Democratic Congress Makes Prop 65 Changes Tough Go for PPAI
With Democrats set to take control of Congress next year, the Promotional Products Association International is concerned that it won’t be able to push through changes to Proposition 65.
Proposition 65 is a 20-year-old California law that imposes requirements for goods made, distributed or sold in the state. The purpose of the bill, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, is to protect citizens and drinking water sources from chemicals known to cause cancer, birth defects or other harm and to inform citizens about such exposures. The requirements are much stiffer than all other states.
The problem for the promotional products industry—particularly those that manufacture ceramic and glassware products—is that enforcement of the law has, over the last 18 months or so, begun to focus on promotional products. Proposition 65 requires that Californians be notified via warning labels about specific chemicals in products that come in contact with food.
Penalties for violating the law can be as high as $2,500 per violation per day. And if a promotional product is found to be in violation, all involved—suppliers, distributors and end users—are potentially liable, Steve Slagle, president of PPAI, said.
Some PPAI members have already paid tens of thousands of dollars to settle lawsuits. And a supplier in Canada has elected not to sell products in California because of the challenges with the law, he said.
“It’s a state law that has national ramifications,” Slagle said. “It’s got the implication for more than just those that reside with offices or a manufacturing facility in California.”
Compliance has not come easy.
The controversial, voter-enacted proposition requires the governor to publish, at least annually, a list of chemicals known to the state to cause cancer. Under Proposition 65, more than 700 chemicals—such as lead and cadmium—are listed. Most manufacturers are addressing the issue by affixing labels or changing detailing and manufacturing processes to remove listed chemicals.
For its part, PPAI supports a Federal bill, the National Uniformity for Food Act (S. 3128), introduced in 2005 that would preempt state law. The House passed the bill in March. It then went to the Senate for review, but no action was taken.
“We’re hoping that legislation can be formed and passed to have the same regulations be uniform across all 50 states,” Slagle said.
Some Senators, however, in particular Democrats from California, have opposed the bill.
“It’s going to be more difficult to have the legislation reintroduced as it currently is formed,” Slagle said. “We aren’t as optimistic about that, quite frankly.”
The association is tackling the issue on a number of fronts.
It may introduce the same bill next year, or try a different bill, all with support from the National Uniformity for Food Coalition, whose mission is to provide for a single set of national food safety standards and warning requirements for packaged foods. PPAI is a member of the coalition along with many others including Coca-Cola, Cadbury Schweppes, Kellogg, Kraft, PepsiCo and Hershey.
It is also ramping up an awareness and education phase and offers detailed information at its Web site, PPAI.org. PPAI will hold a town meeting related to Proposition 65 at The PPAI Expo 2007, to be held Jan. 2-6 in Las Vegas.
The impact on the promotional products industry has been largely anecdotal to date; however, PPAI is conducting a survey this week among its 7,600 members to better understand the negative affects of the proposition.
Between 2000 and 2005, $62 million has been paid in settlements across all industries affected by Proposition 65. Of the close to 1,000 settlements, 913 were civil actions brought by private citizens, Slagle said.
“The key thing here is while the state has jurisdiction over the law and enforcement of it, enforcement can be carried out by private entities,” he said.
Ramping up enforcement for Proposition 65 started slowly, Slagle said. The first efforts targeted food products at retail with challenges to major food and beverage manufacturers like Coca-Cola, PepsiCo and General Foods (now Kraft). Enforcement actions then began to spread very slowly to other types of products that come into contact with food.
In April, the state of California and the city of Los Angeles settled a lawsuit with PepsiCo Inc. where PepsiCo agreed to eliminate labels that contained lead on soft drink bottles imported from Mexico and to pay a $1 million civil penalty. The lawsuit charged that PepsiCo violated Proposition 65 by not notifying consumers that the labels contained lead, according to news reports.
“It’s been an evolution, a stepped up process over time and slow to move into our industry,” Slagle said.
