GUIDE TO RESPONSIBLE SOURCING IN THE PROMOTIONAL PRODUCTS INDUSTRY

Regulations & Liability Social Standards Environmental Standards Evaluation, Testing & Compliance

List Of Acronyms

Introduction

For years the promotional products industry has demonstrated its effectiveness and value—promotional products are targeted, personal, long lasting and connect to all our senses in a way no other advertising medium can match. However, today’s business environment increasingly looks beyond the product itself to evaluate its safety and social and environmental footprint.

End buyers want safe and reliable products, free from harmful chemicals and toxic material. They want products produced in non-polluting environments and ones that meet social and environmental standards, and are not likely to embarrass a company through a product recall. The extra quality assurance, product testing, inspections and auditing necessary to produce these kinds of safe and quality products adds more costs and increases the complexity of delivering a product into the stream of commerce.

We’re entering a new era. Partnerships between suppliers and distributors are needed now more than ever. Reliability, trust and proven track records will create the added value the marketplace expects.

It is everyone’s responsibility to become more educated, more realistic and more thoughtful throughout the distribution channel. It is our hope that this guide will provide you with direction and clarity in assessing and meeting these product, social
and environmental responsibility compliance challenges.

PART 1: Product, Packaging And Decorating Evaluation

When evaluating, developing or launching a product, you must conduct a formal evaluation of the product to ensure that it is safe, appropriate and meets the social and environmental
expectations of the end buyer. This evaluation should address the product, its packaging and any decoration to the product itself. All formal product evaluations are unique and can be complex, but some basic steps are common to all evaluations:

❑ Identify all critical parts and address potential manufacturing and decorating concerns.
❑ Assess the performance and functionality of the promotional product, packaging and decoration.
❑ Evaluate the life cycle of the product: – Who will use it? – How will it be used? – How long is the item expected to last? – How will the user dispose of the product?
❑ Identify risks associated with the product, packaging and decoration. For examples: electrical, mechanical, chemical, environmental, toxicity and flammability hazards. Assess key potential safety issues, human factors concerns and recommendations based on experience and available injury data relative to the type of product.
❑ Identify all applicable mandatory regulations, industry standards and end-buyer test specifications to which the item, packaging and decorating will be subjected. PPAI Promotional Products TurboTest, www.ppai.org/turbotest is a useful resource for identifying regulations and standards. If Identify all potential areas of non-compliance with applicable regulations, standards and end-buyer specifications; identify required modifications to bring the item into compliance.
❑ Conduct age grade determination.
❑ Evaluate labeling requirements specific to the submitted item.
❑ Evaluate recall history, if any, of similar items

Summing It Up
When regulations exist, compliance is required by law. This is a challenging issue in the promotional products industry because the ultimate use and users of the product are not always known at time of manufacture. Promotional products that are intended for use by adults are given out at trade shows and in workplaces and may end up in the hands of children. This does not mean that every promotional product must be designed as safe for children of all ages, but it does mean that a determination about its appeal and foreseeable use by children needs to be considered when manufacturing or distributing a promotional product. It is vital that you communicate frankly with your promotional products partner to ensure that the right product is selected for a specific application.

PPAI Resources:

Product Responsibility Best Practices
PPAI Guide To Navigating The Consumer Product Safety Improvement Act
PPAI Recall Manua

Consumer Product Safety Commission (CPSC) Resources:

CPSC Regulated Product Handbook
Handbook for Manufacturing Safer Consumer Products
CPSC Recall Handbook

UL Resources:
Hardlines Inspection Request Form

PART 2: Standards And Testing

SECTION 2.1: Standards
A standard is defined by the National Standards Policy Advisory Committee as

A prescribed set of rules, conditions or requirements concerning definitions of terms; classification of components; specification of materials, performance, or operations; delineation of procedures; or measurement of quantity and quality in describing materials, products, systems, services, or practices.

Although most consumer products have specific, mandatory safety regulations and standards that are applicable to them, many larger end buyers that are focused on protecting their brands, may impose additional requirements for safety and quality of their promotional products. Suppliers and distributors should always ask their respective clients for information on any additional requirements that may apply to the product before they quote on an item.

There are more than 30,000 procurement specifications, mandatory codes, rules and regulations containing standards developed at every level of government.

In addition, many non-U.S. national, regional and international organizations produce standards of importance to U.S. manufacturers, importers and exporters. The International Organization for Standardization (ISO), in Geneva, Switzerland, produces the largest number of International Standards. More than 19,500 ISO standards have been created through the work of more than 3,500 technical bodies and more than 20,000 experts from all over the world.

Standards may be classified in different ways. ISO uses eight general classifications:

Basic standard has a broad ranging effect in a particular field, such as a standard for metals that affects a range of products from cars to screws.

Terminology standards define words permitting representatives of an industry to use a common, clearly understood language.

Testing standards define the test methods to be used to assess the performance or other characteristics of a product.

Product standards establish qualities or requirements for a product, or related group of products, to assure that it will serve its purpose effectively.

Process standards specify requirements to be met by a process, such as a manufacturing line’s operation, in order to function effectively.

Service standards, such as servicing or repairing a car, establish requirements to be met to achieve the designated purpose effectively.

Interface standards, such as the point of connection between a telephone and a computer terminal, concern the compatibility of products.

Data requirements provide necessary values for a product or service.

Standards can describe characteristics of the product and/or the methodology, for example test, inspection or other assessment methods, used to assess conformity of the product to a design or performance standard. The goal of standard writing is to produce a standard that is clearly and concisely written, readily understood, precise, technically credible, and contains only unambiguous requirements.

When written into standards, requirements are generally stated in terms of shall or will, rather than may. In addition, standards for conformity assessment methods, for example test methods, must be capable of evaluating the conformance of a product to the specified requirements in a manner that produces test results within an acceptable range, are consistent and reproducible. In other words, repeat tests should yield the same or similar results when using the same or a similar test method and be capable of being duplicated by other testing bodies.

A relevant distinction between standards is the manner by which they specify requirements. Performance standards describe how a product is supposed to function. Design standards define the characteristics of how a product is supposed to be built. In general, the standards community generally prefers performance standards to design standards. Although performance standards are more difficult to develop and enforce, they tend to be less restrictive than design standards and therefore promote innovation.

SECTION 2.2: Brief History Of Standard Developing Organizations (SDO)
In the United States, the 20 largest SDOs produce 90 percent of the standards. As of May 7, 2015, over 280 SDOs were accredited by ANSI and there were more than 10,000 American
National Standards (ANS).

The American Society for Testing and Materials (ASTM), founded in 1902, is one of the oldest SDOs and now produces the largest number of non-governmental, voluntary
standards in the United States and many are used worldwide. It is the source for many of the product lines of interest to the promotional products industry. 

The Underwriters Laboratories (UL), www.ul.com, is one of the best-known of the SDOs involved with a wide range of consumer products, from electrical appliances to batteries and batteries to toys and childcare items. UL was founded in 1894 and has operations around the world.

Some trade associations develop standards, such as the Electronic Components Industry Association (ECIA), www.ecianow.org. Professional and technical organizations are also standards developers. The Institute for Electrical and Electronics Engineers (IEEE), www.ieee.org, founded in 1884, maintains more than 1670 standards and projects under development.

SECTION 2.3: The Role Of The American National Standards Institute
Contrary to popular perception, the American National Standards Institute (ANSI), www.ansi.org, is not a standards developing organization. Founded in 1918 as the American Standards Association, it is a private nonprofit organization that administers and coordinates U.S. voluntary standardization and conformity assessment activities. Its mission is to enhance U.S. global competitiveness and the American quality of life by promoting, facilitating and safeguarding the integrity of the voluntary standardization system. It is the organization that approves standards developed by SDOs described above, as “American National Standards.” It is also the coordinator and manager of U.S. participation in the work of ISO and the International Electrotechnical Commission (IEC), www.iec.ch.

For a business in the promotional products industry interested in finding standards, ANSI is a recommended source. It should be noted that most standards are actually proprietary documents. It is very difficult to find a free copy of a standard as most standards are available only for purchase.

How do I know what standards apply to a promotional product or the production process?
There is no easy answer to this question. Some standards developing organizations, including the American National Standards Institute (ANSI) and the Consumer Product Safety Commission (CPSC), have some search engines that can provide assistance in identifying standards, but they are difficult to navigate. PPAI has developed Promotional Products TurboTest, www.ppai.org/turbotest, to guide members through the compliance process. While TurboTest is a good place to start, it focuses on the Consumer Product Safety Improvement Act (CPSIA) and some specific state regulations, and is not all encompassing.

