Commonwealth Numbered Regulations - Explanatory Statements

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TRADE PRACTICES (CONSUMER PRODUCT SAFETY STANDARDS) AMENDMENT REGULATIONS 2004 (NO. 1) 2004 NO. 332

Subsection 172(1) of the Trade Practices Act 1974 (the Act) provides, in part, that the Governor-General may make regulations not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Paragraph 65C(1)(a) of the Act provides that a corporation shall not, in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer, if the goods are of a kind in respect of which there is a consumer product safety standard and they do not comply with that standard.

Subsection 65C(2) of the Act provides that a regulation may, in respect of goods of a particular kind, prescribe a consumer product safety standard consisting of such requirements as are reasonably necessary to prevent or reduce risk of injury to any person. These requirements may relate to: performance, composition, contents, methods of manufacture or processing, design, construction, finish or packaging of the goods; testing of the goods during, or after the completion of, manufacture or processing; and the form and content of markings, warnings or instructions to accompany the goods.

The Trade Practices (Consumer Product Safety Standards) Regulations 1979, amongst other things, establish product safety standards for elastic luggage straps.

Elastic luggage straps commonly comprise an elastic cord fitted with attachment hooks at each end, and are used for a wide variety of tie-down functions. Typically they are an inexpensive item manufactured overseas.

The purpose of the amending Regulations is to extend the existing product safety standard relating to elastic luggage straps, subject to an exclusion from the scope of the goods covered by the standard.

Regulation 11A, which established a product safety standard for elastic luggage straps, was reviewed in 1999 and updated to include a new warning message. The updated standard, which is in Regulation 11B, expires on 30 November 2004 and has been further reviewed to verify its necessity and effectiveness. A Regulation Impact Statement prepared during the course of the recent review is at Attachment A.

The amending Regulations insert a new Regulation 11C after the existing Regulations 11A and 11B. The amending Regulations specify the new consumer product safety standard from 1 December 2004.

The amending Regulations will be subject to the Legislative Instruments Act 2004. That Act provides that all legislative instruments will cease to have effect after ten years. Consequently it is unnecessary to include a sunset clause in the amending regulations.

The amending Regulations also provide a new definition of `elastic luggage strap', including a new exclusion for elasticised cargo nets and elasticised straps specifically made for the purpose of securing a vehicle jack or toolkit within a vehicle. This new exclusion has been made at the request of concerned industry bodies to clarify the intended scope of the standard.

The amending Regulations provide that all elastic luggage straps must have a warning permanently attached to the strap. The warning must be in the following terms: "WARNING. Avoid eye injury. DO NOT overstretch. ALWAYS keep face and body out of recoil path. DO NOT use when strap has visible signs of wear or damage." The requirement that the warning label be clearly displayed, and size and style requirements for the warning, are specified. These are in the same terms as the obligation in Subregulation 11B.

The amending Regulations commence on 1 December 2004.

Attachment A

INTRODUCTION

A Trade Practices (Consumer Product Safety Standards) Regulation for elastic luggage straps was first introduced in December 1989, requiring elastic luggage straps to carry a warning about the safety hazards of using the product.

Elastic luggage straps commonly comprise an elastic cord fitted with attachment hooks at each end, and are used for a wide variety of tie-down functions. Typically they are an inexpensive item manufactured overseas.

The Regulation was reviewed in 1999 and updated to include a new warning message. This mandatory standard is now due for a periodic review to verify its necessity and effectiveness.

PROBLEM

What is the problem being addressed?

Elastic luggage straps have been associated with a number of serious accidents causing injury and death.

The fundamental safety problem with elastic luggage straps is that if a highly stretched strap fails or becomes detached, it rebounds at a very high velocity, up to 270 kph. If any part of the moving strap impacts on a person, this can cause a serious injury.

Continuing Injuries

Available injury data indicates a continuing, but not escalating, level of injuries associated with elastic luggage straps.

Serious injuries involving the use of elastic luggage straps have occurred across Australia. In June 2002 in South Australia, an employee of a hardware/salvage yard lost his right eye after being struck by an elastic restraining strap. In Western Australia, a young shopping centre employee was struck by a luggage strap being used to tie shopping trolleys together. The strap rebounded, penetrating his throat and causing fatal injuries.

Injury prevention specialists advise that it is beneficial to provide warning labels on elastic luggage straps because otherwise the safety hazard may not be recognised by consumers. The continuing level of injury associated with elastic luggage straps confirms that the product presents a serious safety hazard.

