Consumer Product Safety Commission: Better Data Needed to Help Identify
and Analyze Potential Hazards (Testimony, 10/23/97, GAO/T-HEHS-98-23).
Pursuant to a congressional request, GAO discussed the Consumer Product
Safety Commission's (CPSC) procedures to protect consumers from
unreasonable risk of injuries, focusing on CPSC's project selection, use
of cost-benefit analysis and risk assessment, and information release
procedures.
GAO noted that: (1) although CPSC has established criteria to help
select new projects, with the agency's current data, these criteria can
be measured only imprecisely if at all; (2) CPSC has described itself as
"data driven," but its information on product-related deaths and
injuries is often sketchy, and its lack of systematized descriptive
information on past or ongoing projects makes it more difficult for
agency management to monitor current projects and to assess and
prioritize the need for new projects in different hazard areas; (3)
CPSC's data are often insufficient to support rigorous application of
risk assessment and cost-benefit analysis; (4) in addition, the
cost-benefit analyses conducted by CPSC between 1990 and 1996 were
frequently not comprehensive, and the reports on these analyses were not
sufficiently detailed; (5) CPSC has established procedures to implement
statutory requirements restricting the release of manufacturer-specific
information; and (6) although industry representatives, consumer
advocates, and CPSC expressed differing views on the merits of these
restrictions, available evidence suggests that CPSC complies with these
statutory requirements.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-98-23
TITLE: Consumer Product Safety Commission: Better Data Needed to
Help Identify and Analyze Potential Hazards
DATE: 10/23/97
SUBJECT: Cost effectiveness analysis
Data collection
Statistical methods
Product safety
Safety regulation
Government information dissemination
Management information systems
Consumer protection
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Cover
================================================================ COVER
Before the Subcommittee on Telecommunications, Trade, and Consumer
Protection, Committee on Commerce, House of Representatives
For Release on Delivery
Expected at 9:30 a.m.
Thursday, October 23, 1997
CONSUMER PRODUCT SAFETY COMMISSION
- BETTER DATA NEEDED TO HELP
IDENTIFY AND ANALYZE POTENTIAL
HAZARDS
Statement of Carlotta C. Joyner, Director
Education and Employment Issues
Health, Education, and Human Services Division
GAO/T-HEHS-98-23
GAO/HEHS-96-23T
(205358)
Abbreviations
=============================================================== ABBREV
CPSC - x
ABC - x
CONSUMER PRODUCT SAFETY
COMMISSION: BETTER DATA NEEDED TO
HELP IDENTIFY AND ANALYZE
POTENTIAL HAZARDS
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss our work on the Consumer
Product Safety Commission (CPSC). CPSC was created to protect
consumers from "unreasonable risk of injury," and in doing so it
oversees about 15,000 consumer products, ranging from kitchen
appliances and children's toys to hot tubs and garage door openers.
With a budget of about $42.5 million, CPSC enforces existing federal
consumer product regulations and also develops agency projects to
address products with a potential hazard not covered by existing
regulations.\1 These projects may result in CPSC's issuing new
regulations concerning a specific product, assisting in the
development of voluntary industry standards, or providing information
to consumers about how to use a product safely.
Contending that the agency is ineffectively allocating its resources,
some industry representatives and other individuals have voiced
dissatisfaction with the agency's selection of certain projects and
have questioned the validity of CPSC's cost-benefit and risk
assessment analyses supporting those projects. Congressional and
interest-group critics have also raised concerns about the agency's
procedures for ensuring the accuracy of manufacturer-specific
information before it releases the information to the public,
maintaining that such releases can mar the reputation of responsible
corporations. In light of these concerns, you asked us to discuss
CPSC's project selection, use of cost-benefit analysis and risk
assessment, and information release procedures. Today, we are also
releasing our report on CPSC, which covers these issues in more
detail.\2
To do our work, we reviewed internal CPSC documents, relevant
legislation, regulations, and legal cases, and the literature on
cost-benefit analysis and on consumer product safety issues. In
addition, we interviewed current and former CPSC commissioners, CPSC
staff, consumer advocates, industry representatives, and outside
experts to obtain their perspectives on CPSC's work. We identified
CPSC projects by compiling from various agency documents a list of
115 potential product hazards examined by the agency from January
1990 to September 30, 1996, and we reviewed available agency
documentation on each of these projects. We examined the agency's
internal databases to obtain project information and assess the
agency's information on product hazards.
