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Consumer product safety

Research report

Released 07 / 02 / 2006

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  • Key points
  • Media release
  • Contents

The current regulatory system plays a necessary and important role in identifying and removing unsafe products through recalls, bans and standards. Overall, the regulatory system in combination with other mechanisms — the market, the product liability regime, media scrutiny and consumer advocacy — deliver a reasonable level of product safety, as expected by Australian consumers.

Nevertheless there is considerable scope to make the regulation of consumer product safety more efficient, effective and responsive.

A strong case exists for national uniformity in the regulation of consumer product safety. Current differences create inefficiencies in a resource constrained environment, including duplication of effort and inconsistent approaches to similar risks and hazards. The preferred model is to have one national law, the Trade Practices Act, and a single regulator, the Australian Competition and Consumer Commission.

If this is not achievable, jurisdictions should harmonise core legislative provisions, including a changed requirement that permanent bans and mandatory standards should only be adopted on a national basis.

There is also merit in the following legal reforms:

  • including 'reasonably foreseeable use' in the definition of 'unsafe';
  • ensuring that services related to the supply, installation and maintenance of consumer products are covered by all jurisdictions; and
  • requiring suppliers to report products which are associated with serious injury or death.

The Commission also proposes a number of administrative reforms, including:

  • consistently making hazard identification and risk management more central to policy making, standard setting and enforcement;
  • improving the focus and timelines for the development of mandatory standards;
  • providing better regulatory information to consumers and businesses through a 'one-stop shop' internet portal; and
  • establishing a national clearinghouse for gathering information and analysis from existing sources to provide an improved hazard identification system.

Efforts to improve the safety of consumer products would also benefit from:

  • conducting a comprehensive baseline study of consumer product-related accidents; and
  • reviewing product recall guidelines.

A new national approach is needed to improve Australia's consumer product safety system, according to a report released by the Productivity Commission: Review of the Australian Consumer Product Safety System.

Commissioner Robert Fitzgerald said: 'The current consumer product safety system is delivering a reasonable level of product safety. But there are significant regulatory inconsistencies between governments that reduce the efficiency and effectiveness of the system. These should be addressed.'

The adoption of a single national law and regulator, replacing the States and Territories authority, is recommended by the Commission as a key reform to create a more consistent and responsive consumer product protection system.

'Given the Trade Practices Act and the Australian Competition and Consumer Commission already cover most consumer product suppliers, it is both logical and appropriate that they be adopted as the single law and regulator', said Mr Fitzgerald.

'If this cannot be achieved, there at least should be harmonisation of consumer product safety laws and enforcement practices across Australia. This should include an agreement that permanent product bans and mandatory standards should only be applied on a national basis', he said.

The Commission has also called for the responsiveness of the system to be improved by:

  • introducing a new requirement for suppliers to notify the regulator of products associated with serious injury or death;
  • developing a nationally coordinated product hazard identification system; and
  • improving the targeting and timeliness of standards-making processes.

To address information gaps, the Commission has endorsed a number of initiatives including:

  • a national internet based one-stop shop for business and consumer information; and
  • a one-off base line research study into the incidence and costs of product-related accidents, and an analysis of their causes.

Cover, Copyright, Foreword, Terms of reference, Contents, Abbreviations and explanations, Key points, Overview, Findings and recommendations

1 Introduction
1.1 Background to the study
1.2 Scope of the study
1.3 The Commission's assessment framework
1.4 Conduct of the study

2 Policy principles
2.1 Safety and its trade–offs
2.2 Markets and consumer product safety
2.3 Market imperfections
2.4 Living with risk: private responses to unsafe products
2.5 The role of government
2.6 Existing government responses
2.7 Improving government intervention
2.8 Good regulation
2.9 Compliance and enforcement
2.10 Summing up

3 Legal framework
3.1 The product safety provisions
3.2 Product liability arrangements

4 Evaluation of the current system
4.1 Are there sufficient incentives and constraints to encourage the supply of safe consumer products?
4.2 What is the incidence and cost of consumer product-related injury?
4.3 There is significant scope to improve the regulation of consumer product safety
4.4 The broader impacts of the consumer product safety system
4.5 Summing up

5 General safety provision
5.1 Introduction
5.2 Experience with general safety requirements
5.3 Defining safety and demonstrating compliance
5.4 Potential benefits of a GSP
5.5 Potential costs associated with a GSP
5.6 Would a GSP deliver net benefits?

6 Foreseeable use
6.1 Introduction
6.2 Current approach — TPA
6.3 Alternative approaches
6.4 Participants' views
6.5 How should reasonably foreseeable use be defined?
6.6 Costs and benefits of including foreseeable use
6.7 Conclusion

7 Services and second-hand goods
7.1 Services
7.2 Second-hand goods

8 Safety criteria and thresholds
8.1 Factors to consider in determining safety thresholds
8.2 How should safety thresholds be harmonised?

9 Improved information for hazard identification and risk assessment
9.1 Current information sources and problems
9.2 Early warning information
9.3 Better use of complaints data
9.4 Business monitoring and reporting
9.5 The role of research

10 Better informed consumers and businesses
10.1 The context
10.2 Informing consumers
10.3 Informing suppliers

11 Removing unsafe goods
11.1 The current recall system
11.2 Requirement for businesses to recall unsafe products
11.3 Recall audit power

12 Design and standards
12.1 The role of design in reducing injury
12.2 The role of standards in improving design
12.3 The way forward

13 National approaches
13.1 Why greater national consistency is warranted
13.2 What areas should be harmonised?
13.3 How should harmonisation be achieved?
13.4 The ACCC's role
13.5 Summing up

A Submissions and meetings

B Inconsistencies between jurisdictions
B.1 Inconsistencies in legislation
B.2 Inconsistencies in the adoption of standards, bans and recalls
B.3 Inconsistencies in enforcement
B.4 Summary

C Product-related injury: incidence and cost issues
C.1 Incidence: injuries and deaths caused by consumer products
C.2 Cost of product-related injury

D International approaches
D.1 The European General Product Safety Directive (GPSD)
D.2 The US Consumer Product Safety Commission

E Alternative regulatory models
E.1 General safety provisions
E.2 Cooperation between governments