TRADE PRACTICES (CONSUMER PRODUCT SAFETY STANDARDS) (CHILDREN'S NIGHTWEAR AND PAPER PATTERNS FOR CHILDREN'S NIGHTWEAR) REGULATIONS 2007 (SLI NO 21 OF 2007) EXPLANATORY STATEMENT

TRADE PRACTICES (CONSUMER PRODUCT SAFETY STANDARDS) (CHILDREN'S NIGHTWEAR AND PAPER PATTERNS FOR CHILDREN'S NIGHTWEAR) REGULATIONS 2007 (SLI NO 21 OF 2007)

Attachment A

Details of the Trade Practices (Consumer Product Safety Standards) (Children’s Nightwear and Paper Patterns for Children’s Nightwear) Regulations 2007

Regulation 1 – Name of Regulations

This regulation provides that the name of the Regulations is the Trade Practices (Consumer Product Safety Standards) (Children’s Nightwear and Paper Patterns for Children’s Nightwear) Regulations 2007).

Regulation 2 – Commencement

This regulation provides that the Regulations commence on 1 March 2007.

Regulation 3 – Definition

This regulation provides a definition of children’s nightwear, to assist in the determination of the garments to which the mandatory standards apply. Additional assistance on the application of the standards can be obtained by reference to the Australian/New Zealand Standards upon which the mandatory standards are based.

Regulation 4 – Purpose

This regulation provides that the Regulations set out the safety standards for children’s nightwear and for paper patterns for children’s nightwear.

Regulation 5 – Standard for children’s nightwear until 29 February 2008.

This regulation specifies the mandatory standards applicable to children’s nightwear until 29 February 2008. The provision reflects the intention that the Regulations adopt the requirements of the updated Australian/New Zealand Standard (AS/NZS 1249:2003), subject to the variations detailed in Part 4 of Schedule 1, with a view to ensuring after a transition period of 12 months (during which time compliance with the 1999 standard, as varied by Part 2 of Schedule 1, will be permitted) compliance with the 2003 standard will be mandatory.

Regulation 6 – Standard for children’s nightwear from 1 March 2008.

This regulation specifies the mandatory standard applicable to children’s nightwear after 1 March 2008 and adopts the requirements of the updated Australian/New Zealand Standard (AS/NZS 1249:2003), subject to the variations detailed in Part 4 of Schedule 1. The major improvements made to the existing standard include:

§ a clearer definition of infant sleeping bags;

§ fabric with a pile or nap, which meets the requirements for surface burn, can be used on the 2.5cm inside edge for all categories of clothing;

§ new trim requirements;

§ a more specific identification of all-in-one garments;

§ recommendations for the labelling of garment sets where one part of the set is within the scope of the standard and the other is a garment not required to meet the standard;

§ an improved guide to the procedure for determining the categories of children’s nightwear; and

§ removal of the reference to printed labels only, which will no longer restrict the use of woven labels.

Regulation 7 – Standard for paper patterns for children’s nightwear until 29 February 2008.

This regulation specifies the mandatory standards applicable to paper patterns for children’s nightwear until 29 February 2008. The provision, like Regulation 5, is a transitional provision reflecting the intention that the Regulations adopt the requirements of the updated Australian/New Zealand Standard (AS/NZS 1249:2003), subject to the variations detailed in Part 4 of Schedule 2, with a view to ensuring after a transition period of 12 months (during which time compliance with the 1999 standard, as varied by Part 2 of Schedule 2, will be permitted) compliance with the 2003 standard will be mandatory.

Regulation 8 – Standard for paper patterns for children’s nightwear from 1 March 2008.

This regulation specifies the mandatory standard applicable to paper patterns for children’s nightwear after 1 March 2008 and adopts the relevant requirements of the updated Australian/New Zealand Standard (AS/NZS 1249:2003), subject to the variations detailed in Part 4 of Schedule 2.

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Schedule 1 – Australian/New Zealand Standards for children’s nightwear

Part 1 of this schedule provides that AS/NZS 1249:1999 is an applicable safety standard for the purposes of Regulation 5.

Part 2 of this schedule provides for variations to AS/NZS 1249:1999, and ensures consistency with the requirements previously established by now-revoked Consumer Protection Notice No 4 of 2004, notified in the Gazette on 2 November 2004 pursuant to section 65E of the Act.

