Consumer Product Safety Commission: Better Data Needed to Help Identify and Analyze Potential Hazards

Published by the Government Accountability Office on 1997-10-23.

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

                             United States General Accounting Office

GAO                          Testimony
                             Before the Subcommittee on Telecommunications, Trade,
                             and Consumer Protection, Committee on Commerce,
                             House of Representatives

For Release on Delivery
Expected at 9:30 a.m.
Thursday, October 23, 1997
                             CONSUMER PRODUCT
                             SAFETY COMMISSION

                             Better Data Needed to Help
                             Identify and Analyze
                             Potential Hazards
                             Statement of Carlotta C. Joyner, Director
                             Education and Employment Issues
                             Health, Education, and Human Services Division

Consumer Product Safety Commission:
Better Data Needed to Help Identify and
Analyze Potential Hazards
               Mr. Chairman and Members of the Subcommittee:

               We are pleased to be here today to discuss our work on the Consumer
               Product Safety Commission (CPSC). CPSC was created to protect consumers
               from “unreasonable risk of injury,” and in doing so it oversees about
               15,000 consumer products, ranging from kitchen appliances and children’s
               toys to hot tubs and garage door openers. With a budget of about
               $42.5 million, CPSC enforces existing federal consumer product regulations
               and also develops agency projects to address products with a potential
               hazard not covered by existing regulations.1 These projects may result in
               CPSC’s issuing new regulations concerning a specific product, assisting in
               the development of voluntary industry standards, or providing information
               to consumers about how to use a product safely.

               Contending that the agency is ineffectively allocating its resources, some
               industry representatives and other individuals have voiced dissatisfaction
               with the agency’s selection of certain projects and have questioned the
               validity of CPSC’s cost-benefit and risk assessment analyses supporting
               those projects. Congressional and interest-group critics have also raised
               concerns about the agency’s procedures for ensuring the accuracy of
               manufacturer-specific information before it releases the information to the
               public, maintaining that such releases can mar the reputation of
               responsible corporations. In light of these concerns, you asked us to
               discuss CPSC’s project selection, use of cost-benefit analysis and risk
               assessment, and information release procedures. Today, we are also
               releasing our report on CPSC, which covers these issues in more detail.2

               To do our work, we reviewed internal CPSC documents, relevant
               legislation, regulations, and legal cases, and the literature on cost-benefit
               analysis and on consumer product safety issues. In addition, we
               interviewed current and former CPSC commissioners, CPSC staff, consumer
               advocates, industry representatives, and outside experts to obtain their
               perspectives on CPSC’s work. We identified CPSC projects by compiling from
               various agency documents a list of 115 potential product hazards
               examined by the agency from January 1990 to September 30, 1996, and we
               reviewed available agency documentation on each of these projects. We

                Projects vary widely in scope, and CPSC has no standard definition of what constitutes a project. For
               our review, we defined a “project” as work CPSC conducted on any specific consumer product that
               was associated with a potential hazard or hazards not covered by existing regulation.
               Consumer Product Safety Commission: Better Data Needed to Help Identity and Analyze Potential
               Hazards (GAO/HEHS-97-147, Sept. 29, 1997).

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             Consumer Product Safety Commission:
             Better Data Needed to Help Identify and
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             examined the agency’s internal databases to obtain project information
             and assess the agency’s information on product hazards.

             In summary, although CPSC has established criteria to help select new
             projects, with the agency’s current data, these criteria can be measured
             only imprecisely if at all. CPSC has described itself as “data driven,” but its
             information on product-related deaths and injuries is often sketchy, and its
             lack of systematized descriptive information on past or ongoing projects
             makes it more difficult for agency management to monitor current
             projects and to assess and prioritize the need for new projects in different
             hazard areas. CPSC’s data are often insufficient to support rigorous
             application of risk assessment and cost-benefit analysis. In addition, the
             cost-benefit analyses conducted by CPSC between 1990 and 1996 were
             frequently not comprehensive, and the reports on these analyses were not
             sufficiently detailed. We also found that CPSC has established procedures
             to implement statutory requirements restricting the release of
             manufacturer-specific information. Although industry representatives,
             consumer advocates, and CPSC expressed differing views on the merits of
             these restrictions, available evidence suggests that CPSC complies with
             these statutory requirements.