In summary, although CPSC has established criteria to help select new
projects, with the agency's current data, these criteria can be
measured only imprecisely if at all. CPSC has described itself as
"data driven," but its information on product-related deaths and
injuries is often sketchy, and its lack of systematized descriptive
information on past or ongoing projects makes it more difficult for
agency management to monitor current projects and to assess and
prioritize the need for new projects in different hazard areas.
CPSC's data are often insufficient to support rigorous application of
risk assessment and cost-benefit analysis. In addition, the
cost-benefit analyses conducted by CPSC between 1990 and 1996 were
frequently not comprehensive, and the reports on these analyses were
not sufficiently detailed. We also found that CPSC has established
procedures to implement statutory requirements restricting the
release of manufacturer-specific information. Although industry
representatives, consumer advocates, and CPSC expressed differing
views on the merits of these restrictions, available evidence
suggests that CPSC complies with these statutory requirements.
--------------------
\1 Projects vary widely in scope, and CPSC has no standard definition
of what constitutes a project. For our review, we defined a
"project" as work CPSC conducted on any specific consumer product
that was associated with a potential hazard or hazards not covered by
existing regulation.
\2 Consumer Product Safety Commission: Better Data Needed to Help
Identity and Analyze Potential Hazards (GAO/HEHS-97-147, Sept. 29,
1997).
BACKGROUND
---------------------------------------------------------- Chapter 0:1
CPSC was created in 1972 under the Consumer Product Safety Act (P.L.
92-573) to regulate consumer products that pose an unreasonable risk
of injury, to assist consumers in using products safely, and to
promote research and investigation into product-related deaths,
injuries, and illnesses. CPSC currently has three commissioners, who
are responsible for establishing agency policy.\3 One of these
commissioners is designated as the chairman, who directs all the
executive and administrative functions of the agency.
In fiscal year 1997, CPSC carried out its broad mission with a budget
of about $42.5 million and a full-time-equivalent staff of 480.
After adjusting for inflation, the agency's budget has decreased by
about 60 percent since 1974. Similarly, CPSC's current staffing
level represents 43 percent fewer positions as compared with the
agency's 1974 staff.
Although CPSC has broad regulatory powers, many of the agency's
efforts are carried out using nonregulatory methods. For example,
CPSC frequently assists industry and private standard-setting groups
in developing voluntary product safety standards.\4
CPSC also addresses product hazards by providing information to
consumers on safety practices that can help prevent product-related
accidents. In addition to its own efforts to disseminate
information, CPSC provides considerable amounts of information in
response to requests from the public.
--------------------
\3 The Consumer Product Safety Act provides for the appointment of
five commissioners by the President of the United States for
staggered 7-year terms. However, since 1986, no more than three
commissioners have been in office at one time.
\4 The 1981 amendments to the Consumer Product Safety Act require
CPSC to defer to a voluntary standard--rather than issue a mandatory
regulation--if the Commission determines that the voluntary standard
adequately addresses the hazard and that there is likely to be
substantial compliance with the voluntary standard.
CPSC HAS LIMITED INFORMATION
AVAILABLE TO ASSIST IN PROJECT
SELECTION
---------------------------------------------------------- Chapter 0:2
CPSC'S PROJECT SELECTION
PROCESS
-------------------------------------------------------- Chapter 0:2.1
CPSC's resource base and extensive jurisdiction require the agency to
select among potential product hazards. New agency initiatives may
come to CPSC in several ways. First, any person may file a petition
requesting CPSC to issue, amend, or revoke a regulation. For
example, CPSC's cigarette lighter project, which resulted in a new
mandatory safety standard, originated with a petition from an
emergency room nurse. Second, CPSC can receive a product hazard
project from the Congress. The Congress may require CPSC to study a
wide-ranging product area (such as indoor air quality) or impose a
specific regulation (such as a mandatory safety standard for garage
door openers).\5 Third, CPSC commissioners and agency staff can
initiate projects or suggest areas to address.
CPSC has wide latitude over which potential product hazards it
targets for regulatory and nonregulatory action. Although the agency
has little or no discretion over projects mandated by the Congress,
it can accept or reject suggestions submitted by petition or proposed
by agency staff. Of the 115 projects the agency worked on from
January 1, 1990, to September 30, 1996, 59 percent were initiated by
CPSC, 30 percent originated from a petition, and about 11 percent
resulted from congressional directives.
