Fudan University - Center for American Studies - International Cooperation On Product Safety - Wednesday October 27, 2010, Shanghai, China

October 27, 2010

Good afternoon. Thank you Dr. Shen for that kind introduction. I would also like to thank our hosts, Minister Zhi Shuping and his colleagues at AQSIQ and in the Shanghai government for their hospitality during our visit to Shanghai.

 

INTRODUCTION

 

This week, I was pleased to participate in Second Trilateral U.S. – E-U – China Consumer Product Safety Summit here in Shanghai. And today, I am especially pleased to be able to address the Fudan University community about International Cooperation On Product Safety.

 

I am happy to report that International Cooperation has come a long way for both of our countries. In the long history of China, this new level of international cooperation that we are beginning to see, speaks well for China’s determination to be a leader on global business issues.

 

It has been 31 years since our countries re-established diplomatic relations. Our U.S. Consumer Product Safety Commission has been in existence for only 38 years.

 

And after all this time, and after years of cooperation between our agency and AQSIQ, representatives from China and its two biggest markets—North America and European Union—all meet together for just the second time. We are meeting to talk about safety expectations and best practices in designing and manufacturing safety into products.

 

I am delighted to announce that our Joint Statement calls for a joint report on specific actions being taken by China, Europe, and the United States to implement policies that support best practices. This report will be a six-month roadmap for improved product safety through implementation of best practices. This will result in safer products for our consumers, linked to better business for China. This is a historic opportunity you are witnessing.

 

ABOUT CPSC

 

Let me begin by taking a moment to tell you some things about the U.S. Consumer Product Safety Commission:

 

We were established by the Consumer Product Safety Act of 1972, which was written and approved by our Congress.

 

We are funded by our government, but work as an independent federal agency.

 

Five Presidentially-appointed commissioners make policy and vote on issues brought before the Commission.

 

Our offices are near Washington, D.C. and we have about 520 employees – many at our headquarters, but we have workers doing inspections and investigations all over the country.

 

We have also recently opened an office in Beijing to facilitate more communications between our agency and your country.

 

Our mission is essentially to protect our citizens from unreasonable risks of serious injury or death from consumer products under our jurisdiction.

 

We always find it helpful to list the consumer products which we DO NOT regulate. These include: Aircraft, motor vehicles, boats, alcoholic beverages, tobacco, firearms, pesticides, medical devices, food, drugs and cosmetics. We essentially regulate all other consumer products in the United States.

 

We accomplish our mission by enforcing the laws enacted by our Congress. These include:

 

The Consumer Product Safety Act – gives us the power to recall or ban products that present a proven risk. This power to recall products has saved a countless number of lives in our country.

 

The Federal Hazardous Substance Act – regulating any products that are “toxic, corrosive, flammable or combustible, an irritant, a strong sensitizer,” or other hazards.

 

We also have some special authorities established by our laws:

 

The Virginia Graeme Baker Pool and Spa Safety Act – establishing standards for drains to public pools and spas, among other things.

 

Flammable Fabrics Act – restricting flammability of fabrics used in the manufacture of clothing and interior furnishings.

 

Poison Prevention Packaging Act – requiring child-resistant packaging for certain household substances.

 

Children’s Gasoline Burn Prevention Act – regulates gas can closures.

 

Refrigerator Safety Act – regulates refrigerator door closures.

 

And

 

The Consumer Product Safety Improvement Act of 2008 – has special significance to our meetings here in China this week. I will refer to this law many times in my comments.

 

This expansive child safety law was drafted in response to an influx of hazardous children’s toys. Specifically, this law was in reaction to harmful levels of lead paint in children’s toys, to powerful magnets falling out of toys and to dangerous cribs. These products killed and injured our children.

 

Some of the major provisions of this law set new, stringent limits on lead in paint – which is set at 90 ppm and 300 ppm lead content in children’s products; requires tracking labels on children’s products; mandates that CPSC issue mandatory federal safety standards for durable infant nursery products; and requires third party testing and certification of certain children’s products to improve compliance with the law.

