Guest Column: A Checklist for Import Safety

Recent China manufacturing issues highlight importance of having safety policies in place in the supply chain now

New York — September 10, 2007 — Recent waves of import product bans, alerts, recalls and news headlines have generated extreme consumer shock around the world. The global media frenzy affects all companies that source products abroad for domestic consumption by challenging their import safety practices.

Consumers are horrified by (and importers are trying to minimize the damage of) the alarming headlines including "As More Toys Are Recalled, the Trail Ends in China," "China Toy Boss Kills Self after Recall," "China Executes Former Head of Drugs Safety Agency for Bribery," "Why the West Must Regulate China's Exports," "Wider Sale Is Seen for Toothpaste Tainted in China," "F.D.A. Issues Alert on Chinese Seafood," "China Shuts Plants that Produced Tainted Medicine, Pet Food," "U.S. Calls on China to Improve Export Safety" and "The Little Engine That Could Poison".

The torrential problems facing today's exports from China should serve as a wake up call for all importers that the time to act is now — be proactive and not reactive. Do not wait to be the media subject of the next consumer product recall, scandal or catastrophe. While today's focus may be on China-made or sourced products, it is not the only goods and materials source for large-scale importers. Make no mistake — unsafe and hazardous imports can originate from anywhere around the world and companies need to focus on their entire global supply chain, layer-by-layer, to know all that is necessary to ensure that the safety and quality of those products is not inferior or somehow compromised.

President Creates Import Safety Working Group

On July 18, President Bush issued Executive Order 13439 establishing an interagency working group on import safety. Chaired by the secretary of health and human services, the group includes members from key agencies such as Secretary of State, Treasury, Agriculture, Commerce, Transportation, Homeland Security, Attorney General, Director of the Office of Management and Budget, U.S. Trade Representative, Environmental Protection Agency and Consumer Product Safety Commission (CPSC).

The group is tasked "to identify actions and appropriate steps that can be pursued, within existing resources, to promote the safety of imported products." The group's focus will include: foreign governments, foreign manufacturers, private sector exporters, U.S. importers, and federal, state and local government agencies. The working group has to report to the president within 60 days (by mid-September) unless extended.

"We'll be working with companies that import goods from around the world, to make sure that their practices meet the high standards that we set for the United States," President Bush said. Under the group's radar is the identification of best practices utilized by U.S. importers in:

  • Selection of foreign manufacturers;
  • Inspecting manufacturing facilities;
  • Inspecting goods produced before export or distribution in the United States;
  • Identifying origin of products;
  • Safeguarding the supply chain
Import Czar Position in the Making

Major U.S. business leaders recently gathered to discuss the import quality crisis and recognized the need to do more as "the explosion in the volume and diversity of goods has overwhelmed even the biggest companies tasked with evaluating dozens of supply chains, many of which run two or three suppliers deep" reported a July 5 article in Fortune magazine.

One of the ideas being circulated is to create an "import czar" position — a chief imports officer who can oversee global sourcing. Most companies lack a central figure to "reign" over global operations — it's all about accountability, coordination and the need to focus internally to ensure that someone is keeping watch over the shop.

What Are You Doing To Make Sure Your Imports Are Safe?

As the U.S. government looks for ways to step up enforcement of import safety, the question for all companies should be: "What are you doing to make sure your imports are safe?"

Companies must put consumer protection first and above any other motivations. In the end, we are all consumers and should expect nothing less! Before the U.S. government comes knocking on your door, here are some areas to consider as you evaluate your current business:

Import Safety Checklist

I - Inspections — Do you inspect your foreign factories (announced/unannounced)?
M - Management — Do you have commitment and corporate objectives?
P - Policies — Do you have procedures to ensure corporate objectives are followed?
O - Origin — Do you identify and verify product origin?
R - Recalls — Do you have a program to inform consumers and agencies of defects?
T - Testing — Do you test products (internally/externally) and document/track results?

S - Suppliers — Do you have quality/safety requirements in writing/acknowledged?
A – Audit — Do you have a product safety audit plan?
F - Follow — Do you follow or benchmark what your competitors are doing or recommending?
E - Examine — Do you examine what's going on with your product outside the U.S.?
T - Training — Do you train internal units and suppliers on product safety?
Y - You — Know your product and must exercise reasonable care to protect consumers

Safety Depends on Planning and Action

While import safety is finally receiving the U.S. presidential treatment it deserves and consumers expect, companies should take note of the "good practices" suggested by one U.S. federal agency committed to protecting consumers — the CPSC:

  • Build safety into product design
  • Do product safety testing for all foreseeable hazards
  • Keep informed about and implement latest developments in product safety
  • Educate consumers about product safety
  • Track and address your products' safety performance
  • Fully investigate product safety incidents
  • Report product safety defects promptly
  • If a defect occurs, promptly offer a comprehensive recall plan
  • Work with the agency to make sure your recall plan is effective
  • Learn from mistakes — yours and others'
A July 2006 CPSC document titled Handbook For Manufacturing Safer Consumer Products discusses the basic concepts in a comprehensive systems approach for the design, production and distribution of consumer products. It is worth reviewing for further guidance as product safety ultimately depends on "purposeful planning and action."

Conclusion

A famous American, Benjamin Franklin (1706-1790), once stated: "An ounce of prevention is worth a pound of cure." Manufacturers, importers, exporters, distributors and retailers — take the proper precautions now and exercise reasonable care relating to products intended for U.S. consumption. Ultimately, those that put quality and safety first will succeed in the global arena and achieve consumer confidence.

About the author: Despina Keegan is a senior trade advisor for JPMorgan Global Trade Services in New York. As a licensed attorney admitted to federal and state courts, Despina has experience in customs and international trade law matters, including developing customized compliance and auditing programs, formulating training seminars and advising on product safety, recalls and the requirements of federal and state agencies.

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