How to Protect Your Company and Your Customers in a Dangerous World Lee L. Bishop ICPHSO Annual Meeting and Training Symposium February 23, 2011 Orlando, Florida

|2 Product Safety Management System… The Basics  Goals of a Product Safety Management System  Prevent hazardous failure modes  Control manufacturing and supply chain  Respond to new information  The Tools Are Available  Engineering techniques (Failure Mode and Effects Analysis, hazard plots, Weibul projections)  Test labs  Management systems, books, software, experts  You Cannot Comply With CPSC Requirements Without One  Requirement to report potential hazards “immediately”  Requirement to start Fast Track recalls within 20 days  “Reasonable testing program” rule requires a safety management system  Penalty guidelines allow consideration for a “reasonable and effective” program

|3 What Can We Learn From These Product Safety Cases?  “Summer of Recalls” Lead Paint Recalls (2007)  Violation of old lead coating rule on children's jewelry, toys  Common theme – Chinese contract manufacturers  $2.3 million penalty (Mattel), $1.25 million penalty (RC2)  Toyota “Sudden Acceleration” Recalls (2009)  Complaints of uncontrolled, unintended acceleration  Recalls for bunched floor mats, sticky pedals  Concern about software, electronic failures in accelerator assembly  Penalty for late reporting, multiple lawsuits  BP Deepwater Horizon Oil Spill (2010)  Offshore well seal failure, well blowout  Inability to seal well, mitigate spill  “Billions” in penalties, damages

|4 The Summer of Recalls  “Summer of Recalls” Lead Paint Recalls (2007)  Jewelry (millions of units)  Thomas and Friends engines (1.7 million toys)  Mattel, Fisher Price toys (~2 million toys) – Dora the Explorer – Sarge jeep – Barbie playsets  Root Cause Factors  China manufacture  Contract suppliers  “Sub tier” manufacturers  Failure to follow specifications  Lessons Learned?

|5 Toyota – “Sudden Acceleration”  Toyota’s “sudden acceleration” recalls  8 million vehicles recalled to replace floor mats, install a shim behind pedal assembly  Hundreds of lawsuits filed, plaintiffs’ firms have websites to collect clients. Complaints, news reports assert that recalls were inadequate, that accelerator systems have defective electronic controls  Toyota paid $49 million penalty for late reporting  But – NHTSA and NASA have not duplicated the failure, or found a defect in the accelerator linkage  “We have not actually been able to find a defect of electronic-throttle-control systems” in Toyota vehicles, stated NHTSA regulator to National Academy of Sciences panel. NHTSA has received complaints of 64 crashes involving 78 deaths, but only one was found to be due to a vehicle defect. (WSJ June 30, 2010)  NHTSA database includes 9698 unintended acceleration events, 3054 involving Toyota vehicles in the last ten years (NASA January 18, 2011)  NHTSA final report (February 2011) concludes that “most likely” cause is “pedal misapplication” – driver hits accelerator by mistake, pushes harder in attempt to slow speeding vehicle

|6 BP – Deepwater Horizon Rig Explosion and Oil Spill  Rig explosion caused by failure of the cement “plug” to contain the pressure within the well.  BP changed the composition of the cement, and the normal procedure used to complete a well, without a complete analysis. National Commission on the BP Deepwater Horizon Oil Spill And Offshore Drilling, Report to the President, at (January 2011)