             CPSC  was created in 1972 under the Consumer Product Safety Act (P.L.
Background   92-573) to regulate consumer products that pose an unreasonable risk of
             injury, to assist consumers in using products safely, and to promote
             research and investigation into product-related deaths, injuries, and
             illnesses. CPSC currently has three commissioners, who are responsible for
             establishing agency policy.3 One of these commissioners is designated as
             the chairman, who directs all the executive and administrative functions of
             the agency.

             In fiscal year 1997, CPSC carried out its broad mission with a budget of
             about $42.5 million and a full-time-equivalent staff of 480. After adjusting
             for inflation, the agency’s budget has decreased by about 60 percent since
             1974. Similarly, CPSC’s current staffing level represents 43 percent fewer
             positions as compared with the agency’s 1974 staff.

             Although CPSC has broad regulatory powers, many of the agency’s efforts
             are carried out using nonregulatory methods. For example, CPSC frequently
             assists industry and private standard-setting groups in developing

              The Consumer Product Safety Act provides for the appointment of five commissioners by the
             President of the United States for staggered 7-year terms. However, since 1986, no more than three
             commissioners have been in office at one time.

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                           Consumer Product Safety Commission:
                           Better Data Needed to Help Identify and
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                           voluntary product safety standards.4 CPSC also addresses product hazards
                           by providing information to consumers on safety practices that can help
                           prevent product-related accidents. In addition to its own efforts to
                           disseminate information, CPSC provides considerable amounts of
                           information in response to requests from the public.

CPSC Has Limited
Information Available
to Assist in Project

CPSC’s Project Selection   CPSC’s resource base and extensive jurisdiction require the agency to select
Process                    among potential product hazards. New agency initiatives may come to
                           CPSC in several ways. First, any person may file a petition requesting CPSC
                           to issue, amend, or revoke a regulation. For example, CPSC’s cigarette
                           lighter project, which resulted in a new mandatory safety standard,
                           originated with a petition from an emergency room nurse. Second, CPSC
                           can receive a product hazard project from the Congress. The Congress
                           may require CPSC to study a wide-ranging product area (such as indoor air
                           quality) or impose a specific regulation (such as a mandatory safety
                           standard for garage door openers).5 Third, CPSC commissioners and agency
                           staff can initiate projects or suggest areas to address.

                           CPSC has wide latitude over which potential product hazards it targets for
                           regulatory and nonregulatory action. Although the agency has little or no
                           discretion over projects mandated by the Congress, it can accept or reject
                           suggestions submitted by petition or proposed by agency staff. Of the 115
                           projects the agency worked on from January 1, 1990, to September 30,
                           1996, 59 percent were initiated by CPSC, 30 percent originated from a
                           petition, and about 11 percent resulted from congressional directives.

                           CPSC has established criteria for setting agency priorities and selecting
                           potential hazards to address. These criteria, which are incorporated in
                           agency regulations, include the following:

                            The 1981 amendments to the Consumer Product Safety Act require CPSC to defer to a voluntary
                           standard—rather than issue a mandatory regulation—if the Commission determines that the voluntary
                           standard adequately addresses the hazard and that there is likely to be substantial compliance with the
                           voluntary standard.
                            This mandate was imposed in the Child Safety Protection Act (P.L. 103-267, June 16, 1994).

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•   the frequency of injuries and deaths resulting from the hazard;
•   the severity of the injuries resulting from the hazard;
•   addressability—that is, the extent to which the hazard is likely to be
    reduced through CPSC action—agency regulations note that the cause of
    the hazard should be analyzed to help determine the extent to which
    injuries can reasonably be expected to be reduced or eliminated through
    CPSC action;
•   the number of chronic illnesses and future injuries predicted to result from
    the hazard;
•   preliminary estimates of the costs and benefits to society resulting from
    CPSC action;
•   the unforeseen nature of the risk—that is, the degree to which consumers
    are aware of the hazard and its consequences;
•   the vulnerability of the population at risk—whether some individuals
    (such as children) may be less able to recognize or escape from potential
    hazards and therefore may require a relatively higher degree of protection;
•   the probability of exposure to the product hazard—that is, the number of
    consumers exposed to the potential hazard, or how likely it is that typical
    consumers would be exposed to the hazard; and
•   additional criteria to be considered at the discretion of CPSC.

