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On Guard: Kid-Friendly Discs Under Federal Microscope

15 May, 2009 By: Chris Tribbey

Child DVDs

The home entertainment industry is preemptively defending itself against new federal laws that could force replicators to test for certain chemicals in every batch of DVDs and Blu-ray Discs that are rated for children.

DEG: The Digital Entertainment Group is going to bat for the industry to show that neither lead nor phthalates — a class of industrial compounds — appear in significant levels in home entertainment products, if at all.

DEG is asking for exemptions for disc-makers and packaging companies to the new requirements laid out in the Consumer Product Safety Improvement Act (CPSIA), signed into law by President Bush in August 2008. Otherwise replicators and packaging firms would have to spend millions on possibly unnecessary testing and tracking of CDs, DVDs and Blu-rays.

The broad language of the 63-page CPSIA covers anything considered a “children’s toy,” and lawyers representing the DEG have expressed their concern that DVDs and Blu-ray Discs with a “G,” “PG” or “PG-13” rating fall under its scope.

"The studios have traditionally been sensitive to the levels of lead and other poisions in their products which have never tested with high levels of toxins," DEG executive director Amy Jo Smith told Home Media Magazine. “We’ve never had any danger of having either [lead or phthalates] in our product.”

The new law bans any children’s product that contains more than .1% of certain phthalates — a class of industrial compounds — and those that contain more than 300 parts per million of lead. It also requires manufacturers — or in the case of DVD and BD, replicators — to test and certify every children’s product produced for phthalates and lead and adhere “permanent” tracking labels to the products that show where and when it was made.

The federal organization overseeing the enforcement of the CPSIA — the Consumer Product Safety Commission (CPSC) — voted to issue a one-year stay on enforcement of the CPSIA in February, but only after receiving thousands of complaints from various businesses. Dozens of industries, including home entertainment, have argued that they should be exempted from the new requirements, since their products do not contain the chemicals that are being banned. The stay essentially delays third-party testing requirements for lead and phthalates to Feb. 10, 2010, but doesn’t eliminate any requirements.

Paula Tait, EVP of sales and marketing for replicator Precise/Full Service Media, said replicators are “extremely concerned” about the provisions of the CPSIA.

“It’s unconscionable to think we can undertake the costs associated with this,” she said. “It’s not logical.”

Tait shared a story about how her company once did a DVD run for a promotion where the DVD was attached to the outside of a cereal box for a major cereal company. The added testing required by the federal government for that job added 6-8 weeks to the normal production schedule.

A CPSC spokeswoman expressed doubt that DVDs and Blu-ray would fall under the requirements of the CPSIA but acknowledged that the industry would be wise to seek an exemption under the rules.

In a series of letters expressing the industry’s concerns, the DEG is asking for the same thing other industries have asked for when it comes to the CPSIA: common sense.

DEG letters to CPSC

Studios dealing with discs for children recognize that kids can handle discs: In a Blu-ray ad on the recent Walt Disney Studios Home Entertainment release of Bedtime Stories, the cast from the Disney Channel series “The Suite Life on Deck” talk about how the protective layer on Blu-ray is “kid proof” and “more scratch resistant.”

But DEG letters to the CPSC note that both the raw materials and the finished products are already tested to comply with CPSC lead and phthalate guidelines, and testing of CDs, DVDs and Blu-ray Discs found that all were far, far below the CPSIA limits for those chemicals in children’s products. The tests cover everything: discs, various packages and print materials included with home entertainment products.

“Notwithstanding that discs are not toys, and therefore not within the scope of the phthalate provisions of the CPSIA, in an abundance of caution the industry has done testing of the disc products for phthalates,” one DEG letter to the CPSC reads. “The test results attached … show either non-detectable levels or very low levels well within the limits established by the CPSIA.”

DEG sent the CPSC technical specs for how discs, packaging, and print materials are created, and included tests on materials from Arvato Digital Services, Technicolor and The Walt Disney Company to show that if levels of the chemicals were there, they were so miniscule that they posed no danger to children.

DEG also noted that at no point along the supply chain for discs is the product compromised with either lead or phthalates.

Instead of being forced to test every single batch of discs that come off production lines, DEG is proposing that statistical sampling and quarterly testing be done by replicators and component suppliers, to “satisfy the legislative intent behind the CPSIA.”

“The disc replicators produce 4 to 5 million discs from over a thousand different SKUs daily,” one letter concludes. “Including home entertainment disc within [CPSIA requirements] will create enormous logistical difficulties for the supply chain. … The testing laboratories’ capacity is already strained … failing to allow the procedures proposed by these comments will create enormous logistical difficulties for the supply chain and increase financial burdens to both the public and the industry, with no commensurate public safety benefit.”

DEG’s Smith added, “We believe that’s showing corporate responsibility, that our product doesn’t change.”

The CPSC has already recognized that certain children’s products, such as clothes, books and some textiles, shouldn’t require the levels of testing and tracking the CPSIA calls for, and has already granted a handful of exemptions to certain industries. The DEG is hoping discs are next.

