accident, at the manufacturer, the government or indeed the medical profession as well as a host of other convenient scapegoats in attempting to place the blame for accidents and injuries relating to products. However, the Consumer Protection Safety Act provides constructive alternative-namely, the development of a positive course of action. The American Academy of Pediatrics and its twelve thousand member physicians caring for children endorses and joins in the partnership which will provide all segments of society the opportunity to play a more responsible and responsive role in protecting the public health and safety.

Senator SPONG. The next witness is Mr. Eugene Keeney.

Mr. Keeney, we are very pleased to have you here this morning. If you would identify Mr. Chaucer and Mr. Sherman, we would be most appreciative.

STATEMENT OF EUGENE ADAMS KEENEY, PRESIDENT, AMERICAN RETAIL FEDERATION; ACCOMPANIED BY EUGENE SHERMAN, DIRECTOR, MECHANDISE RESEARCH AND DEVELOPMENT, NEWBERRY'S; AND DANIEL CHAUCER, VICE PRESIDENT AND DIRECTOR, BUREAU OF STANDARDS, R. H. MACY & CO.

Mr. KEENEY. Thank you, Mr. Chairman.

Accompanying me today on my right is Mr. Daniel Chaucer, vice president and director, Bureau of Standards, R. H. Macy & Co. On my left is Mr. Eugent Sherman, director of Merchandise Research and Development of Newberry's. Both of these gentlemen have had long experience in the field of product design and safety.

We appreciate the opportunity to appear here today to state the retail industry's position on the major bills introduced during this Congress dealing with consumer product safety.

The American Retail Federation accepts the need for development of safer products. We have always believed that consumers have a right to buy and enjoy safe products. Government, business and the consumer, can, by working together, control unreasonable hazards.

We support Government presence in the area and the setting of product safety standards where there is a demonstrable need. We support and urge the wide collection and dissemination of product safety information.

We feel that S. 1797, among the product safety bills pending before this subcommittee, offers a better approach to the resolution of the problem. Some areas of that bill could be strengthened, particularly in the area of information collection and disclosure.

The federation supports the establishment of a product safety program within the Department of HEW. That department is the most appropriate agency to handle such an enormous and complex program. There are already several laws in the area of product safety that are under HEW. The Federal Insecticide, Fungicide, and Rodenticide Act, the Federal Hazardous Substances Act, the Radiation. Control for Health and Safety Act of 1968, the Public Health Service Act, the Food, Drug, and Cosmetic Act, and the Poison Prevention Packaging Act of 1970 are all administered by the Department of HEW. It is desirable to use this existing technical knowledge and capability to its fullest extent.

Mr. Chairman, we realize that you have indicated that many of these programs under HEW are inadequately administered and un

productive. We submit that the creation of a new agency will not solve that problem. That agency itself may very well be unproductive. What is needed is a greater concern over the people employed to run an administrative agency or program. What is needed is an adequate funding to permit these agencies to act as intended. What is needed is greater oversight and pressure from Congress, business, and the consumer. We believe that if these needs are implemented, efficiency and productivity would have to follow. These needs would also apply to any new product safety program.

We also support the idea of mandatory safety standards where there is a demonstrable need. Most consumer products are safe and nonhazardous. Some require little more than reasonable and commonsense precautions or instructions. A few, on the other hand, may pose unreasonable hazards.

We feel that the procedures proposed by S. 1797 for the promulgation of standards are good. We especially support the sections dealing with the use of existing standards and the acceptance of offers to develop proposed standards. Section 6(b) allows the Secretary to publish, in lieu of accepting offers, an existing standard as a proposed product safety standard. This has much merit, for it allows the use of existing expertise and avoids duplication. Section 6(c) requires the Secretary to accept at least one proposed product safety standard and allows him to contribute to the cost. This is also utilization of existing expertise and helps some of the capable technical associations develop competent proposals.

Section 9 requires the Secretary to either publish a proposed regulation or withdraw the prior notice within 210 days. We interpret this as being an outer limit which would not preclude more rapid action in those instances there the hazards present can be eliminated by a change in cautions, warnings, or use instructions, or where a competent voluntary standard has already been promulgated.

