[Federal Register Volume 62, Number 142 (Thursday, July 24, 1997)]
[Notices]
[Pages 39827-39828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19554]



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CONSUMER PRODUCT SAFETY COMMISSION


Conditions Under Which the Staff Will Refrain From Making 
Preliminary Hazard Determinations

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: The Consumer Product Safety Act requires manufacturers, 
distributors, and retailers of consumer products distributed in 
commerce to notify the Commission of certain defects, unreasonable 
risks, or non-compliance with voluntary or mandatory standards. The 
Commission has made permanent its ``No PD'' program: The staff refrains 
from making a preliminary hazard determination when firms report and, 
within 20 working days, implement an acceptable corrective action.

DATES: The Commission's revised procedures became permanent on March 
27, 1997.

FOR FURTHER INFORMATION CONTACT:
Marc J. Schoem, Office of Compliance, Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, MD 20814 (mailing 
address: Washington, DC 20207); telephone 301-504-0608, extension 1365; 
e-mail address ``[email protected].''

SUPPLEMENTARY INFORMATION: 

A. Background

    Under section 15(b) of the Consumer Product Safety Act (CPSA), 15 
U.S.C. 2064(b), manufacturers, distributors, and retailers of consumer 
products must report certain potential product hazards to the 
Commission. They must report immediately if they obtain information 
which reasonably supports the conclusion that a product (1) fails to 
comply with certain mandatory or voluntary standards, (2) contains a 
defect which could create a substantial product hazard, or (3) creates 
an unreasonable risk of serious injury or death. 15 U.S.C. 2064(b).
    If the Commission believes that a product presents a substantial 
product hazard under the CPSA, 15 U.S.C. Sec. 2064 (c) and (d), or 
contains a defect which creates a substantial risk of injury to 
children under the Federal Hazardous Substances Act, 15 U.S.C. 
Sec. 1274(a), (b) and (c), it may pursue corrective action.
    After receiving a report, the Commission staff evaluates the 
hazard. If the available facts justify pursuing corrective action for 
the product, the staff generally makes a preliminary determination 
(``PD'') of ``substantial product hazard'' or ``substantial risk of 
injury to children.'' See 16 CFR 1115.12(a).

B. Initiation of ``No PD'' Pilot Program

    On August 17, 1995, the Commission initiated a six-month pilot 
program in which, under certain conditions, the Office of Compliance 
staff would not make a preliminary determination. See 60 Fed. Reg. 
42848 (Aug. 17, 1995). Later, the Commission extended the pilot program 
through March 1997.
    The Commission initiated the pilot program to use staff resources 
more efficiently and to promote quicker recalls. In addition, the 
Commission hoped to reduce any disincentive to companies that want to 
report and undertake corrective action, but fear the consequences of a 
staff preliminary determination.
    When the staff preliminarily determines that a product presents a 
substantial product hazard or creates a substantial risk of injury to 
children, it requests that the reporting company take corrective 
action. If a company acts promptly to correct a defective product, 
staff resources can be devoted to helping the company recall the 
product instead of investigating the defect and making the preliminary 
determination.
    The Commission designed the pilot program to ``reward'' companies 
that acted quickly on a corrective action. The staff made no 
preliminary determination concerning the products of those companies.

C. Results of Pilot Program

    The pilot program was successful. During its first six months, 
companies participating in the program initiated 57 corrective action 
plans that affected approximately 3.5 million products. By the end of 
the pilot program's extension, companies had initiated 140 recalls of 
approximately 12.9 million products.
    On average, companies in the pilot program took 14 working days to 
initiate corrective action plans. The staff sometimes granted an 
extension of time for issuance of a joint news release or final staff 
approval of an alternative notice program. In most of those cases, 
however, the firm's corrective action plan was underway within 20 
working days.
    During the pilot program, companies undertook corrective actions 
for a variety of products. They included children's articles with small 
parts that presented choking hazards, products that collapsed and 
presented impact hazards, bicycles and recreational vehicles that could 
cause falls or loss of control, products that presented the risk of 
carbon monoxide poisoning, electrical products that presented shock and 
fire risks, and power tools that could cause serious lacerations.
    Industry response to the pilot program was positive. During the 
program, more than one-third of the companies making section 15 reports 
initiated corrective actions under the ``no preliminary determination'' 
approach.