“Electronics was the one area that Congress identified for special exemption attention,” said then-acting CPSC Chairwoman Nancy Nord in February, about an exemption for electronics.

Precise/Full Service’s Tait warned that requiring facilities to test for lead and phthalates would be cost prohibitive.

“Having all the testing done outside would be time-prohibitive,” she said. “The government needs to rethink this thing, because they’re going to put a lot of companies out of business.”

But testing for chemicals isn’t the only CPSIA issue threatening home entertainment.

Tracking everything

Another provision of the CSPIA requires detailed tracking data on children’s products, the DEG has expressed concern that strict interpretation of the requirements would force new tracking data on discs, packages and printing materials.

DEG’s Smith said the tracking requirements could have enormous impacts on the DVD and Blu-ray supply chain, effectively pushing back street dates and cutting into profit margins.

DEG’s letters to the CPSC call the tracking requirements “impracticable” due to the way discs are made, and unnecessary due to the information already included with UPCs, ISBNs and SKU data. “The DEG’s members … submit that their current recall procedures and tracking information will insure safety of home entertainment discs and provide for sufficient recall of unsuitable products in the unlikely event that it is necessary,” the DEG’s letter on tracking concludes.

Other corners of business have come out hard against the requirements of the CPSIA, especially the tracking label portion. Richard Woldenberg, chairman of Learning Sources, Inc., which produces a huge variety of children’s products for classrooms and the home, wrote a scathing letter to the CPSC about the tracking requirements.

“Of all the provisions in the CPSIA that I consider dangerous and ill-conceived, the tracking labels provision has the greatest potential to wreak economic damage and induce unmerited market restructuring,” he wrote. “This provision alone may bankrupt companies and wipe out entire product lines, all without improving children’s product safety.”

He noted that many companies in other industries — such as home entertainment — already have sophisticated management/inventory-tracking software to follow where products go.

The Printing Industries of America has also approached the CPSC about being more lax with the tracking requirements, calling the scope of the provision “quite broad.”

Legislative battles

More than one politician has come out with legislation to “fix” the CPSIA. Most-discussed among the legislative proposals is HR 1815, the Consumer Product Safety Solutions Act of 2009, introduced by Rep. Joe Barton (R-Texas), who says the bill will “fix flaws in the Consumer Product Safety Improvement Act that are driving millions of small businesses toward bankruptcy.” The bill would grant the CPSC more flexibility to grant exemptions, such as the one the DEG is seeking, for both testing and the tracking requirements.

Five other bills to amend parts of the CPSIA have been introduced between the House and the Senate, including one from Sen. Jon Tester (D-Mont.), which is simply called the Common Sense in Consumer Product Safety Act (S 608).

The commissioners on the CPSC have said they understand industry concerns.

“It is not the intent of the commission, nor has it ever been the intent of Congress, to force any company out of business who is operating in good faith to produce safe products,” CDSC commissioner Thomas Moore wrote in early February. “As we work through the issues in the new law, the disruptions that now seem overwhelming will fade and the marketplace will emerge as a much safer one for our nation’s children.”

However, Moore also wrote in a March letter to Congress that concerns from the business community were from people “who will never be happy with the closer scrutiny and accountability required by the act.”

In early May, the House Small Business Committee’s Subcommittee on Investigations and Oversight slammed the CPSC over the muddled regulations in the CPSIA.

“The wave of product recalls in 2007 highlighted the need to update our safety standards to protect consumers, especially our children,” Subcommittee Chairman Jason Altmire (D-Penn.) said, according to a press release.  “Unfortunately, now many small businesses, including those that sell products that do not pose a health risk, are facing significant losses as they struggle to meet a host of new, and often confusing, regulations.”

Altmire and others urged the CPSC to begin immediately granting exemptions where they make sense, calling CPSC leadership “ineffective.”

“In particular, I am troubled that the act includes unrealistic deadlines for rulemakings and compliance, as well as too little implementation discretion for the CPSC, both of which are exacerbated by CPSC’s lack of adequate resources, both in terms of funding and staff,” Congressman John Dingell (D-Mich.) wrote to the CPSC in early March.

The CPSC responded in a mid-March letter to members of Congress: “As we implement each new requirement, we are seeing unanticipated issues arise, and we are learning more of the far-reaching effects of the CPSIA, and there will undoubtedly be more to learn.

“The Commission has been inundated with thousands of product specific inquiries about what types of products fall within those definitions, from shows to sporting goods to electronic games.”

To ease the pressure on the CPSC, President Obama has stated that he wants to double the amount of money the CPSC receives, and has already upped the amount of funding in the federal budget for the organization to $107 million. In early May, Obama nominated two people to the commission and reiterated his intent to expand the commission from three people to five.

“It is a top priority of my administration to ensure that the products the American people depend on are safe,” the President said in a news release. “We must do more to protect the American public — especially our nation’s children — from being harmed by unsafe products.”

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