 

COOPERATION

 

That summarizes who we are and what we do. Now let’s take a look at how we are using international cooperation in improving product safety and protecting our citizens.

 

As part of my trip to China this week, I visited one of the third party testing labs located here in Shanghai. The increase in testing facilities here in China is seen as thoughtful development, because it puts testing labs in close proximity to many manufacturers of exported products.

 

The hope is that close proximity between manufacturers and qualified testing labs will improve compliance with the laws of the many countries receiving imports from China. But testing and inspections are just one layer of protection. Working together we can do even better. And we are—let me explain how.

 

Last year when I visited your country, CPSC and our Chinese partner agency, AQSIQ with whom we have had a long history of cooperation, signaled in the strongest possible way that times have changed. Collectively, we have a new policy expectation and we intend for companies to get in line.

 

Together, we need to move the emphasis away from simply inspecting final products and put much more effort into building safety into the product in the first place. Our agreement on that strategy last year has fueled the discussions we are having this week here in Shanghai.

 

Our policies should promote a philosophy of quality and safety among manufacturers, not mere reliance on a few test results as a legal requirement. These policies should provide an incentive for distributors and retailers to be actively involved in assuring the conformity of the products they sell, regardless of where those products are made.

 

It is taking some time, but Chinese suppliers and U.S. importers are beginning to understand, from both governments, that it is a mistake to depend on good intentions and a few final inspections to ensure compliance with safety requirements.

 

TRILATERAL WORK

 

The work of CPSC and our European Union and AQSIQ counterparts at this year’s summit, is to lay the ground work for companies to implement proven best practices, such as:

 

factoring the potential for misuse into design,

 

putting strict controls on components and other inputs, and

 

conducting enough sampling and testing to ensure that all of the products coming off the manufacturing line are safe for consumers.

 

KEY MESSAGES

 

Representing my Commission, I emphasize two key messages to AQSIQ, and to Chinese manufacturers and suppliers:

 

First, that I believe that there is no inherent conflict between trade and safety. This is particularly true if we keep in mind the interconnection of markets in all regions of the world, and the responsibilities we all have to each other.

 

And second, that the best way to protect families is to build safety into products during design and manufacturing.

 

Those are our expectations. Generally speaking, the Chinese government has been responsive to our concerns and AQSIQ, for its part, is looking for new ways to hold Chinese suppliers responsible for implementing best practices in manufacturing. Following this path, safety—and compliance with export market requirements—can be built into products Chinese manufacturers are making or for which they are supplying materials.

 

STATISTICAL SLIDES

 

You may be curious about what is at stake in pursuing this mutual understanding? Here is a slide that illustrates the situation. You will see that the red lines indicate the number of CPSC recalls in the U.S. of China and Hong Kong manufactured products for fiscal years 2001 to 2010. Note the climb from 2003 to a peak at 2008 – the year of many U.S. recalls of Chinese goods.

 

The subsequent drop in 2009 and 2010 reflects many things, but the opportunity we are seizing here today is that learning better international quality standards, learning better manufacturing methods and learning better enforcement protocols will lead to fewer and fewer recalls of Chinese products AND safer products for our consumers.

 

US COMPLIANCE

 

On the U.S side, importers should have assurances that their suppliers are complying with all U.S. safety requirements. We can, and are, holding businesses in the U.S. accountable for recalls and imposing larger fines on those with repeated or severe violations.

 

But, to avoid such severe reactions, CPSC developed and translated into Chinese a handbook for manufacturers containing best manufacturing practices. We are now developing a new Importer’s Handbook on best practices for importing safe consumer products.

 

If manufacturing companies follow the guidance in the Manufacturer’s Handbook and if importers use the Handbook we are developing, fewer companies in China will be subject to the negative public reaction that comes with product recalls.

