Corporations put profit before safety Clearly, dangerous goods are slipping past the safety standards set up by government agencies. By JAY COOK Published on: 09/18/07 First it was Vioxx. Then it was poisonous pet food. Now it's toxic toys and chemically enhanced popcorn. Last year alone, unsafe products killed more than 8,000 Americans and sent millions more to emergency rooms. But let's not lay the blame on the crippled regulatory agencies or the Chinese. For once, let's lay the blame where it really belongs: on the doorstep of those megacorporations that cut corners and break rules to gain unfair advantage over American businesses, big and small, that don't. Recently, The Wall Street Journal reported that Mattel, which has recalled more than 20 million dangerous toys this summer alone, has delayed reporting product defects because it finds the reporting rules "unreasonable." According to The New York Times, the Consumer Product Safety Commission has fined Mattel twice for such delays since 2001. The commission collects millions of dollars in penalties every year from U.S. companies that import or sell products that violate mandatory safety standards, fail to report potential hazards and fail to report lawsuits and settlements for product-related injuries. And those are just the ones that get caught. Clearly, dangerous goods are slipping past the safety standards set by the many regulatory government agencies that are supposed to be protecting us, including the Food and Drug Administration and the Environmental Protection Agency. Last year, Dr. David Graham, the senior FDA drug safety researcher who blew the whistle on dangers of the pain-killer Vioxx, told the Senate Finance Committee that "the FDA is incapable of protecting America from unsafe drugs or from another Vioxx." Now we're learning that the EPA has been suppressing a report on the possible dangers of a chemical used in microwave popcorn. Copies of the report were provided to popcorn producers last July, but kept secret from the public. But even with potent regulatory enforcement, Americans injured by defective products have only one place to turn for a remedy: our court system. But that, too, is being neutered by the same forces that are muzzling our watchdogs. A multimillion-dollar propaganda machine has convinced many of us (and our elected officials) that tethering our tort system will improve the economy. It may be just the opposite. A briefing paper published last year by the Economic Policy Institute concluded: "The costs of the tort system have been grossly exaggerated, and its supposed impact on job creation, research and development, productivity, and profits has been exaggerated or simply invented. With respect to job creation in particular, significant tort law change would be more likely to slow employment growth than to promote it." But the so-called "tort reform" movement marches on in perfect step with government deregulation. We've watched state after state weaken the ability of citizens to seek redress in the courts. Access to justice for "the little guy" is the real target of these "reforms"— not the "problems" they've trumped up to trick us into giving them what they really want: damage controls that take the teeth out of our juries and the bite out of compensating the victims of their corner-cutting. Tort law is a small but important facet of our civil justice system. We call it a tort when somebody acts unreasonably and harms another person's body, property, legal rights or reputation. You can't call the police when somebody commits a tort, but you can file a suit in the civil courts to seek an appropriate legal remedy. The rules of our tort system are roughly the same common-sense principles we all learned as kids: Everybody should play fair. The one who broke the rules of fair play should pay for the damage they caused. Our Founding Fathers understood that we needed these systems in place to make us safe and regulate the practices of fair play. Let's cut to the chase: There's nothing wrong with making an honest buck. America was built on hard work and free enterprise. There's nothing wrong with wanting higher profits. The American Dream still lives or dies in the profit margin. But there is something wrong when profit-making turns into corner-cutting that puts public safety in peril. And there is definitely something wrong when some conscienceless megacorporations engage in "remedy rigging": gaming the system so that even when they cheat and get caught, they get no more than a gentle slap on the hand. - 81 - 90

SHANGHAI, Sept. 7 — When Mattel, the world’s largest toy maker, announced its third recall in six weeks this month, the company asked consumers to return toys because they contained dangerously high levels of lead paint. Toxic paint also turned up in several other products Mattel recalled in recent weeks, and in about 16 other recalls this year, including the popular Thomas & Friends train sets, according to the United States Consumer Product Safety Commission. All the products were made in China. Why is lead paint — or lead, for that matter — turning up in so many recalls involving Chinese-made goods? The simplest answer, experts and toy companies in China say, is price. Paint with higher levels of lead often sells for a third of the cost of paint with low levels. So Chinese factory owners, trying to eke out profits in an intensely competitive and poorly regulated market, sometimes cut corners and use the cheaper leaded paint. On the books, China’s paint standards are stricter than those in the United States, requiring that paint intended for household or consumer-product use contain no more than 90 parts of lead per million. By comparison, American regulations allow up to 600 parts per million. The regulations are supposed to safeguard health, particularly in cases involving children, where ingesting excessive amounts of lead has been linked to disorders including mental retardation and behavioral problems. But enforcement of the regulations in China is lax. “The standard doesn’t matter,” said Scott Clark, a professor of environmental health at the University of Cincinnati. “Remember, in the Soviet Union during the cold war, they had very high standards on the books, but they never enforced them. It was just for show.” Dr. Clark and a team of investigators sampled paint supplies in Shanghai and other parts of China in recent years, and in some 26 percent of the cases, they said, the paint met neither American nor Chinese standards. Even goods at high-end shopping malls in Shanghai contained unacceptable levels of lead. But Mr. Clark said that China was not alone in producing such tainted goods. “We also looked at India, Malaysia and Singapore,” he said, “and only Singapore met the requirements.” The General Administration of Quality Supervision, Inspection and Quarantine in China — which has some oversight authority over paint regulation — did not respond to questions about the prevalence of lead paint and about the inspection regimen. But some Chinese toy makers were more forthcoming. They acknowledged that they use paint with high levels of lead; others said they knew of other companies that did — sometimes because lead paint is cheaper, sometimes because it is easier to apply to hard surfaces and to produce richer color. Ms. Zhang, a sales manager at Big Tree Toys, a company in Shantou in southern China, who did not want her first name used, said leaded paint was about 30 percent cheaper than paint without lead. She noted that some countries, in the Middle East, for instance, did not restrict lead content. But Ms. Zhang insisted that if her company used leaded paint, it disclosed that. “It depends on the client’s requirement,” she said. “If the prices they offer make it impossible to use lead-free paint, we’ll tell them that we might have to use leaded paint. If they agree, we’ll use leaded paint. It totally depends on what the clients want.” Chen Tao, sales manager at the Chenghai Guangxin Plastic Toys Factory, also in Shantou, said his plant did not use lead paint at all. But he added that Chinese regulators were essentially absent. “There is a national standard on the lead level in toys,” he said. “But no one really enforces it. Factories can pick whatever paint they want.” Another problem is the abundant supply of industrial paint in China, used on buildings, bridges and cars as well as sidewalks and other outdoor surfaces. Several paint companies said the government had no formal standard on lead in industrial paint. As a result, a lot of cheap industrial paint may be finding its way into toy factories and even households. While the United States still allows paint with higher levels of lead to be used outdoors and in many industrial settings, paint with high lead content is slowly being phased out of even industrial use, experts say, partly because it can pose dangers to work crews who apply or remove it. Lead paint is not the only problem in China. Lead is increasingly turning up in children’s jewelry, for instance. - 82 - 90

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