the corrective action implemented to address the noncompliance.

Agency officials said that the databases have the capacity to track 26
hazards in 8 hazard categories, including fire hazards for fabrics,
materials, and electric appliances; mechanical hazards in children’s,
household, and sports and recreation products (involving choking,
strangulation, and other injury hazards); electrocution; and chemical
hazards. Staff use data from the compliance databases to identify types
of product defects such as those associated with design, construction,
and packaging of a product, or absence of warning labels or instructions.
They also track the number of defective products in the market and
assess the severity of risk of defects and likelihood of injury.

In addition to tracking trends from compliance data, agency staff,
including the Hazard Analysis Division, perform a range of statistical
analyses across reported incident data to identify patterns of
noncompliance. CPSC staff said they analyze compliance in terms of the
product rather than the manufacturer. Incident data comes from various
sources, including retailers; manufacturers; public safety professionals;
health care professionals; death certificates; news reports; state and local
governments; and incident reports submitted by consumers through
CPSC’s website, SaferProducts.gov. CPSC staff identify potential
emerging patterns, produce estimates of injuries and quantify the
frequency of fatalities based on emergency room data, test for injury
trends over time, and characterize hazard patterns. Analysts evaluate
these data on a daily basis and report increased frequency of reports for
a given product or manufacturer to appropriate teams in the agency.
Officials said that on a weekly basis, analysts apply algorithms across
reports to characterize the frequency by product code. They generate
statistics comparing the number of reports received in the week for
particular products to the number received for the same product over a
20-week period. CPSC officials then use the data to determine which
incidents should be investigated and report on their findings to internal
teams. For example CPSC has identified instances of appliance tipovers
and issued press releases with information to consumers to raise
awareness of tipover hazards. To address this, the agency plans to
participate in standard revision activity to address kitchen range tipovers.

In a previous report we addressed CPSC work resulting from
identification of certain hazard patterns. We reported that during the
1980s, the data CPSC collected on injuries and fatalities related to all-
terrain vehicles, especially among children, led it to file a lawsuit alleging
that the vehicles were an imminently hazardous product. CPSC and


Page 26                            GAO-12-582 Consumer Product Safety Commission
              manufacturers eventually settled the lawsuit through a consent decree in
              which manufacturers and distributors agreed to implement certain safety
              measures and stop selling certain vehicles considered dangerous for
              young children. 37 In its fiscal year 2012 Operating Plan and Performance
              Budget, CPSC also noted that it plans to update safety publications
              addressing children’s hazards, fire and electrical hazards, mechanical
              hazards, sports and recreational hazards, and chemical and combustion
              hazards.


              Voluntary standards establish safety guidelines for many of the thousands
Conclusions   of consumer products in CPSC’s jurisdiction. CPSC is required by law to
              rely on these standards, developed through consensus by industry,
              consumer, and government participants, when the standards are
              adequate to address the risk of harm and substantial compliance with
              them is likely. Because of the substantial prevalence of voluntary
              standards for consumer products, CPSC’s early and active participation in
              standards development activity is critical to establishing adequacy of the
              standard. If CPSC finds that a manufacturer does not comply with a
              voluntary standard and it creates a substantial product hazard, the
              agency can seek a corrective action, such as a recall; however, CPSC
              does not have the authority to compel compliance with voluntary
              standards as such. For fiscal years 2008 through 2011, 80 percent of
              recalls have been of imported products that may be subject to voluntary
              standards, highlighting challenges CPSC faces in helping to ensure the
              safety of consumer products. CPSC has taken steps to ensure
              compliance by (1) performing industry surveillance through analysis of
              incident and other data, (2) participating in standards development
              activities, and (3) monitoring selected voluntary standards. Although
              CPSC regularly participates in standard development activity to the extent
              possible, consumer product safety experts we spoke to generally agreed
              that earlier and more active CPSC participation could increase its
              efficiency and effectiveness in developing standards. Our review also
              found that CPSC regulations concerning meetings policies and allowable
              conduct for CPSC staff participating in standards development activity are
              generally more restrictive than the existing general government policy on
              such participation. While OMB guidance gives agencies discretion to
              determine their level of participation in standard setting activities, CPSC



              37
               GAO, All-terrain Vehicles: How They Are Used, Crashes, and Sales of Adult-Sized
              Vehicles for Children’s Use, GAO-10-418 (Washington, D.C.: Apr. 8, 2010).




              Page 27                               GAO-12-582 Consumer Product Safety Commission
                     has chosen to limit participation to maintain impartiality and avoid
                     appearance of endorsing a specific voluntary standard. Further, a recent
                     White House memorandum on national standards policy states that
                     where statute, regulation, or administration policy identifies a national
                     priority, the federal government may need to be actively engaged or play
                     a convening role to accelerate standards development and
                     implementation. Changing regulations to enable staff to more actively
                     participate, especially when working with technical committees for which
                     CPSC has expertise and permitting CPSC staff to vote on the standard,
                     could result in stronger voluntary standards without compromising
                     CPSC’s independence. Without more active participation from CPSC,
                     standards emerging from standards development organizations risk being
                     less stringent and may be inadequate to protect the public from hazards.