 

TRAINING SEMINARS

 

We are here this week to find ways to help companies avoid the embarrassment and cost of recalls and to reduce the safety risk to our citizens that comes from unsafe products. This is the second year that we have been in Shanghai conducting training seminars and we hope that our efforts in China will pay dividends for the safety of products sent to the United States and other countries. This year’s topic was “Preventing Consumer Injury: Analysis of Design and Risk.”

 

RECALL NUMBERS

 

Our work last year with the Chinese government and Chinese manufacturers is bearing fruit in the area of toy safety.

 

In fiscal year 2008 there were more than 80 toy recalls in the United States, with nearly half of those recalls related to lead violations. I am pleased to report that in fiscal year 2009, there were about 40 toy recalls, with only 15 lead violations.

 

Preliminary numbers at the end of our recently concluded fiscal year 2010 indicate that those numbers continue to drop. Our goal is to have no toy recalls and no lead paint violations, and together, we are moving in the right direction.

 

SPEAK WITH ONE VOICE

 

In Europe, Canada, and the United States, we are continually tightening our policies to ensure that importers and distributors are diligent in ensuring their products meet safety requirements. This makes it more important than ever for industry, consumer groups, and governments to work together.

 

All of us must assure those we serve that there is a transparent and fair handling of the vast responsibilities we are being given. Serving as the Chairman of the Consumer Product Safety Commission puts me in a position to help lead a reshaping of consumer product safety issues affecting the global community, and I take my responsibilities seriously.

 

My interest in working with foreign regulators is motivated by a desire to reduce product safety hazards in the United States and to increase the confidence of American consumers. My vision for CPSC is focused on making us more proactive and dedicated to injury prevention, rather than always reacting to the next emerging hazard.

 

I’ll be the first to say that some of our approaches might not work as well in other jurisdictions. Every legal and cultural environment is different. But we’ve also been discovering in meetings such as this Trilateral Summit, how much we have in common with other jurisdictions and how much more we can have in common with regard to product safety.

 

I am focused on doing my utmost to protect the health and safety of children and families. As a former educator, this has been at the heart of my life’s work.

 

CPSC GROWS

 

The United States Congress showed their commitment to reinvigorating CPSC by passing the Consumer Product Safety Improvement Act—known as the CPSIA—two years ago and increasing our funding. Among other things, the CPSIA gave CPSC substantial new enforcement authority, authorized increased staffing to its highest point in 21 years, increased public disclosure of emerging product safety issues, and provided new, mandatory standards for children’s toys and juvenile products.

 

The CPSIA recognizes many of the challenges the agency has faced over the years—and demands that we rebuild the Commission to adapt to an era of consumer products that come from all over the world – 45.5 percent of all our imports and 80 percent of our toys currently come from China. The CPSIA also recognizes the need to take proactive measures to protect consumers from new and emerging hazards.

 

TECHNOLOGY

 

This includes rebuilding CPSC’s internal business processes. CPSC’s information technology systems are truly the lifeblood of my agency. These systems were overdue for an upgrade.

 

A patchwork of reporting systems made it very difficult for CPSC staff to “connect the dots” between different incidents, identify patterns of defects, and respond quickly to emerging hazards.

 

This has led to a situation where CPSC is constantly in the position of reacting to events, rather than receiving new hazard information and proactively targeting harmful products before they flow into the stream of commerce.

 

Through the CPSIA, we have been able to upgrade our infrastructure and create an online, database of product incident reports that is easily searchable by the public.

 

CPSC staff is working with consumer advocacy and business communities globally to expand this effort and establish an online, searchable product incident database that is trustworthy and informative. I am a strong supporter of the creation of this database, as I believe it furthers the vision of creating a more transparent CPSC and a more informed consuming public.

 

CPSC continues to look at all of its business processes in order to identify improvements. Improvements that will provide the agency with the tools necessary for identification of emerging hazards, such as:

 

using predictive data-mining technologies to analyze the increasing amount of information the agency receives, and

 

identifying emerging hazards in real-time.

 

It is impossible to overstate the essential nature of these improvements and their ability to transform the way the CPSC receives, reviews, and acts on new and emerging threats.