Clarification of Coverage

The Federal Chamber of Automotive Industries (FCAI) has made representations seeking clarification of the definition of elastic luggage strap. The FCAI expressed concern that elasticised cargo nets and elasticised straps used for securing vehicle jacks or toolkits were notionally subject to the current standard, although it was not intended that the mandatory standard should apply to these products and they are not implicated as a significant cause of injuries. Accordingly, it is proposed that the present review of the standard should examine this problem with a view to including a definition of products that are subject to the standard.

OBJECTIVES

What are the objectives of government action?

The Government's consumer protection policy includes the objective of ensuring that consumer products are reasonably safe. The Trade Practices Act 1974 (TPA) includes provisions to support this objective through the establishment of mandatory consumer product safety standards, product bans, recalls of unsafe products and the issuing of product safety warning notices.

In the case of elastic luggage straps, the Government's aim is to develop a cost-effective strategy to significantly reduce the rate of injuries and the hazards associated with the use of these products.

Is there any regulation currently in place? Who administers it?

The Trade Practices (Consumer Product Safety Standards) Regulation for elastic luggage straps was first introduced in December 1989, and required that a warning label be attached to elastic luggage straps. The Regulation was substantially revised in 1999, and introduced an updated warning label which incorporated improved safety information.

New South Wales, South Australia and Western Australia have introduced regulations under their respective Fair Trading legislation that are complementary to the Trade Practices Regulation.

OPTIONS

There are three options that might be considered at the national level to reduce injuries associated with elastic luggage straps:

•       Consumer education - remove the mandatory safety standard and initiate a campaign to educate consumers about the safety hazards of using the product;

•       Industry self regulation - remove the mandatory standard and rely on market forces to ensure the safety of the product; or

•       Amend the mandatory safety standard to better define the targeted product:

-       the standard could reduce unintended disruption to the market by providing clarification that elasticised cargo nets and elasticised straps used in the motor vehicle industry for securing vehicle jacks or toolkits are not subject to compliance with this Regulation.

CONSUMER EDUCATION

The injury problem in the use of elastic luggage straps relates to how the product is used. The present mandatory safety standard addresses the problem by requiring the product to have a warning label advising users of the risk of an overstretched strap rebounding. A consumer education campaign could be an alternate means of getting this safety message to consumers.

Possible mechanisms might be to target consumers through advertisements in newspapers and magazines and the distribution of information leaflets through relevant retail stores. While these mechanisms would be expected to have some impact by raising general consumer awareness of the safety problem, general awareness does not target users at the time that they use the product as product labelling does. The wide range of uses for the product also makes it difficult to target product users in an awareness campaign.

INDUSTRY SELF-REGULATION

Industry self-regulation would require coordinated voluntary action by industry to control the supply of elastic luggage straps for the benefit of consumers.

Experience to date indicates that relevant industry associations are supportive of the present mandatory safety standard for elastic luggage straps, and should the present regulation be withdrawn the associations might be encouraged to adopt a self-regulation policy for the supply of elastic luggage straps with safety features.

The Federal Chamber of Automotive Industries (FCAI) supports the mandatory safety standard and regards improved labelling requirements as a priority area to address. Specifically, the FCAI has proposed that the standard be amended to include a clarification that elasticised cargo nets and elasticised straps used for securing vehicle jacks or toolkits are not subject to compliance with this mandatory standard.

FCAI also believes that educational programs aimed at an industry and community level would assist in improving product safety by giving and re-enforcing clearer directions for correct usage.

Impediments to effective industry self-regulation are a lack of coordination between the number of industry associations whose members supply the product, and the limitations in industry association coverage of suppliers. Elastic luggage strap suppliers include automotive accessory suppliers, hardware stores, discount home wares shops and department stores.

The product is commonly manufactured in Asia and the product source is effectively outside the direct influence of Australian industry associations. Also, many small and independent suppliers of the product are not members of industry associations and so would not be readily encompassed in an industry self-regulation initiative.

AMEND CURRENT MANDATORY SAFETY STANDARD

Under this option the current requirements for the labelling of elastic luggage straps would substantially remain the same and the present requirement for the provision of consumer warning labels would continue.

The Government has the power to regulate the supply of consumer products under the product safety provisions of the Trade Practices Act 1974 by either prohibiting the supply of unsafe goods or by permitting the supply of goods only if they comply with mandatory safety or information requirements. TPA mandatory standards are enforced by the Australian Competition and Consumer Commission (ACCC) through surveys and monitoring of the market and legal action where required.

The mandatory consumer product safety standard for elastic luggage straps would be revised to include clarification of elasticised cargo nets and elasticised straps used for securing vehicle jacks or toolkits. This would provide a focused response to the problem.

