Consumer Product Safety Commission: Challenges and Options for Responding to New and Emerging Risks
Published: 2014-10-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: CPSC is responsible for ensuring the safety of thousands of consumer products, including imports, after they enter the U.S. market. Its jurisdiction covers a range of products–from children's toys to off-road recreational vehicles. Identifying and assessing new and emerging consumer product risks can present challenges. Questions have been raised in recent congressional hearings about the length of time CPSC takes to address a safety hazard, during which injuries and fatalities can continue to occur. Section 4 of the Consolidated Appropriations Act of 2014 mandated that GAO review CPSC's ability to respond quickly to new and emerging risks.
This report discusses (1) how CPSC's authorities and other factors may affect its response time to new and emerging hazards and (2) options and their trade-offs that may be available to address CPSC's ability to respond to these hazards. GAO reviewed CPSC's laws and regulations, prior GAO reports, and other published studies. Additionally, GAO interviewed CPSC commissioners and staff, consumer safety experts, legal experts, and representatives from consumer and industry organizations.
section_title: What GAO Found
paragraphs: According to Consumer Product Safety Commission (CPSC) officials, industry representatives, consumer groups, and subject-matter experts GAO interviewed, the timeliness of CPSC's responses may be affected by several factors, including (1) compliance actions that can involve litigation, (2) reliance on voluntary standards, (3) rulemaking procedures, (4) restrictions on sharing information with the public and international agencies, and (5) limited agency resources. For example, CPSC must defer to a voluntary standard if it determines that compliance with a voluntary standard would eliminate or adequately reduce the risk of injury and there is likely to be substantial compliance with the voluntary standard. However, because the laws do not establish a time frame for finalizing a voluntary standard, conflicting industry and consumer interests can delay its development, sometimes for years. CPSC has worked with the window covering industry since 1994 to develop a voluntary standard to address strangulation hazards stemming from window blind cords, but as of September 2014, no voluntary standard that addresses the ongoing safety concerns had been finalized. Further, new and emerging product safety risks present challenges because, statutorily, CPSC was established to respond to risks after products have been introduced into market.
Various options have been suggested for improving CPSC's ability to respond to new and emerging product safety risks, including the following examples:
Preventative regulatory approaches . Many representatives said that regulatory approaches designed to prevent hazardous products from entering the market—such as premarket approval—could reduce consumer injuries, but could also inhibit market innovation and impose burdensome costs on manufacturers and CPSC.
Expedited rulemaking authority . Some stakeholders proposed expanding CPSC's authority to use expedited rulemaking procedures similar to those authorized in 2008 in the Consumer Product Safety Improvement Act, which streamlined the rulemaking process for durable infant products. Most believed streamlined procedures would enable CPSC to promulgate rules in a more timely manner to address risks, but opinions differed on the extent to which the authority should be expanded.
Enhancing CPSC's authorities to address unsafe imports . CPSC has proposed several statutory changes to improve its ability to identify hazardous products at the ports of entry and prevent them from entering the marketplace. About half the representatives GAO talked to supported the proposed changes, with some exceptions where the changes would impose additional burdens on industry.
Enhanced data analysis capabilities . Most representatives agreed that CPSC could respond to new and emerging hazards more quickly if it had additional funding for technology and staff with technical expertise in the areas of engineering, toxicology, and public health to analyze product hazard data and conduct risk assessments.
section_title: What GAO Recommends
paragraphs: GAO makes no recommendations in this report. In prior reports GAO has made a recommendation related to CPSC's participation in voluntary standards development and suggested that Congress address restrictions on how CPSC is able to share information with its international counterparts.

section_title: Letter
paragraphs: The Consumer Product Safety Commission (CPSC), created in 1972, is  charged with protecting U.S. consumers against death or injury from  unsafe products, which may be manufactured in the United States or  imported. CPSC has broad jurisdiction over thousands of types of  consumer products, including off-road recreational vehicles and  hazardous substances. It aims to identify hazards associated with a  consumer product and understand whether they are known, new, or  emerging. Because CPSC generally regulates consumer products after  they enter the market, identifying new products and any new hazards  associated with them can be challenging. In particular, the number of  imported consumer products presents CPSC with challenges related to  the growth of global supply chains that assemble products across a vast  web of interconnected geographies as well as the difficulty of identifying  product hazards among thousands of containers entering U.S. ports.  CPSC reported that during calendar year 2012, more than 235,000  importers imported approximately $706.6 billion of consumer products  under CPSC’s jurisdiction—an average of nearly $2 billion per day. In  addition, since 2008, four out of five product recalls in the United States  involved an imported product. Although its authorities generally address  product hazards post-market, CPSC reports that the continued growth in  volume and diversity of consumer products has recently made strategies  to prevent hazardous products from entering the marketplace a critical  focus of the agency.
In 2008, Congress enacted the Consumer Product Safety Improvement  Act of 2008 (CPSIA) to reform CPSC, strengthen its authority to enforce  consumer product safety standards, and in some instances, enable  CPSC to respond to safety hazards more quickly than it had before. For  example, CPSIA required CPSC to convert voluntary standards for  durable infant and toddler products, all-terrain vehicles, and children’s  toys to mandatory standards through a more expedited process than the  rulemaking procedures set forth in the Consumer Product Safety Act  (CPSA), which was enacted in 1972. Despite CPSC’s expanded  authorities and progress in establishing new mandatory standards, during  recent congressional hearings concerns were raised about the length of  time it takes for CPSC to address an identified safety hazard particularly  because injuries and deaths, as well as industry uncertainty due to lack of  guidance to address the risk, can continue in the interim.
In accordance with the joint explanatory statement accompanying the  Consolidated Appropriations Act of 2014, GAO is conducting a study of  CPSC’s ability to respond quickly to emerging consumer product safety  hazards using specified authorities under CPSA, the Federal Hazardous  Substances Act, and the Flammable Fabrics Act.  This report discusses  (1) how CPSC’s authorities and other factors may affect the time it takes  CPSC to respond to new and emerging hazards and (2) options that may  be available to improve CPSC’s ability to respond to new and emerging  hazards in a timely manner and trade-offs associated with those options.