 

IDENTIFYING RISKS

 

Another area that we are thinking differently at CPSC is the singular approach used in the past to identify risks and simply recall products when necessary. This is one aspect of enforcement that will not work if pursued alone.

 

To do our job well, I feel that we must educate both manufacturers and consumers about the risks in products. In the U.S., we have a saying that: “An ounce of prevention is worth a pound of cure.” This was a saying from one of our founding fathers, Ben Franklin.

 

Our recognition of this reality in a global marketplace is making the Consumer Product Safety Commission of today a much more efficient agency than in the past.

 

PORT SECURITY

 

In addition to working with suppliers and manufacturers on good manufacturing practices, we have created an Import Surveillance Division. Our import safety inspectors work directly at U.S. ports and are tasked with identifying products coming into the United States that may be defective or violate one of our regulations. We are taking action at the ports before the products are distributed.

 

CPSC has been given access to a special database which contains advance manifest information for shipments on their way to the United States. And we are being successful. Last year we seized 1,800 shipments at the ports and found 56 percent were non-compliant.

 

Additionally, our field investigators are conducting more surveillance activities in support of CPSC projects than ever before. In a matter of a few days, we were able to inspect more than 1200 public pools and spas around the county in an effort to determine if they were in compliance with a very important child safety law.

 

DRYWALL

 

Our field investigators are also actively responding to what is the most expansive and expensive investigation in our history concerning problem drywall inside homes. There have been thousands of reports from consumers, many of which involve drywall first made here in China.

 

I have had a first-hand look at this issue, having visited numerous homes, where I have met families devastated by this issue in terms of their health and finances. We are working tirelessly to bring answers and solutions to these affected families.

 

And, in a continuing effort by CPSC to go to the source of problems, a special team traveled here in 2009 to get a first hand look at various mines and plants that made the drywall connected to the problems.

 

In the spirit of international cooperation, we have asked for meetings with the Chinese manufacturers of problem drywall, looking forward to a dialog that will move us toward a fair and just resolution to this issue.

 

We look forward to the Chinese government’s help in reaching a fair and just settlement for everyone involved.

 

ADVOCACY

 

As I stated earlier, education and advocacy is a top priority of mine. We have developed new ways to reach out further and further to consumers with our messages.

 

Through the media and Internet, I have regularly reached out to millions of American families with information about dangerous cribs, bassinets, and window blinds. These are products that have killed young children, and we are working tirelessly to inform parents and caregivers about recalled products that need to be removed from homes or repaired to keep kids safe.

 

We have extended those broadcast efforts to worldwide audiences with the launch of our social media program. We have a blog, a YouTube channel, a Twitter page, great photos on FlickR (`flicker`), streaming recall news on our widget, and we will soon be on Facebook. All of these sources help us get safety messages to U.S. consumers.

 

These platforms provide a low cost, highly effective and creative way to reach millions of families in the U.S. and worldwide who may have never heard of CPSC before. Once you see the YouTube videos we posted about furniture and television tipovers and our window falls video, you’ll be hooked.

 

INSPIRATION

 

In my role as Chairman of the CPSC for these past sixteen months, as I see international cooperation on product safety move forward with a new understanding and new opportunities to resolve issues, I have come to realize that the people who work at CPSC, AQSIQ and the European Commission have a true dedication to the issue of product safety. Maybe some of you in today’s audience share this dedication and will be part of future summits between our countries.

 

With the cooperative efforts we are seeing this week, I believe that we are turning the corner and heading in a new direction. A direction that will keep children safe in and around their homes and give parents and consumers confidence that the products they see on store shelves meet the best standards in the world. And those actions, those decisions to make this vision a reality, are taking shape right here, right now, right here in Shanghai.

 

We want our U.S. consumers to know and believe that CPSC Stands For Safety. And we want the world to know that China, the E-U and U.S. are all working together to make products safer for all our children and our families.

 

Thank you for inviting me here today and I am looking forward to your questions about International Cooperation On Product Safety.