Concerns of consumers and retailers over the safety of Chinese exports have been reignited by the recent large-scale recall announced by US toy manufacturer Mattel.
It is the latest in a series of high-profile safety scares involving Chinese exports including toys made with lead paint, defective tyres, contaminated toothpaste and faulty mobile-phone batteries. Mattel has since acknowledged that some of the difficulties with Chinese-manufactured toys which have recently been in the news related to design flaws rather than manufacturing flaws. That said, manufacturers and suppliers are looking to their own quality control measures to prevent dangerous flaws in imported products passing unnoticed. Retailers will be keen to ensure that their suppliers have put appropriate quality control measures in place.
In the UK, major companies tend to take a pro-active approach to the recall of potentially dangerous products to avoid damage to their reputation, a practice which is encouraged by the general product safety regulatory regime. The General Products Safety Regulations 2005 have been in force in the UK since the implementation of the EC General Product Safety Directive on 1 October 2005. The Regulations impose three main obligations on producers and distributors:
- to ensure that products are identifiable and traceable;
- to monitor the safety of products; and
- to take appropriate and speedy action, including a recall, in the event of an unsafe product being placed on the market.
The Regulations complement the existing product-specific safety legislation, which continues to apply with the provisions of the 2005 Regulations filling in any gaps in the existing framework. For example, the Toys (Safety) Regulations 1995 have specific provisions dealing with the safety of toys and notifications thereto which operate in conjunction with the 2005 Regulations.
The 2005 Regulations gave enforcement authorities greater powers to order the recall of unsafe products which may have contributed to an increase in the numbers of notifications of dangerous products to UK enforcement authorities and to the European Commission through the rapid alert system known as RAPEX. Statistics show that in the first half of 2007 Chinese-imported products represented 44% of the serious risk products notified in the EU and toys were the most frequently notified category in this period with 177 notifications. The European Commission makes all RAPEX data available to the Chinese authorities.
Retailers should ensure that they have procedures in place to deal with product recalls instigated by a producer, distributor or enforcement authority. When preparing supply agreements, it may also be worth including a contractual obligation on a supplier to comply and/or to procure compliance by its own suppliers, with the product safety regulatory regime. This contractual obligation could be accompanied by a right for the retailer to terminate the supply arrangements if it can prove, or suspects on reasonable grounds, that the product safety regime is not being complied with in relation to the relevant products by parties in the supply chain. This contractual right could be drafted so as to apply in the absence of any action being taken by enforcement authorities.
Vertically-integrated retailers who are themselves also producers of goods will also need to think carefully about their direct obligations under the product safety regulatory regime