Up Close: TIA's Carter Keithley on industry's toy safety efforts
By Staff -- Gifts and Dec, 10/14/2009 5:05:00 AM
Late last month, Playthings.com columnist Richard Gottlieb convened his second Building Our Future conference, a gathering of the toy business' various stakeholders with a goal of helping the industry increase its chances of success in the near term. At one point during the day-long discussion, Toy Industry Association president Carter Keithley briefed the attendees about the status of industry efforts at safety standards harmonization at home and abroad. Because of its timeliness, we've chosen to preview that exchange now instead of waiting for it to appear in the print magazine.
Q: What’s the situation like for industry efforts towards with global toy safety standards?
Carter Keithley: I think we have a huge opportunity in front of us right now – and a huge problem, too. We had the ICTI group about two years ago commission an analysis of the existing product safety standards—ASTM, EN-71 and ISO—to determine the extent of the differences. There was a roughly 15 percent difference between them. The other 85 percent of the regulations were all consistent, and that was sort of a manageable amount. But what we’re worried about now—and the real challenge and the threat—is that in the course of the development of implementation regulations for the CPSIA here in the US, the implementing regs for the new toy safety directive in Europe, and moves to amend the ISO by China and Australia, which are the only two nations using those, that we run the risk of instead of convergence of that last 15 percent, further divergence—and that could become a 40 percent difference or a 60 percent difference, so there’s a real threat and challenge in front of us.
At the same time we have a tremendous opportunity because the global regulatory community has gotten itself together, recognizing that the bureaucrats used to be able to focus solely on their domestic markets but now have sort of woken up to the fact that, inevitably, they’ve got to deal with product that’s going to come in from markets overseas. That’s something that’s always going to change—it’s a fast moving target—so they’ve realized they’ve got to get themselves together and address things on a global basis. So, they formed something called the International Consumer Product Safety Caucus (ICPSC). We’ve had our global industry group, ICTI, around for a while, and now we’ve got someone to talk to, collectively. That’s good, but the problem is there’s a huge amount of work to be done.
Somebody has to own the responsibility for identifying when Malaysia proposes a requirement, as it has, for testing and labeling toy products that come into Malaysia. When Brazil wants to demand testing in Brazil of products coming into the country, somebody has to own the responsibility for trying to pull all that together under the ICTI umbrella and right now, frankly, we’re struggling as a trade association with having the resources for that. Any effort like this should be done under the umbrella of ICTI, not under the umbrella of TIA, but the trouble is that TIA represents the largest component of the global toy industry—the US still has the largest toy industry in the world—so the largest percentage of the funding, ultimately, would have to come from the US toy industry, probably funneled through ICTI.
Q: Have manufacturers—particularly big ones—been asked to contribute or participate?
Carter Keithley: Under the umbrella of ICTI there’s been formed a group called the CEO Roundtable. It has now met three times. It consists of 14 to 18 CEOs of major toy companies from around the world, only a handful of them being from the US, others being companies like Ravensburger and Schleich from Germany. It’s not always the exact same 14 to 18, so there’ll be some that come sometimes and others at other times.
Q: At the end of the day, meeting various international standards is an expensive proposition for large companies, but doesn’t it also benefit them if they don’t support standards harmonization? If may cost them more for testing to several different regional standards, but wouldn’t that help them eliminate all their small to medium competitors from the playing field since only the big guys could afford to sell globally in that environment?
Carter Keithley: Personally, I thought [standards harmonization] was only of interest to those big guys who are doing business globally, too, but when we were in LA and I asked the question, “How many of you are doing business globally?” half the room raised their hands, which included lots of small companies, so it is of interest to more than just Mattel and Hasbro, apparently. If you figure that the toy market in the US is a mature market—I don’t know if it is or not—but if you assume it is, then the real opportunities for growth are overseas for small companies as well.
In reality you can argue there really is one global toy standard—it’s the toy standard to which each one of those big companies has figured out to make the one toy that they can sell to each jurisdiction. Of course, they have the resources to figure out what each jurisdiction requires, but the remaining piece that’s still costing them money—which they’d like to be able to do away with—is one conformity assessment. So you test something one time, one way and it’s good to go in every jurisdiction. There’s still that interest.
Q: Where is the industry on having a uniform testing standard here in the States?
Carter Keithley: We turn[ed] the switch on our new Toy Safety Certification Program [on October 1], going live on it for applications so any company that wants to apply to have a TSCP certification can go online and try it out. It’ll take a company some time to get through the system, but by the first of next year we hope to be able to do a more public role out.
