How to survive the new labeling law

January 5, 2009
On Christmas morning my nieces—ages 3, 6 and 9—paused at the doorway in wide-eyed wonder, to observe a room filled with presents. That moment was beautiful—until the girls unleashed themselves like a trio of Tasmanian devils, and the room was trans formed into something akin to a 10-car pile up on I-465.

It might not surprise you to learn that the girls didn't stop to check Holiday Barbie for tracking labels or a statement of the consumer products laws by which she was tested. And, while I wish the adults in my family were better, we're not. Even adults don't review the labels and warnings for the multitude of goods carefully selected as Christmas gifts. (Try telling your husband not to plug in his new grill light until he reviews its warnings.)

But thousands of Indiana manufacturers, importers, distributors and retailers are spending hundred of thousands of dollars testing, certifying and labeling goods under the Consumer Product Safety Improvement Act of 2008, which includes about 40 new requirements.

As Peter Schnitzler explained in "Rules rile toy stores" (Dec. 15 IBJ), the act's requirements are so onerous that many local manufacturers and retailers fear the economic impact may put them out of business. And many Indiana businesses are unaware of the act's requirements or incorrectly believe they only apply to imports.

The act is sweeping, applying to manufacturers, importers, distributors and retailers of more than 15,000 products. Pajamas, blenders and Holiday Barbie? All are subject to the act. Even some non-conventional consumer goods, such as generators, motorcycle helmets and painted furniture, fall within the act.

What should Indiana businesses do to comply? Here are a few resolutions for the new year:

• Find out if the act applies to your products. The act applies to all children's products and toys, as well as thousands of products used in households and schools. However, the act doesn't cover products not regulated by the Consumer Product Safety Commission, like cars, food and prescription drugs.

• Issue certificates of compliance. The act requires manufacturers and importers to issue certificates of compliance based on actual product testing. Certification of consumer products requires a "reasonable testing program," and children's products must be tested by an accredited third-party laboratory. If a shipment doesn't contain a certificate, it can be held or destroyed by the commission, with fines ranging up to $15 million.

• If you make, import or sell products primarily for use by children under 12, pay attention to the act's limits on phthalates and lead. Phthalates are used as a plasticizer in products to make them flexible (think Holiday Barbie's legs, Tupperware containers and the like). While the science on the risks of phthalates remains inconclusive, in the face of several high-profile recalls in 2007, Congress wasn't taking any chances. The act strictly regulates six phthalates beginning Feb. 10, and severely restricts the lead content and use of lead-containing paints and coatings.

• Retailers: confirm that your suppliers are in compliance. The act contains no direct requirements for retailers who do not import, but retailers should receive a certificate of compliance with each shipment of regulated goods. While retailers may task employees with checking for certificates, for most, it will be easier to contact suppliers and request written verification of compliance. The initial investment of time is greater, but the peace of mind and long-term reduction in employee resources are worth it.

"Yes, Virginia, there is a Santa Claus," but the act requires Santa to test, certify and label everything from Candyland to cordless screwdrivers. Now, if only we could get consumers to stop long enough to read them.

I suppose that's one way to make the magic of Christmas morning last just a little longer.


Roberts is a partner in the local law firm of Baker & Daniels LLP.
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