CPSC has established criteria for setting agency priorities and
selecting potential hazards to address. These criteria, which are
incorporated in agency regulations, include the following:
-- the frequency of injuries and deaths resulting from the hazard;
-- the severity of the injuries resulting from the hazard;
-- addressability--that is, the extent to which the hazard is
likely to be reduced through CPSC action--agency regulations
note that the cause of the hazard should be analyzed to help
determine the extent to which injuries can reasonably be
expected to be reduced or eliminated through CPSC action;
-- the number of chronic illnesses and future injuries predicted to
result from the hazard;
-- preliminary estimates of the costs and benefits to society
resulting from CPSC action;
-- the unforeseen nature of the risk--that is, the degree to which
consumers are aware of the hazard and its consequences;
-- the vulnerability of the population at risk--whether some
individuals (such as children) may be less able to recognize or
escape from potential hazards and therefore may require a
relatively higher degree of protection;
-- the probability of exposure to the product hazard--that is, the
number of consumers exposed to the potential hazard, or how
likely it is that typical consumers would be exposed to the
hazard; and
-- additional criteria to be considered at the discretion of CPSC.
Commissioners and staff may select projects on the basis of what they
believe are the most important factors. For example, the regulations
do not specify whether any criterion should be given more weight than
the others, nor that all criteria must be applied to every potential
project. Our interviews with present and former commissioners and
our review of CPSC briefing packages showed that three criteria--the
number of deaths and injuries, the cause of injuries, and the
vulnerability of the population at risk--were more strongly
emphasized than the others. However, although the commissioners and
former commissioners we interviewed generally agreed about which
criteria they emphasized for project selection, they expressed very
different views on how some of these criteria should be interpreted.
For example, their opinions differed about choosing projects on the
basis of the cause of injuries. A major issue in this regard
concerned the appropriate level of protection the agency should be
responsible for providing when a product hazard results, at least in
part, from consumer behavior. Some current and former commissioners
argued that no intervention was warranted when consumer behavior
contributed to injuries; others were more willing to consider a
regulatory approach in these situations.
--------------------
\5 This mandate was imposed in the Child Safety Protection Act (P.L.
103-267, June 16, 1994).
PROJECT MANAGEMENT
INFORMATION WAS INCOMPLETE
OR UNAVAILABLE
-------------------------------------------------------- Chapter 0:2.2
Although CPSC conducts a number of projects annually, staff were
unable to give us a comprehensive list of projects the agency had
worked on in the 6-year period we examined. CPSC was also unable to
verify the completeness of the project list that we compiled from
agency documents and interviews with staff. According to CPSC staff,
internal management systems do not generally contain this information
because most projects are accounted for under either broad codes such
as "children's products" or activity codes such as "investigations,"
"product safety assessment," and "emerging problems." In addition,
CPSC staff told us that reliable inferences about the characteristics
of individual projects, their outcomes, and the resources spent on
them cannot be drawn from management information systems because of
limitations in the computer system and because no consistent rule
exists about how staff time in different directorates is recorded to
project codes. Without systematic and comprehensive information on
its past efforts, CPSC cannot fully assess whether its projects
overrepresent some hazard areas and therefore agency resources might
be more efficiently employed. In our report, we recommend that the
Chairman of CPSC direct agency staff to develop and implement a
project management tracking system to compile information on current
agency projects.
SIGNIFICANT GAPS EXIST IN
CPSC'S DATA ON ALL SELECTION
CRITERIA, INCLUDING
PRODUCT-RELATED INJURIES AND
DEATHS
-------------------------------------------------------- Chapter 0:2.3
CPSC has developed a patchwork of independent data systems to provide
information on deaths and injuries associated with consumer products.
To estimate the number of injuries associated with specific consumer
products, CPSC gathers information from the emergency room records of
a nationally representative sample of 101 hospitals. CPSC also
obtains information on fatalities by purchasing a selected group of
death certificates from the states. Because neither emergency room
nor death certificate data provide detailed information on hazard
patterns or causes of injuries, CPSC also investigates selected
incidents to obtain more detailed information.
CPSC's data give the agency only limited assistance in applying its
project selection criteria. Data on all CPSC's project selection
criteria suffer from major limitations, as shown in table 1. In
fact, none of the criteria are supported by complete data that are
available for most projects at the time the project is selected.