It is established practice to publicise the revision of mandatory TPA standards with an information campaign advising industry and consumers of the new requirements. In this instance, an information campaign is not warranted as the amendment is one of clarification. At some point though, it may be pertinent to remind consumers of the hazards associated with the use of elastic luggage straps.

IMPACT ANALYSIS

Who is affected by the problem and who is likely to be affected by its proposed solution?

CONSUMER EDUCATION

Costs

Consumers

Under this option information about the safety hazards of elastic luggage straps would be made available to the community at large, but removal of the present mandatory standard for product labelling is likely to result in product safety warning labels no longer being provided.

The absence of a safety labelling on the product would remove the most effective method of conveying the warning message to users of the product at the time that the product is being used. Accordingly, the level of user awareness of the safety hazards in using the product would necessarily be lower, resulting in more injuries to users.

The cost to consumers would be the trauma, medical costs and financial costs associated with the expected increase in injuries associated with the use of the product.

Industry and Small Business

Removal of the mandatory safety standard would allow suppliers to choose whether to provide product warning labels. Suppliers might be asked to voluntarily display product safety information brochures for customers, but the cost of this would be negligible.

Government

The product safety awareness campaign would be a Government responsibility. It is considered that the most effective means of targeting consumers would be to publish product information brochures for distribution to retailers. It is estimated that the production cost would be approximately $5 000, and the publishing and distribution cost $2 000 per year.

Government would also be expected to incur additional costs in the operation of the medical system for the treatment of increased product-related injuries.

Benefits

Consumers

Without a mandatory requirement for product labelling, consumers would benefit from marginally reduced product costs. It is estimated that the cost might be reduced by about 10 cents per item, with elastic luggage straps typically costing from about $2 to $5 each.

Industry and Small Business

It is expected that many suppliers would opt to supply product without the warning labels in order to reduce the cost of the product and compete in the market.

Government

Removal of the mandatory requirements would provide savings to Government by removing the need to maintain and enforce the mandatory standard. It is estimated that the savings might be about $10 000 per year.

INDUSTRY SELF-REGULATION

Costs

Consumers

It is unlikely that independent businesses would voluntarily supply elastic luggage straps that have the safety labelling requirements, and in consequence consumers would use elastic luggage straps which fail to provide adequate warnings concerning use. This would be expected to lead to increased serious injuries.

Any costs which are incurred by businesses seeking to reduce injuries through self-regulation will be passed on to consumers as part of the product price.

Industry and Small Business

Industry would need to meet the cost of implementing and monitoring a permanent labelling regime. If the overseas manufacturers do not agree to do so, this cost would be borne by importers and passed on to consumers. Industry would need to establish an infrastructure to monitor the effectiveness of the regime. There are a range of compliance costs which would be borne by both importers and others in the supply chain.

Suppliers who choose to supply elastic luggage straps with safety warning labels would loose market competitiveness to suppliers of cheaper products without labels.

Government

The Government may be subject to criticism for failing to act to protect the well-being of Australian consumers. In accordance with the expectation that industry self-regulation would not encompass the entire market, there would be an increased cost to the Government and community for health care and other government services as a result of injuries to consumers connected with the use of elastic luggage straps.

Benefits

Consumers

A significant part of the market would be expected to conform to industry self-regulation and provide product with safety warning labels.

Where safety warning labels are not provided, consumers might benefit from cheaper products.

Industry and Small Business

It is expected that many suppliers would opt to supply product without the warning labels in order to reduce the cost of the product and compete in the market.

Government

Removal of the mandatory requirements would provide savings to Government by removing the need to maintain and enforce the mandatory standard. It is estimated that the savings might be about $10 000 per year.

Self-regulation would be expected to moderate the injuries through the provision of safety warnings labels and so provide savings in the operation of the health care system. However, industry self-regulation would be expected to be less effective than the current mandatory requirements in the provision of safety warning labels, resulting in increased injuries relative to the present system.

AMEND CURRENT MANDATORY SAFETY STANDARD

An amended mandatory labelling requirement for all elastic luggage straps would have little effect on Australian consumers. It would have a positive effect on businesses involved in the supply of elastic luggage straps (importers, distributors and retailers) and government as it would remove the possibility of confusion over products that are covered by the standard. Enquiries have been made of the Federal Chamber of Automotive Industries, which has advised that, so far as it is aware, elasticized straps used to retain vehicle jacks or tool kits in motor vehicles are not presently being labelled in accordance with the Standard, but uncertainty exists within the industry concerning the coverage of the present Standard, and its clarification will alleviate these concerns.

Costs

Consumers

There would be no cost to consumers of amending the current mandatory safety standard as the amendment is one of clarification.

Industry and Small Business

There would be no increased cost to suppliers.

