Options

• Maintaining the Existing Requirements - Unsafe Goods Notice
  • Costs
• Removing the Unsafe Goods Notice (Self Regulation)
• Mandatory Product Safety Standard
  • Costs
  • Contents of a Mandatory Standard
• Product Recalls

Maintaining the Existing Requirements - Unsafe Goods Notice

23. Maintaining the status quo is an option although not a desirable option. Section 31 of the Fair Trading Act 1986 gives the Minister of Consumer Affairs the power to declare goods to be unsafe by a further notice in the Gazette, indefinitely or for a specified period.

24. A ban on the supply of a product is a severe regulatory option. It is seen as a measure of last resort and must satisfy the elements of natural justice. Where this measure is adopted it must be clearly established that the product itself is the primary cause of injury and that any other mitigating circumstances have only a minor impact.

25. On the 25 November 2004 the Minister declared rubber hot water bottles that did not meet BS 1970:2001 to be unsafe, and show compliance from an accredited laboratory to ISO 17025, of less than 12 months (refer Appendix A). The Unsafe Goods (Rubber Hot Water Bottles) Notice 2004 currently has very strict requirements on importers of rubber hot water bottles.

26. There is currently only one laboratory in the United Kingdom that is certified to test to BS 1970:2001 under the ISO 17025 accreditation requirements. Specific comment is sought in regard to the Unsafe Goods Notices' current effectiveness and any possible weaknesses.

Costs

27. The introduction of the Unsafe Goods Notice for rubber hot water bottles has increased the cost to importers/suppliers to meet the requirements of the notice, in particular a significant increase in cost to suppliers with the testing of the product from an accredited laboratory. Specific comment is sought on the stringent requirement in the Unsafe Goods Notice that the test report must be less than 12 months old.

28. The Unsafe Goods Notice has also imposed an additional burden on the Commerce Commission's and New Zealand Customs Service's resources that may require additional funding or lead to a reduction in enforcement activity in other areas, if an indefinite notice were to be declared. These costs would be borne by taxpayers generally, rather than the purchaser of the product.

Removing the Unsafe Goods Notice (Self Regulation)

29. The Unsafe Goods Notice was brought into force to address unsafe design and poor construction of rubber hot water bottles entering the market. The potential injury risk remains present for the community.

30. If the Unsafe Goods Notice was removed the relevant legislative framework would rest with broad guarantees under the Consumer Guarantees Act 1993 that products sold in trade be safe. Consumers and retailers would have to rely on suppliers to provide adequate information.

31. Major suppliers have a long term commitment to the market and reputations to maintain. Small and often transient market participants however are a feature of this market sector. These suppliers appear largely unaware of some of the regulatory requirements and the prospect of gaining their voluntary compliance is not good.

Mandatory Product Safety Standard

32. This is the preferred option.

33. Product safety standards are designed to address generic safety issues that apply to an entire class of goods. By adopting national standards that have been drawn up by industry and consumer representatives, they attempt to provide achievable safety outcomes. This option is intended as a preventive measure against identified safety concerns and provides a benchmark of safety in terms of design, construction, performance, and information as to use. Product safety standards are mandatory and are enforced by the Commerce Commission in the market, and the NZ Customs Services at the border.

34. The obligation of a mandatory product safety standard could provide the necessary benchmark to ensure that rubber hot water bottles within the market meet minimum safety requirements. The mandatory standard would specify certain safety requirements for rubber hot water bottles, such as minimum thickness of the rubber and marking of the bottles, as cited in BS 1970:2001.

Costs

35. Prices in the market have increased for the product from 50 cents-$5.00, to $3.00-$7.00. Although this is a large percentage increase, it is not large in actual dollar terms. The Ministry considers this a cost that consumers are prepared to pay for a gain in safety.

36. Enforcement procedures and complementary trader education programmes are already well established by the Commerce Commission for current product safety standards and could be extended to cover additional products. This would impose an additional burden on the Commerce Commission's resources that may need to be met either with additional funding or with a reduction in enforcement activity in some other area. These costs would be borne by taxpayers generally, rather than the purchaser of the product.

37. Additional burden would be imposed on the New Zealand Customs Service's resources that may need to be met either with additional funding or with a reduction in enforcement activity in some other area. These costs would also be borne by taxpayers generally, rather than the purchaser of the product.

Contents of a Mandatory Standard

38. Should a product safety standard be declared, the national standard BS 1970:2001 is likely to be used as the basis or specified parts thereof, this is the internationally recognised standard for rubber hot water bottles. There are, however, a range of options that need to be considered. The final shape of any standard must take account of the following:

• the major safety risks associated with rubber hot water bottles
• information for safe use
• testability of compliance with safety requirements
• international trends, including other internationally recognised standards, and
• international commitments.

39. National standards are standards reached by consensus creating the technical benchmarks for a safe product. Adopting the British Standard BS 1970: 2001 Hot water bottles manufactured from rubber and PVC. Specification as a mandatory product safety standard will ensure that rubber hot water bottles entering the market are designed to a national standard and will enhance the level of protection.

40. The product manufactured for distribution in Australasia uses BS 1970:2001 as the technical benchmark, although internationally there is an American Standard ASTM D4316-95 (2001) Standard Specification for Elastomeric Water Bottles available for rubber hot water bottles.

41. Comment is sought on the effectiveness and possible inadequacies associated with BS 1970:2001 Hot water bottles manufactured from rubber and PVC Specification.

Product Recalls

42. Section 32 of the Fair Trading Act 1986 gives the Minister powers to require the recall of goods which, are of a kind which will or may cause injury. A product recall is not considered a viable option.

43. Mandatory recalls are warranted on a case by case basis and while the well established stores have reputations to maintain, the low discount sector, where these products are sold, are difficult to identify and hold to a recall notice.