Table 1
CPSC's Regulatory Priority-Setting
Criteria and Their Major Limitations
Criterion Major limitations
---------------- ----------------------------------------------------
Number of deaths Incomplete because not all certificates are gathered
and not all product-related incidents are noted on
the certificates
Number of Generally limited to injuries treated in emergency
injuries room, excluding injuries treated in other settings
Severity of Not representative of the severity of all injuries
injuries
Chronic Little systematic information
illnesses
Predicted future Questionable validity, given changes in medical care
injuries over time
Vulnerable Incomplete�information available only on age and not
populations on other vulnerable populations, such as people with
disabilities
Exposure Exposure surveys are time consuming and expensive,
not done for all projects, and done only after
project is well under way
Addressability/ Often impossible to make an informed judgment until
causation project is well under way; investigations are time
consuming and expensive
Preliminary Quality data are frequently not available; data from
cost-benefit early stages of project are of limited accuracy
analysis
----------------------------------------------------------------------
CPSC staff identified four data-gathering areas as key concerns: (1)
lack of data on injuries treated in physicians' offices and other
settings outside the emergency room; (2) lack of data that would
identify chronic illnesses that may be associated with consumer
products; (3) sketchy information about accident victims, which
limits the ability to assess which hazards disproportionately affect
vulnerable populations; and (4) lack of data on exposure to consumer
products.
CPSC's injury and death data allow at best an incomplete view--and at
worst a distorted one--of the incidents that result from consumer
product hazards. Product-related injuries may be treated in a
variety of settings--a hospital emergency room, a physician's office,
or an outpatient clinic, for example. CPSC systematically collects
information only on deaths and on injuries treated in the emergency
room; injuries treated in other settings (such as physicians'
offices) are generally not represented in CPSC's data. Because
CPSC's data reveal only a portion of the injury picture, the agency
underestimates the total numbers of deaths and injuries associated
with any given consumer product. The extent of this undercount is
unknown, but it may be increasing; pressure to contain health care
costs has led to more injuries and illnesses being treated outside
the hospital setting.\6 In addition, CPSC's incomplete injury
information raises doubts about whether the agency can reliably
discern long-term trends in injuries. Trend information is needed
not only because it is a criterion for project selection but also
because it is important in evaluating the success of CPSC's injury
reduction efforts and determining the need for possible follow-up
actions.
According to CPSC staff, identifying chronic illnesses associated
with consumer products is nearly impossible with CPSC's current data.
CPSC staff stated that little is known about many chronic illness
hazards that may be associated with potentially dangerous substances,
and even less information is available about which consumer products
may contain these ingredients. Chronic illnesses are likely to be
especially underestimated in CPSC's emergency room data, because they
are underrepresented among emergency room visits and because product
involvement is more difficult to ascertain. Similarly, consumer
product involvement is seldom recorded on death certificates in the
case of chronic illnesses.
Sketchy information about accident victims also limits CPSC's ability
to assess which consumer product hazards have a disproportionate
impact on vulnerable populations. CPSC's surveillance data systems
provide information only on the age of the victim; no systematic or
comprehensive information is available to determine whether a given
hazard has a special impact on other vulnerable populations such as
people with disabilities. A former commissioner told us that the
lack of other demographic information (such as race, income, and
disability status) made it difficult to know which subpopulations
were predominantly affected by a particular hazard. Another
commissioner echoed this concern, adding that such information would
be useful in targeting public information campaigns on certain
hazards to those groups that need the information most.
Although CPSC staff identified the need for additional exposure data
as a major concern, they also said that obtaining such information
can be time consuming and costly. Because exposure data are
generally not included in CPSC's ongoing data collection efforts,
exposure is assessed either not at all or well after the project has
started, precluding the use of exposure as an effective criterion for
project selection. Similarly, CPSC's emergency room and death
certificate data give little information about the circumstances of
the incident. Therefore, CPSC staff follow up on a few selected
incidents to obtain additional details. These investigations may
include detailed interviews with victims and witnesses, police or
fire reports, photographs of the product and the accident site,
laboratory testing of the product, and recreations of the incident.
As with exposure data, these investigations are not conducted for
every project and are done only after a project has been established.
Thus, assessment of causation at the project selection stage is
unavoidably speculative.