160 Cong. Rec. H906 (daily ed. Jan. 15, 2014)(Division E, Title V – Independent  Agencies, Consumer Product Safety Commission, Salaries and Expenses). Specifically,  the mandate asks us to conduct a study of the ability of the CPSC to respond quickly to  emerging consumer product safety hazards using authorities under sections 7, 8, and 9 of  the Consumer Product Safety Act (15 U.S.C. §§ 2056-2058); section 3 of the Federal  Hazardous Substances Act (15 U.S.C. § 1262); and section 4 of the Flammable Fabrics  Act (15 U.S.C. § 1193). and other relevant studies in this area.available to address CPSC’s ability to respond to new and emerging  risks, we reviewed our prior reports and conducted a literature review to  identify published studies and reports that discussed possible options. To  address both objectives, we interviewed staff at CPSC, representatives  from various consumer and industry organizations, and consumer safety  experts. We also interviewed former and current CPSC commissioners  individually.
To identify options that may be  We conducted this performance audit from March 2014 to October 2014  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.
subsections: section_title: Background
paragraphs: CPSA created CPSC to regulate consumer products and address those  that pose an unreasonable risk of injury; assist consumers in evaluating  the comparative safety of consumer products; and promote research and  investigation into the causes and prevention of product-related deaths,  injuries, and illnesses. CPSC’s jurisdiction is broad, covering thousands  of types of consumer products used in and around the home and in  sports, recreation, and schools.regulated—that is, subject to mandatory standards governing  performance or labeling requirements established by CPSC through  regulations. In contrast, many consumer products that are under CPSC’s   Some consumer products are  jurisdiction are subject to voluntary standards, which are generally  determined by standard-setting organizations, with input from government  representatives and industry groups. Unregulated products are those  products not subject to mandatory standards and may include those  covered by voluntary standards. The 1981 amendments to CPSA  required CPSC to defer to a voluntary standard rather than promulgating  a mandatory standard through rulemaking if CPSC determines that (1)  the voluntary standard adequately addresses the hazard and (2) there is  likely to be substantial compliance with the voluntary standard. To  address product hazards, CPSC may attend the meetings of standard- setting organizations and contribute relevant hazard data to assist in the  development of voluntary standards, but staff are not permitted to vote on  the standards or hold leadership positions.
CPSC has broad authority to identify, assess, and address hazards  associated with consumer products under the following laws:
Consumer Product Safety Act (CPSA), which consolidated federal  safety regulatory activity relating to consumer products within CPSC;
Consumer Product Safety Improvement Act (CPSIA) of 2008,  which amended CPSA to, among other things, expand CPSC’s  authorities to address consumer product safety risks and direct the  agency to develop a risk assessment methodology to identify  hazardous imports;
Flammable Fabrics Act, which, among other things, authorizes  CPSC to prescribe flammability standards for clothing, upholstery, and  other fabrics; and
Federal Hazardous Substances Act, which establishes the  framework for the regulation of substances that are toxic, corrosive,  combustible, or otherwise hazardous.
Other laws provide CPSC with authorities to prescribe performance  standards for specific consumer products.  In addition, CPSIA required  CPSC to promulgate mandatory standards for durable infant and toddler  products—such as cribs and strollers—through rulemaking in accordance  with section 553 of the Administrative Procedure Act (APA), rather than  the rulemaking procedures required by CPSA.governs “informal” or “notice and comment” rulemaking procedures for  federal agencies and, according to CPSC officials, does not impose the   Section 553 of the APA  cost-benefit requirements specified in the rulemaking procedures in  CPSA.
When addressing a consumer product hazard, CPSC generally assesses  whether it is known, new, or emerging. New or emerging hazards may be  associated with either a new or existing product. For example, a new  hazard could present itself in the form of new materials used to  manufacture an existing product. CPSC’s Emerging Hazards Team— composed of statisticians—is responsible for reviewing incident reports to  identify new and emerging product-associated hazards, performing  product safety assessments, and directing new reports to appropriate  Integrated Product Teams.  The Emerging Hazards Team’s review is  one of CPSC’s first steps in identifying the nature of a hazard. According  to CPSC staff, the Emerging Hazards Team reviews all reports of  incidents stemming from consumer products on a daily basis, including  those stored in CPSC’s data management system, to identify trends and  patterns.
Integrated Product Teams are composed of subject-matter experts from a number of  offices within CPSC and are organized by type of hazard. The teams are responsible for a  variety of risk-related activities, including reviewing incident reports, requesting  investigations, recommending new activities to management as needed, and monitoring  follow-up status on corrective actions and the status of projects for standard development. standards, CPSC compliance staff conduct searches of the Internet and  monitor online retailers. CPSC also monitors risks through agreements  with other federal and state agencies to conduct research. For example,  CPSC has a joint agreement with the Environmental Protection Agency  (EPA) to research the health effects of nanotechnology in consumer  products. In addition, CPSC staff attend trade shows to identify possible  products of interest and exchange information about consumer products  with a number of other federal agencies, including the National Institutes  of Health and the Centers for Disease Control and Prevention.
CPSIA mandated that CPSC, in tandem with Customs and Border  Protection (CBP), develop a risk assessment methodology to identify  products intended for import into the United States that are likely to  violate consumer product safety laws enforced by CPSC.the agencies developed an import surveillance data system, known as  Risk Assessment Methodology (RAM), and began to pilot it in 2011. The  purpose of RAM is to evaluate products entering the United States based  on criteria designed to identify imports with the highest risk to consumers.  The criteria are determined through CPSC’s analysis of its historical data  on consumer product risks and CBP’s advance shipment data. Currently,  CPSC staff have access to CBP data systems and request data extracts,  as necessary.
