explanatory Statement

Consumer Protection Notice No. 16 of 2010

Issued by the Authority of the Minister for Competition Policy and Consumer Affairs

Trade Practices Act 1974

Consumer Product Safety Standard – Projectile Toys

Subsection 65E(1) of the Trade Practices Act 1974 (TPA) provides that the Minister may, by notice in writing, declare that, in respect of goods of a kind specified in the notice, a particular standard, or a particular part of a standard, prepared or approved by Standards Australia, with additions or variations specified in the notice, is a consumer product safety standard for the purposes of section 65C.

Paragraph 65C(1)(a) of the TPA 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.

This instrument declares certain parts of the Australian/New Zealand Standard for the Safety of toys Part 1, AS/NZS ISO 8124.1:2000 published by Standards Australia on 16 May 2002, as amended by Amendment 1 to that Standard published by Standards Australia on 25 May 2007, to be a consumer product safety standard for the purposes of section 65C.  The purpose of the TPA safety standard is to ensure that new children’s projectile toys include safety features to address the product’s known hazards.

The hazards of children’s projectile toys are currently addressed by various State and Territory consumer product regulations and a TPA ban on the supply of dart gun sets that incorporate small suction tipped darts.  The State and Territory consumer product regulations will cease when the new Australian Consumer Law becomes operational from January 2011, and the TPA safety standard will effectively replace the superseded regulations.  The new standard will also replace the TPA ban on dart gun sets.

The TPA safety standard addresses the hazard to children of being struck by toy projectiles.  Projectile toys have long been recognised to pose particular hazards for children, causing a range of injuries.  The more serious injuries are eye injuries and choking resulting from small suction tipped darts lodging in the throat.  A number of children have died when small suction tipped darts were accidentally fired into the throat, including one child in Australia.

The TPA safety standard adopts only those parts of the Australian/New Zealand Standard for toys considered necessary to address the critical safety hazards of projectile toys, and specifies requirements to provide a reasonable level of safety for these products.

A Regulation Impact Statement (RIS) for this consumer product safety standard is at Attachment 1.  The RIS identifies the product safety issues and considers the options for addressing the issues, presenting the case for introducing a TPA safety standard for projectile toys and the rationale for the content of the new standard.

A draft of the RIS was circulated for consideration by interested parties including manufacturers and suppliers of children’s toys, State and Territory Fair Trading/Consumer Affairs agencies, consumer groups and child safety specialists. Comment received supported the regulation of projectile toys under the TPA. Consultation proceedings are reported in the RIS.

The Consumer Protection Notice declaring the TPA safety standard is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Consumer Protection Notice becomes law on the day after it is registered on the Federal Register of Legislative Instruments.  In order to allow a reasonable period of time for suppliers to ensure that all stock complies with the new safety standard and to provide a timely replacement for State and Territory regulations, the date of effect of the consumer product safety standard is 31 December 2010.

Attachment 1

Regulation Impact Statement

Projectile Toys

Product Safety Hazard Response Branch

Australian Competition and Consumer Commission

2010

Office of Best Practice Regulation

Reference 11292

INTRODUCTION

This draft Regulation Impact Statement has been prepared by the Australian Competition and Consumer Commission (ACCC) to consider a possible new regulation for children’s projectile toys under the product safety provisions of the Trade Practices Act 1974 (TPA).

State and Territory jurisdictions have various long-established consumer product standards and bans for projectile toys to address potential injury hazards to children, particularly eye injury and choking hazards. The Commonwealth has also established a ban on dart gun sets incorporating small darts that may be a choking hazard.

As part of a national product safety harmonisation project agreed between the Commonwealth, States and Territories, the ACCC has agreed to consider the case for establishing a Commonwealth regulation for projectile toys that would replace similar State and Territory regulations and the Commonwealth ban.

PROBLEM

What is the problem being addressed

Projectile toys have long been considered dangerous to children because of the potential for serious eye injury and asphyxiation. Major safety standards for children’s toys include requirements to address the injury hazards inherent in projectile toys.

Under the new Australian Consumer Law (ACL), existing State and Territory regulations addressing the hazards of projectile toys will cease to have effect from 1 January 2011, and product safety agencies have determined that these product safety requirements should be maintained by the Commonwealth under the ACL.