    Commissioners and staff may select projects on the basis of what they
    believe are the most important factors. For example, the regulations do
    not specify whether any criterion should be given more weight than the
    others, nor that all criteria must be applied to every potential project. Our
    interviews with present and former commissioners and our review of CPSC
    briefing packages showed that three criteria—the number of deaths and
    injuries, the cause of injuries, and the vulnerability of the population at
    risk—were more strongly emphasized than the others. However, although
    the commissioners and former commissioners we interviewed generally
    agreed about which criteria they emphasized for project selection, they
    expressed very different views on how some of these criteria should be
    interpreted. For example, their opinions differed about choosing projects
    on the basis of the cause of injuries. A major issue in this regard
    concerned the appropriate level of protection the agency should be
    responsible for providing when a product hazard results, at least in part,
    from consumer behavior. Some current and former commissioners argued
    that no intervention was warranted when consumer behavior contributed
    to injuries; others were more willing to consider a regulatory approach in
    these situations.

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                            Consumer Product Safety Commission:
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Project Management          Although CPSC conducts a number of projects annually, staff were unable
Information Was             to give us a comprehensive list of projects the agency had worked on in
Incomplete or Unavailable   the 6-year period we examined. CPSC was also unable to verify the
                            completeness of the project list that we compiled from agency documents
                            and interviews with staff. According to CPSC staff, internal management
                            systems do not generally contain this information because most projects
                            are accounted for under either broad codes such as “children’s products”
                            or activity codes such as “investigations,” “product safety assessment,”
                            and “emerging problems.” In addition, CPSC staff told us that reliable
                            inferences about the characteristics of individual projects, their outcomes,
                            and the resources spent on them cannot be drawn from management
                            information systems because of limitations in the computer system and
                            because no consistent rule exists about how staff time in different
                            directorates is recorded to project codes. Without systematic and
                            comprehensive information on its past efforts, CPSC cannot fully assess
                            whether its projects overrepresent some hazard areas and therefore
                            agency resources might be more efficiently employed. In our report, we
                            recommend that the Chairman of CPSC direct agency staff to develop and
                            implement a project management tracking system to compile information
                            on current agency projects.

Significant Gaps Exist in   CPSC  has developed a patchwork of independent data systems to provide
CPSC’s Data on All          information on deaths and injuries associated with consumer products. To
Selection Criteria,         estimate the number of injuries associated with specific consumer
                            products, CPSC gathers information from the emergency room records of a
Including Product-Related   nationally representative sample of 101 hospitals. CPSC also obtains
Injuries and Deaths         information on fatalities by purchasing a selected group of death
                            certificates from the states. Because neither emergency room nor death
                            certificate data provide detailed information on hazard patterns or causes
                            of injuries, CPSC also investigates selected incidents to obtain more
                            detailed information.

                            CPSC’s data give the agency only limited assistance in applying its project
                            selection criteria. Data on all CPSC’s project selection criteria suffer from
                            major limitations, as shown in table 1. In fact, none of the criteria are
                            supported by complete data that are available for most projects at the time
                            the project is selected.

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Table 1: CPSC’s Regulatory
Priority-Setting Criteria and Their   Criterion                 Major limitations
Major Limitations                     Number of deaths          Incomplete because not all certificates are gathered and not all
                                                                product-related incidents are noted on the certificates
                                      Number of injuries        Generally limited to injuries treated in emergency room,
                                                                excluding injuries treated in other settings
                                      Severity of injuries      Not representative of the severity of all injuries
                                      Chronic illnesses         Little systematic information
                                      Predicted future          Questionable validity, given changes in medical care over time
                                      Vulnerable                Incomplete—information available only on age and not on other
                                      populations               vulnerable populations, such as people with disabilities
                                      Exposure                  Exposure surveys are time consuming and expensive, not done
                                                                for all projects, and done only after project is well under way
                                      Addressability/           Often impossible to make an informed judgment until project is
                                      causation                 well under way; investigations are time consuming and expensive
                                      Preliminary               Quality data are frequently not available; data from early stages
                                      cost-benefit analysis     of project are of limited accuracy

                                      CPSC staff identified four data-gathering areas as key concerns: (1) lack of
                                      data on injuries treated in physicians’ offices and other settings outside the
                                      emergency room; (2) lack of data that would identify chronic illnesses that
                                      may be associated with consumer products; (3) sketchy information about
                                      accident victims, which limits the ability to assess which hazards
                                      disproportionately affect vulnerable populations; and (4) lack of data on
                                      exposure to consumer products.