CPSC generally evaluates consumer products to determine whether  products present risks to consumers and how they should be addressed,  such as through a voluntary standard, a consumer product safety  standard, or ban by regulation to prevent or reduce an unreasonable risk.  According to CPSC, it uses a multifaceted approach to reduce the risk of  injury to consumers that is intended to address both immediate and future  problems stemming from the risk. CPSC’s actions to address and reduce  the risk of injury to consumers include the following:
Compliance—CPSC conducts voluntary and mandatory recalls,  enforcement of existing regulations by seeking civil and criminal  penalties, and injunctive relief against prohibited acts.
Standards and Rulemaking—As previously discussed, CPSC  participates in the voluntary standards process, and develops  mandatory safety standards, and product bans through rulemaking.
Public education—CPSC notifies the public of safety hazards and  educates them about safe practices.
section_title: CPSC’s Authorities and Other Factors Affect How Quickly It Responds to New and Emerging Hazards
paragraphs: Certain aspects of CPSC’s authorities, as well as other factors, impact  how quickly CPSC responds to new and emerging hazards, including (1)  compliance actions involving litigation, (2) reliance on voluntary  standards, (3) rulemaking procedures, and (4) information-sharing  restrictions. In addition, CPSC commissioners (former and current),  consumer groups, and industry representatives have stated that limited  resources can prolong the time it takes CPSC to respond to new and  emerging hazards.
subsections: section_title: Compliance Actions May Involve Litigation and Prolong Response to Hazardous Products
paragraphs: CPSC can take a number of compliance actions to address unsafe  products, including conducting voluntary recalls, mandatory recalls, and  mandatory bans. Generally, CPSC negotiates the terms of voluntary  recalls with manufacturers of products that have been identified to be  hazardous or in violation of voluntary or mandatory standards. The  company submits its corrective action plan to CPSC indicating how it  plans to repair, refund, or replace the product. CPSC then reviews and,  if necessary, negotiates the terms of the manufacturer’s proposed  corrective action plan before approving it. According to CPSC staff and  one commissioner we interviewed, because both CPSC and the  manufacturer are seeking acceptable terms, the negotiations involved in  the voluntary recall process could add time to CPSC’s response to a new  or emerging product hazard.
If CPSC and a manufacturer are unable to reach agreement on how to  address a consumer product safety hazard through the voluntary recall  process, the agency may pursue compliance actions through  administrative hearings or in district court that could result in a number of  remedies, including mandatory recalls and bans, and further increase the  agency’s response time. While mandatory recalls, once imposed, may  be used to remove hazardous products from the marketplace, according  to CPSC officials, litigating such an action may lead to lengthy delays. For  this reason, CPSC officials said that the agency typically pursues  compliance actions that involve litigation as a last resort because such  actions generally require additional time and resources. For example, in  2009, CPSC staff began learning about incidents of toddlers and young  children ingesting small, loose, high-powered, rare earth magnets that  were marketed to consumers aged 13 and older. In 2010, CPSC worked  to obtain agreements with a number of retailers to voluntarily stop selling  the product. After the agency continued to receive reports about  ingestions and injuries, it issued a public safety alert in 2011. However, in  July 2012, CPSC announced that attempts to negotiate a voluntary recall  with one of the manufacturers of the high-powered magnets had failed.  CPSC concluded that product warning labels and public education efforts  were ineffective and could not prevent further injuries and incidents. As a  result, CPSC staff filed an administrative complaint—the second in 11  years for any product, according to CPSC officials—which the  commissioners approved, seeking a determination that the product  constituted a substantial product hazard and that the firm stop selling the   The manufacturer refused to  product and offer consumers a full refund.submit to the conditions, and litigation continued for almost 2 years before  CPSC reached a settlement in May 2014, ordering the former owner of  the company to fund a trust to refund consumers.
Officials with whom we spoke stated that CPSC may also address new  and emerging risks through its imminent hazard authority. Specifically, if a  consumer product is “imminently hazardous”—defined as a consumer  product that presents an imminent and unreasonable risk of death,  serious illness, or severe personal injury—CPSC may file an action in  U.S. district court. If the court declares the product to be imminently  hazardous, it may grant temporary or permanent relief—such as seizure  of the product, recall, or public notice of the risk—to protect the public  from the hazard. According to CPSC officials, the time needed to file the  required legal actions and work through the courts using the imminent  hazard authority prolongs the time CPSC takes to respond to new and  emerging risks. Further, they noted that the legal standard required to  prove that a product is an imminent hazard requires extensive data  analysis and is difficult to prove in court.
CPSC officials said that the agency attempted to use its imminent hazard  authority one time, in 1986, to address hazards related to lawn darts, but  was unsuccessful. In 1970, prior to the creation of CPSC, FDA, under its  authority to administer the FHSA, issued a regulation banning lawn darts  other than those that were not intended for use as a toy and were  marketed solely for adults. CPSC later assumed responsibility for  administering the FHSA and continued to enforce FDA’s regulations  regarding the ban on lawn darts as well as the exemption from that ban.  After receiving several reports that lawn darts were being sold in toy  stores, between 1984 and 1987, CPSC inspected nearly 200 retailers  throughout the U.S. and found numerous violations of both the labeling  and marketing requirements for lawn darts. In 1987, CPSC staff met with  manufacturers of lawn darts and discussed several voluntary actions that  could be taken to assure firms’ compliance with the exemption from the  ban, including making the warning label more conspicuous. Despite these  efforts, continued reports of fatalities due to injuries involving lawn darts,  according to CPSC, led Congress to question the adequacy of the ban. In  an effort to prevent further injuries and fatalities, in 1988 CPSC issued a  ban, through its rulemaking authority, on the sale of all lawn darts.Subsequently, CPSC received new reports of injury, and in March 2012  the agency issued a safety alert to reiterate the ban.
