The Mattel loophole: Congress may back off pledge of independent toy testing

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The Mattel loophole

Congress may back off pledge of independent toy testing

By Callahan and kson

Tribune Reporters

June 25, 2008

http://www.chicagotribune.com/business/chi-matteljun25,0,889911.story

Some companies would be permitted to skirt independent lab testing of

children's products in favor of their own in-house certification, thanks

in large part to lobbying by the world's biggest toymaker, the Tribune

has found.

Toymaker Mattel Inc. argued to lawmakers that it should be allowed to

use its own labs to conduct these certification tests, which were

supposed to be a hallmark of Congress' efforts to overhaul the nation's

product-safety system. The House and Senate added provisions permitting

companies with sophisticated labs to avoid the independent testing

requirement by winning federal approval for their in-house testing

facilities.

Consumer advocates and some lawmakers worry that this creates a conflict

of interest and could compromise safety.

" Companies that are going to do testing, obviously they have a vested

interest in the outcome of the test, " said Sen. Byron Dorgan (D-N.D.),

who tried unsuccessfully to amend the Senate bill to mandate that only

independent labs be used. " From the standpoint of a consumer, there's

much more credibility to independent testing. "

The provision for in-house testing is likely to benefit the largest

manufacturers because smaller ones are less likely to have labs that

" provide equal or greater consumer safety protection " than independent

ones, which both House and Senate versions require. A small toy

manufacturer, for instance, could easily test small parts for choking

hazards but would be less likely to have the sophisticated equipment

needed to test paint for lead content.

On Wednesday, members of the House and Senate, which have been ironing

out differences between their product-safety measures, are likely to

discuss the " Mattel amendment " ---as one consumer advocate calls it ---

when they meet.

Sens. Dick Durbin (D-Ill.) and Bill (D-Fla.) introduced

legislation last year mandating that toys undergo strict tests by

independent labs before they're sold. A Mattel lobbyist told Durbin's

staff that the company had invested in its own labs and wanted to be

allowed to use those facilities rather than hire outside labs for the

testing.

In an interview, Durbin said he prefers independent testing and opposes

allowing companies to use in-house labs for the required tests. " This

could be abused, " Durbin said.

When Durbin's bill was combined with others into a more comprehensive

product-safety law last year, the new bill retained his mandate that

independent testing be conducted by a lab that is " not owned, managed,

controlled or directed " by the manufacturer or importer of the product.

Late last year, other lawmakers---no one will say who --- inserted the

provision allowing companies to use in-house labs. The Senate then

passed that legislation in March.

Mattel has recently had serious safety problems. In the last two years

the California company recalled more than 14 million toys for lead

paint, potentially deadly loose magnets and entrapment hazards. Mattel's

Fisher-Price unit has twice paid federal fines to settle civil charges

that it failed to report serious defects in toys that injured children.

The company's handling of its Polly Pocket doll recalls for loose

magnets remains the subject of an active investigation by the U.S.

Consumer Product Safety Commission, the Tribune has learned.

'It's the rigor'

Mattel has invested many years and many millions of dollars in

internationally accredited " world-class labs, " said Mattel spokeswoman

Marie Bongiovanni. The California company has 10 labs in six

countries. Using in-house labs connected to factories encourages more

testing, Bongiovanni said, adding that the company also uses four

independent testing labs.

" It's not where the test takes place, " she said. " It's the rigor of the

testing protocol. That has changed since last year. "

Bongiovanni said the high-profile recalls were tied to Mattel vendors

and that Mattel labs helped pinpoint the problems. Mattel has set up

stricter requirements for vendors, she said, and increased the frequency

of testing.

She said no one should fear that Mattel employees would be less strict

than an independent lab.

" Wouldn't that same logic apply to independent labs that have huge

contracts with big players in the industry? " she asked.

The product-safety legislation grew out of hearings prompted by a

Chicago Tribune investigation last year that revealed how a gutted

federal agency's myopic and docile oversight of children's products led

to injuries and death.

As lawmakers vowed to reform the nation's fractured product-safety

system last year, Mattel stepped up its lobbying efforts in Washington.

In 2007 and the first quarter of this year, Mattel spent $690,000 on

lobbying Congress on a host of issues, including the product-safety

legislation. That's more than twice what the company spent in the

previous five years combined, according to federal lobbyist disclosure

records.

A similar provision allowing companies to certify their own products

popped up in House legislation, which passed last December. Jodi Seth, a

spokeswoman for the House Committee on Energy and Commerce, said members

of both parties agreed to add the provision because they worried there

weren't enough labs to handle the testing required by the bill.

Likewise, Mattel's Bongiovanni said that independent labs couldn't

handle all of Mattel's testing in a timely manner.

But Intertek Plc., one of the world's largest consumer-product testing

companies, said it could absorb Mattel's business and more. Intertek has

substantially expanded its lab space to test children's products in the

last year and has enough capacity to meet the added demand an

independent-testing mandate would bring, said Gene Rider, Intertek's

North American president of consumer goods.

Room to grow

The British-based company, which already tests toys and other children's

products for many American importers and manufacturers, has labs in 16

countries that can conduct the kinds of tests Congress wants to require.

In Asia alone, it has six labs for toy testing, including a new

four-story lab opened in Guangzhou, China, in March. In addition, the

company could quickly convert additional textile-testing labs in China

and India to test toys if needed, Rider said.

" We could pretty much double the business we did in 2007 and not have

significant delivery problems, " Rider said of testing children's products.

Mattel's Bongiovanni noted that testing textiles is very different from

testing toys and questioned whether the company could obtain the proper

accreditation in a timely manner. Intertek said it can get the

accreditation needed in one to two months.

Both the House and Senate versions say that companies that want to

certify their products with in-house facilities must have " established

procedures to ensure the lab is protected from undue influence,

including pressure to modify or hide test results, " and a confidential

way to report allegations of undue influence to the CPSC.

While those safeguards may sound good on paper, consumer advocates worry

they don't go far enough.

Lemov has seen the issue from all sides. As a House Commerce

Committee lawyer in the 1970s, he helped craft the legislation that

established the CPSC. For years he represented manufacturers with

problems before the CPSC but shifted gears last year to lobby for

tougher safety laws as an attorney for Public Citizen. Just last week,

he returned to private practice representing companies.

" You can have all the regulations you want, but how can you get inside

the head of the manager of safety testing at Mattel? " Lemov asked. " When

in doubt, err on the side of public safety, not on the side of the

slight economic advantage of the producer. "

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