In addition to the product standards, end buyers may have expectations or requirements for addressing societal standards or environmental standards as well as age-related
requirements.

SECTION 2.4: Testing To Assure Compliance With Standards
There are more than 100 private organizations and more than 60 Federal programs in the U.S. that test and certify products ranging from electrical cords to cell phones. Product certification is intended to confirm that the product conforms to one or more specified standards. It is a method to increase an end buyer’s and consumers’ confidence in a product and for furnishing product information.

There are several paths to achieve this conformity assurance:

Manufacturer’s self-declaration of conformity is when a manufacturer or supplier attests to the fact that his or her product meets one or more standards. Third-party certification is the term applied to the process by which an organization, independent of either the manufacturer or supplier, assesses the product’s conformance to one or more standards.

The manufacturer’s overall quality control program may also be examined as part of the certification process. Third-party certification programs differ greatly and the
degree of confidence in the resultant certification depends on the program’s type and comprehensiveness.

The methods used in third-party testing/certification programs can be classified as follows:

Type-testing/initial inspection assures that the manufacturer’s design specifications can produce a product that conforms to a particular standard. Products from a production run are not inspected or tested and there is no information regarding whether products from a production run also consistently meet the specification.

Audit-testing, in which test samples are selected at random from the marketplace.

Surveillance of the manufacturing process assesses the manufacturer’s production and control processes to ensure that the manufacturer’s quality control procedures are adequate.

Field investigations investigate alleged failures of products under use conditions to determine the cause of the failure and suggest corrective action.

Batch-testing tests a sample of products from a production batch for conformance to the standard. It does not ensure that products made previously or subsequently in the production run also meet the standard.

100 percent testing, as it implies, tests each individual product to determine if it meets the designated standard. If the testing procedures are adequate and performed by an accredited laboratory, it provides the highest possible level of assurance that the product conforms to a particular standard. It is also usually the most expensive method and can only be used, obviously, when the test has no adverse effect on the product.

Many testing/certification providers use two or more of these methods in their certification process. The choice of methods depends on the needs of the end buyer as well as the promotional product supplier and distributor and the nature of the product. The methods chosen can greatly affect both the cost of the program and the level of confidence that can be ascribed to it.

SECTION 2.5: Laboratory Accreditation
To ensure end-buyer and consumer confidence, the advice and services of an independent accredited laboratory should be considered. Laboratory accreditation is a process for evaluating testing facilities and designating those laboratories judged competent to perform specific tests using standard test methods, where available. The National Voluntar Laboratory Accreditation Program (NVLAP), www.nist.gov/nvlap, in the NIST and the American Association for Laboratory Accreditation (A2LA), www.a2la.org, are the two largest accreditation bodies in the U.S., although with the rapidly increasing demand for these services, new accreditation bodies have developed, such as Assured Calibration and Laboratory Accreditation Select Services (ACLASS), owned by ANSI and the American Society for Quality National Accreditation Board (ANAB), anab.org.

Why is accreditation important?
The rigorous, internationally recognized accreditation process assesses the competence of a laboratory to conduct testing, generally using standard test methods. The process can greatly enhance the quality of certification programs or the confidence of the party requesting testing because it requires evidence that the laboratory that achieves accreditation has competent personnel, adequate equipment and sufficient knowledge of the testing procedures for which accreditation is sought. In addition, several accreditation organizations are directly recognized by international and regional accreditation bodies around the world. The U.S. recognition body is the National Cooperation for Laboratory
Accreditation (NACLA), www.nacla.net.

How to find a laboratory? There are several paths to finding an accredited laboratory to assist you in ensuring the safety and efficacy of a product:

• The American Council of Independent Laboratories (ACIL), www.acil.org, founded in 1937, requires accreditation as a criterion for membership for all
areas of testing a laboratory may conduct for which accreditation is required and the annual signing of the ACIL Code of Ethics. ACIL provides a useful referral service, by which those seeking laboratories services can submit a detailed request and that will be distributed to the ACIL member labs to match needs with member capabilities.

• Most accreditation bodies provide a list of their accredited laboratories online.

• In addition, several of the larger SDOs, such as ASTM International, provide a search for a laboratory feature. However, it does not specify whether the laboratories listed are accredited.

• Federal law requires that every children’s product subject to a federal consumer product safety requirement be tested by a CPSC-accepted
laboratory for compliance with the applicable federal children’s product safety requirements.

With the plethora of products, many requiring multiple tests or test methods for a variety of intended uses, it is recommended that you seek an accredited laboratory within the scope required. Accredited laboratories are required by the accreditation process to own a copy of the standards for which they can provide testing services and to ensure they are current, many standards undergo revisions, particularly in fast-moving industries, such as information technology and telecommunications.

Given the challenges associated with identifying all standards and regulations, it may be worthwhile for your organization to rely on the advice and services of an independent accredited laboratory (often referred to as a testing partner).

❑ No conflict-of-interest.
The laboratory should be a legal entity, organized in a manner that permits satisfactory performance of all required functions in an impartial and unbiased fashion.

❑ Financial stability.
The laboratory should have sufficient resources to enable it to properly use and maintain the test equipment and facility, to satisfactorily perform all required functions, and to adequately indemnify itself against financial liabilities/penalties resulting from its operations.

❑ Staff qualifications requirements.
Each staff member in the laboratory should have the education, training, knowledge and experience necessary to perform the tasks assigned and an appropriate level of supervision should be maintained. The training of each staff member should be kept current and documented.

❑ Adequate quality system.
The laboratory should have a quality system appropriate to the type and amount of work performed. It should be suitably documented in a comprehensive manual that is readily available for consultation by staff. 

❑ Sampling requirements.
If a laboratory receives test materials in quantities larger than the amount required for the test, the laboratory should sample the material in such a manner as to ensure that the sample tested is representative of the entire quantity of material received, using appropriate sampling methods and/or techniques.

❑ Sample control/integrity requirements.
The laboratory should have an effective system that ensures both the identity and integrity of the test samples. Maintaining the sample’s integrity involves preventing it from being damaged during any stage of its collection, shipment, storage or handling.

❑ Statistical methods requirements.
The statistical methods used to interpret or to provide additional information about test data should be appropriate and adequate for the type and level of testing undertaken.

❑ Record-keeping requirements.
A laboratory should maintain all test records, observations, calculations and derived data for all tests it performs for an appropriate time or as required by law.

❑ Test report content/format requirements.
Test reports should include all information relevant to sample selection, test performance and test results. They should be in a format that is easy to read and understand and routinely audited and validated. Increasingly, laboratories are offering online testing scheduling and online delivery of final test data.

❑ Available operational manuals/instructions.
The laboratory should have readily available instructions on the operation and maintenance of all materials and equipment, copies of the test methods and standards employed with any additional instructions needed on their application, sample selection and handling procedures, and any other relevant information necessary to ensure the quality of the work performed.

❑ Participation in proficiency testing programs.
The laboratory should participate in proficiency testing programs, if they are available for the scope of the item being tested, to ensure the competence of its testing processes. Proficiency testing can provide the laboratory with valuable feedback on the competence of its testing processes.

❑ Adequacy of facilities and equipment.
The laboratory should own or have access to all equipment required to perform all test methods it conducts. The facility should require test methods to be conducted in a controlled environment to prevent any adverse effects on the test result’s accuracy.

❑ Equipment maintenance/repair/calibration requirements.
Equipment calibration, preventive maintenance and repair procedures and the choice of reference materials used for calibration should be appropriate for the nature and amount of work being performed. Equipment calibrations should be traceable to some ultimate or national reference standard. Complete records should be maintained on these procedures.

❑ Adequate control over subcontractors.
The laboratory should have a system to ensure that testing and related work performed by any of its subcontractors is at an acceptable level of quality.

❑ Appeals procedure.
The laboratory should have a mechanism to deal with technical questions, appeals, complaints and challenges, originating either from the customer or from interested regulatory or other parties.

Can I test the products or processes myself?
Typically, the answer is yes, with a few notable exceptions, particularly in the area of children’s products. Some consumer products have no standards or regulations however, many larger end-buyers that are focused on protecting their brands, may impose additional requirements for safety and quality. Suppliers and distributors should always ask their respective clients for information on any additional requirements that may apply to the product before they quote on an item.

If it is not a matter of law or specific end buyer requirement, the relevant questions are:
– Can I meet the end buyer’s expectations with a conformity self-assessment?
– Do I have the capacity to identify the standards and tests myself?