Government

The introduction of an amended mandatory safety standard would not result in any new costs to Government.

As the amendment is one of clarification, there would not be a need for an awareness campaign to educate consumers and suppliers about the new safety standard. Enforcement activities such as market surveys would be made easier as product identification would be clarified. There would also be less likelihood of legal challenges to the legislation.

There would be a continued cost for enforcement of the mandatory safety standard, currently approximately $10,000 per annum (based on Australian Competition and Consumer Commission (ACCC) estimates).

Benefits

Consumers

The proposed amendment to the mandatory safety standard would benefit consumers by ensuring that the requirement for all elastic luggage straps to have permanent warning labelling features was maintained. This would assist in providing a constant reminder to consumers for the need to be safety aware when using these products.

Elastic luggage straps with warning labels will continue to lead to an increased adult safety conscious awareness and moderate the associated injury rate.

Industry and Small Business

Amending the current mandatory safety standard will assist in clarifying exactly what products are covered by the standard, and remove the possibility of inconsistencies in enforcement. It will also continue to establish a minimum standard throughout the supply chain, making it easier for retailers and small businesses to determine whether particular products are covered by the standard. It is difficult to determine whether there will be any direct savings to manufacturers as a result of clarifying the scope of the Standard, particularly as it has not been contended that elasticized retaining straps for car jacks/tool kits are currently being labelled. As there is no evidence of whether luggage/cargo nets are currently being labelled or not, it is similarly unclear as to whether industry savings will be appreciable. In the case of luggage/cargo nets, it is also possible that manufacturers / importers may wish to label their goods with appropriate instructions on safe usage (but not in the form of the mandatory warning).

Government

The proposed amendment would help in clarifying exactly what products are covered by the standard, and therefore remove the possibility of inconsistencies in enforcement.

It would also ensure that all elastic luggage straps on the market continue to comply with key safety labelling requirements, thereby maximising the potential for these safety features to reduce injuries and deaths. This would maintain the present moderating effect on associated health care costs.

The well-being of the community in general is a keystone of government policy, and the revision of the regulation will reassure the community that product safety is being addressed.

Although there would be no need to educate the community about the requirements of the proposed new safety standard, being essentially the same as the present standard, Government could capitalise on the launch of the new standard to promote community awareness of the safety hazards in using elastic luggage straps.

CONSULTATION

Consultations have been held with suppliers, injury prevention specialists and government consumer safety agencies, and further liaison is envisaged. Both the Federal Chamber of Automotive Industries and the Australian Competition and Consumer Commission support clarification of the scope of the Standard.

Supplier organisations:

Federal Chamber of Automotive Industries
Australian Competition and Consumer Commission
Australian Consumers Association
Australian Retailers Association
Relevant discount outlets

Government committees:

Ministerial Council on Consumer Affairs (MCCA),
Standing Committee of Officials of Consumer Affairs (SCOCA)
Consumer Products Advisory Committee (CPAC)
(these bodies comprise Commonwealth, State Territory and New Zealand Consumer Affairs/Fair Trading Ministers/officers).

CONCLUSION and RECOMMENDED OPTION

A revised mandatory consumer product safety standard

A revised mandatory consumer product safety standard under the Trade Practices Act 1974 is the most efficient means of addressing the hazards associated with elastic luggage straps, insofar as the economic and social benefits of reducing the incidence of injuries associated with elastic luggage straps will substantially outweigh any direct or indirect costs involved.

The proposed revised mandatory standard would in essence maintain the current labelling requirements and include a provision for clarification of elasticised cargo nets and elasticised straps used for securing vehicle jacks and toolkits. It is proposed that wording such as or similar to the following be inserted:-

"Trade Practices (Consumer Product Safety Standards) Regulations 1979 - Reg 11A Elastic Luggage Straps - Consumer Product Safety Standard from 1 December 2004 (Act s65C (2))

(1)       In this regulation, elastic luggage strap means an elastic strap or cord or 2 or more elastic straps or cords permanently joined and:

(a)       having an open hook at each extremity; and

(b)       designed to be used for the purpose of securing luggage or other objects.

Note:       Elasticised cargo nets, and elasticised straps specifically made for the purpose of securing a vehicle jack or toolkit within a vehicle, are not subject to compliance with this regulation."

IMPLEMENTATION AND REVIEW

The mandatory standard will be implemented by amending the Trade Practices (Consumer Product Safety Standards) Regulations 1979. Given that the only change is a clarification of the definition of an elastic luggage strap and does not include changes to the labelling requirements, there will not be a lead-in time.

The standard will be reviewed periodically to determine the need for its continued application.