section_title: Reliance on Voluntary Standards Can Prolong Response to Product Safety Hazards
paragraphs: As previously discussed, consumer product safety laws require CPSC to  rely on voluntary standards if it determines that (1) compliance with a  voluntary standard would eliminate or adequately reduce the risk of injury  identified and (2) there is likely to be substantial compliance with the  voluntary standard. In addition, the agency may address the risk  presented by unregulated products—that is, products not subject to  mandatory standards—by recommending revisions to voluntary  standards. However, if a voluntary standard does not address the  particular defect or hazard that is being examined, the process of taking a  corrective action to address the hazard is prolonged. In some instances,  CPSC may find that a product meets a voluntary standard but still has a  defect that creates a serious risk of injury or death, but the manufacturer  may disagree. Because standards are voluntary, CPSC cannot legally  compel a manufacturer to comply with a voluntary standard or take action  against it for noncompliance. According to CPSC officials and staff, the  nature of voluntary standards may extend the amount of time the agency  takes to properly address new and emerging risks in consumer products.
CPSC does not control the voluntary standards development process,  and the laws do not establish a time frame within which standard- development organizations must finalize a voluntary standard. As a result,  the voluntary standards development process can, in some instances,  last for prolonged periods of time. For example, CPSC has worked with  the window-covering industry since 1994 to develop voluntary standards  to address strangulation hazards stemming from window blind cords, but  conflicting consumer and industry goals have prolonged the process. The  first voluntary standard to address this hazard was developed in 1996 and  has been revised at least six times. However, some consumer groups  argue that none of the revisions include designs aimed at eliminating the  strangulation risk. Between 2007 and 2011, CPSC negotiated with 38  individual companies to voluntarily recall hazardous window blinds and  issued multiple consumer safety alerts about hazards related to window  blind cords. Consumer groups have asked standard-setting organizations  to consider technologies, such as cordless window coverings, that would  eliminate window cord-related hazards. Some manufacturers have said  that while cordless window blinds would eliminate the hazard, a voluntary  standard asking manufacturers to produce such window coverings would  be too costly for some firms and could create a product that would be  unaffordable for some consumers. In 2011, a coalition of consumer  groups announced that they had withdrawn from the voluntary standard  development process because it lacked transparency, and because  resulting revisions to the standard still did not consider existing  technologies that could eliminate strangulation hazards from accessible  cords. In May 2013, the coalition of consumer groups petitioned CPSC to  promulgate a mandatory standard because, according to the petition, the  voluntary standards process had failed to develop a standard that  eliminated or significantly reduced the strangulation risk. As of September  2014, CPSC continued its efforts to work with standard-setting  organizations to develop a new voluntary standard. CPSC indicated in its  proposed budget request for fiscal year 2015 that staff planned to include  a response to the consumer groups’ petition for a mandatory standard for  window-coverings in a briefing package to be considered by the  commission.
section_title: Some CPSC Rulemaking Procedures Result in Lengthy Time Frames
paragraphs: CPSC’s rulemaking procedures, as outlined in CPSA, often lengthen the  time the agency takes to respond to new and emerging risks. According  to CPSC officials, the time required for mandatory standard rulemaking  varies depending on multiple factors, including the complexity of the  problem to be addressed; the volume of public comments responding to a  proposed rule; time constraints imposed by other federal statutes,  executive orders, or other administrative obligations; agency resources;  and competing agency priorities. Under CPSA, CPSC shall not  promulgate a rule, including a mandatory consumer product safety  standard, unless it finds that all of the following conditions exist:
The rule is in the public interest.
The rule is reasonably necessary to eliminate or reduce an  unreasonable risk of injury associated with the product.
If a voluntary standard exists, compliance with such voluntary  standard is not likely to eliminate or adequately reduce the risk of  injury, or it is unlikely that there will be substantial compliance with  such voluntary standard.
The rule’s expected benefits bear a reasonable relationship to its  costs.
The rule imposes the least burdensome requirement that prevents or  adequately reduces the risk of injury at issue.
Additionally, any final rule must include a regulatory analysis describing  (1) the potential benefits and costs of the rule; (2) any alternatives to the  rule that CPSC considered, as well as the costs and benefits of the  alternatives to the rule and why they were not chosen; and (3) significant  issues raised by public comments submitted in response to the  preliminary regulatory analysis and CPSC’s assessment of the issues.  Some CPSC officials said that the required cost-benefit analysis is  lengthy and resource intensive. These officials stated that requirements to  explore possible alternatives to a new consumer product standard and  completing the corresponding cost-benefit analysis proved to be time- consuming elements. For example, CPSC has been considering a  mandatory rule to address the risk of fire associated with ignitions of  upholstered furniture since 1994. However, action has yet to be taken  because, according to one commissioner, demonstrating the efficacy of  the risk-reduction alternatives is difficult. The commissioner cited CPSC’s  efforts to address risks associated with flammable upholstered furniture,  in particular, because options to address the hazard include  manufacturers’ use of flame retardant chemicals, which some scientific  studies have indicated could cause cancer in humans.
section_title: Information-Sharing Restrictions May Prolong Response to New and Emerging Product Risks
paragraphs: Specific sections of CPSA restrict CPSC’s ability to disclose certain  information about potential product hazards, which in turn may impact  CPSC’s ability to notify the public about new and emerging risks and  prolong the time it takes for CPSC to respond to new and emerging risks.  Section 6(b) of CPSA generally prohibits CPSC from publicly disclosing  information that would readily identify a product manufacturer unless  CPSC first takes reasonable steps to ensure that the information is  accurate, and that the disclosure is fair in the circumstances, and  reasonably related to carrying out CPSC’s purposes under its  jurisdiction. Before publicly disclosing information, CPSC is required to  provide the manufacturer advance notice and opportunity to comment on  the accuracy of the information. If CPSC decides to disclose information  that the manufacturer claims to be inaccurate, it generally must provide 5  days advance notice of the disclosure, and the manufacturer may bring  suit to prevent the disclosure. Some consumer representatives and CPSC  officials we interviewed said that these confidentiality requirements in  CPSA may prolong the time it takes to get hazardous products out of  consumers’ homes because CPSC is prohibited from releasing the name  of the product or manufacturer until it has followed the 6(b) procedures or  until the manufacturer has waived any objections to the information’s  release.