Third party testing/certification providers can provide other services necessary to conduct a product responsibility program, such as:

Conformity Assessment:
• Concept review and safety consultation
• Formal design evaluation (if needed)
• Develop a Quality Assurance Plan (QAP)
• Facilitate the implementation of the processes and procedures outlined in the QAP
• Test product to meet end buyer’s standards and local requirements and standards
• Preproduction testing
• Intervention testing
• Provide immediate update on testing result by issuing short report
• Provide final detailed reports
• Factory audit (if needed)
• Provide guidance and assistance on Corrective Action Plan (if failure occurs at preproduction and/or intervention)
• Sample collection for intervention testing
• Witness for sample destruction if required
• Provide product recall information, changes in regulatory information and scientific updates
• Provide injury data

Other services can include:
• Research testing
• Process validation
• Site inspection audit
• Online inspection during mass production at manufacturing facility
• Provide a service package and educate new vendors and manufacturers on end buyer’s safety and quality expectations
• Perform factory orientations, including education to factory workers on safety processes, quality control, etc.

Further Reading On Standards And Tests:

Understanding Standards And Conformity Assessment
The National Institute of Standards and Technology (NIST): www.nist.gov
ABCs of Standard-Related Activities in The United States: gsi.nist.gov/global/docs/pubs/NISTIR_3821.pdf
The ABCs of the U.S. Conformity Assessment System: gsi.nist.gov/global/docs/pubs/NISTIR_6014.pdf
The Consumer Product Safety Improvement Act (CPSIA): www.cpsc.gov/en/Regulations-Laws–Standards/
Statutes/The-Consumer-Product-Safety-Improvement-Act/

Where To Find A Testing Laboratory
The American Council of Independent Laboratories (ACIL): www.acil.org
– ACIL Code Of Ethics: www.acil.org/?page=712
The ASTM Laboratory Search Engine: www.astm.org/LABS/search.html
The CPSC Lab Accreditation resources and list of acceptable laboratories:
www.cpsc.gov/en/Business–Manufacturing/Testing-Certification/Lab-Accreditation/

Where To Buy Standards
The American National Standards Institute (ANSI): www.ansi.org
International Organization For Standardization (ISO): www.iso.org

PPAI Best Practices:
Undue Infiuence
Working With A Test Lab
Component Part Testing
Reasonable Testing Program
Product Inspection
Hazard Identification
Product Life Cycle
Restricted Substances

PART 3: Age Grading

Age grading helps manufacturers, suppliers, importers and distributors determine the applicability of mandatory toy regulations to toys that are given as promotional products. While most promotional products are not intended for use by children, it is helpful to know where the lines are drawn.

Toys age-graded for children under three years of age are subject to the Consumer Product Safety Commission’s (CPSC) small parts regulation. Toys and games age-graded for children at least three years of age, but not older than six, containing small parts are subject to labeling requirements. In addition, there are tests for identifying hazardous sharp edges and points in toys and children’s products age-graded for children under eight years of age. Similarly, many of the requirements in industry voluntary standards apply to toys for children of specific age ranges.

Federal law also imposes specific warning label requirements for certain toys and games containing small parts intended for use by children over three years of age but not older than six years of age; for small balls and marbles intended for children three years of age or older; and for balloons. These requirements warn purchasers that these products are not suitable for children under three years of age because the products present choking risks or, with balloons, that children under eight can choke or suffocate on uninflated or broken balloons. The law also bans small balls for children under three years of age that pass through a circular hole with a diameter of 1.75 inches (44.4mm).

The industry standard, ASTM F963, “Standard Consumer Safety Specification on Toy Safety,” includes information on age grading toys. This specification covers hazard identification, various age requirements by product type and “contains test methods for toys intended for use by children under 14 years of age”.

Further Reading And Internet Sources On Age Grading:

Age Determination Guidelines: Relating Children’s Ages To Toy Characteristics and Play Behavior: www.cpsc.gov//PageFiles/113962/adg.pdf
PPAI’s Best Practices-Determing Children’s Product: http://www.ppai.org/inside-ppai/corporate-responsibility/product-responsibility/Documents/PR-BP-Determining-
Childrens-Products.pdf
ASTM F963 Standard: www.astm.org/Standards/F963.html

PART 4: Production And Conformity Assessment

SECTION 4.1: Production Policies And Procedures
If an end buyer asks for assurances that a product and the production process will meet its standards for quality, safety and societal concerns, how does a company know what policies and procedures it needs to implement? In the product design and evaluation phase, the standards for the product and production process should have been identified. The majority of products recalled are due to design hazards rather than regulatory non-compliance. Standards and regulations are the minimum requirements. All products entering the U.S. stream of commerce must not simply be compliant with regulations—they must not expose consumers to undue risk of injury or even death.

Reverse engineering protocols allow for improved conformity assurance through the extraction of knowledge, design and performance information. To get to that end result, the company will have to conduct a conformity assessment of the product and the production process. A checklist is typically prepared to evaluate conformance to regulatory and performance requirements. The results will aid in the development of policies and actions a company needs to implement to assure compliance with standards.

SECTION 4.2: Conformity Assessment And Assurance
Conformity assessment is defined by the ISO as “any activity concerned with determining directly or indirectly that relevant requirements are fulfilled.” According to NIST, “conformity assessment procedures provide a means of ensuring that the products, services, or systems produced or operated have the required characteristics, and that these characteristics are consistent from product to product, service to service, or system to system.”

Conformity assessment includes:

Sampling & Testing
Inspection
Certification
Quality & Environmental System Assessment
Registration
Accreditation

The accreditation of the competence of those activities by a third party and recognition, usually by a government organization or non-governmental organization, of an accreditation provider’s capability.

For the purposes of the promotional products industry, the conformity assessment of promotional products and processes is what we do to provide the proof that product and/or processes meet the expectations or requirements of end buyers.

SECTION 4.3: Types Of Conformity Assessment Activities
Inspection is defined by ISO as “conformity evaluation by observation and judgment accompanied as appropriate by measurement, testing or gauging.” Most other types of conformity assessment involve inspection to some degree. It would be unusual to test a product without first inspecting it to determine if it is intact or has undergone rough handling that might have damaged it and therefore affect the testing outcome. Similarly, it would be unusual to assess a company’s quality system without inspecting the elements of the facility that could impact the system’s operations.

The following is a partial list of testing laboratories’ data uses:

• Product design and research
• Quality control prior to acceptance of incoming materials/components, during production and prior to shipment/sale
• Insurance underwriting
• Meeting contractual agreements
• Satisfying government regulatory requirements
• Certification and labeling
• Buyer protection and information
• Product comparisons
• Environmental protection
• Product operation, maintenance and repair
• Legal proceedings
• Forensic work

The ISO standard for laboratory accreditation requirements include:

• Having adequate resources and using only properly trained staff
• Having a good quality system – ISO/IEC 17025 incorporates by reference ISO 9000 management programs; no separate registration for ISOIEC 9000 is necessary
• Using equipment that has been adequately maintained and calibrated
• Conducting tests under acceptable environmental conditions and using appropriate test methods; and
• Producing accurate, clear, unambiguous and objective test reports

Laboratories use ISO/IEC 17025 to implement a quality system aimed at improving their ability to consistently produce valid results. It is also the basis for accreditation from an accreditation body. Since the standard is about competence, accreditation is simply formal recognition of a demonstration of that competence. A prerequisite for a laboratory to become accredited is to have a documented quality management system. The usual contents of the quality manual follow the outline of the ISO/IEC 17025 standard.

Certification is the process of providing assurance that a product conforms to a standard or specification or that an organization and/or individual is competent to perform a certain task.

Accreditation is the recognition by an independent accrediting body, that a certification body adheres to specific standards.

In some cases, certification programs may mandate that only accredited laboratories conduct any required testing, CPSIA for example. Certification and laboratory accreditation programs both use standards, however not all standards apply to every lab. It is recommended to choose a lab that is skilled and knowledgeable about all the regulations that apply to your product.

SECTION 4.4: Types Of Certification

There are three types of certification, reflecting different levels of testing:

First Party Certification: or self-certification, is the process by which a manufacturer or supplier declares that the product meets one or more standards based on:

The manufacturer’s confidence in the quality control system

The results of testing or inspection the manufacturer undertakes or authorizes others to undertake on his/her behalf.

The process is also known as supplier’s declaration of conformity (SDOC). The manufacturer’s capability, integrity and reputation determine the degree of confidence that can be placed in this type of certification, which is commonly used in Europe.