We believe that improved information on each of these four areas is
necessary for CPSC to make informed decisions on potential agency
projects. However, we also recognize that such information may be
costly to obtain. In our report, we recommend that the Chairman of
CPSC consult with experts both within and outside the agency to
prioritize CPSC's needs for additional data, investigate the
feasibility and cost of alternative means of obtaining these data,
and design systems to collect and analyze this information.
--------------------
\6 For example, according to the American Hospital Association,
hospitalizations decreased by 5 percent on a per capita basis between
1982 and 1994, while between 1983 and 1993 hospital outpatient
clinics saw a 53-percent increase in visits on a per capita basis.
BETTER DATA AND METHODOLOGY ARE
NEEDED TO IMPROVE CPSC'S
COST-BENEFIT ANALYSIS AND RISK
ASSESSMENT
---------------------------------------------------------- Chapter 0:3
CPSC uses two analytical tools--risk assessment and cost-benefit
analysis--to assist in making decisions on regulatory and
nonregulatory methods to address potential hazards. Risk assessment
involves estimating the likelihood of an adverse event, such as
injury or death. Cost-benefit analysis details and compares the
expected effects of a proposed regulation or policy, including both
the positive results (benefits) and the negative consequences
(costs). The Congress requires CPSC to perform cost-benefit analyses
before issuing certain regulations, and CPSC has conducted
cost-benefit analyses for these regulations and in other situations
in which such an analysis was not required by law. Because most of
the agency's projects do not involve regulation, relatively few CPSC
projects conducted between January 1, 1990, and September 30, 1996,
were subject to these requirements. We identified 8 cost-benefit
analyses that CPSC performed in accordance with these requirements
and an additional 21 analyses that it conducted when it was not
required.\7 Before issuing certain regulations, CPSC is required to
consider the degree and nature of the risk of injury the regulation
is designed to eliminate or reduce. However, CPSC usually does not
conduct a formal, numerical risk assessment before issuing a
regulation, and the law does not require it to do so. We determined
that CPSC conducted 24 risk assessments between January 1, 1990, and
September 30, 1996; only 4 of these were associated with regulatory
action.
Both risk assessment and cost-benefit analysis require extensive
data. CPSC's data systems are frequently unable to adequately meet
the extensive demands for information posed by risk assessment and
cost-benefit analysis. As a result, the agency's estimates of risks,
costs, and benefits are less accurate because they reflect the
substantial limitations of the underlying data. For example, because
CPSC's data undercount the deaths and injuries associated with
particular consumer products, estimates of risk--and the potential
benefits of reducing that risk--appear smaller than they actually
are. However, CPSC's data provide information only on whether a
product was involved in an accident, not whether the product caused
the accident. This can sometimes make the risks assessed by
CPSC--and the benefits of reducing those risks--appear greater.
The methodology used to conduct a cost-benefit analysis frequently
depends on the circumstances and the context of the analysis. For
this reason, there is no complete set of standards for evaluating the
quality of an individual cost-benefit analysis. However, the
professional literature offers some guidance for analysts, and
certain specific elements are frequently used to determine whether a
given analysis meets a minimum threshold of comprehensiveness and
openness. For example, analysts generally agree that all
methodological choices and assumptions should be detailed, all
limitations pertaining to the data should be revealed, and measures
of uncertainty should be provided to allow the reader to take into
account the precision of the underlying data. Similarly,
practitioners generally call for sensitivity analysis, which enables
the reader to determine which assumptions, values, and parameters of
the cost-benefit analysis are most important to the conclusions.
Our review of all the cost-benefit analyses that CPSC conducted
between January 1, 1990, and October 31, 1996, showed that for six of
eight evaluation elements, CPSC's analyses were not comprehensive and
not reported in sufficient detail (see table 2).\8
Specifically, CPSC provided descriptive information on proposals and
also provided information on a variety of reasonable alternatives in
almost 100 percent of cases. But in only 17 percent of its analyses
did CPSC provide any statistical information on the precision of the
underlying estimates. Similarly, when estimates are based on a
relatively small sample size, projections are generally not
considered reliable. But CPSC analysts cautioned the reader against
drawing conclusions on the basis of small sample data only 45 percent
of the time. Furthermore, some of CPSC's data sets have a known
upward or downward bias because of the way the data were constructed.
For example, when estimates of incidents are based only on
investigated or reported cases, two potential biases are likely to be
introduced into the analysis: (1) the estimates are likely to be
biased downward by nonreporting and (2) the incidents reported tend
to be the more severe ones. In only 53 percent of applicable cases
did CPSC's analysis inform the reader of known limitations inherent
in the data being used for cost-benefit analysis.