15 U.S.C. § 2078(e). concluded that CPSC has been unable to complete certain information- sharing agreements with foreign counterparts because it cannot offer  them reciprocal terms on disclosure of nonpublic information.reported that CPSC’s inability to establish information-sharing  agreements with its foreign counterparts may hinder the agency’s ability  to respond to a potential hazard in a timely manner because of the delay  that might occur between when a foreign counterpart decides to take  action in response to a product hazard and when that action becomes  public. In that report, we also concluded that to better enable CPSC to  target unsafe consumer products, Congress may wish to amend section  29(f) of CPSA to allow CPSC greater ability to enter into information- sharing agreements with its foreign counterparts that permit reciprocal  terms on disclosure of nonpublic information. Our report concluded that  this restriction on sharing information may hinder CPSC’s ability to  identify risks from new products in a timely manner, possibly leading to  injury and death if unsafe products enter the U.S. market. As of  September 2014, there have been no changes to section 29(f) of CPSA.
section_title: Limited Resources Could Hinder the Timeliness of CPSC’s Response
paragraphs: In addition to factors previously discussed, CPSC’s ability to respond to  new and emerging risks in a timely manner depends on the resources  required to understand the nature of and address the specific product  hazard. For example, the simplest risk assessments, such as lead testing,  may require few resources to complete. However, assessing complex  products, such as those involving phthalates, may require additional time,  staff, and laboratory resources because the agency may need to develop  new standards or consult outside scientific expertise in areas such as  toxicology and epidemiology.U.S. imports under the agency’s jurisdiction increased by ten percent in  two years—from about $637 billion in calendar year 2010 to $706.6 billion  in calendar year 2012. In addition, CPSC’s full-time-equivalent staff  generally decreased between fiscal years 2000 and 2008—from 492 to  396—until fiscal year 2009, when CPSC saw an increase in staff, to 435.  As of September 2014, CPSC has 528 full-time equivalent staff, which is  41 percent less than the 890 full-time equivalent staff the agency had in   CPSC data indicate that the dollar value of  1975. Further, many of the CPSC commissioners, consumer groups, and  industry representatives we spoke with stated that CPSC currently lacks  the staff, laboratory resources, and related funding to conduct risk  assessments more efficiently than it currently does. According to these  sources, CPSC’s lack of sufficient staff with scientific expertise could also  prolong the time the agency takes to assess product hazards and  ultimately address new and emerging risks.
We reported in 2012 that CPSC has taken steps to improve its  responsiveness through better technologies for identifying risks, more  targeted surveillance of imported products, and a program for  manufacturers to streamline the process for conducting recalls.  According to CPSC, in fiscal year 2013, the pilot RAM helped port  investigators to identify and prevent more than 12.5 million units of  violative imports from entering the U.S. stream of commerce. In addition,  since our December 2012 report on CPSC’s risk assessment activities,  CPSC has stationed an additional full-time investigator at another port, for  a total of 21 investigators at 16 of the 327 ports of entry. However,  CPSC has reported that increased resources would help to expand these  efforts. For example, according to CPSC, the pilot RAM import  surveillance program is focused on import surveillance and compliance,  but the fully developed program would emphasize prevention and  programs that provide incentives for importers to implement preventive  actions to improve product safety and better ensure legal and regulatory  compliance. CPSC requested additional funding in its 2015 congressional  budget request to expand the RAM and reports that additional funding  would increase its capacity for laboratory sample testing and software  acquisition for the RAM.
section_title: Proposed Options for Improving CPSC’s Timeliness in Responding to New and Emerging Hazards Involve Trade-offs
paragraphs: Over the years, stakeholders and observers have proposed various  options to shorten the time CPSC takes to respond to new and emerging  hazards. Some options, such as expanding CPSC’s use of regulatory  approaches to prevent product safety hazards, may pose more  challenges to implementation than others, such as enhancing CPSC’s  resources to address product hazards, which could be achieved within  the existing regulatory framework. We asked a range of consumer and  industry representatives about the viability of these regulatory options as  well as others that could be used to improve CPSC’s timeliness. Some  options have the potential to prevent hazardous products from entering  the market; and some could reduce the number of deaths and injuries  from these products. But each also involves trade-offs that should be  considered. These options and their trade-offs are summarized in   figure 1.
subsections: section_title: Expanding Preventive Approaches to Regulating Consumer Products
paragraphs: According to CPSC, preventing hazards from entering the marketplace is  one of the most effective ways the agency can protect consumers. CPSC  reports that many consumer product hazards and safety defects arise in  the very early stages of the supply chain, including product design and  the selection and use of raw materials. As discussed earlier, CPSC  addresses product hazards after the product has entered the market and  after a specific product hazard has been identified. According to CPSC,  given the large volume and diversity of products under CPSC’s  jurisdiction, recalls and bans alone may not prevent product hazards from  occurring. CPSIA mandated a preventive approach to the development  and marketing of certain juvenile products by requiring that manufacturers  of such products, prior to importing or distributing them for sale, submit  samples of their product for third-party testing and certify that, based on  such testing, their product complies with applicable safety standards.