This is primarily a self-certification program, although some organizations do audit manufacturers’ self-certifications to ensure their standards are not being misused.

Second Party Certification: is also common in the United States. It is usually the buyer who requires or certifies that the products they wish to purchase from a supplier meet
standards. These certifications are generally only available for those companies wishing to be suppliers for a specific buyer.

Third Party Certification is a process by which the producer’s claim of conformity is validated by a technically and otherwise competent third party, a body not controlled by or under the influence of the producer or buyer.

The sponsor of the third party program, the certifier, may be responsible for collecting the required data, generating test results or conducting inspections, in addition to reviewing the results of these activities and making a final determination on the product’s conformance or lack of conformance. The certifier may also delegate all or part of the data collection and review activities to another party or parties.

The degree of confidence that can be placed in third party certification programs varies greatly depending on:

• The number and types of testing/inspection methods used within the program to ensure product conformance.
• The adequacy of the manufacturer’s quality control system.
• The competence of the body that conducts the testing and/or inspection and evaluates the test results. As noted above, accredited laboratories are favored for this process.

SECTION 4.5: Certificates Of Conformity (Certification Marks)
ISO defines a certificate of conformity, also known as marks of conformity, as a “document issued under the rules of a certification system, providing confidence that a duly identified product, process, or service is in conformity with a specific standard or other normative document”

The marks, or accompanying information should include the following:

• Identify the certification body and any other testing bodies, if applicable
• The relationship between the certification body and the manufacturer
• The lot, batch or other production information – to allow traceability to the production source and time of production, thereby allowing a partial recall of a product, rather than the recall of an entire product line
• The date when the certificate was issued
• The officer of the company responsible for its issuance
• Proper labeling be applied and visible required by the certification

Labeling included with the product should identify the supplier and contain information on the name, type of model number and all instructions necessary for the correct and safe use and maintenance.

Certification marks and certificates of conformity should be used to indicate that all essential characteristics of the product have been assessed. In cases where only one of several aspects of the product have been evaluated, such as flammability or electrical safety, this information should be conveyed in some manner to the buyer, or the mark may mislead the buyer into placing more reliance on the certification than is justified. To the extent possible, the symbols used in connection with the certification mark should be capable of being interpreted without further definition.

SECTION 4.6: Self Assessment Checklist (Factory Audit) Example
The consumer products market is increasingly regulated and subject to scrutiny by many government agencies and consumer groups. It is essential that promotional products professionals can provide assurances that our products meet—or exceed—all international standards for quality, safety and societal concerns. The following is an example of a factory audit checklist for the purposes of conformity assessment:

Elements of practices:

Eating, drinking, spitting, smoking, gum chewing are restricted to designated areas and must be kept away from the product zone.

Workers should wear a functioning hair net and protective coat in the production area.

Personal belongings (i.e., watches, jewelry, earrings, rings, necklaces, drinking bottles) are prohibited from being brought into the production area.

Pockets above the waist should be sewn.

Unused tools (for example: tools, rags, gloves excluding sharp tools) should be stored away from the production area.

Workers with beards should wear beard restraints.

No false eyelashes, false nails, strong perfumes or exposed nail polish.

Workers must effectively clean their hands before entering the production area.

The next step after the self assessment is to review the information results with the the appropriate parties and communicate a corrective action plan where necessary.

SECTION 4.7: Social Standards Factory Audit Example
If an end buyer or distributor asks you for assurances that a product is produced in a socially compliant way, do you know what policies and procedures you need to implement? Do you know what standards to apply? To answer that question, you may need to conduct a conformity assessment of both the product and the production process.

The following is an example of a factory audit checklist for conformity with social standards:

Part 1

Randomly select X number of employees. Review all applicable records regarding payment, such as payroll records, pay stubs and time cards.

Interview employees for whom records were selected. Verify above and:

Is employee paid regularly?

Is employee paid in cash?

Is employee given pay stubs?

Is employee required to perform work before or after hours?

Is the employee given lunch or other breaks?

Part 2

Randomly select X number of employees. Select separate groups for each topic. Interview employees and verify status of items below. Note any exceptions and explain.

Part 3

Part 4

Part 5

Further Reading On Production And Conformity Assessment:

CONE Communications/ECHO Global CSR Study

PPAI Social Responsibility Content

The International Labour Organization (ILO)

Fair Labor Association (FLA)

PPAI Best Practices-Care Labels For Apparel

PPAI Best Practices-Secondary Tracking Labels For Third Party Decoration Of Children’s Apparel

PART 5: Social Standards

Generally, when an end buyer indicates a preference for the purchase of a promotional product that meets social standards, the end buyer is referring to labor standards or working conditions under which a product is produced.

SECTION 5.1: History of International Labour Organization (ILO)

The common touchstone for most social standards is the International Labour Organization (ILO), www.ilo.org. The ILO is a “tripartite” United Nations agency that brings together representatives of governments, employers and workers to jointly shape policies and programs. The ILO adopts either conventions, which are legally binding international treaties that may be ratied by member states, or recommendations, which serve as non-binding guidelines. Once recommendation and conventions are adopted by the International Labou Conference and ratied by the the states, the ILO supervises their application. For most business purposes, the eight conventions the ILO’s governing body has identied as fundamental are the points of reference. These eight conventions that deal with four major issues: freedom of association, forced labour, prohibition of child labour and nondiscrimination.

Figure 5.1: ILO Core Conventions

Freedom of Association and Protection of the Right to Organise Convention, (No. 87)

“Workers’ and employers’ organizations shall organize freely and not be liable to be dissolved or suspended by administrative authority, and they shall have the right to establish and join federations and confederations, which may in turn affiliate with international organizations of workers and employers.”

Right to Organise and Collective Bargaining Convention, (No. 98)

“Workers shall enjoy adequate protection against acts of anti-union discrimination, including requirements that a worker not join a union or relinquish trade union membership for employment, or dismissal of a worker because of union membership or participation in union activities. Workers’ and employers’ organizations shall enjoy adequate protection against any acts of interference by each other, in particular the establishment of workers’ organizations under the domination of employers or employers’ organizations, or the support of workers’ organizations by financial or other means, with the object of placing such organizations under the control of employers or employers’ organizations. The convention also enshrines the right to collective bargaining.”

Forced Labour Convention, (No. 29)

Prohibits “all forms of forced or compulsory labour, which is defined as ‘all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.’ ”

Abolition of Forced Labour Convention, (No. 105)

“Prohibits forced or compulsory labour as a means of political coercion or education or as a punishment for holding or expressing political views or views ideologically opposed to the established political, social or economic system; as a method of mobilizing and using labour for purposes of economic development; as a means of labour discipline; as a punishment for having participated in strikes; and as a means of racial, social, national or religious discrimination”

Minimum Age Convention, (No. 138)

“Sets the general minimum age for admission to employment or work at 15 years, 13 for light work, and the minimum age for hazardous work at 18, 16 under certain strict conditions. It provides for the possibility of initially setting the general minimum age at 14, 12 for light work, where the economy and educational facilities are insufficiently developed.”

Worst Forms of Child Labour Convention, (No. 182)

“Defines as a ‘child’ a person under 18 years of age. It requires ratifying states to eliminate the worst forms of child labour, including all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; child prostitution and pornography; using children for illicit activities, in particular for the production and trafficking of drugs; and work which is likely to harm the health, safety or morals of children.”

Equal Remuneration Convention, (No. 100)

“Requires the application of the principle of equal remuneration for men and women workers for work of equal value. The term ‘remuneration’ is broadly defined to include the ordinary, basic or minimum wage or salary and any additional emoluments payable directly or indirectly, whether in cash or in kind, by the employer to the worker and arising out of the worker’s employment.”

Discrimination (Employment and Occupation) Convention, (No. 111)

“Defines discrimination as any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation. It requires ratifying states to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in these fields.”

SECTION 5.2: Social Accountability International (SAI)
The ILO conventions and recommendations have been taken a step further by the Social Accountability International (SAI), www.sa-intl.org. SAI’s mission is to promote human rights for workers around the world as a standards organization, ethical supply chain resource and programs developer.

SAI promotes workers’ rights primarily through its voluntary SA8000 standard. Based on the ILO standards and U.N. Human Rights Conventions, SA8000 is widely accepted as a viable and comprehensive international ethical workplace management system.