In 2002 a six year old NSW boy choked to death on a small dart with a suction cap tip. The boy accidentally fired the dart into his mouth from a toy dart gun and the dart blocked his airways. The dart, which lodged in the boy’s throat, was approximately 30 mm in length and under safety specifications common to major standards for children’s toys would be considered a choking hazard for children under three years of age. The US CPSC has reported two deaths where US children choked on suction cap darts from dart gun sets - an eight year old boy died in 2001[1] and a six year old boy died in 2005[2].

Data supplied by the Victorian Injury Surveillance Unit of Monash University indicates there were 46 child injuries associated with projectile toys recorded by Victorian hospital emergency departments for the five year period July 2004 to June 2009. Thirty nine percent of the injuries were eye injuries and a further 28% were open wounds. The injuries were mainly to older children, with 61% of injuries to children aged 10-14 years and 24% to children 5-9 years.

While national injury data is not currently available, based on the Victorian data, and considering that some injuries may be treated by family doctors rather than emergency departments, it is estimated that the total number of injuries to children (including flesh wounds, eye injuries and choking incidents) associated with projectile toys in Australia for the five year period would be about 300.

This national injury rate is considered to be relatively low and reflects the effectiveness of the current State, Territory and Commonwealth regulation in preventing the supply of hazardous projectile toys. Injury data currently available does not generally provide sufficient detail to identify the particular toys involved in the continuing occurrence of injuries, and is likely to include home-made and improvised projectile toys. The continuing ‘background’ of injuries does, however, illustrate the potential for hazardous projectile toys to cause injuries to children.

On the basis of the evidence of choking deaths caused by small projectile darts lodging in the throat and the ready availability of toys on the Australian market that incorporate these darts, the then Parliamentary Secretary to the Treasurer published an unsafe goods notice under section 65(C)5 of the Trade Practices Act 1974 (TPA) banning the supply of children’s dart gun sets consisting of a firing gun and suction cap tipped darts of a size that fit entirely into the small parts test cylinder when tested in accordance with clause 5.2 (small parts test) of the Australian/New Zealand Standard Safety of Toys, Part 1 (AS/NZS ISO 8124.1: 2002). The notice was published in the Commonwealth of Australia Gazette No GN 12 of 26 March 2003. A permanent ban of these toys was introduced on 15 December 2004.

In addition, the State and Territory consumer affairs/fair trading authorities have implemented various standards and bans for projectile toys. Table 1 provides a list of current projectile toys standards and bans in Australia.

The standards and bans aim to address the two main hazards associated with projectile toys – injuries (such as eye injuries) that may result from being struck by a toy projectile, and the potential for choking on a small projectile.

Table 1 demonstrates that there are a number of differing standards and bans for projectile toys currently in place around Australia which specify requirements for:

• Small parts – choking hazard
• Kinetic energy – force that the projectile is propelled
• Protective tips on projectiles
• Limited potential for using Improvised projectiles

As noted above, the various standards and bans introduced by the Commonwealth, State and Territory consumer affairs/fair trading authorities have been in place for a number of years and are considered effective. A small number of non-compliant projectile toys appear on the market from time to time and are removed under the existing product safety regulations. The occasional emergence of these products indicates a need to maintain market controls.

OBJECTIVES

What are the objectives of proposed government action?

The Government’s goal in the case of projectile toys is to develop a cost-effective strategy to ensure the risk of serious injuries and deaths associated with the use of these types of products is low.

Under an agreed national product safety program, State, Territory and Commonwealth governments have undertaken to harmonise product safety regulations across Australia. Two principal mechanisms are considered viable for achieving harmonisation of safety requirements for projectile toys:

–        withdrawing the various existing regulations and relying on industry self-regulation to ensure the supply of safe products, or

–        replacing the various regulations for projectile toys with a national safety standard that might be adopted by all jurisdictions.

Is there a regulation currently in place?

See Table 1 for details.

OPTIONS

Option 1 - Industry self-regulation

Industry self regulation is voluntary action by industry to control the supply of particular products for the benefit of consumers. Self regulation might comprise a voluntary industry code of practice under which industry members agree to supply only products that comply with specified safety standards.

This method of controlling the safety of products in the market is likely to be effective where the relevant industry sector is cohesive, with members belonging to industry associations that are committed to product quality and product safety. While many suppliers of toys are members of industry associations, industry sources indicate that up to 30% of toys are supplied by a range of other retailers such as small variety and discount stores that trade in a variety of goods, with toys only being a small section of their business. Hence they are not aligned with industry associations that focus on toys or children’s products. Accordingly, overall, suppliers of toys are not a cohesive group, which is expected to limit the effectiveness of industry self-regulation to about 70% market coverage.