                                      CPSC’s injury and death data allow at best an incomplete view—and at
                                      worst a distorted one—of the incidents that result from consumer product
                                      hazards. Product-related injuries may be treated in a variety of settings—a
                                      hospital emergency room, a physician’s office, or an outpatient clinic, for
                                      example. CPSC systematically collects information only on deaths and on
                                      injuries treated in the emergency room; injuries treated in other settings
                                      (such as physicians’ offices) are generally not represented in CPSC’s data.
                                      Because CPSC’s data reveal only a portion of the injury picture, the agency
                                      underestimates the total numbers of deaths and injuries associated with
                                      any given consumer product. The extent of this undercount is unknown,
                                      but it may be increasing; pressure to contain health care costs has led to
                                      more injuries and illnesses being treated outside the hospital setting.6 In
                                      addition, CPSC’s incomplete injury information raises doubts about whether
                                      the agency can reliably discern long-term trends in injuries. Trend

                                       For example, according to the American Hospital Association, hospitalizations decreased by 5 percent
                                      on a per capita basis between 1982 and 1994, while between 1983 and 1993 hospital outpatient clinics
                                      saw a 53-percent increase in visits on a per capita basis.

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information is needed not only because it is a criterion for project
selection but also because it is important in evaluating the success of
CPSC’s injury reduction efforts and determining the need for possible
follow-up actions.

According to CPSC staff, identifying chronic illnesses associated with
consumer products is nearly impossible with CPSC’s current data. CPSC staff
stated that little is known about many chronic illness hazards that may be
associated with potentially dangerous substances, and even less
information is available about which consumer products may contain
these ingredients. Chronic illnesses are likely to be especially
underestimated in CPSC’s emergency room data, because they are
underrepresented among emergency room visits and because product
involvement is more difficult to ascertain. Similarly, consumer product
involvement is seldom recorded on death certificates in the case of
chronic illnesses.

Sketchy information about accident victims also limits CPSC’s ability to
assess which consumer product hazards have a disproportionate impact
on vulnerable populations. CPSC’s surveillance data systems provide
information only on the age of the victim; no systematic or comprehensive
information is available to determine whether a given hazard has a special
impact on other vulnerable populations such as people with disabilities. A
former commissioner told us that the lack of other demographic
information (such as race, income, and disability status) made it difficult
to know which subpopulations were predominantly affected by a
particular hazard. Another commissioner echoed this concern, adding that
such information would be useful in targeting public information
campaigns on certain hazards to those groups that need the information

Although CPSC staff identified the need for additional exposure data as a
major concern, they also said that obtaining such information can be time
consuming and costly. Because exposure data are generally not included
in CPSC’s ongoing data collection efforts, exposure is assessed either not at
all or well after the project has started, precluding the use of exposure as
an effective criterion for project selection. Similarly, CPSC’s emergency
room and death certificate data give little information about the
circumstances of the incident. Therefore, CPSC staff follow up on a few
selected incidents to obtain additional details. These investigations may
include detailed interviews with victims and witnesses, police or fire
reports, photographs of the product and the accident site, laboratory

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                      testing of the product, and recreations of the incident. As with exposure
                      data, these investigations are not conducted for every project and are done
                      only after a project has been established. Thus, assessment of causation at
                      the project selection stage is unavoidably speculative.

                      We believe that improved information on each of these four areas is
                      necessary for CPSC to make informed decisions on potential agency
                      projects. However, we also recognize that such information may be costly
                      to obtain. In our report, we recommend that the Chairman of CPSC consult
                      with experts both within and outside the agency to prioritize CPSC’s needs
                      for additional data, investigate the feasibility and cost of alternative means
                      of obtaining these data, and design systems to collect and analyze this