                     To strengthen the adequacy of voluntary standards, we recommend that
Recommendation for   the Chairman of CPSC direct agency staff to review the policy for
Executive Action     participating in voluntary standards development activities and determine
                     the feasibility of assuming a more active, engaged role in developing
                     voluntary standards.


                     We provided a draft of this report to CPSC for comment. In their written
Agency Comments      comments, reproduced in appendix II, CPSC supported our
and Our Evaluation   recommendation and wrote that staff would review agency policies and
                     determine the feasibility of changes to the policies. CPSC staff also
                     provided technical comments that were incorporated, as appropriate.




                     Page 28                          GAO-12-582 Consumer Product Safety Commission
We are sending copies of this report to interested congressional
committees and the Chairman and commissioners of CPSC. In addition,
the report will be available at no charge on GAO’s website at
http://www.gao.gov.

If you or your staff members have any questions about this report, please
contact me at (202) 512-8678 or cackleya@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.




Alicia Puente Cackley
Director, Financial Markets and Community Investment




Page 29                          GAO-12-582 Consumer Product Safety Commission
Appendix I: Scope and Methodology
             Appendix I: Scope and Methodology




             To evaluate the extent to which manufacturers comply with voluntary
             standards for consumer products, we interviewed officials from the
             Consumer Product Safety Commission (CPSC) and national consumer,
             industry, standard-setting, and legal organizations that have expertise in
             working on voluntary standards development for consumer products. We
             reviewed internal CPSC operating procedures and learned about the
             agency’s outreach programs to educate the public about safety
             standards. We reviewed statutory authorities and procedures for
             establishing voluntary standards. We interviewed the three standards
             development organizations that coordinate the development of more than
             90 percent of voluntary standards developed with CPSC staff technical
             support to learn about how standards and certification programs are
             developed.

             To evaluate CPSC’s authority and ability to encourage compliance with
             voluntary standards, we reviewed CPSC’s statutory and regulatory
             authority related to voluntary standards. We also reviewed CPSC
             standard operating procedures, performance and accountability reports,
             and budget documents to obtain information about CPSC’s work plans
             with respect to voluntary standards. We met with cognizant CPSC
             officials, including all of CPSC’s current commissioners and the
             Chairman, to discuss their authorities and ability to enforce them. We
             reviewed relevant laws, regulations, and our prior reports on CPSC’s
             authorities. We interviewed legal experts in the consumer product safety
             field regarding CPSC’s authorities. We conducted a literature search for
             information regarding CPSC’s effectiveness in getting manufacturers to
             comply with voluntary standards. We attended a conference on the
             adequacy of voluntary standards sponsored by the Consumer Federation
             of America and a conference by the International Consumer Product
             Safety and Health Organization on trends in international consumer
             product safety.

             To evaluate the consequences for manufacturers that fail to comply with
             voluntary standards, we reviewed documents from CPSC officials and
             obtained and reviewed publicly available data on recalls and other
             corrective actions. We obtained and analyzed data collected by CPSC
             through SaferProducts.gov regarding product safety incident reports and
             corrective actions assigned to manufacturers whose products did not
             comply with voluntary standards. We assessed the reliability of these data
             by (1) reviewing existing information about the data and the system that
             produced them and (2) interviewing agency officials knowledgeable about
             the data and related management controls. We found the data to be
             reliable for the purposes of determining the number and trends of product
             safety incident reports and corrective actions. We interviewed CPSC


             Page 30                             GAO-12-582 Consumer Product Safety Commission
Appendix I: Scope and Methodology




officials, legal experts, and consumer and industry participants to learn of
possible corrective actions that could be imposed on firms that fail to
comply with voluntary standards. Further, we conducted a legal literature
search for information about CPSC’s authorities to determine
consequences for manufacturers who fail to comply with voluntary
standards.

To evaluate CPSC’s efforts to identify patterns of noncompliance with
voluntary standards, we interviewed CPSC officials about their data
collection methods and internal processes for analyzing incident data and
tracking patterns. We obtained and reviewed data from CPSC’s
compliance databases to identify (1) the number of reported instances of
noncompliance; (2) the number of times these instances led to a
corrective action; (3) the numbers of corrective actions that resulted; (4)
the number of product units recalled; and (5) the type of standard, if any,
that covered the product. We assessed the reliability of these data by (1)
reviewing existing information about the data and the system that
produced them and (2) interviewing agency officials knowledgeable about
the data and related management controls. Based on this assessment,
we determined the data to be sufficiently reliable for the purposes of this
report.

We conducted this performance audit from January 2012 to May 2012 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




Page 31                             GAO-12-582 Consumer Product Safety Commission
Appendix II: Comments from the Consumer
             Appendix II: Comments from the Consumer
             Product Safety Commission



Product Safety Commission




             Page 32                               GAO-12-582 Consumer Product Safety Commission
Appendix III: GAO Contact and Staff
                  Appendix III: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Alicia Puente Cackley, (202) 512-8678 or cackleya@gao.gov
GAO Contact
                  In addition to the individual named above, Debra Johnson, Assistant
Staff             Director; Nina E. Horowitz; DuEwa Kamara; Angela Messenger; Barbara
Acknowledgments   Roesmann; Jessica Sandler; Andrew Stavisky; and Henry Wray made
                  major contributions to this report.




(250662)
                  Page 33                               GAO-12-582 Consumer Product Safety Commission
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