Option 2 - Government regulation

The Government has the power to regulate the supply of consumer products under the product safety provisions of the Trade Practices Act. The most suitable regulatory mechanism for addressing the safety hazard would be to control the supply of projectile toys through a mandatory standard which cites the safety requirements for projectile toys that are incorporated in the Australian/New Zealand Standard for the safety of toys, AS/NZS ISO 8124.1. These requirements are drawn from the international (ISO) standard for toy safety.

All State and Territory consumer affairs/fair trading authorities have standards and bans for these products currently in place, so the introduction of a TPA safety standard would not impose additional compliance costs on industry. In fact, the replacement of separate State and Territory bans and standards with a Commonwealth regulation would simplify national compliance requirements for industry, thereby reducing costs. The proposed safety standard would incorporate the requirements of the current Commonwealth and State and Territory bans on dart gun sets in order to address all projectile toy hazards in the one document.

In simplifying national compliance requirements, a replacement TPA safety standard would have the potential to increase safety standard compliance rates.

The implementation of national TPA safety requirements for projectile toys would allow the Australian Customs Service to consider including these product safety requirements in Australian import regulations, thereby adding the potential for enhanced control of imported products. It is understood that the majority of these toys are imported into Australia.  In order to do this the Minister for Competition Policy and Consumer Affairs would write to the Minister responsible for customs requesting them to amend the Customs (Prohibited Imports) Regulations 1956, which are made under the Customs Act 1901.

In accordance with normal product safety practices, the introduction of a government regulation would be supported by explanatory material directed to product suppliers and to consumers. A campaign would be developed to alert consumers to the hazards of projectile toys and provide parents and carers with safe-use advice.

IMPACT ANALYSIS

Option 1: Industry self-regulation

Costs

From market observations it is estimated that the present State and Territory regulations for projectile toys ensure that 95+% of product in the market complies with safety standards. As noted previously, the market for children’s toys is substantially fragmented, with many suppliers not being members of industry associations such as the Australian Toy Association. As noted above it is expected that many of the estimated 30% of suppliers who are not members of industry associations would not adhere to a voluntary code. Accordingly, a move to self regulation is likely to result in reduced compliance rates (estimated to 70% of the market), resulting in a corresponding increased potential for child injuries. This represents increased costs to the community in terms of child injuries and possible deaths.

Industry would be subject to costs associated with establishing and maintaining a self regulation regime, such as the distribution of material promoting adherence to voluntary safety requirements. The collective cost to toy suppliers for the publication and distribution of suitable supplier information through the Australian Toy Association is estimated to be about $10,000 p.a. based on ACCC experience in supplier education and industry feedback on likely distribution mechanisms.

Where self regulation is not effective, any associated increase in injuries might be expected to generate increased product liability claims made against toy suppliers.

The Government could be subject to criticism for not taking action to protect the lives of Australian consumers, and health services could be subject to increased demand for treatment for the effects of injuries from toy projectiles, being flesh wounds, eye injuries and serious choking incidents.

Benefits

Under self regulation, consumers might benefit from a slightly increased range of available products and marginally reduced purchase prices where supplied products are no longer subject to standards compliance costs.

Compliance costs would be voluntary under self regulation, providing benefits to businesses which choose not to comply through slightly reduced costs for sourcing products and removing barriers that currently limit trade to complying products. However, these savings could be outweighed by any increase in product liability claims made against toy suppliers. 

Government would save on enforcement costs such as the costs of maintaining legislation, surveying the market and prosecuting suppliers for non-compliance, with State, Territory and Commonwealth costs estimated to total about $80 000 p.a. The estimate is based on ACCC national enforcement costs for similar regulations, with an additional cost allowance for coordinating the enforcement work of the current multiple enforcement jurisdictions.

On balance, it is estimated that this option would support around $287,000 in net benefits.

Option 2:  Government regulation

Costs

There would be no increased costs to consumers associated with the introduction of a mandatory safety standard as these products are currently subject to compliance costs associated with existing State and Territory standards and bans.