Part 3 of this schedule provides that AS/NZS 1249: 2003 is an applicable safety standard for the purposes of Regulations 5 and 6.

Part 4 of this schedule provides for variations to AS/NZS 1249: 2003, and maintains a general consistency with the variations to the 1999 standard made by Part 2.

Schedule 2 – Australian/New Zealand Standards for paper patterns for children’s nightwear

Part 1 of this schedule provides that AS/NZS 1249:1999 is an applicable safety standard for the purposes of Regulation 7.

Part 2 of this schedule provides for variations to AS/NZS 1249:1999, and ensures consistency with the requirements previously established by now-revoked Consumer Protection Notice No 5 of 2004, notified in the Gazette on 2 November 2004 pursuant to section 65E of the Act.

Part 3 of this schedule provides that AS/NZS 1249: 2003 is an applicable safety standard for the purposes of Regulations 7 and 8.

Part 4 of this schedule provides for variations to AS/NZS 1249: 2003, and maintains a general consistency with the variations to the 1999 standard made by Part 2.

INTRODUCTION

This paper considers whether there is a need for continuing government regulation to address the burn hazard to children wearing nightwear. It is an Australian Competition and Consumer Commission (ACCC) regulation impact statement and the decision maker is the Parliamentary Secretary to the Treasurer.

Australia first introduced a mandatory safety standard to address a significant incidence of severe burns to children wearing nightwear in 1978. A marked drop in the incidence of burns admissions to hospital followed. A similar decrease occurred in the United States as a result of the introduction of standards for the flammability of children’s nightwear.

The existing consumer product safety standards are based on Australian/New Standard AS/NZS 1249: 1999 Children’s nightwear and limited daywear having reduced fire hazard, which itself makes reference to a range of standards for sizing, care labelling and testing of fabrics. The Commonwealth adopted the majority of AS/NZS 1249: 1999 on 1 November 1999 as a mandatory standard for the purposes of the Trade Practices Act 1974.

Both the design and materials used for children’s nightwear are critical to the level of fire safety in the garment. The potential level of burn injury to a child if a garment catches fire is very high, at times resulting in death. The current mandatory standard addresses both design and material.

Standards Australia/Standards New Zealand in consultation with a wide range of stakeholders have revised the Australian Standard to bring it up to current market practice, taking into account trade harmonization issues. As a result AS/NZS 1249: 2003 was published on 29 December 2003.

The new standard has introduced changes to improve and clarify some parts of the existing standard that were considered confusing and to provide users with a more workable document containing more specific identification to illuminate previous “grey areas”.

PROBLEM

What is the problem being addressed?

The problem to be addressed is the need to maintain, and improve on, the existing level of protection against the risk of injury and death to children by ensuring that nightwear available in the Australian market does not present an excessive fire hazard, and that consumers are able to purchase garments fully informed of the level of risk.

The technical nature of the manufacturing and fire safety issues related to children’s nightwear is such that it is unlikely that an average consumer would be able to independently assess the fire safety of a garment and make an informed purchase decision. The fire safety of a garment relates to a range of factors that describe the comparative ease with which garments can catch alight and stay alight. There are popular misconceptions about the comparative safety of certain fabric types (e.g. that cotton is safe with fires when it is not) which underpin the need for a standard. A further problem is that people who make their own nightwear possibly do so without the necessary knowledge to make them safe. Hence the need for a standard dealing with paper patterns for children’s nightwear.

Data that equates injury with type of clothing is not available, as burn injury data does not consistently report on the type of clothing involved, Given the lack of specific injury data it is not possible to provide a quantitative comparison of pre and post 1978 frequency and severity of nightwear related injury; anecdotally, it reportedly has dropped significantly. Similarly, specific injury data relating to the 1980’s and 1990’s is scant.

The injury toll for Victoria alone, over 1993/94 for fire/flames/burns injury to children aged 0 to 14, including nightwear related injury, was 3,132. These injuries resulted in one fatality, 1187 hospitalisations and 2,798 medical treatments.

Extrapolating this data based on population figures, the national figures for 1993/94 would give something like 12,528 children injured.