The SA8000 standard’s elements are:

Child Labour:
No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 developing-country exception; remediation of any child found to be working

Forced Or Compulsory Labour:
No forced labor, including prison or debt bondage labor; no lodging of deposits or identity papers by employers or outside recruiters

Health And Safety:
Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water

Freedom Of Association And Right To Collective Bargaining:
Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining

Discrimination:
No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment

Disciplinary Practices:
No corporal punishment, mental or physical coercion or verbal abuse

Working Hours:
Comply with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement

Remuneration (Compensation):
Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic needs of workers and their families; no disciplinary deductions

Management Systems:
Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices.

Businesses have two options for SA8000 implementation according to the SAI:
certification to SA8000 and participation in the Corporate Involvement Program (CIP).

Certification to SA8000:
Certification is the process by which facilities submit to an independent audit against the SA8000 Standard. If a facility meets the Standard, it will earn a certificate attesting to its social accountability policies, management and operations. Companies that operate production facilities can seek to have individual facilities certified to SA8000 through audits by one of the accredited certification bodies. SA8000 certification is conducted by organizations accredited and overseen by SAI’s own auditors. Both certified and accredited organizations undergo semi-annual review and revisits.

SA8000 Corporate Involvement Program:
Companies that focus on selling goods or combine production and selling can join the SA8000 Corporate Involvement Program. The CIP is a two-level program that helps companies evaluate SA8000, implement the SA8000 Standard, and report publicly on implementation progress.

SA8000 Explorer (CIP Level One):
Evaluate SA8000 as an ethical sourcing tool via pilot audits

SA8000 Signatory (CIP Level Two):
Implement SA8000 as a step-wise approach in some or all of the supply chain through certification and communicate implementation progress to stakeholders via SAI-verified public reporting.”

A company could become SA 8000 Certified to provide additional assurances to others that promotional products are produced under widely accepted social conditions. Assessment of compliance to the SA8000 Standard and the issuance of SA8000 certifications is available only through SAI-accredited, independent organizations. A facility wishing to seek certification to SA8000 must apply to an SAI-accredited auditing firm, known as a Certification Body. SAI recommends that facilities contact at least three of the SAI-accredited Certification Bodies to provide a bid for certification service. SAI does not set a specific amount for the cost of the certification process—the size, scope and location of the facility determines the number of days and auditors needed to conduct the audit at the facility, which affects the cost. In general, the costs typically range between $500-$1,500 per day, as determined by each individual Certification Body.

SECTION 5.3: The Value Of A Code Of Conduct

The Code of Conduct is the tangible presentation of what you are doing to meet the expectations of the end buyer for product safety, social and environmental assurances. It is a statement of principles. It is what a supplier would hand to a distributor and what a distributor would hand to an end buyer when an end buyer expresses those expectations. It is your commitment. Many end buyers, particularly larger businesses, have already adopted their own Code of Conduct. There is no specific law that requires a Code of Conduct, but there is remarkable similarity among those that have been adopted. Many of them draw from working conditions standards that have been put forth by various international entities, government as well as non-governmental, and discussed earlier or previously or already touched upon and possibly refer to the page or section above.. In addition, many of the Codes include statements on environmental, safety and quality commitments.

Since a Code of Conduct is not mandatory, each company can compose its own Code of Conduct. End buyers are increasingly accustomed to seeing certain items in a Code of Conduct. For your convenience, we have provided a Code for our members to adopt that includes many of the common characteristics of existing codes. The statement in the Code of Conduct does not obligate an employer to anything more than that which is already required under U.S. law. However, the statement is widely accepted as an international principle as explained in the chapter on social conditions and is commonly expected by end buyers. At the end of the day, it is up to you to decide what to include in your Code of Conduct.

Further Reading On Social Standards:

The International Labour Organization (ILO): www.ilo.org
ILO Labor Standards: www.ilo.org/global/standards/lang–en/index.htm
ILO’s Rules Of The Game: www.ilo.org/wcmsp5/groups/public/—ed_norm/—normes/documents/publication/wcms_318141.pdf
ILO SA8000 Standard: www.sa-intl.org/index.cfm?fuseaction=Page.ViewPage&PageID=1463
Fair Labor Association (FLA): www.fairlabor.org/
The Social Accountability International (SAI): www.sa-intl.org
International Organization for Standardization (ISO): www.iso.org/iso/home.html
UN’s Declaration Of Human Rights: www.un.org/en/documents/udhr/

PPAI Best Practices And Resources:
Social Compliance Basic Audit Checklist
www.ppai.org/inside-ppai/corporate-responsibility/social-responsibility/Documents/SR-BP-Basic-Audit.pdf
California Supply Chain Transparency
www.ppai.org/inside-ppai/corporate-responsibility/product-responsibility/Documents/PR-BP-California-SupplyChain-Transparency.pdf
Adopt the PPAI Code of Conduct
www.ppai.org/inside-ppai/corporate-responsibility/social-responsibility/PPAI-Code-Of-Conduct

PART 6: Environmental Standards

SECTION 6.1: What It Means To Be Green
When an end buyer asks for a green product, the end buyer is generally referring to a broad set of expectations that are environmentally friendly or ecologically-friendly. Sometimes a green claim can relate to a specific quality of the product and packaging, like “Made from recycled material”. Other specific green claims might be an energy-efficient production process that says the production is carbonfineutral or the product is bio-based, which means, the product utilizes biological products or renewable, domestic, agricultural (e.g., plant, animal and marine), or forestry materials.

There is no specific standard that is likely to encompass an end-buyer’s specific expectations. Indeed, a specific interest may actually contradict another ecologically friendly concept. For example, a desire to have a product made from recyclables may require a production process that results in a significant carbon footprint. The ISO 14000 has some standards for environmental management and strategies. They do not establish specific criteria but set forth principles to guide the process.

SECTION 6.2: Federal Trade Commission
In 2011, the Federal Trade Commission (FTC), www.ftc.gov, reissued the Guides for the Use of Environmental Marketing Claims, also known as Green Guides or Guides. These guides were first introduced in 1992, and revised in 1996 and 1998. The Guides set forth the FTC’s thinking about environmental claims, and are designed to help marketers avoid making environmental marketing claims that are unfair or deceptive. The Commission can take action under the FTC Act if a marketer makes an environmental claim inconsistent with the Guides. The Guides apply to claims made by the manufacturer or distributor of an item about the environmental attributes of a product, package or service in connection with the marketing, offering for sale, or sale of such item or service to individuals, businesses or other entities. The Guides apply to all forms of marketing for products and services: advertisements, labels, package inserts, promotional materials, words, symbols, logos, product brand names and marketing through digital or electronic media, such as the internet or e-mail. They apply to any claim, express or implied, about the environmental attributes of a
product, package or service in connection with the sale, offering for sale or marketing of a product, package or service for personal, family or household use, or for commercial institutional or industry use.

General Green Guides Principles:

• Marketers must ensure that all interpretations of their claims are truthful, not misleading, and supported by a reasonable basis typically requiring competent and reliable scientific evidence.
• Unless it is clear from the context, an environmental marketing claim should specify whether it refers to the product, the product’s packaging, a service, or just to a portion of the product, package, or service.
• To prevent deceptive claims, qualifications and disclosures should be clear, prominent, and understandable.
• An environmental marketing claim should not overstate, directly or by implication, an environmental attribute or benefit.
• Comparative environmental marketing claims should be clear to avoid consumer confusion about the comparison.

SECTION 6.3: Non-Governmental Organizations
There are some organizations that have their own certification programs and some standards (e.g., Green Seal and Bluesign); however, most of those certifications apply only to narrow categories of products.

SECTION 6.4: Environmental Protection Agency (EPA)
The Environmental Protection Agency (EPA), www.epa.gov, has identified positive attributes that it recommends other government agencies consider during procurement. However, the presence of the attributes alone does not qualify a product or service as an environmentally preferable option.

The EPA suggests looking for positive attributes such as:

• Recycled content/Recyclability
• Product disassembly potential
• Durability/Reusability
• Reconditioned or remanufactured
• Other attributes with positive environmental effects

SECTION 6.5: ISO 14000 Series
Within the ISO 14000 series, ISO 14021- provides definitions of specific environmental labels claims such as those attributes listed by the EPA. The certification requirements for ISO 14001 provide additional assurances to end buyers that the company is committed to addressing environmental concerns.

In order to become ISO Certified, a company would secure the services of a third-party certification body (CB) accredited by the ANSI-ASQ National Accreditation Board (ANAB).

The ANAB offers these suggestions when selecting a CB:
❑ Accreditation by a reputable body.
❑ Industry experience, background, and expertise.
❑ Recommendations from your clients or customers.
❑ References provided by the CB.
❑ Scheduling issues and ability to meet your time frame.
❑ All aspects of the CB fee schedule.
❑ Your comfort level in establishing a long term relationship with a CB.

