New Toxics Ban Hurts Small Businesses

A new law banning lead and phthalates in children's products could put small, environmentally conscious companies out of business.

Last summer, Congress passed a sweeping new law that effectively
banned lead and phthalates in all children’s products, from toys and
books to clothing, bedding, and furniture. Environmentalists and
consumer’s rights advocates immediately cheered the new law, which came
in reaction to the latest lead scare in China. The law was designed to
force large toy companies who outsource to China to start making
products safe for children and the environment. However, as the
legislation is set to take effect across the country on February 10,
it’s becoming clear that giant corporations will have little problem
complying with it, while small, eco-friendly companies could be put out
of business.

The law, known as the Consumer Product Safety Improvement Act,
requires that nearly all manufacturers, wholesalers, and retailers of
children’s products certify that their goods are lead and phthalate
free by February 10. Phthalates are toxic chemicals used in plastics to
make them bendable. The law has good intentions. After all, no one
wants their kids exposed to lead or other poisons. The only problem is
that the new tests are extremely costly — several thousand
dollars per item — and they must be performed on nearly every
children’s product sold in the United States.

Large manufacturers, such as Mattel and Fisher Price, should have no
trouble affording the tests, and spreading the costs over their huge
inventories so they won’t hurt consumers’ pocketbooks. But small,
mom-and-pop businesses, including many in Northern California, who
already use environmentally friendly products, can’t afford the tests.
That means they can no longer sell their wares legally come February
10.

In addition, many small retailers that sell environmentally
conscious products may be forced to shutter their doors as well,
because most of their inventory will become illegal. If they stay open,
they will have to throw out most items or risk huge fines, even
imprisonment (it also will be illegal to donate uncertified items to
charity after February 10). The US Consumer Product Safety Commission
has said that it will consider all untested children’s products to be
“hazardous waste.” The new law allows fines of up to $100,000 per
occurrence, or felony criminal prosecutions that carry sentences of up
to five years in prison.

Nishan Shepard, owner of Rockridge Kids, a popular children’s store
on College Avenue in Oakland that’s been in business for twenty years,
told Eco Watch that he’s worried about the new law and the impending
deadline. “It’s very difficult to deal with,” he said. “There’s a lot
of confusion. We don’t know what’s going to happen.” His store buys
eco-friendly children’s products from 250 to 300 vendors, but as of
late last week, only fifteen have certified that they can afford the
new tests and comply with the law, he said. If that doesn’t change, it
will be impossible for him to throw away most of his inventory and
still afford to stay in business. He also doesn’t have the money to
test each uncertified product himself. One children’s products web
site, called NationalBankruptcyDay.com, is
counting down the days to February 10.

Consumer Product Safety Commission officials did not return phone
calls seeking comment for this story. But commission spokeswoman Julie
Vallese told a Baltimore TV station earlier this month that it will not
approve testing results from inexpensive home testing kits. According
to the National Association of Manufacturers, a trade group, the new
law requires that each piece of a children’s product be tested in
hydrochloric or nitric acid, which dissolves most metals and other
materials and allows for identification of lead.

Earlier this month, the Consumer Product Safety Commission said the
new law would not apply to children’s items made with wood, cotton,
some metals, and other natural materials known to have no lead in them.
But that’s little solace for small businesses that paint, dye, or stain
their products, because they still must test. Most clothing also will
have to be tested if it uses dye or has buttons or zippers.

The new law also will hurt libraries, bookstores, and sellers of
used children’s clothes, toys, and other products. Earlier this month,
after complaints from large resellers, the commission said used stores
won’t have test products themselves. But the agency added that it will
still be illegal for used stores to sell items that aren’t certified as
being virtually lead- and phthalate-free. The new rules require that
products have no more than 600 parts per million of lead, and 1,000 ppm
of phthalates.

Shawn Hall, owner of Child’s Play, a children’s store that sells
used clothes, toys, and other eco-friendly items just up the street
from Rockridge Kids, said it should be easy for her to determine
whether toys and other products are lead-free by simply contacting the
manufacturer. But she said it will be impossible to tell with used
clothes. “It just can’t be done,” she said. As a result, if the
commission vigorously enforces the law, she and other small used stores
will be forced out of business.

There’s been much speculation that the commission, which only has
one hundred investigators nationwide, will just target big box
retailers and large manufacturers that sell the most items. “We are an
agency of limited resources and the agency will be putting those
resources to use in places that we can address the greatest risk and
those products that would produce the most harm,” Vallese told the
Baltimore TV station. But if the commission also decides to go after
mom-and-pop businesses, it could be devastating.

Some children’s products manufacturers and retailers are hoping that
the Obama administration will take another look at the new law. One
simple fix, although expensive, would be for the federal government to
supply the testing for small manufacturers and retailers. Congress also
should grandfather-in used items, including library books.

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