There should be a recognition within S. 1797 that cautionary labeling could be sufficient to protect the public in certain circumstances. The Secretary should have the option to so mandate in lieu of setting standards that would cause a change in the product characteristics. The federation supports the widest possible collection and dissemination of product information safety. Perhaps the most important part of protecting the consumer's safety lies in the information that will be collected and evaluated. Without complete and thorough information, the injury problem itself cannot be properly understood. Such information can be used to the benefit of both the manufacturer and the consumer. Inadequate and incomplete information can only result in poor protection for the consumer.

We therefore recommend the establishment of an injury information clearinghouse within the Department of HEW, to be established by the Secretary as a part of the product safety program. Such a clearinghouse was recommended by the National Commission on Product Safety. Present systems for collecting injury data are inadequate and primitive. A national system is needed. The commission correctly pointed out that:

An information system for product safety must provide for estimating injuries, monitoring the frequency of injuries in association with contributory factors, and investigating injuries to elucidate the best methods of preventing or reducing them.

Such a clearinghouse should promptly supply the industry a userwith-safety information which could be applied to the manufacture, instruction, repair, maintenance, use, and disposal of products. Industry would welcome this, for it helps them produce safer products.

Section 4(c) (1) of S. 1797 prohibits the release of certain information to the public that relates to trade secrets, costs, methods of doing business, et cetera. We feel that this prohibition is good and protects necessarily secret competitive information. There are situations, however, that would make the dissemination of such information necessary to protect the consumer from a hazardous product. In these situations we feel that the Secretary should be allowed to disclose that information.

The federation therefore recommends the addition of the following proviso to the end of section 4 (c)(1) :

Provided, That, nothing in this subsection shall preclude the Secretary from disclosing the product name or an identification of the offending defect, component or ingredient where he determines that such disclosure is necessary to carry out the purposes of this Act.

We feel that is a good balance between the protection of the consumer and the protection of the manufacturer.

Where the Secretary finds that no feasible product safety standard will adequately protect the public from unreasonable risk of death or serious illness or injury associated with a product, he may declare that product a banned hazardous product. The federation supports this authority. We recognize the fact that in some cases this may be the only means by which the public will be adequately protected.

The federation also supports the authority of the Secretary to request the Attorney General to file an action against an imminently hazardous product where that product presents an immediate and unreasonable risk to the public health or safety. The initiation of a proceeding to promulgate a standard or to declare the product a banned hazardous product must begin as soon as practicable thereafter. We recognize that occasionally a dangerous product may inadvertently be placed on the marketplace and that the best recourse would be to proceed against that product independently of the whole class of products. While this would protect the public health and safety, it would not disturb the entire production of one manufacturer or that of an entire industry.

Section 13 of S. 1797 provides remedial measures for the consumer in situations where a consumer product fails to comply with an order issued under this act. In such situations it gives the Secretary authority to require the manufacturer, importer, distributor, or dealer to give public notification and to mail to each consumer known to such manufacturer, importer, distributor, or dealer a notification of the failure of compliance.

In addition, the manufacturer, importer, distributor, or dealer could be required by the Secretary to either bring the product into conformity with the requirements of the applicable order, or to replace such product with a like or equivalent product, or to refund the purchase price less a reasonable allowance for use where the product has been in the possession of the purchaser for more than 1 year. Likewise, the retailer should have the same rights of recovery from his supplier as is afforded under the Toy Safety Act.

For example, we would recommend the following to be added on page 13, line 17, after "fees":

The manufacturer, importer, distributor, or dealer against whom an order is issued under this subsection shall reimburse each retailer of the product which is subject to such order for the cost of the product plus any reasonable expenses incurred by the consumer and reimbursed to the consumer in availing himself of the remedies and any reasonable and foreseeable expenses incurred by the retailer in return of said product.

Retailers would have little trouble complying with such requirements when there is a significant risk of injury involved. Our only fear is when there is a massive recall of a product that presents technical violation of a part of a standard, but presents no risk of injury.