Because ISO 14021 sets specifications regarding environmental claims, common terms such as green, eco-friendly, environmentally safe and the like are not acceptable for an ISO 14021 certified company. The standard contains general requirements regarding “self-declared” claims and verification of those claims in order to ensure truthfulness and avoid misleading the consumer. As a result, an ISO 14021 accredited company would provide detailed claims in lieu of vague terms. These would be based base any environmental claims on thorough and comprehensive scientific methodology. Under the standard all information, criteria and results regarding the claim would be available upon request.

SECTION 6.6: Carbon Footprint
In recent years, there has been much discussion in the media about carbon footprint. Generally, a carbon footprint is a measurement of the amount of carbon dioxide (CO2)
emitted by an activity or over the product’s life cycle.

The life cycle assessment, commonly referred to as “cradle to grave,” entails comprehensive examination of a product’s environmental and economic aspects and tracks a product from the extraction of the various raw materials through the production and sale to use of the product, and, finally, its disposal. Transportation of the raw materials, the product and the waste is included and measured. ISO 14040:2006 and 14044 deal with life cycle assessment.

They are the accepted standards for life based environmental assessments across the globe.

The ISO 14040 standard
Addresses “framework” for life cycle assessment (LCA) studies and life cycle inventory (LCI) studies. The results of these studies are to be incorporated into the organization’s environmental responsibility goal and scope. However, application of LCA and LCI fall outside this standard.

The ISO 14044 standard
Addresses the requirements and guidelines for the technical application of LCA and LCI.

Compliance with these standards may provide end buyers with assurances that all steps are being taken to reduce a product’s carbon footprint. Another option to reduce a product’s carbon footprint is offset technology. The World Resources Institute defines a carbon offset as “a unit of carbon dioxide-equivalent, CO2e, that is reduced, avoided, or sequestered to compensate for emissions occurring elsewhere”. 1

1 Goodward, Jenna; Kelly, Alexia (August 2010). “Bottom Line on Offsets”. World Resources Institute. Retrieved 2010-09-08

There are non-governmental organizations, nonprofits, and commercial enterprises
that offer plans to allow you to offset the carbon footprint of your products. The US
Environmental Protection Agency (EPA) offers this advice:

“Renewable energy is electricity generated by fuel sources that restore themselves over a short period of time and do not diminish. Although some renewable energy technologies have an impact on the environment, renewables are considered environmentally preferable to conventional sources and, when replacing fossil fuels, have significant potential to reduce greenhouse gas emissions.”
https://www.epa.gov/statelocalclimate

“State and local governments have an important role to play in advancing clean energy and reducing greenhouse gas emissions that contribute to climate change. Governments can lead by example by implementing programs within their own buildings, operations, and procurement policies that reduce greenhouse gas emissions and save energy and money.”
https://www3.epa.gov/climatechange/basics/

“Driving a car, using electricity to light and heat your home, and throwing away garbage all lead to greenhouse gas emissions. You can reduce emissions through simple actions like changing a light bulb, powering down electronics, using less water, and recycling.”
www.epa.gov/climatechange/wycd/

The EPA site provides several steps steps citizens and businesses can take to protect the climate, reduce air pollution, and save money.

Some offset schemes may involve planting trees but it can take many years for the environmental benefits to be realized—and it is difficult to measure how much carbon is actually saved. Renewable energy and energy efficiency projects can be good projects to support as these can have immediate benefits to the environment. There are many different types of carbon offsetting projects.

Examples Of Carbon Offsetting Projects:

• Providing people in Aceh, Indonesia, with newly developed solar cookers and heat retention containers for cooking, heating, sterilizing water, and preserving food
• Implementing energy efficiency measures at a resort-hotel in India
• Harnessing run of river, without dams, hydropower in Fiji
• Establishing the first wind energy plant in Cyprus
• Collecting methane to generate electricity from landfill sites in Durban, South Africa
• Generating electricity from the bagasse residue produced by a sugar mill in Ecuador

According to the United Nations (UN), “emissions trading schemes may be established as climate policy instruments at the national level and the regional level. Under such schemes,
governments set emissions obligations to be reached by the participating entities. The European Union emissions trading scheme is the largest in operation.”

When purchasing offsets you should look out for Certified Emissions Reductions (CERs) to ensure that they receive recognized and reputable credits. CERs are verified by the UN and meet the requirements of the Kyoto Protocol.

2Source: Electronic Industry Citizenship Coalition (EICC) Code of Conduct, http://www.eiccoalition.org/standards/code-of-conduct/

Further Reading On Environmental Standards

PPAI Environmental Responsibility Site:
www.ppai.org/inside-ppai/corporate-responsibility/environmental-responsibility/

The Federal Trade Commission (FTC): www.ftc.gov

FTC Act: www.ftc.gov/enforcement/statutes/federal-trade-commission-act

FTC Green Guides: www.ftc.gov/news-events/media-resources/truth-advertising/green-guides

The Environmental Protection Agency (EPA): www.epa.gov/

ISO 14000 Environmental Standards: www.iso.org/iso/home/standards/management-standards/iso14000.html

ISO 14001 Environmental Management Systems: www.iso.org/iso/home/store/catalogue_ics/catalogue_detail_ics.htm?csnumber=60857

ISO 14021 Environmental Labels And Declarations: www.iso.org/iso/home/store/catalogue_ics/catalogue_detail_ics.htm?csnumber=66652

ANAB List Of Accredited Organizations: http://anab.org/

NATF Environmental Trends: www.unepfi.org/fileadmin/documents/greenprods_01.pdf

PART 7: Federal Regulation And Enforcement

SECTION 7.1: Consumer Product Safety Commission
As of 2015, the U.S. Consumer Product Safety Commission (CPSC), www.cpsc.gov, has jurisdiction over about 15,000 types of consumer products. The CPSC draws its authority from five statutes:

Consumer Product Safety Act (CPSA)
Flammable Fabrics Act (FFA)
Poison Prevention Packaging Act (PPPA)
Refrigerator Safety Act (RSA)
Federal Hazardous Substances Act (FHSA)

CPSA
Enacted in 1972, established the Commission, defines its basic authority, and provides that when the CPSC finds an unreasonable risk of injury associated with a consumer product it can develop a standard to reduce or eliminate the risk. The CPSA also provides the authority to ban a product if there is no feasible standard and it gives CPSC authority to pursue recalls for products that present a substantial product hazard.

FHSA
The FHSA requires that certain hazardous household products, hazardous substances, bear cautionary labeling to alert consumers to the potential hazards that those products present and to inform them of the measures they need to take to protect themselves from those hazards. Any product that is toxic, corrosive, flammable or combustible, an irritant, a strong sensitizer, or that generates pressure through decomposition, heat, or other means requires labeling. If the product may cause substantial personal injury or substantial illness during or
as a proximate result of any customary or reasonable foreseeable handling or use, including reasonable foreseeable ingestion by children.

The FHSA gives the Commission authority to ban by regulation a hazardous substance if it determines that the product is so hazardous that the cautionary labeling required by the act is inadequate to protect the public. Any toy or other article that is intended for use by children and that contains a hazardous substance is also banned under the FHSA if a child can gain access to the substance. In addition, the Act gives the Commission authority to ban by regulation any toy, or other article intended for use by children that presents a mechanical, electrical or thermal hazard.

SECTION 7.2: Reporting
Under the CPSA, there are three principal reporting requirements. Any manufacturer, importer, distributor or retailer of consumer products must notify CPSC immediately if it could be concluded that one of its products:

• Has a defect that creates a substantial risk of injury to the public;
• Creates an unreasonable risk of serious injury or death; or
• Violates a consumer product safety standard or ban of the product.

A manufacturer must report to the CPSC when any of its consumer products has been involved in three or more lawsuits in a two-year period. Each lawsuit must have alleged death or grievous bodily injury and resulted in a settlement or a court judgment in favor of the person who filed the suit. A manufacturer, distributor, retailer or importer of marbles, small balls, latex balloons or toys or games that contain such items must report to CPSC any incidents of children choking on those items.

The National Electronic Injury Surveillance System (NEISS) monitors patients who come into 100 hospital emergency rooms nationwide. From it the CPSC develops statistical estimates
of product-related injuries. Last year the NEISS system developed reports on product-related injuries from more than 410,000 emergency room visits.

SECTION 7.3: Enforcement
In addition to acting on the reports required by the law, the CPSC enforces existing regulations and laws by conducting both domestic surveillance through inspections of the regulated industry and import surveillance at ports of entry and following up on injury reports, consumer complaints, trade complaints or other allegations or indications that a firm is manufacturing or distributing a consumer product not in compliance with the law.