Table 2
Evaluation of CPSC's Analyses Shows
Problems in Several Evaluation Elements
Percen
tage
of
CPSC's
analys
es
that
were
consis
tent
with
this
elemen
Evaluation element t
-------------------------------------------------------------- ------
Provided descriptive information about a well-defined proposal 98
Addressed multiple alternatives 95
Reported measures of precision for underlying data 17
Cautioned reader about making inferences from data with a 45
small sample size
Reported known biases in underlying data 53
Provided any sensitivity analysis information 26
Included all important categories of benefits and costs 54
Considered risk-risk trade-offs\a 49
----------------------------------------------------------------------
\a A "risk-risk" trade-off refers to an action to decrease a hazard's
risk that unintentionally increases that or another risk.
We identified several other areas in which CPSC analyses could
benefit from improvement. For example, researchers agree that
sensitivity analysis should be incorporated in cost-benefit analyses.
CPSC usually did not provide sensitivity analysis information. In
addition, only 54 percent of CPSC analyses considered the full range
of costs and benefits likely to result from regulation. CPSC
analysts frequently did not mention intangible costs or benefits
(costs or benefits that are difficult to quantify, such as loss of
consumer enjoyment) or potential indirect effects (such as changes in
the prices of related goods). CPSC also frequently excluded
risk-risk considerations from its evaluation of the costs and
benefits of potential actions. Sometimes actions taken to reduce one
risk can unintentionally increase that or another risk--such as when
individuals take more or fewer precautions in response to a change in
a product's safety features. For example, in establishing a standard
for child-resistant packaging that was also "senior-friendly," CPSC
considered that because child-resistant medicine bottles can be
difficult to open, a grandparent might leave the cover off the
bottle, creating an even greater risk than would exist with the
original cap. Although CPSC considered such factors in some cases,
only 49 percent of its analyses reflected potential risk-risk
trade-offs.
CPSC has not established internal procedures that require analysts to
conduct comprehensive analyses and report them in sufficient detail.
For example, according to CPSC staff, the agency has little written
guidance about what factors should be included in cost-benefit
analyses, what methodology should be used to incorporate these
factors, and how the results should be presented. Staff also told us
that CPSC analyses are not generally subject to external peer review.
Such reviews can serve as an important mechanism for enhancing the
quality and credibility of the analyses that are used to help make
key agency decisions. In our report, we recommend that the Chairman
direct agency staff to develop and implement procedures to ensure
that all cost-benefit analyses performed on behalf of CPSC are
comprehensive and reported in sufficient detail, including providing
measures of precision for underlying data, incorporating information
on all important costs and benefits, and performing sensitivity
analysis.
--------------------
\7 In addition to the complete cost-benefit analyses, we identified
an additional 23 cases in which some information was provided on some
economic benefits or costs.
\8 From our review of the cost-benefit literature, we developed a
list of the elements that are frequently used in evaluating
cost-benefit analyses. Although we compared each of these elements
with each of CPSC's analyses, not all elements were applicable to
each case. For this reason, and to emphasize those areas that we
viewed as most critical, we reported only those results that related
to key elements, applied to the majority of CPSC's analyses, and for
which a determination was possible in all or nearly all cases.
CPSC HAS ESTABLISHED PROCEDURES
FOR COMPLYING WITH STATUTORY
REQUIREMENTS FOR RELEASING
MANUFACTURER-SPECIFIC
INFORMATION
---------------------------------------------------------- Chapter 0:4
To help minimize the possibility that a product might be unfairly
disparaged, in section 6(b) of the Consumer Product Safety Act, the
Congress imposed restrictions on CPSC's disclosure of
manufacturer-specific information.\9 Before CPSC can release any
information that identifies a manufacturer,\10 it must
-- take "reasonable steps" to verify the accuracy of the
information and to ensure that disclosure is fair;
-- notify the manufacturer that the information is subject to
release; and
-- give the manufacturer an opportunity to comment on the
information.
These restrictions apply not only to information the agency issues on
its own--such as a press release--but also to information disclosed
in response to a request under the Freedom of Information Act.
Section 6(b) also requires CPSC to establish procedures to ensure
that releases of information that reflect on the safety of a consumer
product or class of products are accurate and not misleading,
regardless of whether the information disclosed identifies a specific
manufacturer.