The precautionary principle approach is a preventive framework for  guiding decision making that is used in some policy areas in the United  States, such as the regulation of environmental policy and drugs, and  more broadly in other countries, such as the European Union. The  precautionary principle approach to regulation generally specifies that  when a product, technology, or activity presents the possibility of severe  or irreversible risk to human health or the environment, precautionary  measures should be taken to reduce or eliminate the risk, even if the  cause and effect are not fully understood. For example, Sweden has  taken an approach to reducing the occurrence of pharmaceuticals in  drinking water that is based on the precautionary principle. Sweden has  taken steps, such as encouraging that prescriptions be written in smaller  amounts to limit the amount of unused pharmaceuticals patients dispose  of, even though there is no scientific evidence that the occurrence of  pharmaceuticals in the environment is affecting human health. According  to the precautionary principle, action should be taken preventively  because definitive knowledge about causation might take decades of  further research. In the United States, a consumer product is generally  allowed on the market unless sufficient evidence can be presented to  demonstrate that that product is unsafe. Under a precautionary principle  approach, a product would generally not be allowed on the market unless  sufficient evidence could be presented to demonstrate that it is safe.  Further, the precautionary principle approach generally places the burden  of proving the safety of a new product, technology, or activity on its  proponents—such as manufacturers and distributors—rather than on the  regulator.
Premarket approval is an application of the precautionary principle in  which certain products must be tested and approved before they can be  marketed to consumers. In the United States, regulatory agencies such  as FDA and EPA require that some products undergo an approval  process. As part of the premarket approval process, regulators establish  specific safety standards that products must meet before being approved  for marketing to consumers. As in the precautionary principle approach,  manufacturers generally bear the burden of demonstrating—with  reasonable certainty and through sufficient scientific data and other  requirements—that the product will not harm consumers. Regulators,  then, must evaluate the data as part of the product approval process.
A few consumer representatives we interviewed said a broad application  of the precautionary principle approach to regulating consumer goods  could decrease the number of products that come to market with  unknown safety hazards and that as a result, injuries and deaths from  hazardous products could decrease. However, the majority of the industry  and consumer representatives we spoke with did not believe it was wise  for CPSC to fully implement a precautionary principle approach.  Representatives discussed various challenges the approach could  present. For example, one representative said the approach would  require manufacturers to incorporate into a product’s design a means of  addressing all of the ways that consumers could potentially be harmed by  using the product; in practice, the representative noted, manufacturers  improve upon a product’s safety by learning how consumers actually use  it. In addition, an industry representative noted that manufacturers could  face significant additional costs from requirements to design and conduct  an unknown number of new safety tests applicable to each new product.  Several representatives said that, given the vast number of products  under CPSC’s jurisdiction, the agency would need a significant increase  in staff and budget to facilitate the ability to evaluate risk assessment data  for all new consumer products. A commissioner and an industry  representative also expressed concern about underlying assumptions that  the approach would result in improvements over the current regulatory  scheme. For example, both noted that because CPSC’s actions are  already driven by data, a precautionary principle approach may not  necessarily result in better outcomes.
In addition, CPSC officials said that it would be unrealistic for the agency  to implement a premarket approval process for all consumer goods given  the vast number of products under CPSC’s jurisdiction. However, officials  noted that a focused application of premarket approval on a specific  product line, such as for cribs, could be an acceptable approach. An  industry representative, a consumer representative, and a commissioner  commented that certain children’s products regulated by CPSC are  already subject to a process similar to premarket approval because of  CPSIA’s requirement that such products meet third-party testing for  compliance with applicable safety standards before they can be marketed  to consumers. Two consumer representatives and a consumer safety  expert we interviewed said that implementing a premarket approval  process for all consumer products could, in theory, prevent hazardous  products from entering the market and potentially reduce related injuries  and deaths. However, most representatives we interviewed agreed that  implementing premarket approval for all consumer products would not  enable CPSC to respond to new and emerging hazards faster than it  currently does. Some representatives said that such an approach could,  among other things, increase (1) the time CPSC takes to respond to  product risks, (2) the agency’s costs, and (3) the time for new products to  come to market. In addition, one commissioner said that CPSC lacks the  laboratory testing capacity to effectively implement a full premarket  approval process. An industry representative also noted that a full  premarket approval process would require CPSC to develop standards  for testing all products, which would not be consistent with the current  regulatory framework requiring CPSC to rely upon voluntary standards.
CPSC officials said that the nature of CPSC’s work already incorporates  some preventive measures because the agency relies upon an array of  data and scientific analyses to determine the best way to reduce or  prevent consumer safety risks. One industry representative noted that  CPSC used a preventative approach to address risks stemming from the  use of phthalates, as required by statute, much like the precautionary  principle prescribes. Specifically, in 1998, CPSC asked manufacturers to  remove specific types of phthalates from certain juvenile products, such  as soft rattles and teething rings, after its study identified areas of  scientific uncertainty about negative effects of the chemical on human  health. In 2008, Congress passed a ban on certain phthalates in  children’s toys until CPSC could convene an independent advisory panel  to study the chemicals’ effects. The study, published in July 2014,  concluded that additional phthalates should also be permanently banned  and others should be subject to further risk assessment.
section_title: Expedited Mandatory Standard Rulemaking Authority
paragraphs: As previously discussed, CPSIA mandated that CPSC promulgate  mandatory standards for durable infant and toddler products using  rulemaking procedures in the Administrative Procedure Act (APA) which,  according to CPSC staff, lack the cost-benefit analysis requirements  specified in the rulemaking procedures in CPSA. CPSC staff said that  APA rulemaking procedures enabled them to promulgate the mandated  standards more easily and quickly than if they had been required to use  CPSA’s procedures. Officials expressed interest in expanding CPSC’s  authority to promulgate rules for other types of products with existing  voluntary standards using APA rulemaking procedures. Several  consumer representatives and a commissioner supported this idea and  said if CPSC had such authority, its response to new and emerging  hazards could be timelier. However, CPSC officials noted that expanding  its use of this authority could inhibit the industry’s access to CPSC and  due process as provided by section 9 of CPSA. Opinions vary among  current and former commissioners about the extent to which expedited  rulemaking authority should be used. At least two commissioners have  said that the APA procedures provided CPSC with more flexibility to  quickly issue the mandatory standards as required by CPSIA and one  said that they could expedite its consideration of others, such as a  standard to address the flammability of upholstered fabric. Conversely,  one commissioner has said that CPSA’s cost-benefit analysis  requirements make agencies, like CPSC, take the costs and benefits of  their regulations more seriously before finalizing them; and another  commissioner commented that CPSA’s cost benefit analysis is an  important part of rulemaking because it requires agencies to identify a  rational justification for proposing a rule.