Under the CPSA, any person who knowingly violates the CPSA is subject to a civil penalty not to exceed $8,000 for each violation. Under the FHSA, the Commission may seek a civil penalty of up to $8,000 per violation product, up to a maximum of $1.825 million for any related series of violations. There are criminal penalties and the CPSC can seek injunctive relief or seize products.

Where appropriate, based on the nature of the hazard and the likelihood of injury associated with the non-complying product, the CPSC staff will request that the firm recall the product from the marketplace, including consumers who already own the product. It may provide for the return of a product to the manufacturer or retailer for a cash refund or a replacement product; for the repair of a product, and/or for public notice of the hazard.

Once the CPSC staff determines a product violates a specific statute or regulation, CPSC staff generally notifies the responsible firm, the product manufacturer, importer, distributor or retailer. Notification to the responsible firm is usually in the form of an official letter, referred to as a Letter of Advice (LOA).

While the CPSC has the authority to require a mandatory product recall, due to the lengthy and costly nature of the proceeding that it must undertake in order to issue such a recall, the majority of the recalls are voluntary on the part of the recalling firm, the details of which the CPSC negotiates with that firm, generally after a significant exchange of information between the firm and the CPSC.

The majority of recalls are initiated under a “Fast Track” recall program. Under this program the subject firm agrees to initiate a recall within 20 days after being contacted by the CPSC, generally in exchange for the lack of a formal finding by the CPSC that a product is defective and a substantial product hazard exists.

In calendar year 2014, the CPSC announced 715 recalls of defective products, representing more than 120 million individual products. Other corrective actions, short of a recall, including modifying the product, issuing a consumer warning, or through other means were ordered for more than 300 products directly involving a risk of injury to children.

The CPSC publishes a comprehensive guide, entitled Regulated Products Handbook.

SECTION 7.4: Recall Handbook
The CPSC also publishes a comprehensive handbook on recalls. The Recall Handbook is a useful tool for identifying potential problems and actions a company might want to take on a voluntary proactive basis when a potential problem has been identified.

Some of the questions a company must be prepared to answer in the event of a potential recall:

❑ What is the defect that causes the product hazard?
❑ What caused the product defect to occur in the first place?
❑ Where are the unsafe products? How many are there?
❑ Did the product fail to comply with government safety regulations? How?
❑ Was the government or the appropriate regulatory body informed about the defect or lack of compliance?
❑ Has the company discontinued production and shipment of these products to others in the distribution channel?
❑ Has the company notified those selling the product to stop selling the product and asked them to help identify consumers who own the product?
❑ Has the company started reviewing existing databases to identify potential product owners, e.g., product registration and customer service records?
❑ Has a press release been prepared announcing the recall? What other forms of public notice are needed?
❑ Has a toll-free telephone service been set up that will be able to handle the number of calls expected after the recall is announced?
❑ What is the company’s estimate of the cost of the product recall campaign?
❑ Is the company prepared to deploy manpower and/or fund an effort to provide replacement parts for defective products or to exchange them for new products that do not have the problem?
❑ Has a plan been developed to ship replacement parts or new units to others in the distribution channel participating in the product recall, or otherwise repair units in their inventory?
❑ Is the company prepared to monitor the product recall and provide timely reports to the Commission on the progress of the recall?
❑ How is the company upgrading its quality control or risk analysis procedures to prevent a similar product recall in the future?

Further Reading On Federal Regulation Of Consumer Products:

Consumer Product Safety Commission (CPSC): www.cpsc.gov
Consumer Product Safety Act (CPSA): www.cpsc.gov/PageFiles/105435/cpsa.pdf
Federal Hazardous Substances Act (FHSA): www.cpsc.gov/en/Business–Manufacturing/Business-Education/Business-Guidance/FHSA-Requirements/
Flammable Fabrics Act (FFA) Poison Prevention Packaging Act (PPPA): www.cpsc.gov/en/Regulations-Laws–Standards/Statutes/Poison-Prevention-Packaging-Act/
Refrigerator Safety Act (RSA): www.cpsc.gov//Global/PDF/Statues/rsa.pdf
National Electronic Injury Surveillance System (NEISS): www.cpsc.gov/en/Research–Statistics/NEISS-Injury-Data/
CPSC’s Fast Track Recall Program: www.cpsc.gov/en/Business–Manufacturing/Recall-Guidance/CPSC-Fast-Track-Recall-Program/
CPSC Regulated Products Handbook: www.cpsc.gov//Global/Business-and-Manufacturing/Business-Education/RegulatedProductsHandbook.pdf
CPSC Recall Handbook: www.cpsc.gov//PageFiles/106141/8002.pdf

PPAI Best Practices And Resources:

PPAI’s Best Practices: http://www.ppai.org/inside-ppai/corporate-responsibility/product-responsibility/bestpractices
Product Recall Preparedness: http://www.ppai.org/inside-ppai/corporate-responsibility/product-responsibility/Documents/PR-BP-Recall-Preparedness.pdf
PPAI’s Product Recall Manual: http://www.ppai.org/inside-ppai/corporate-responsibility/product-responsibility/Documents/PR-Recall-PPAI-Product-Recall-Manual.pdf

PART 8: Product Liability

SECTION 8.1: Law
“Product liability” is a broad term that encompasses many difference standards of responsibility for a product. For the most part, it is a matter of state law and state court-made law, also known as common law, both vary from state to state. Generally, the claims are based on negligence, strict liability or a breach of warranty of fitness. Most often, product liability claims are based on a defective product, which could be a design defect or manufacturing defect or sometimes a marketing defect, in the latter case improper instructions or failures to warn.

While the goal is not to be defending against a product liability claim in a court, the more practical concerns are addressing the allocation of liability by contract and managing risk through insurance.

SECTION 8.2: Contracts And Language
In the context of contractual obligations, many legal terms are frequently linked to any discussion of product responsibility. Defend, indemnify and hold harmless, are frequently used in conversation interchangeably, but have slightly different meanings. They are frequently found together in the same contract provision.

An agreement to defend
When one party to the agreement agrees to pay the fees the other party incurs for representation against claims and lawsuits.

Some of the issues the come into dispute include:
– When does the obligation arise?
– What is a claim?
– Does the obligation include all litigation costs and experts?
– Who chooses the representation?

An agreement to indemnify
When one party to the agreement agrees to pay for the other party’s financial losses such as settlement costs, court awards and other specific expenses. Most of the issues in this situation relate to the financial losses.

An agreement to hold harmless
When one party to the agreement agrees that the other party will be freed of any liability resulting from the sale or use of the products. In some respects, this is the most confusing of the three. The issue is whether the party agreeing to hold the other party harmless is relinquishing its own claims against the other party or agreeing to hold the other party harmless from the claims of others

A typical provision reads as follows:

“X shall defend, indemnify and hold harmless Y from and against any and all demands, claims, actions, legal proceedings, damages, liability, costs and expenses of whatsoever kind and nature (including reasonable attorneys’ fees) arising out of or related to sale or use of the promotional products.”

A waiver or release of liability

is the opposite side of the coin. It means one party gives up the right to pursue the protections afforded by the duty to defend, indemnification and hold harmless. Technically, the waiver is an agreement not to pursue a right, while the release is giving up the right, but they are essentially equivalents.

Typical simple examples of provisions read as follows:

“Y hereby releases X from any liability from demands, claims, actions, legal proceedings, damages, liability, costs and expenses of whatsoever kind and nature (including reasonable attorneys’ fees) arising out of or related to sale or use of promotional products.”

“Y hereby waives its right to any and all demands, claims, actions, legal proceedings, damages, liability, costs and expenses of whatsoever kind and nature (including reasonable attorneys’ fees) arising out of or related to sale or use of the promotional products.”

The waiver or release generally is limited to the two parties. For example, if the supplier wishes protection from end buyers, it would seek the indemnification, defend and hold harmless provision from a distributor, not a waiver or release.

Warranties and representations
address a variety of concerns from intellectual property authorization to fitness for purpose. To reaffirm the obligation of a party as it relates to product responsibility, clauses could be added to the warranties and representations.

Typical simple examples of such provisions read as follows:

“X represents and warrants that products subject to this agreement comply with all applicable United States and States’ laws currently in force.”

“X represents and warrants that products subject to this agreement were produced in compliance with all applicable national and local labor and environmental laws.”