In implementing section 6(b), CPSC established several procedures
designed to ensure compliance with these statutory requirements.
These include obtaining written verification from individuals of the
information they report to the agency, notifying manufacturers by
certified mail when manufacturer-specific information has been
requested, and giving manufacturers the option to have their comments
published with any information disclosed. For example, CPSC has
issued clearance procedures for situations when commissioners and
staff initiate public disclosures--for example, when CPSC publishes
the results of agency research. Under CPSC's guidelines, each
assistant or associate executive director whose area of
responsibility is involved must review the information and indicate
approval for the release in writing. After all other reviews have
been completed, the Office of the General Counsel must also review
and approve the release.
Information from three sources--industry sources, published legal
cases, and data on retractions--suggests that CPSC complies with its
statutory requirements concerning information release. Industry
sources, even those otherwise critical of the agency, told us that
CPSC generally keeps proprietary information confidential as required
by law. Our review of published legal decisions found no rulings
that CPSC violated its statutory requirements concerning the release
of information. Retractions by CPSC are also rare--only three
retractions have been issued by CPSC since the agency was
established.\11
Industry observers, CPSC staff, and consumer groups expressed a wide
range of opinions on the effectiveness of section 6(b). In response
to our inquiries, some CPSC commissioners and former commissioners
said that these restrictions serve a useful purpose and should not be
changed. However, CPSC's current chairman, industry and advocacy
group representatives, and others expressed dissatisfaction with 6(b)
and some suggested possible changes. Although these individuals
raised issues about the extent of the protection afforded to
manufacturers and the resources necessary to ensure compliance, we
did not assess whether the specific suggestions were necessary or
feasible.
CPSC's chairman, other CPSC officials, former commissioners, and the
representative of a consumer advocacy group stated that compliance
with 6(b) is costly for CPSC and delays the agency in getting
information out to the public. To reduce the burden of complying
with these requirements, CPSC staff have suggested that the
notification requirement that gives manufacturers 20 days in which to
comment should apply only to the first time information is released
and that, instead of requiring CPSC to verify information from
consumer complaints, the agency should be allowed to issue such
information with an explicit disclaimer that CPSC has not verified
the consumer's report.
Instead of reducing CPSC's verification requirements, some industry
representatives suggested expanding them. These manufacturers stated
that before CPSC releases incident information, the agency should
substantiate it, rather than relying on a consumer's testimony.
Industry representatives stated--and CPSC staff confirmed--that many
of the requests for CPSC information come from attorneys for
plaintiffs in product liability suits. As a result, some industry
representatives expressed concern that unsubstantiated consumer
complaints could be used against them in product liability
litigation. They suggested that 6(b) should require CPSC to
substantiate all incident reports by investigating them before they
can be disclosed, instead of merely checking with the consumer.
However, CPSC officials told us that, because of limited resources,
investigations--which are time consuming and costly--can be conducted
only on a small proportion of specially selected cases.
Retailers' representatives also suggested specific changes to CPSC's
information release requirements. They said that retailers do not
receive timely notice of recalls because CPSC has interpreted the law
to prohibit advance notification of retailers. Consequently, the
retailers said, they sometimes receive notice of recalls at the same
time as their customers and have no time to prepare. Retailers'
representatives suggested amending 6(b) to provide for 5 business
days' advance notice to retailers before the public announcement of a
recall. CPSC officials said that typically manufacturers are, and
should be, the ones to contact the retailers and make all
arrangements for a recall. Although they disagreed on the need for a
statutory change, both CPSC staff and a major retailers' association
said they were trying to work out a more satisfactory arrangement.
--------------------
\9 An exception to these restrictions is given if CPSC has declared
that the product is an "imminent hazard" under section 12 of the
Consumer Product Safety Act.
\10 These restrictions also apply even if the manufacturer is not
named but the information would allow the reader to readily identify
the manufacturer from the context. For example, if there is only one
manufacturer of a product identified in the information, the
information may be subject to restriction even if the manufacturer's
name is not given.
\11 Two of these retractions, in 1984 and 1994, were issued in
response to requests from firms. A third retraction, in 1990, was
issued after CPSC discovered that a report in its public reading room
had mistakenly included inaccurate information.
-------------------------------------------------------- Chapter 0:4.1
Mr. Chairman, that concludes my prepared statement. I would be
happy to answer any questions you or Members of the Subcommittee
might have.
*** End of document. ***