Children and consumer product safety: Current regime and scope for reform

The article below was written for the special 2016 Children Rights Edition of the HRLC Monthly Bulletin, Rights Agenda, developed in collaboration with the National Children’s and Youth Law Centre, King & Wood Mallesons and the Human Rights Law Centre.

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In 2014, the Australian Institute for Health and Welfare reported that from 2011 to 2012 over 130,000 children were hospitalised for injuries. Common causes of injury included falls, burns or the ingestion of foreign objects. Such injuries are frequently associated with consumer products, such as trampolines, cots and polystyrene beads. The high incidence of child injuries, and the link with consumer product safety, calls for a consideration of product safety regulation and how it promotes and upholds child rights.  In particular, it raises a question about the extent to which Australia is upholding the fundamental right of children to life, survival and development as provided for under Article 6 of the Convention on the Rights of the Child (Convention).

This article considers these issues from the perspective of children as consumers and the product-related injuries affecting them. It analyses the consumer product safety regime in place under Australian domestic law, as set out in Part 3-3 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL), to assess whether it goes far enough in relation to children and to identify possible areas for reform.

The ACL is set to be reviewed this year and product safety has been flagged by Rod Sims, Chairman of the Australian Competition and Consumer Commission (ACCC), as a key area for review. We hope that in addition to addressing the product safety protections afforded to consumers generally, this review will specifically consider and strengthen the protections afforded to children who represent one of the most vulnerable consumer groups.

The current consumer product safety regime and areas for reform

There are three key tenets of the consumer product safety regime under the ACL – safety standards, bans and recalls. The operation of each of these and their applicability to children is considered below, along with suggestions of possible areas for reform.

Safety standards

Under the ACL, the Commonwealth Minister who administers Part XI of the Competition and Consumer Act 2010 (Cth) (Commonwealth Minister) has power to impose mandatory safety standards (mandatory standards). These standards may be made for consumer goods of a particular kind and can regulate aspects such as the design, method of manufacture, or packaging of goods. Mandatory standards specify the minimum requirements of particular goods in order for them to be safe. If a supplier supplies, manufactures, possesses or has control of consumer goods that do not comply with mandatory safety standards, they may face penalties.At the time of writing, mandatory standards exist for 41 types of consumer goods. Nineteen of these goods relate to children’s items, which include prams and strollers, children’s nightwear and baby dummies.

In addition to mandatory standards, the ACL provides a consumer guarantee that goods will be safe, and independent bodies such as Standards Australia (the national peak non-government standards organisation) formulate voluntary standards for particular categories of goods.

The current safety standards are somewhat limited in their operation. Consumer goods that do not fall under the purview of the mandatory standards may pose a risk to children, as suppliers have little legal incentive to incorporate safety standards into the design, manufacture process or labelling of the goods. Voluntary standards may go some way to address this, but they are not a legal requirement and are complied with at the discretion of the supplier. In the absence of clear, approved standards, a considerable burden is placed upon parents and child consumers themselves to ‘buy safe’.

The safety standards provisions in the ACL could be improved by implementing a general safety requirement mirroring the European Union General Product Safety Directive (GPSD) 2001/95/EC (Directive). The Directive provides a generic definition of a ‘safe product’ applicable to all member States and obliges all producers to place safe products on the market. The Directive is complementary to specific safety requirements. It applies in its entirety to products that aren’t covered by specific standards, and applies partially to those that are.

Implementing similar legislation in Australia would fill the gaps between the existing mandatory standards for particular products and all other products by providing a general definition of a ‘safe product’. As in the European Union, suppliers would be legally required to comply with minimum safety requirements for all products, prior to supplying goods for sale.

The Directive also requires producers and distributors to report to national authorities when goods fall short of the general safety definition. This applies to products that pose a serious risk in addition to those that pose a moderate/low risk. Introducing similar provisions into the ACL, requiring suppliers to report safety-related concerns for all injuries (not just serious injuries), could address concerns about the limited scope of current reporting requirements which only obliges suppliers of consumer goods to report deaths or serious injury/illness related to those goods. As Associate Professor Kirsten Vallmuur identified in a presentation given at the Rights of the Child Consumer conference in Sydney on 20 November 2015, the resulting lack of data on primary care representations, injuries not requiring treatment at a health facility and near miss injuries is one of the key problems in the Australian product safety regime. The imposition of broader reporting requirements and more proactive investigation by authorities through information-sharing with other jurisdictions could ensure that Australia develops a comprehensive database of injuries, thereby enabling quick responsive action.

Bans

The ACL provides for two types of product bans. Both the Commonwealth Minister and responsible State and Territory ministers, such as the NSW Fair Trading Minister, are able to impose a 60 day interim ban on products (which may be extended).The Commonwealth Minister may also impose permanent bans on products. Once a ban is made, it is an offence to supply, manufacture, possess or have control over the banned goods. Just over 20 products are currently subject to a permanent ban in Australia, almost half of which are directed at children. The review of the ACL should consider whether bans could be used more frequently to prevent product-related injuries, particularly for children.

Recalls

Recall measures are more frequently used than bans to limit the supply of unsafe goods in Australia. Under the ACL, a product may be recalled if it appears that it may cause injury to any person. The Commonwealth Minister and responsible State and Territory ministers may publish a compulsory recall notice on the internet for consumer goods of a particular kind where it becomes apparent that a product presents a safety risk or is non-compliant with a mandatory standard or ban. However, most recalls are made voluntarily by suppliers and then communicated to the Commonwealth Minister. If a recall notice is in force, the consumer goods to which is relates must not be supplied in trade or commerce. Since 2010, the ACCC has reported a steady increase in the number of recalls in Australia, with a 14 per cent increase seen from 2013 to 2014.

One of the main difficulties with recalls is ensuring consumer compliance. On average, only half of all recalled goods are returned. For toys, this figure is less than one in five. There is clearly room for the recall regime to be improved.  Three additional measures which could be considered in the upcoming review of the ACL are:

• First, establishing a “Recall Registry” which allows purchasers to leave their contact details at the time of purchasing particular goods such as toys. This would enable the relevant authority to directly contact consumers who are in possession of recalled items.
• Second, further promoting existing initiatives such as the Recalls Australia smart phone application, which notifies users of newly recalled items and allows consumers to report products they think are unsafe.
• Third, using information drawn from other jurisdictions, such as the European Union and the United States of America, to issue recall notices for products of concern before they lead to injuries or even deaths in Australia.

Conclusion

The significant number of recalls for consumer goods and frequent instances of child death or injury linked to consumer products indicates that not enough is being done to prevent unsafe goods from reaching vulnerable consumers. This article has considered the three key aspects of the ACL’s consumer product safety provisions – safety standards, bans and the recall process – which, if strengthened could assist with preventing product-related death or injury of children. In turn, this would assist with the fulfilment of Australia’s obligations under the Convention. The upcoming review of the ACL is an opportune time to reconsider the role of suppliers and Australian government authorities in the protection of child safety.

Hannah Lippmann and Sarah Rodrigues, Summer Clerk and Law Graduate, King & Wood Mallesons.