Sometimes, warranties and representations include references to specific law or requirements:

“X represents and warrants that products subject to this agreement comply with all applicable United States and States’ laws currently in force including but not limited to the Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA).”

“X represents and warrants that all products subject to this agreement were produced in facilities that meet standards of social accountability including: no form of forced labor including indentured, prison, bonded or slave labor; no use of physical or verbal harassment or abuse to discipline employees; no child labor; respect for the rights of employees to associate, or organize or join a union without fear of reprisal or interference; no discrimination in hiring and employment practices on the basis of age, nationality, race, religion, social or ethnic orientation, gender or disability; compliance with all applicable wage, work hours, benefits, and overtime laws and regulations; provision of a safe, healthy and secure workplace; and provision of proper sanitation, lighting, ventilation and fire safety protection.”

SECTION 8.3: Product Liability Insurance
Any party in the product delivery channel may want to obtain product liability insurance. Most businesses have a commercial general liability (CGL) policy, which may cover some aspects of a claim related to a product injury. A product liability policy is a separate policy or an additional endorsement on a CGL that specifically covers product-related claims.

It is important to know what is covered and what is not covered. In product liability insurance, consider the following:

Does the policy cover you if there are violations of specific safety laws or specific risks (e.g. lead poisoning)?
– If it is excluded, you may need to ask for a rider for additional coverage.

Some policies cover only situations in which the injury occurs and a claim is made while the policy is still in force.

Are there aggregate limits?
Typically, a distributor would seek to be added to a supplier’s policy. Most policies have aggregate limits, so if there is a claim or claims, the amount the insurer will pay on behalf of any or all of the insured is limited to one overall amount; each of the insured is not covered up to the limit of the policy.

Some insurance companies now offer product recall insurance that covers expenses related to product recalls. If you are evaluating this insurance, please consider:

What constitutes a recall?

Is it a voluntary or a government-mandated recall?

Whose expenses are covered? Just the insured or other parties as well?

What is the cost associated with such a policy?

SECTION 8.4: Imported Products
While agreements can be enforced against foreign manufacturers and foreign manufacturers can be sued for product liability claims, for all practical purposes, end buyers want the assurance that there is someone in the United States who accepts responsibility for a product. It is possible that you will spend extra time and resources on initiating litigation in another country and frequently the laws do not favor an out of country plaintiff.

The importer should require the foreign source to have U.S. insurance:

“X agrees to obtain and maintain in effect during the entire period of this agreement and for a period of (number) years after the termination thereof, a commercial general liability insurance policy with a limit of not less than ($ amount) for each occurrence underwritten by a United States insurer.”

If insurance cannot be secured, at least request a certificate of insurance from the foreign source’s insurance company. This will provide you with the details of their coverage.

Require the foreign source to accept the jurisdiction of U.S. courts if a claim involving its products is filed.

Glossary Of Terms

Accreditation: recognition by an independent accrediting body, that a certification body adheres to specific standards.

American Society For Testing and Materials (ASTM): Founded in 1902, one of the oldest SDOs and now produces the largest number of non-governmental, voluntary standards in the United States and many are used worldwide. It is the source of many of the product lines of interest to the promotional products industry.

ASTM F963: a mandatory requirement for toys while the Consumer Product Safety Commission (CPSC) studies the effectiveness of the standard and issues final consumer guidelines for toy safety.

Basic Standard: has a broad ranging effect in a particular field, such as a standard for metals that affects a range of products from cars to screws.

Carbon Dioxide-equivalent (CO2e): A standard unit for measuring carbon footprints. The idea is to express the impact of each different greenhouse gas in terms of the amount of CO2 that would create the same amount of warming.

Carbon Footprint: the amount of carbon dioxide and other carbon compounds emitted due to the consumption of fossil fuels by a particular person, group, etc.

Carbon Offset: a unit of carbon dioxide-equivalent, CO2e, that is reduced, avoided, or sequestered to compensate for emissions occurring elsewhere.

Certification Of Conformity/Certification Marks/Marks Of Conformity: document issued under the rules of a certification system, providing confidence that a duly identified product, process, or service is in conformity with a specific standard or other normative document.

Certification: the process of providing assurance that a product conforms to a standard or specification or that an organization and/or individual is competent to perform a certain task.

Children’s Product: A consumer product that is designed or intended for use by children 12 years of age or younger.

Children’s Toy: A consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays.

Code Of Conduct: a set of rules outlining the social norms and rules and responsibilities of, or proper practices for, an individual, party or organization. Related concepts include ethical, honor, moral codes and religious laws.

Commercial General Liability: is coverage that will protect your business in the event that you are sued. CGL coverage is designed to protect against claims bodily injury or property damage.

Conformity Assessment: Process of determining whether someone or something meets the requirements of a standard.

Consumer Product Safety Commission (CPSC): A U.S. government agency that protects the American public from products that may create a potential hazard to safety.

Consumer Product Safety Improvement Act (CPSIA): Signed into law on Aug. 14, 2008. It is designed to allow The CPSC to better regulate the safety of products made and imported for sale in the U.S.

Consumer Product: Any article, or component part thereof, produced or distributed for sale to a consumer for use in or around a permanent or temporary household or resident, a school, in recreation, or otherwise, or for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation or otherwise.

Data Requirement Standard: provide necessary values for a product or service.

Environmental Protection Agency (EPA): an agency of the United States federal government whose mission is to protect human and environmental health.

Federal Hazardous Substances Act: Public law that requires that certain hazardous household products (“hazardous substances”) bear cautionary labeling to alert consumers to the potential hazards that those products present and to inform them of the measures they need to protect themselves from those hazards.

Federal Trade Commission (FTC): a federal agency, established in 1914, that administers antitrust and consumer protection legislation in pursuit of free and fair competition in the marketplace.

Federal Trade Commission Act: An independent federal agency whose main goals are to protect consumers and to ensure a strong competitive market by enforcing a variety of consumer protection and antitrust laws.

First Party Certification: an individual or organization providing the good or service offers assurance that it meets certain claims.

Food and Drug Administration (FDA): A federal agency in the Department of Health and Human Services established to regulate the release of new foods and health-related products.

Guides For The Use of Environmental Marketing Claims (Green Guides): FTC’s thinking about environmental claims, and are designed to help marketers avoid making environmental marketing claims that are unfair or deceptive.

Inspection: conformity evaluation by observation and judgment accompanied as appropriate by measurement, testing or gauging.

Interface Standards: concern the compatibility of products.

International Labour Organization (ILO): a “tripartite” United Nations agency that brings together representatives of governments, employers and workers to jointly shape policies and programs.

International Organization for Standardization (ISO): a non-governmental organization that promotes the development of standardization and related activities to facilitate the international exchange of goods and services, and to develop cooperation in intellectual, scientific, technological, and economic activity.

ISO SA8000: An auditable certification standard that encourages organizations to develop, maintain, and apply socially acceptable practices in the workplace.

Kyoto Protocol: an international treaty, which extends the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits State Parties to reduce greenhouse gases emissions, based on the premise that (a) global warming exists and (b) man-made CO2 emissions have caused it.

Life cycle Assessment: A tool for the systematic evaluation of the environmental aspects of a product or service system through all stages of a products life cycle.

Manufacturer’s Self-Declaration Of Conformity: when a manufacturer or supplier attests to the fact that his or her product meets one or more standards.

Process standards: specify requirements to be met by a process, such as a manufacturing line’s operation, in order to function effectively.

Product Liability: The legal liability a manufacturer or trader incurs for producing or selling a faulty product.

Product Life cycle: the cycle through which every product goes through from introduction to withdrawal or eventual demise.

Product Standards: establish qualities or requirements for a product, or related group of products, to assure that it will serve its purpose effectively.

Second Party Certification: an association to which the individual or organization belongs provides the assurance.

Service Standards: establish requirements to be met to achieve the designated purpose effectively.

Standard Developing Organizations (SDO): refers to the thousands of industry- or sector-based standards organizations that develop and publish industry specific standards.

Standard: A prescribed set of rules, conditions or requirements concerning definitions of terms; classification of components; specification of materials, performance, or operations; delineation of procedures; or measurement of quantity and quality in describing materials, products, systems, services, or practices.

Terminology Standards: define words permitting representatives of an industry to use a common, clearly understood language.

Testing Standards: define the test methods to be used to assess the performance or other characteristics of a product.

Third-Party Certification: process by which the producer’s claim of conformity is validated by a technically and otherwise competent third party, a body not controlled by or under the influence of the producer or buyer.

Voluntary Standard: safety standards developed through collaboration and research of best safety practices