D. Permanent Program

    After reviewing the results of the pilot program, the Commission 
revised its procedures on a permanent basis effective March 24, 1997. 
The permanent program is governed by the following requirements and 
procedures:
    1. If a company reports and implements within 20 working days after 
filing an initial report a corrective action that the staff believes 
will be effective, the staff will generally refrain from making a 
preliminary determination. ``Implement'' means issuance of a news 
release or other form of public notice approved by the staff commencing 
a consumer-level corrective action.
    If the Commission believes that more than 20 working days is 
necessary, the Director of the Division of Corrective Actions may 
extend the time period for any appropriate reason, including that: (a) 
technically complex issues must be resolved to assure the staff that 
the company's action is adequate (for example, laboratory testing is 
necessary); (b) retailers and distributors must be notified in advance 
so that the plan will be effective; or (c) the news release must be 
scheduled for optimum coverage (for example, a video news release is 
necessary).
    2. A company's reporting obligations remain unchanged. 
Specifically, companies that have an obligation to notify the 
Commission under section 15(b) or section 37 of the CPSA, or section 
102 of the Child Safety Protection Act, must continue to do so even 
when they believe the risk does not warrant corrective action.
    3. A company must file a full report under 16 CFR 1115.13(d). In 
particular, the report must include copies of complaints and claims, 
which is crucial for staff evaluation and which many companies 
currently omit.
    4. A company must advise the staff that it wishes to participate in 
the program.
    5. A company must submit a proposed corrective action plan in 
sufficient time for the staff to review and analyze it. In addition, 
the staff must have sufficient time to work out the details of the 
corrective action with the company. All of this must occur before the 
company initiates the plan

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within 20 working days of filing its report.
    6. A company's proposed corrective action plan must include:
    (a) A description of the recall action (refund, repair, or 
replacement) that the company will take to eliminate the identified 
risk.
    (b) Sufficient product design, incident, and testing information to 
allow the staff to determine whether the proposed action corrects the 
identified problem and the problem is limited to the model(s) and 
production dates identified by the company. Such information should 
include, but is not limited to: consumer complaints, test data, 
engineering drawings, material specifications, samples of product, and/
or component parts, as needed. If the needed information and 
documentation is being compiled, but is not yet available, the company 
must provide the date it expects to forward the information to CPSC. 
CPSC staff must have sufficient time to review the information and 
respond within the 20 working day time limit.
    (c) Usually, the company's proposed plan must include notice of the 
recall to distributors, retailers, and consumers of the subject 
product. The notice must describe the product, the hazard, the number 
and type of injuries that have been reported, the type of injury that 
can occur, and the action to be taken in plain language understandable 
to the people to whom the notice is directed. Generally, the plan must 
include a joint news release with the Commission announcing the recall, 
letters and instructions to retailers and distributors, point-of-
purchase posters, and, depending upon the level of risk, the population 
at risk, age and number of products involved, additional notice. 
Supplementary notice may include a video news release, print and/or 
radio advertisements, incentives or bounties to encourage consumer 
response, posters for specific audiences, such as for posting in 
pediatricians' offices, medical clinics, national parks and 
campgrounds, and repair shops (see Corrective Action Handbook, 
available for CPSC Division of Corrective Actions). In those cases 
where all purchasers can be contacted directly, a news release may not 
be necessary.
    (d) An agreement that the Commission may publicize the terms of the 
plan and inform the public of the nature and the extent of the alleged 
hazard. The consumer notice should be targeted to reach a significant 
portion of the public likely to have purchased the subject product. 
(See 16 CFR Sec. 1115.20(a) and CPSC Corrective Action Handbook.)
    7. The corrective action plan and notice must be acceptable to the 
staff. The staff will consider whether the corrective action plan 
adequately addresses the risk of injury presented by the product and 
whether the notice and corrective action plan are designed to make the 
plan as effective as is reasonably possible given the nature of the 
product and the risk.
    8. The staff will provide expedited review of every proposal 
submitted and work with every interested company to develop an 
acceptable corrective action plan that can be implemented within 20 
working days. However, there may be cases where the staff cannot 
evaluate and approve implementation of a corrective action plan within 
20 working days, even though the company has submitted all the 
necessary information in a timely manner. Similarly, there may be cases 
where the staff and firm agree that notice and corrective action should 
occur after 20 working days have passed (for example, in the case of a 
seasonal product). So long as delay is not caused by or the fault of 
the company, the staff generally will not make a preliminary hazard 
determination.
    9. If corrective action is implemented within 20 working days, 
staff will acknowledge in writing that the company has submitted 
information under section 15(b) of the CPSA and that, based on 
available information, the proposed corrective action plan is adequate. 
In addition, the staff will advise the company that it has a continuing 
obligation to report new or different information that may affect the 
scope, prevalence or seriousness of the defect or hazard. Once the 
company implements its corrective action plan, the staff will monitor 
its progress.
    10. If the company does not implement a corrective action 
acceptable to the staff within 20 working days, the staff will continue 
its evaluation and will preliminarily determine whether the product 
contains a defect that creates a substantial risk of injury to children 
under the FHSA or presents a substantial product hazard under the CPSA. 
The staff will so inform the company.
    11. A company should not delay its report under section 15(b) of 
the CPSA in order to prepare a corrective action plan. The staff will 
not refrain from making a preliminary determination if the information 
available suggests that a company did so.

    Dated: July 21, 1997.
Todd A. Stevenson,
Deputy Secretary, Consumer Product Safety Commission.
[FR Doc. 97-19554 Filed 7-23-97; 8:45 am]
BILLING CODE 6355-01-M