There would be no significant additional costs to industry as the Commonwealth, State and Territory consumer affairs/fair trading authorities currently have a range of standards and bans applying to these products. During consultation on this RIS, an industry group pointed out that some suppliers may not be providing the product labelling required by the Australian Standard, which for these products would result in additional costs of a few cents per item.

The Commonwealth Government would incur costs in the establishment of a mandatory safety standard (estimated once-only cost of $25,000 for the development and publication of the safety standard) and in the ongoing enforcement of the mandatory requirements through market surveys, supplier liaison and possible prosecution activity (estimated $40,000 p.a.). In addition, it is estimated that the cost of establishing and maintaining a product safety campaign including the publication of supplier information and consumer education materials would be about $20,000 p.a. These costs are based on the costs of similar regulation in the past, and would be marginally less that the current costs of maintaining the similar but separate State and Territory regulations for projectile toys.

Accordingly, the costs of implementing and maintaining government regulation for the supply of projectile toys over a five year period would amount to approximately $325,000.

Benefits

Consumers, particularly children, would be protected from hazardous projectile toys, being flesh wounds, eye injuries and the choking hazard posed by small size darts.

The well-being of the community in general and especially those most vulnerable, such as children, is a keystone of government policy, and the introduction of a national safety standard will reassure the community that product safety is being addressed.

Industry would benefit from the introduction of a uniform Australia-wide safety standard for projectile toys that would replace the present multiple regulations, which have caused some confusion about requirements in the market and required suppliers to check product compliance with the various State regulations. Accordingly, this simplification of national requirements would assist suppliers by reducing compliance costs and providing benefits through clearer product safety standards that could reduce risks associated with product safety related liability claims.

As noted previously, was one death recorded in Australia before the product was regulated, and no deaths since. Maintenance of the present product safety requirements for projectile toys under a national regulation would help avoid further occurrence of deaths and serious injuries associated with these products. Based on the incident rate in the USA, it is likely that one child would die over a five year period absent the regulation.

In its Guidance Note ‘Value of a Statistical Life’[3], the Office of Office of Best Practice Regulation suggests that the value of $3.5 million be used in assessing the statistical value of a human life for the purposes of developing a RIS. Accordingly, the benefits of government regulation preventing the supply of projectile toys that are a threat to life may amount to $3.5 million over a five year period.

The valuation of the prevention of injury is more problematic. The Office of Best Practice Regulation also notes that the Australian Institute of Health and Welfare has published disability weights for most diseases and injuries. However given the injuries associated with projectile toys may range from bruising to the loss of an eye it is difficult to estimate the saving to the community.

On balance, it is estimated that this strategy would support around $3.6 million in net benefits.

CONSULTATION

This Regulation Impact Statement was circulated for consideration by interested parties, being:

• Australian Toy Association (ATA);
• National Retailers Association (NRA);
• Australian Retailers Association (ARA);
• State, Territory and Commonwealth consumer product regulators;
• Child safety specialists;
• Product testing agencies; and
• A cross-section of toy retailers such as toy shops, department stores, discount variety stores and chemist shops.

The New Zealand Ministry of Consumer Affairs has been consulted in the development of this regulatory proposal, and no concerns about possible adverse effects on trans-Tasman trade or operation of the Trans-Tasman Mutual Recognition Arrangement have been expressed.

Six written responses were received during the consultation period. All respondents supported the proposal to institute a national regulation (Option 2), citing the importance of regulations being applied nationally and being consistent with the Australian Standard for the safety of toys. Three respondents objected to the proposed variation to the Standard limiting application of the small parts (choking hazard) test to darts having suction cap tips and one respondent objected to the proposed implementation timing.

A consumer organisation noted the Australian Standard was developed to address the range of known hazards associated with projectile toys and considered that all the relevant requirements of the Standard should be adopted in the mandatory standard. An industry group and industry representative noted that while the proposed variation to the Standard would be consistent with the full Standard, reported choking incidents associated with non-suction cup projectiles and a death in the US 30 years ago make a case for adopting all relevant requirements of the Standard.

The proposed variation to the Standard was included in the current proposal on the advice of a State Fair Trading office which administers these requirements under State legislation. The office strongly advised that the restricted focus on the choking hazard associated with suction cap tip darts is appropriate because this addresses recently reported incidents and broadening the scope to include other projectiles would be an unnecessary restriction on the market. Toys designed for children aged up to 36 months are already subject to the small parts choking hazard test applied in an existing mandatory TPA safety standard, so it is appropriate that the proposed standard relate to projectile toys designed for older children. It is also the experience of the Fair Trading office that the application of the small parts choking requirements to all toy projectiles would unnecessarily eliminate from the market toys such as “spud guns” that have not been shown to present a choking hazard.