However, the nature and severity of fire injury to children is an important factor. Even an incidence causing minor physical disfigurement affects the victim and family members over a long period. In some cases, the victim never fully recovers.

Had the mandatory standard for children’s nightwear not been in place it is reasonable to assume that the incidence of fire injury and associated costs would have been higher. There is a clear need to ensure that children’s nightwear continues to provide appropriate levels of personal safety for children and that we continue to strive to reduce the incidence and severity of fire injury.

OBJECTIVES

What are the objectives of government action?

The Government’s consumer protection policy includes the objective of ensuring that consumer products are safe. Particular attention is paid to products intended to be used by children. The Trade Practices Act includes provisions to support this objective through the establishment of mandatory consumer product safety and information standards, product bans, recalls of unsafe products and the issuing of product safety warning notices.

The Government’s aim is to continue to reduce the risk of serious injury and death to children as a result of accidents involving children’s nightwear and fire.

Is there a regulation currently in place? Who administers it?

The current mandatory standard for children’s nightwear and limited daywear having reduced fire hazard came into effect on 2 November 2004 and is derived from Australian/New Zealand Standard 1249:1999 Children’s nightwear and limited daywear having reduced fire hazard published on 5 April 1999.

Mandatory standards are enforced by the Australian Competition and Consumer Commission (ACCC).

OPTIONS

The viable options available to achieve the objective are:

1. maintain the status quo;

2. industry self regulation;

3. an updated new mandatory standard to reflect Australian/New Zealand Standard AS/NZS 1249: 2003 Children’s nightwear and limited daywear having reduced fire hazard.

Consumer education is not regarded as a viable option because the technical nature of the manufacturing and fire safety issues is such that it is unlikely that an average consumer would be able to independently assess the fire safety of a garment.

IMPACT ANALYSIS

Who is affected by the problem and who is likely to be affected by its proposed solution?

The proposed viable options would affect consumers who purchase children’s nightwear and their children, businesses involved in the supply of children’s nightwear (manufacturers, importers, distributors and retailers), government (including consumer product regulators) and providers of public hospital services.

Option 1: Maintain the Status Quo

Maintaining the status quo would still ensure a good level of protection for consumers. However a level of confusion would remain in the marketplace, because the requirements of the existing standard are open to interpretation, and, some would say, not fully comprehensible at times.

Costs and benefits to consumers

Choice for consumers would remain unchanged, as the existing standard is not specific enough in some instances for retailers to ascertain whether garments comply or not. The only benefit to consumers would be confidence that the goods they buy are safe and appropriately labelled.

Costs and benefits to industry

The cost to industry associated with this option would be failure to achieve the clarity and more workable options offered by an updated standard. Retailers in particular consider that compliance is difficult to achieve at the moment, and this restricts the range of clothing available to them.

Costs and benefits to government

Enforcement costs are $20,000 per year. (Approximately $3000-$4000 for market survey costs and the rest for legal expenses.)

Another cost to government is that because the existing standard does not reference the most up to date tests in international (ISO) standards, it could be seen as a barrier to trade.

Option 2: Industry-Self Regulation

Removing the mandatory standard would permit any form of children’s nightwear onto the Australian market regardless of fire safety consideration.

In the absence of a mandatory standard the possible outcomes are:

· availability on the Australian market of garments which do not guard against fire risk;

· insufficient product safety information on garments to facilitate informed decisions;

· loss of certainty for consumers, manufacturers, distributors and retailers that the nightwear in the market provides sufficient levels of safety;

· possible wider product choice of garments for consumers;

· possible ‘cheaper’ garments on the market; and

· reliance on Australian Standards by some industry members, but unlikely all, as good corporate citizens and to guard against litigation.

Costs and benefits to consumers

The potential costs to consumers include:

· a loss in certainty that the garments on sale provide an adequate level of fire safety^{^[1]}; and

· a possible increase in the number and severity of fire injuries and deaths and a resultant increase in physical and mental trauma and associated health costs.

The possible benefits to consumers would be a wider choice of garments and potentially reduced prices.