                      CPSC uses two analytical tools—risk assessment and cost-benefit
Better Data and       analysis—to assist in making decisions on regulatory and nonregulatory
Methodology Are       methods to address potential hazards. Risk assessment involves estimating
Needed to Improve     the likelihood of an adverse event, such as injury or death. Cost-benefit
                      analysis details and compares the expected effects of a proposed
CPSC’s Cost-Benefit   regulation or policy, including both the positive results (benefits) and the
Analysis and Risk     negative consequences (costs). The Congress requires CPSC to perform
                      cost-benefit analyses before issuing certain regulations, and CPSC has
Assessment            conducted cost-benefit analyses for these regulations and in other
                      situations in which such an analysis was not required by law. Because
                      most of the agency’s projects do not involve regulation, relatively few CPSC
                      projects conducted between January 1, 1990, and September 30, 1996,
                      were subject to these requirements. We identified 8 cost-benefit analyses
                      that CPSC performed in accordance with these requirements and an
                      additional 21 analyses that it conducted when it was not required.7 Before
                      issuing certain regulations, CPSC is required to consider the degree and
                      nature of the risk of injury the regulation is designed to eliminate or
                      reduce. However, CPSC usually does not conduct a formal, numerical risk
                      assessment before issuing a regulation, and the law does not require it to
                      do so. We determined that CPSC conducted 24 risk assessments between
                      January 1, 1990, and September 30, 1996; only 4 of these were associated
                      with regulatory action.

                      Both risk assessment and cost-benefit analysis require extensive data.
                      CPSC’s data systems are frequently unable to adequately meet the extensive

                       In addition to the complete cost-benefit analyses, we identified an additional 23 cases in which some
                      information was provided on some economic benefits or costs.

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demands for information posed by risk assessment and cost-benefit
analysis. As a result, the agency’s estimates of risks, costs, and benefits are
less accurate because they reflect the substantial limitations of the
underlying data. For example, because CPSC’s data undercount the deaths
and injuries associated with particular consumer products, estimates of
risk—and the potential benefits of reducing that risk—appear smaller than
they actually are. However, CPSC’s data provide information only on
whether a product was involved in an accident, not whether the product
caused the accident. This can sometimes make the risks assessed by
CPSC—and the benefits of reducing those risks—appear greater.

The methodology used to conduct a cost-benefit analysis frequently
depends on the circumstances and the context of the analysis. For this
reason, there is no complete set of standards for evaluating the quality of
an individual cost-benefit analysis. However, the professional literature
offers some guidance for analysts, and certain specific elements are
frequently used to determine whether a given analysis meets a minimum
threshold of comprehensiveness and openness. For example, analysts
generally agree that all methodological choices and assumptions should be
detailed, all limitations pertaining to the data should be revealed, and
measures of uncertainty should be provided to allow the reader to take
into account the precision of the underlying data. Similarly, practitioners
generally call for sensitivity analysis, which enables the reader to
determine which assumptions, values, and parameters of the cost-benefit
analysis are most important to the conclusions.

Our review of all the cost-benefit analyses that CPSC conducted between
January 1, 1990, and October 31, 1996, showed that for six of eight
evaluation elements, CPSC’s analyses were not comprehensive and not
reported in sufficient detail (see table 2).8 Specifically, CPSC provided
descriptive information on proposals and also provided information on a
variety of reasonable alternatives in almost 100 percent of cases. But in
only 17 percent of its analyses did CPSC provide any statistical information
on the precision of the underlying estimates. Similarly, when estimates are
based on a relatively small sample size, projections are generally not
considered reliable. But CPSC analysts cautioned the reader against
drawing conclusions on the basis of small sample data only 45 percent of

 From our review of the cost-benefit literature, we developed a list of the elements that are frequently
used in evaluating cost-benefit analyses. Although we compared each of these elements with each of
CPSC’s analyses, not all elements were applicable to each case. For this reason, and to emphasize
those areas that we viewed as most critical, we reported only those results that related to key
elements, applied to the majority of CPSC’s analyses, and for which a determination was possible in all
or nearly all cases.

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                                     the time. Furthermore, some of CPSC’s data sets have a known upward or
                                     downward bias because of the way the data were constructed. For
                                     example, when estimates of incidents are based only on investigated or
                                     reported cases, two potential biases are likely to be introduced into the
                                     analysis: (1) the estimates are likely to be biased downward by
                                     nonreporting and (2) the incidents reported tend to be the more severe
                                     ones. In only 53 percent of applicable cases did CPSC’s analysis inform the
                                     reader of known limitations inherent in the data being used for
                                     cost-benefit analysis.

