Last week, the Toy Industry Association, which represents the country's big toy makers, announced that it wanted the government to impose mandatory safety-testing standards on all toys. While this is a good first step, given the industry's checkered past (forgive me), the sudden hankering for regulation is suspect. The reason so many toys were recalled this summer is not that there weren't enough regulations. It's that toy makers were ignoring the regulations that are already on the books. And the new testing proposal won't stop them from continuing to do so.
It is already illegal for manufacturers to sell toys with lead and small parts. There is also a law that requires companies to tell regulators within 24 hours if they discover one of their products is defective or dangerous. And yet big toy companies dispute this. In a move that is certain to earn him a spot in the CEO Chutzpah Hall of Fame, Mattel's top executive, Robert Eckert, told the Wall Street Journal last week that he disagrees with the 24-hour requirement. His company eventually passes on the information, Eckert said, but "vagaries in the law" allow him to decide exactly when.
What's new about the toy industry's proposal is that it calls for third-party testing. Rather than relying on their own testers, the manufacturers will turn over their products to independent testing companies, which will certify the products that pass. This could help reduce the time it takes for a toy company or the Consumer Product Safety Commission, the overseeing federal agency, to discover that a toy is dangerous. Currently, that can take quite a while: Curious George spinning tops, recalled last month for their high levels of lead, were on the market for six years before anyone noticed the problem. More than 1.5 million Thomas the Tank Engine toy trains were sold over 18 months before they were recalled for excessive lead.
But lead, despite its terrible reputation, is only a small fraction of the problem. A Canadian study recently found that of all the toys recalled since 1988, 76 percent involved design flaws. Kids choked, were strangled, and were burned by toy makers' design mistakes. When I asked Rick Locker, lobbyist for the Toy Industry Association, what his third-party testers will test for, exactly, he said they'd start with lead and eventually move to other hazards addressed by existing regulations, like small parts. Design flaws were not on Locker's list.
That selectivity is not surprising, because the toy industry has a long history of fighting efforts to rein it in that might lower profits. In 1992, toy company defense lawyer Aaron Locker (Rick Locker's father) went after members of Congress who supported a bill that required companies to put a warning label on toys and games with small parts. The label—now ubiquitous but at that time rare—warned parents that kids under 3 years old could swallow and choke on small parts. "Requiring cautionary labeling on all products may make us feel better as parents and grandparents," Locker said, "but we should not deceive ourselves into believing that there is any evidence which suggests that injuries and deaths will be further reduced." A year later, TIA President David Miller testified before lawmakers to oppose a bill that would prohibit companies from selling balls less than 1.75 inches in diameter for use by babies and toddlers. At the time, about 5,000 children were being taken to hospital emergency rooms each year after aspirating or ingesting small toys or parts of toys. Congress passed the Child Safety Act of 1994, and the rule went into effect—but only over the toy industry's objections.
So, why is the toy industry now calling for third-party testing? The short answer is Christmas. Toy makers have only a few months to regain parents' trust and avoid a financial disaster this holiday season. But there are longer-term rationales as well. Mandating third-party testing drives up production costs, which helps large companies like Mattel and hurts small toy makers—particularly those sporting "Made in America" labels. While many small domestic toy makers applaud the idea of more testing, some worry about what the big guys are up to. "I test for lead already," said Pete Bultman, president of family-owned Lindewood Inc., the company that makes Uncle Goose wooden building blocks. "But if Mattel and Hasbro and others band together to impose a mandatory testing process that would cost me a lot of money, I would just fold up and go away."
The problem, say the small fry, is how the big guys make toys. They outsource everything, and their contractors rely on subcontractors, who rely on other subcontractors to sell them goods. There's a reason the Toy Manufacturers of America changed their name to the Toy Industry Association in 2001—many of their members no longer manufacture toys, and they rarely do so in America. When a multibillion dollar company like Mattel has such an attenuated supply chain, you can be sure that a measly $63 million regulatory agency like CPSC has little idea what's going on. And when it does, there's not much it can do (even if the officials in charge want to, which lately, they haven't). Requiring third-party testing won't mean that CPSC has the money or the will to enforce it.
And enforcement is the key. At Mattel, Eckert brags about flouting the 24-hour rule simply because he knows he can get away with it. Regulators have been complaining to Congress about companies that flout their regulations since 1983. A law school professor wrote about this in 1989, and Consumer Reports reported on it in 1994, concluding that few "scofflaws" are ever punished. And in those rare cases, the most CPSC can do is to issue a fine of $1.83 million per infraction, a mere slap on the wrist for a company the size of Mattel, which racked up nearly $6 billion in sales last year.
The solution is a bulked-up, bolder CPSC, and fines large enough to make a multibillion company think twice before taunting regulators. CPSC has not had a permanent chairman for more than a year. A good start would be for President Bush to appoint one who is pro-consumer. And Congress needs to make sure that the industry's offer of third-party testing doesn't turn into a bid for immunity from civil lawsuits filed by parents whose kids are injured or killed by toys. There's a precedent for this at CPSC: When the agency's last chairman, Hal Stratton, signed off on a rule intended to improve the safety of mattresses, he agreed to an industry-backed clause that tries to restrict consumers' right to sue if they are injured in a mattress fire. If the toy companies try this trick again and Congress lets them get away with it, kids could wind up even worse off.