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Economy & Business

Product safety procedures need more cost-benefit analysis, commissioner says

This article first appeared in the St. Louis Beacon, June 21, 2011 - To Nancy Nord, one of five federal commissioners charged with protecting Americans from dangerous products, there truly is safety in numbers.

The kinds of numbers that Nord is talking about are statistics that balance risks and benefits and can show that she and her colleagues on the Consumer Product Safety Commission are using tax dollars in the most efficient manner.

In St. Louis this week to talk to graduates of a Saint Louis University program on product safety management, Nord said that such analysis is not always performed, and when it isn't, consumers don't get all they should for their money. Dealing with products that sometimes are laden with emotion, such as baby cribs or children's wading pools, it's important that such analysis be heeded, she said.

"The Consumer Product Safety Commission is at a crossroads on how we deal with regulating the safety of consumer products," Nord told the Beacon in an interview. "We have a choice to make. We can either focus our regulations by analyzing the risks that products present to consumers and base those regulations on data and science and economics, or we can adopt what is known as the precautionary principle, where we regulate first and ask questions later.

"The precautionary principle is finding its way into our thinking, and that causes me concern. It means you regulate things that you think may be risks, as opposed to when you actually see the risks. In a world of constrained resources, we need to prioritize, and that is the world we are in.

"If you try to regulate based on something other than hard data and real science, you end up putting out regulations that cannot be supported and really do not push forward the whole concept of consumer safety. Consumers do not really benefit by that approach."

Joining the commission after a career that included a number of legal positions in both the public and the private sector, Nord said that her perspective helps broaden the way the commission views its charge.

"I am one of the few commissioners who have had extensive experience in the business world," she said, "dealing with people who make things and trying to counsel people who make and sell things. Having someone on the commission who has had to meet a payroll, has actually been in business and has worked with business leaders and understands where they are coming from is a real contribution, in my view."

Nord was appointed to the commission by President George W. Bush. Her term began in 2005 and expires in 2012.

Nord praised the product safety management program at SLU as an example of how the recognition of the need for safeguards against dangerous products has grown in recent years.

"It really does show a commitment on the part of the companies that are involved in a major business school like Saint Louis University," she said. "That just speaks volumes."

The following interview has been edited for length and clarity.

How does the commission operate? Can it recall products on its own, or does it rely on companies to issue the recalls?

Nord: The commission can issue a recall, but we very rarely order a recall. We find that it is much more effective if we can get the company to do it voluntarily. We end up with a more effective recall, and we get it done more quickly.

If we feel there is a problem, we can issue a recall. But short of going to court to do so, we can warn consumers unilaterally about the problems we see. Given our unilateral warning ability, that is an effective tool to drive folks to the negotiating table.

Talk about the problem a few years ago with lead paint in items, some of those imported from China.

Nord: Back in 2007, we saw some very dismal breakdowns in quality control with respect to safety, with the lead paint recalls. The agency worked very, very hard to clean up the marketplace, and I'm proud of the work the agency did.

We put in place increased surveillance and a variety of other things to really push the agency into looking at the whole question of import safety, and we worked very closely with manufacturers to drive home the concept that safety doesn't start at our shorelines. Safety has to be inculcated into the conversations you have with your suppliers and their suppliers, all the way up the chain. Those conversations and that activity and all those efforts, which started back in '06 and '07 and really crescendoed in 2009 and 2010, are really showing results now.

It's important to understand that consumer safety is a concept that requires buy-in and support, certainly of regulators -- that's why we're all on the commission, that's why we get up every day and go to work. It obviously involves consumers talking to us and making sure that we know what they want with respect to safety, a relative level of safety vis-a-vis risks associated with using a product. But it also requires the buy-in of those who make and sell products, making sure that we are pushing up the supply chain the whole concept of product safety. I think that's an important point to make.

How has the commission's impact changed, in a Washington where budget-cutting is a major topic of discussion?

Nord: Persuading people that consumer protection is a value that needs to be retained is not hard at all. We all understand the importance of consumer protection. We're all consumers. I'm a mom. Every decision I make on the Consumer Product Safety Commission is one that is informed by my experiences raising children. No mother, no father, no parent wants to buy a product that is going to harm their child. That's not hard to explain or defend.

What the American people need to expect from us, and what we need to be sure to deliver to them, is value for their tax dollars. We have to be sure every decision we make can be justified by science and by data rather than politics or emotion. So it's very important that we look at our data and make decisions based on whether a product is risky, and what is the best way and the most cost-effective way to address the risk.

The reality is we can't make every single risk go away. We live in an environment that has risk. Our challenge at the commission is to make sure we prioritize and we regulate based on providing consumers with the most cost-effective solutions we can possibly find. Consumers aren't benefited by us taking safe products off the market or reducing consumers' choices, which is what can happen if we don't regulate appropriately.

This is what the public expects us to do, regulate in a competent manner. The way to do that is to go out, get information, look at the evidence, look at how consumers are being injured, look at the societal benefits of regulating, look at the societal costs of regulating, and pick the route that gives consumers the most safety for their money. This is what we should be doing more of.

Dangerous products are one thing; how does the commission try to prevent accidents from careless use of products?

Nord: Consumer education is one of our most important responsibilities. But we can't make this a world of totally rounded corners, with no risk. If a consumer modifies a product and uses it improperly, we can't really police that situation. On the other hand, if we see a pattern of misuse, then we might become concerned about that. That could be something we might very well require a recall or a regulation to address.

So many children drown in swimming pools, even in an inch of water. Many parents think they can leave their child unattended in a swimming pool while they run in to get a towel or answer the phone. We have had campaign after campaign after campaign to bring to public awareness the fact that when you have a child in water, it requires constant vigilance. It's a message we have to keep pushing out there over and over and over again.

As new parents come online, we have to educate them, and as people migrate from parents to grandparents, we have to educate them again. You obviously can't address the risk of drowning by regulating the product. We can't empty all the pools. The way we can address it most effectively is to educate the caregivers.

With three commissioners appointed by Democrats and two by Republicans, how do political considerations fit into the commission's decisions?

Nord: On more controversial issues, it's happening more frequently than I would like. But understand that all five of the commissioners are at the Consumer Product Safety Commission because we care passionately about consumer safety. I really believe in the mission of the agency, and that's true of all of my colleagues.

So when we come down on different sides of issues, it's because we see the solution in a different way. It's not because any one of us cares more about safety than someone else does. If someone says it's because we don't care about safety, it just shows that they don't know what they're talking about.

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