Table 2: Evaluation of CPSC’s
Analyses Shows Problems in Several                                                                                               Percentage
Evaluation Elements                                                                                                               of CPSC’s
                                                                                                                                   that were
                                                                                                                                    with this
                                     Evaluation element                                                                             element
                                     Provided descriptive information about a well-defined proposal                                            98
                                     Addressed multiple alternatives                                                                           95
                                     Reported measures of precision for underlying data                                                        17
                                     Cautioned reader about making inferences from data with a small sample
                                     size                                                                                                      45
                                     Reported known biases in underlying data                                                                  53
                                     Provided any sensitivity analysis information                                                             26
                                     Included all important categories of benefits and costs                                                   54
                                     Considered risk-risk trade-offs                                                                           49
                                      A “risk-risk” trade-off refers to an action to decrease a hazard’s risk that unintentionally increases
                                     that or another risk.

                                     We identified several other areas in which CPSC analyses could benefit
                                     from improvement. For example, researchers agree that sensitivity
                                     analysis should be incorporated in cost-benefit analyses. CPSC usually did
                                     not provide sensitivity analysis information. In addition, only 54 percent of
                                     CPSC analyses considered the full range of costs and benefits likely to
                                     result from regulation. CPSC analysts frequently did not mention intangible
                                     costs or benefits (costs or benefits that are difficult to quantify, such as
                                     loss of consumer enjoyment) or potential indirect effects (such as changes
                                     in the prices of related goods). CPSC also frequently excluded risk-risk
                                     considerations from its evaluation of the costs and benefits of potential
                                     actions. Sometimes actions taken to reduce one risk can unintentionally
                                     increase that or another risk—such as when individuals take more or

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                            fewer precautions in response to a change in a product’s safety features.
                            For example, in establishing a standard for child-resistant packaging that
                            was also “senior-friendly,” CPSC considered that because child-resistant
                            medicine bottles can be difficult to open, a grandparent might leave the
                            cover off the bottle, creating an even greater risk than would exist with the
                            original cap. Although CPSC considered such factors in some cases, only
                            49 percent of its analyses reflected potential risk-risk trade-offs.

                            CPSC has not established internal procedures that require analysts to
                            conduct comprehensive analyses and report them in sufficient detail. For
                            example, according to CPSC staff, the agency has little written guidance
                            about what factors should be included in cost-benefit analyses, what
                            methodology should be used to incorporate these factors, and how the
                            results should be presented. Staff also told us that CPSC analyses are not
                            generally subject to external peer review. Such reviews can serve as an
                            important mechanism for enhancing the quality and credibility of the
                            analyses that are used to help make key agency decisions. In our report,
                            we recommend that the Chairman direct agency staff to develop and
                            implement procedures to ensure that all cost-benefit analyses performed
                            on behalf of CPSC are comprehensive and reported in sufficient detail,
                            including providing measures of precision for underlying data,
                            incorporating information on all important costs and benefits, and
                            performing sensitivity analysis.

                            To help minimize the possibility that a product might be unfairly
CPSC Has Established        disparaged, in section 6(b) of the Consumer Product Safety Act, the
Procedures for              Congress imposed restrictions on CPSC’s disclosure of
Complying With              manufacturer-specific information.9 Before CPSC can release any
                            information that identifies a manufacturer,10 it must
Requirements for        •   take “reasonable steps” to verify the accuracy of the information and to
                            ensure that disclosure is fair;
Releasing               •   notify the manufacturer that the information is subject to release; and
Manufacturer-Specific   •   give the manufacturer an opportunity to comment on the information.

                             An exception to these restrictions is given if CPSC has declared that the product is an “imminent
                            hazard” under section 12 of the Consumer Product Safety Act.
                              These restrictions also apply even if the manufacturer is not named but the information would allow
                            the reader to readily identify the manufacturer from the context. For example, if there is only one
                            manufacturer of a product identified in the information, the information may be subject to restriction
                            even if the manufacturer’s name is not given.

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These restrictions apply not only to information the agency issues on its
own—such as a press release—but also to information disclosed in
response to a request under the Freedom of Information Act. Section 6(b)
also requires CPSC to establish procedures to ensure that releases of
information that reflect on the safety of a consumer product or class of
products are accurate and not misleading, regardless of whether the
information disclosed identifies a specific manufacturer.