section_title: Enhancing CPSC’s Authorities to Address Unsafe Imports
paragraphs: In September 2011, CPSC staff submitted a report to Congress that  recommended several statutory changes designed to improve CPSC’s  ability to identify hazardous products at the ports of entry and prevent  them from entering the marketplace. For example, CPSC staff proposed  that CPSC be granted authority to detain products at the ports like other  federal agencies, such as Customs and Border Protection. Given the  agency’s relatively small staff size, another proposal suggested giving  CPSC authority to commission employees of other federal agencies to  assist in the agency’s investigations and inspections to allow for greater  enforcement efficiency. In August 2014, CPSC officials confirmed that  they continue to support all of the statutory changes recommended in the  2011 report.
Almost half of the 23 consumer and industry representatives and  commissioners we interviewed expressed an opinion about whether the  proposed statutory changes would enable CPSC to respond more quickly  to new and emerging risks. Of these, about half generally supported  efforts to improve CPSC’s import surveillance authorities. For example, a  consumer safety expert said that improvements to CPSC’s import  surveillance authorities could improve opportunities to stop hazardous  products from entering the markets.
However, a commissioner and a consumer safety expert we interviewed  did not support the proposed statutory changes and said that they would  not help CPSC address new and emerging risks. The commissioner said  that new and emerging product risks are rarely identified at the ports. The  consumer safety expert expressed concern that some of the statutory  changes would add an undue cost burden particularly to the juvenile  products industry. According to this representative, one of the statutory  changes could result in manufacturers of certain children’s products  incurring costs to have containers marked “refused for entry” in addition to  the costs of compliance with CPSIA’s requirement that juvenile products  be tested by third-party facilities to ensure compliance with applicable  safety standards. Specifically, CPSC’s September 2011 report included  a proposal to add a new statutory provision to both CPSA and the Federal  Hazardous Substances Act designed to prevent the re-entry of all  products that have been refused entry into U.S. ports by authorizing  CPSC to require visible markings on all containers transporting refused  consumer products. Refused products are currently prohibited from being  sold or re-exported to other ports unless revised to address the safety  violations. In some cases, manufacturers must destroy products that are  refused for entry. Some importers attempt to circumvent the requirements  by presenting the same violative product at a different port. According to  CPSC, the “refused for entry” marking would enhance CPSC’s ability to  identify such products.
section_title: Improving CPSC’s Capabilities to Analyze Data
paragraphs: In 2012, we reported that CPSC faced challenges in collecting and  analyzing large quantities of data to identify potential product risks. Some  sources it uses to identify injuries or death are dated—for instance, death  certificates can be 2 or more years old—or contain limited information  about the product involved in the incident. According to one CPSC  official, additional resources could enable CPSC to purchase death  certificates from a more direct source than it currently does, shortening  the time it takes to analyze incidents and identify trends. According to  CPSC, the agency has upgraded its data management system to  enhance CPSC’s efficiency and effectiveness, enable a more rapid  dissemination of information, and allow public access to its searchable  database on consumer product safety information. As previously  discussed, CPSC also recently requested additional funding in its fiscal  year 2015 congressional budget request to expand the RAM. The  majority of consumer and industry representatives and commissioners we  interviewed agreed that additional funding and staff would better enable  CPSC to identify and address consumer safety hazards, and more than  half had suggestions to improve CPSC’s efforts. Specifically, because the  agency relies heavily upon analyses of scientific and technical data to  assess potential hazards from a growing number of consumer products,  these representatives said that additional resources to hire staff with  expertise in technical areas, such as toxicology, public health,  epidemiology, and engineering, could improve the timeliness of CPSC’s  response to new or emerging product risks.
section_title: Other Options
paragraphs: Several consumer groups and a commissioner we interviewed discussed  two other options to improve CPSC’s ability to respond more quickly to  new and emerging risks than it currently does, both of which would  involve changes to CPSA.
Amend Section 6(b) of CPSA. As previously discussed, the  confidentiality requirements in section 6(b) of CPSA may prolong the  time it takes to notify the public about potentially hazardous products,  which could increase the time that hazardous products remain in  consumers’ homes. Specifically, two consumer groups, a consumer  safety expert, and two commissioners we interviewed commented that  changes to section 6(b) of CPSA could improve CPSC’s ability to  notify consumers about new and emerging safety hazards. A  consumer safety expert we interviewed said that both consumers and  manufacturers would benefit from knowing about potential product  safety hazards as soon as they are identified. According to a  consumer representative, consumers would be able to make informed  purchases and manufacturers would learn about potential design  defects that may be applicable to their own products. CPSC officials,  however, said that releasing information to consumers before  manufacturers have had an opportunity to review the details for  accuracy could potentially unfairly harm manufacturers and inhibit  their right to due process.