On reviewing the comments received in relation to the limited focus on the suction cap tip hazard, it is considered that no substantial information has been provided to negate the appropriateness of the original proposal.

A further issue raised by an industry group is that the proposal to establish the new safety standard without delay is not appropriate because some suppliers will need to arrange for labelling of their products in accordance with clause 4.18.3(e) of the Australian Standard. The group recommends a delay of six months in the implementation of the mandatory requirements.

It is acknowledged that under present arrangements some suppliers may not currently be complying with the labelling requirement of the Standard, and it would be appropriate to allow an implementation period of six months. The proposed standard has been amended accordingly.

CONCLUSION AND RECOMMENDED OPTION

Option 1, Industry self-regulation is expected to provide limited control of the safety of projectile toys in the market because the lack of cohesion in the toy retail industry and is likely to result in about 70% market compliance, leaving a substantial proportion of consumers exposed to hazardous projectile toys.  Under voluntary standards compliance, the supply costs to industry and product costs to consumers may marginally reduce.

Option 2, a mandatory Trade Practices Act 1974 consumer product safety standard is assessed as the most effective and efficient means of addressing the hazards associated with projectile toys, and is the preferred option. The economic and social benefits of reducing the potential for death and injuries associated with the products will substantially outweigh the minor direct or indirect costs incurred in standards compliance. The implementation of a national TPA standard will provide savings for suppliers and regulation administrators compared to the current costs incurred in relation to the individual State, Territory and Commonwealth regulations.

As derived in the Impact Analysis section of this RIS, the cost of administering the preferred national regulation over a five year period is estimated to be $325,000, and the benefit of the regulation through reduced rate of death and injury associated with projectile toys is estimated to be at least $3.5 million over that period.

On balance there is some evidence to support the conclusion that the potential net benefits derived from option 2 could exceed the net benefits supported by option 1. Based on costs and benefit estimates informed by stakeholders most of the benefits would accrue from potential deaths averted and costs synergies associated with the application of a single harmonised standard. 

Form of the proposed standard

The proposed draft standard is included as an attachment to this RIS. The standard references the relevant parts of Australian/New Zealand Standard for the safety of toys, AS/ANZ ISO 8124.1 and Amendment 1 to that Standard.

The experience of some State jurisdictions in the administration of regulations for projectile toys is that the requirements in the Australian Standard regarding the choking hazard associated with small projectiles is too broad and effectively prohibits the supply of many products that are not considered to be hazardous. Accordingly, it should be noted that the proposed standard varies clause 4.18.2(d) to restrict its application to small projectiles that have a suction cap tip.

IMPLEMENTATION AND REVIEW

It is recommended that a Trade Practices Act consumer product safety standard for projectile toys be declared based on the relevant parts of the Australian/New Zealand Standard for toys. 

The standard would be declared through a Consumer Protection Notice and registered on the Federal Register of Legislative Instruments.

Date of effect

It is proposed that the new standard would take effect six months from the time of declaration to allow manufacturers and suppliers to fully comply with the new requirements. 

Replacement and repeal of existing regulations

To help achieve national harmonisation of regulations, States and Territory jurisdictions may then amend their regulations to reference the new TPA standard. The proposed new safety standard would incorporate requirements for toy dart gun sets that would replace the existing TPA product ban and similar State and Territory bans on dart gun sets, allowing the repeal of those bans.

Import regulations

The requirements of the new standard may subsequently be put forward for consideration for adoption under Customs Import Regulations.

Review of safety standard

The standard would be reviewed periodically to ensure that it remains effective and relevant to the market.

Table 1 – List of current projectile toys standards and bans in Australia

* - these are identical

** - these are identical

*** - these are similar, but differ slightly

[1] US CPSC Memorandum 23 October 2002, Toy-Related Deaths and Injuries, Calendar Year 2001

[2] US CPSC Consumer Product safety Review, Summer 2006 (Summer 2006 Vol 11, No.1)

[3] See http://www.finance.gov.au/obpr/docs/ValuingStatisticalLife.rtf .