In implementing section 6(b), CPSC established several procedures
designed to ensure compliance with these statutory requirements. These
include obtaining written verification from individuals of the information
they report to the agency, notifying manufacturers by certified mail when
manufacturer-specific information has been requested, and giving
manufacturers the option to have their comments published with any
information disclosed. For example, CPSC has issued clearance procedures
for situations when commissioners and staff initiate public
disclosures—for example, when CPSC publishes the results of agency
research. Under CPSC’s guidelines, each assistant or associate executive
director whose area of responsibility is involved must review the
information and indicate approval for the release in writing. After all other
reviews have been completed, the Office of the General Counsel must also
review and approve the release.

Information from three sources—industry sources, published legal cases,
and data on retractions—suggests that CPSC complies with its statutory
requirements concerning information release. Industry sources, even those
otherwise critical of the agency, told us that CPSC generally keeps
proprietary information confidential as required by law. Our review of
published legal decisions found no rulings that CPSC violated its statutory
requirements concerning the release of information. Retractions by CPSC
are also rare—only three retractions have been issued by CPSC since the
agency was established.11

Industry observers, CPSC staff, and consumer groups expressed a wide
range of opinions on the effectiveness of section 6(b). In response to our
inquiries, some CPSC commissioners and former commissioners said that
these restrictions serve a useful purpose and should not be changed.
However, CPSC’s current chairman, industry and advocacy group
representatives, and others expressed dissatisfaction with 6(b) and some

  Two of these retractions, in 1984 and 1994, were issued in response to requests from firms. A third
retraction, in 1990, was issued after CPSC discovered that a report in its public reading room had
mistakenly included inaccurate information.

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Better Data Needed to Help Identify and
Analyze Potential Hazards

suggested possible changes. Although these individuals raised issues about
the extent of the protection afforded to manufacturers and the resources
necessary to ensure compliance, we did not assess whether the specific
suggestions were necessary or feasible.

CPSC’s chairman, other CPSC officials, former commissioners, and the
representative of a consumer advocacy group stated that compliance with
6(b) is costly for CPSC and delays the agency in getting information out to
the public. To reduce the burden of complying with these requirements,
CPSC staff have suggested that the notification requirement that gives
manufacturers 20 days in which to comment should apply only to the first
time information is released and that, instead of requiring CPSC to verify
information from consumer complaints, the agency should be allowed to
issue such information with an explicit disclaimer that CPSC has not
verified the consumer’s report.

Instead of reducing CPSC’s verification requirements, some industry
representatives suggested expanding them. These manufacturers stated
that before CPSC releases incident information, the agency should
substantiate it, rather than relying on a consumer’s testimony. Industry
representatives stated—and CPSC staff confirmed—that many of the
requests for CPSC information come from attorneys for plaintiffs in product
liability suits. As a result, some industry representatives expressed
concern that unsubstantiated consumer complaints could be used against
them in product liability litigation. They suggested that 6(b) should require
CPSC to substantiate all incident reports by investigating them before they
can be disclosed, instead of merely checking with the consumer. However,
CPSC officials told us that, because of limited resources,
investigations—which are time consuming and costly—can be conducted
only on a small proportion of specially selected cases.

Retailers’ representatives also suggested specific changes to CPSC’s
information release requirements. They said that retailers do not receive
timely notice of recalls because CPSC has interpreted the law to prohibit
advance notification of retailers. Consequently, the retailers said, they
sometimes receive notice of recalls at the same time as their customers
and have no time to prepare. Retailers’ representatives suggested
amending 6(b) to provide for 5 business days’ advance notice to retailers
before the public announcement of a recall. CPSC officials said that
typically manufacturers are, and should be, the ones to contact the
retailers and make all arrangements for a recall. Although they disagreed
on the need for a statutory change, both CPSC staff and a major retailers’

Page 13                                                      GAO/T-HEHS-98-23
           Consumer Product Safety Commission:
           Better Data Needed to Help Identify and
           Analyze Potential Hazards

           association said they were trying to work out a more satisfactory

           Mr. Chairman, that concludes my prepared statement. I would be happy to
           answer any questions you or Members of the Subcommittee might have.

(205358)   Page 14                                                    GAO/T-HEHS-98-23
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