But before then, on October 14, there’s a huge milestone in the process. On that day, the CPSC is going to have a public hearing at which we’ll be making a presentation of the TSCP to the CPSC. In reality all the CPSIA requires is that toys be tested by a CPSC-accredited certifying body to be sure they meet the safety standard. However, the statute also says that the CPSC should establish standards and protocols for periodic retesting. So the CPSC is going to issue, after they see our presentation on October 14, a notice of proposed rulemaking (NPR). In that NPR will be their proposal for how often you have to re-test a toy so as to assure that it continues to meet the safety standards.
We realize there are an infinite variety of ways for products come to market, the size of production runs and other considerations. And we believe the CPSC genuinely understands the fundamental principle that you can’t test in safety; that you have to build in safety upstream in the manufacturing process and in the design process. So, to incentivize the industry to build the process controls and design analysis upstream, the plan is to allow them to test less frequently if they have installed all the upstream safety mechanisms. So what we’re going to be presenting to the CPSC is a program developed jointly by the industry, with NGO participation and lab participation and retailer participation. The program is: If you come to the TSCP platform and you submit evidence that you’ve done the design analysis and submit evidence that you’ve sourced the product from a qualified factory, then you can test less frequently. That saves a lot of money for the manufacturer that otherwise is having to test the product more often. But it remains to be seen what the rules will say that come out of the CPSC, so that’s where we are.
Q: Who’s going to decide which factories are good enough?
Carter Keithley: The quality engineers working on the program have created a process control check list, the idea being in the longer term that we’ll be sending auditors into factories. Now, we could not put into the field an army of factory auditors in order to get that done, so in the short term we will accept any ISO 9001 certified factory as being one from which manufacturers will be able to test less frequently.
In the longer term, the big retailers who have said they will sign on to this program once its operational and running as it’s supposed to, say that this is okay to start out with but in the longer term you’re going to have to have the toy-specific factory process controls. So once we get it launched, the next step over the following 18 months would be to have an ISO 9001+. So then, what we’re proposing is that if you’re sourcing from a factory that has no certification of any kind you have to test once a quarter or once every 150,000 units; if you’re sourcing from a factory that is ISO 9001 certified then you can test twice a year or once every 500,000 units; and, ultimately, when there is ISO 9001 Plus and you source from a factory that’s that qualified to that degree, you can test once a year or every 1 million units.
Now, the [non-governmental organizations], of course, have said from day one that that’s not frequent enough testing. But what’s frequent enough testing? You can never do enough testing to be statistically reliable—you’d have to test hundreds of thousands of units. So, if we can get people to embrace the notion that the test is really only the final screen—if you can ensure that everything that came before it is working you shouldn’t have to test very frequently... There are a whole lot of other knotty problems that still need to be worked out.
Q: Mattel got a pass on having to do third party testing? Can I set up my own testing facility?
Carter Keithley: You could; the statute specifically allows for that. It explicitly says proprietary laboratories are allowed, but there are some additional requirements that are placed on them—they have to be fire-walled, they have to be shown not to have undue influence from the manufacturing operation, etc.
Q: What’s been retail’s role in streamlining the testing situation? Right now, if a company sells to three major retailers, odds are their products will have to meet three different testing protocols.
Carter Keithley: Our starting point on that is with Wal-Mart and Toys R Us. Our oversight council consists of three manufacturers, plus three retailer representatives—Wal-Mart and Toys R Us, plus ASTRA representing the small retailers. Of course, many retailers will follow Wal-Mart or TRU—if it’s good enough for them it’s good enough for us. So if TRU and Wal-Mart will begin to say that if a toy’s got the TSCP mark on it it’s good enough for us, we feel many other retailers will follow suit, but we can’t guarantee it. All we can do is deliver a program with integrity.
Q: Another issue companies are talking about is retailers requiring “global security verification,” which isn’t about toy safety but about terrorism. I’ve heard there’s only one company in the world allowed to do the auditing and certification required—and that certain retailers won’t buy your product without passing this test. What’s TIA’s position on that?
Carter Keithley: One of the areas we’ve been concerned about is that Customs and Border Control here in the US has been imposing new requirements on imported products for anti-terrorism reasons. That includes things like the so called “10+2”—which has to do with submitting information about the product two days before it’s shipped—and then there’s an issue of the public release of the information and, apparently, people who are selling that, so we reached out; we thought there’s a whole area of concern, particularly for our smaller manufacturers who may not have the means to comply with those requirements, so we did a survey of our manufacturers and most people told us they’re relying on their customs broker to walk us through it. So, we’re going to try to do some webinars on that topic.
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