Establish Timeframes for CPSC Rulemaking Activities. As noted  earlier, existing laws do not provide a time frame for standard-setting  organizations to complete the development of voluntary standards,  which often prolongs the time CPSC takes to promulgate a rule to  address a product safety hazard. One commissioner we spoke with  suggested giving CPSC authority to set a time limit after which it  would promulgate a final rule if industry has not developed a voluntary  rule. When asked about the viability of this option, CPSC officials said  that it takes time to sort through the complex issues associated with  some safety hazards, and that it would be difficult to establish a  meaningful time frame for the process.
section_title: Concluding Observations
paragraphs: Expansion of international trade, increasingly global supply chains, and  technological advances have increased the spectrum of consumer  products available to U.S. consumers. These changes have increased the  challenges of overseeing and regulating thousands of product types and  the potential for new and emerging hazards in the marketplace. Certain  aspects of CPSC’s authorities, and other factors such as litigation and  limited resources, prolong the time it takes CPSC to respond, potentially  increasing the risk that consumers will be harmed by hazardous products.  A number of options have been proposed that, individually or in  combination, could improve CPSC’s ability to respond to new and  emerging risks in a more timely manner. However, these options require  making trade-offs, such as balancing sometimes competing consumer  and industry interests. For example, changes to expand CPSC’s use of  preventive approaches to consumer product safety could give the agency  greater ability to respond to risks by preventing hazardous products from  entering the market, but also could inhibit market innovation and impose  costs on manufacturers. Statutory changes, such as enhanced authority  to address unsafe imports, could allow CPSC to address existing hazards  in a more timely manner and prevent hazardous products from entering  the market, but also could create disadvantages for manufacturers by  imposing costs and prolonging the time for some products to come to  market. In addition, improving CPSC’s ability to analyze scientific and  other data could also help the agency to respond to risks more quickly but  may require enhanced resources in a constrained fiscal environment.
section_title: Agency Comments
paragraphs: We provided a draft of this report to CPSC for review and comment. In  written comments, CPSC expressed appreciation for the report, but took  no position since we made no new recommendations.  These comments  are reprinted in appendix II.  In addition, CPSC provided technical  comments, which we incorporated as appropriate.
We are sending copies of this report to appropriate congressional  committees and the Chairman and Commissioners of CPSC. The report  also will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff 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 II.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: In accordance with section 4 of the Consolidated Appropriations Act of  2014, GAO conducted a study of the ability of the Consumer Product  Safety Commission (CPSC) to respond quickly to emerging consumer  product safety hazards using authorities under the Consumer Product  Safety Act (15 U.S.C. §§ 2056-2058), the Federal Hazardous Substances  Act (15 U.S.C. § 1262), and the Flammable Fabrics Act (15 U.S.C. §  1193); and report to congressional appropriations committees on an  assessment of CPSC’s ability to respond quickly to new and emerging  risks. This report discusses (1) how CPSC’s authorities and other factors  may affect the time it takes CPSC to respond to new and emerging risks  and (2) proposed options that may be available to improve CPSC’s ability  to respond to new and emerging risks in a timely manner and trade-offs  associated with those options.
To address both objectives, we reviewed our prior work on CPSC’s  authorities, CPSC standard operating procedures, performance and  accountability reports, and agency budget documentation in order to  obtain information on the resources currently available to CPSC and how  those resources may impact the agency’s ability to respond to new and  emerging consumer product safety hazards. In addition to our document  review, we interviewed cognizant CPSC officials, knowledgeable staff,  and three current and three former CPSC commissioners, including  CPSC’s acting Chairman, regarding CPSC’s ability and authority to  identify, assess, and address new and emerging risks in a timely   To gather perspectives on the sufficiency of CPSC’s current  manner. statutory authority and specific factors affecting its ability to respond to  emerging risks and to seek opinions on potential options that may be  available to CPSC to address these risks in a more timely manner, we  interviewed representatives from four consumer advocate groups and  representatives from seven industry organizations that represented  manufacturers for various consumer products, including juvenile products,  clothing and home goods, chemical production, and general consumer  goods. We also interviewed six consumer safety experts, three of which  were legal experts in the consumer product safety field regarding CPSC’s  existing statutory and regulatory authorities for addressing new and  emerging risks and other potential options available to CPSC.
A new Chairman and commissioner were appointed after we conducted our interviews.
To address objective one, we reviewed and analyzed relevant federal  laws that authorize CPSC to both promulgate and enforce consumer  product safety standards, as well as those that authorize the agency to  take corrective action necessary to remove a potentially hazardous  product from the consumer market. We then examined CPSC rulemaking  procedures as stipulated in relevant sections of the Consumer Product  Safety Act, the Federal Hazardous Substances Act, and the Flammable  Fabrics Act. We identified additional administrative and statutory  requirements that may impede CPSC’s implementation of corrective  action, and we reviewed CPSC’s ability to issue mandatory standards and  enforce voluntary standards designed to address new and emerging  consumer product safety hazards.
To address objective two, we conducted a literature review of scholarly  articles using Proquest, Nexis.com, and law review databases. Some of  the search terms we used to identify articles on options available to  respond to new and emerging risks were “consumer safety,” “new and  emerging risks,” “precautionary principle,” “premarket model,” and the  “Consumer Product Safety Commission” either in combination or alone  with geographic delimiters such as “European Union,” or “United States,”  and a date boundary of “after 2007”. After removing duplicate articles, we  selected 96 scholarly articles and legal reviews from the thousands that  were identified based on the extent to which they discussed (1)  advantages and disadvantages of the precautionary principle approach or  premarket approval or (2) the regulation of relevant policy areas such as  consumer product safety, public health, or the environment. Two team  members independently reviewed these articles for relevance and found  that 18 were relevant for our study. We reviewed these articles more  closely for background information on CPSC’s authorities and factors that  affect timeliness of responding to new and emerging risks and also to  identify trade-offs for any options the article discussed. Similarly, we also  searched for additional material on the Internet using search terms such  as “United States,” “precautionary principle,” and “premarket approval”  and identified an additional 4 articles that we used for contextual  purposes.
We conducted this performance audit from March 2014 to October 2014  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.
section_title: Appendix II: Comments from Consumer Product Safety Commission
section_title: Appendix III: GAO Staff Contact and Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Debra Johnson (Assistant  Director), Tiffani Humble (Analyst in Charge), Thomas Beall, Tarik Carter,  Marc Molino, Patricia Moye, Rhonda Rose, Jennifer Schwartz, and Carrie  Watkins made key contributions to this report.
In addition, JoAnna Paige Berry, Timothy Bober, Christine Broderick,  Philip Curtin, Kimberly Gianopoulos, Richard Hung, DuEwa Kamara,  Steve Morris, and Michelle Sager also made contributions to the report.