Section 14(b) of S. 1797 provides that every person who manufactures, assembles, distributes, sells, or imports a product required to conform to a product safety standard must maintain such records as the Secretary may require. We feel that there are potentially vast administrative problems here. It is conceivable that the Secretary could require that extensive records be kept on all first purchasers of all products covered by a product safety standard. Recordkeeping provisions will be difficult and costly to comply with. Considering the number of products that could come under product safety standards, what is now difficult would then become impossible. We urge this subcommittee to seriously consider the recordkeeping provisions of sections 13 and 14(b) and seek to strike a balance between what is realistically obtainable and what will best protect the consumer from unsafe products, without creating an undue cost burden, which would be passed on to the consumer.

Section 16 provides for civil penalties for knowing violations of the act and for criminal penalties for willful violations of the act. It also provides for injunctions and seizures by the Attorney General of products manufactured in violation of an applicable product safety standard or which has been declared a banned or imminently hazardous consumer product. There are also provisions for private lawsuits by any interested person.

We support this section. We realize that laws will not be effective unless there is some degree of sanction imposed therein. The mere existence of authority to enforce a product safety standard will make their use rare.

We also urge the subcommittee to add to S. 1797 a section that would permit the manufacturer of a product subject to a product safety standard to furnish to the retailer, at the time of delivery of the product, a continuing guarantee that such product conforms to all standards. Included in this guarantee should be a provision whereby the retailer who establishes the existence of a guarantee received in good faith and, absent any evidence of fraud or collusion, be exempted from civil or criminal liability. This would isolate the responsibility but still give a power of enforcement against those who would wrongfully seek to use this as a shield.

Such a guarantee is not new. Many other acts have provisions for practical and effective continuing guarantees.

Section 17 prohibits delivery from customs of any product to which a product safety standard applies or which is declared a banned or imminently hazardous product without certification that such product

is in complicance with the standard. The section then details procedures by which the imported product could be brought into compliance with the applicable standard.

We suggest that section 17 be modified to place the importer in the same position as a domestic manufacturer of a consumer product which is subject to a safety standard. The advance certification now in section 17 would delay imported products at the docks pending testing and certification. The modification we have suggested would provide for a more consistent approach to the problem.

We would also suggest that the subcommittee include a provision for an advisory committee composed of technical and merchandising experts from business, government, and consumer organizations. This committee should be consulted before any product safety standard is proposed. The committee could be asked for assistance in developing standards, as well as advice on other proposals. A good advisory committee can provide insights and act as a brake on weaknesses of proposed standards. Public meetings should be held and a record of deliberations should be kept.

Wtih respect to the preemption section, section 19 of S. 1797 provides for preemption of any law established by any State or any political subdivision which applies to any aspect of health or safety of the consumer porduct which is covered by any standard or regulation under

the act.

The section further provides for exemptions from preemption where, upon application to the Secretary, the State law imposes a stricter standard, is required by compelling local conditions, does not unduly burden commerce and is adopted pursuant to procedures comparable to those required of HEW.

Whenever States go into the field of safety standard setting, there arises a considerable number of conflicts caused by varying requirements. Manufacturers cannot produce uniform products for a national market and comply with these variances. The consumer is the one who pays for this in the long run through inconsistently safe products and necessarily more costly products. However, there may exist situations which make a geographic or climatic condition so unusual that it requires standards stricter than Federal ones. The federation supports this concept with a suggestion that provisions for opposing comments on the issue of exemption be required. This should not, however, be allowed to delay the expediting of a needed exemption.

In conclusion, Mr. Chairman, we urge this subcommittee to seriously consider what we feel are positive recommendations. We support the approach of S. 1797 to the problem of protecting the consumer from hazardous and unsafe products. We have suggested several measures which will strengthen that bill.

Our recommendations fall into five areas: First, we feel that the presence of the Federal Government in the product safety area is necessary and that product safety standards are required.

Second, we believe that the widest possible collection and dissemination of product information is absolutely necessary to the effectiveness of any safety program. To this end we have suggested strengthening changes in S. 1797 which would set up an injury information clearinghouse and allow the Secretary of HEW to collect and disseminate information.