Costs and benefits to industry

The costs to industry would include:

· loss of certainty about the fire safety characteristics and compliance of product (the mandatory standard makes explicit the specifications considered necessary for consumer safety and fire testing requirements and provides a high level of reassurance);

· potential for increased product liability claims;

· need for remedial action where a court determines that product labelling is inadequate;

· potential for an increasing number of recalls of products that are identified as unsafe; and

· need to put in place and maintain the infrastructure to support self regulation. Previous experience with industry codes of practice such as the Infant and Nursery Products Association (INPAA) Safe Baby Code suggests that the printing costs would amount to approximately $20,000 in the first year.

The benefits to industry would be some cost savings from not having to comply with a specific standard, or the freedom to adopt more expedient test requirements and fire hazard labelling of garments, and possibly more freedom in garment style, fabric selection and pricing.

Costs and benefits to government

The costs to Government would be:

· additional costs incurred as a result of the added reliance on the judicial system for redress, in the case of the supply of dangerous goods;

· the involvement of time and effort consulting with industry to educate and encourage the development of arrangements for self regulation; and

· increased health costs as less safe nightwear could result in higher injury and death rates.

The benefit to Government would be the removal of the existing enforcement costs. (Approximately $20,000 per year).

Option 3: An Updated Mandatory Standard Based on AS/NZS 1249: 2003

A new revised mandatory standard would:

· resolve the coherency and clarity problems in the existing standard, facilitating ease of compliance and enforcement;

· take account of trade harmonisation with New Zealand, in accordance with the Trans Tasman Mutual Recognition Arrangement, and with other countries recognizing the broad aims of the World Trade Organization (WTO) of which Australia is a member;

· gain widespread industry and consumer acceptance and support;

· enhance consumer safety objectives; and

· encourage industry members to take more responsibility.

The major improvements made to the standard include:

· a clearer definition of infant sleeping bags;

· fabric with a pile or nap, which meets the requirements for surface burn, can be used on the 2.5 cm inside edge for all categories of clothing;

· new trim requirements;

· a more specific identification of all-in-one garments;

· recommendations for the labelling of garment sets where one part of the set is within the scope of the standard and the other is a garment not required to meet the standard;

· an improved guide to the procedure for determining the categories of children’s nightwear; and

· removal of the reference to printed labels only, which will no longer restrict the use of woven labels.

Mandating the latest version of the Australian Standard will resolve many of the problems associated with the other options. It is proposed to exclude second hand clothing from compliance with the standard for the following reasons:

· second hand nightwear would have been made to comply with the mandatory standard, eg styled to reduce fire hazard;

· second hand clothing is sold through charity shops, market stalls and the like and it is not practical to expect these outlets to know what labelling should be applied;

· preventing charity shops from selling children’s nightwear would result in inexpensive second hand nightwear becoming unavailable to disadvantaged consumers;

Possible trade implications

The Commonwealth Government is concerned that its regulations do not impose unnecessary barriers to trade by setting standards that make compliance by overseas manufacturers difficult, especially if it cannot be shown to be maintaining a higher level of consumer protection. However, under the terms of the Agreement on Technical Barriers to Trade a Government is able to regulate to protect human life and health.

The Australian children’s nightwear market is estimated to be worth around $200 million per annum. The majority of garments, about 80%, are imported.

There is a range of consumer protection measures for nightwear in overseas countries and these are summarised below.

The United States controls sleepwear through its Flammable Fabrics Act, which dictates garment style: they are to be “tight fitting”.

Canada has guidelines to help industry to comply with their Hazardous Products Act, including restrictions on trim.

The United Kingdom has a combination of mandatory and voluntary measures to control the fire performance of fabrics used in the full range of baby, child and adult nightwear garments and to make the public more aware.

Sweden has guidelines that govern the fire properties of apparel and textiles generally.

In general other countries do have controls in place to protect their public from unsafe nightwear. There is a high degree of conformity among standards and therefore Australia is not setting a precedent by maintaining a mandatory standard for children’s nightwear.

The proposed mandatory standard does not make compliance by overseas manufacturers difficult. On the contrary, advice from retailers is that it will make compliance easier by making the requirements clearer.

It is Standards Australia policy to mirror international (ISO) standards, but, as there is no ISO standard for children’s nightwear they have referenced tests in agreed international (ISO) standards, which provides a high degree of conformity between the various standards. As a result it does not impose an unreasonable barrier to trade nor does it impact significantly on Australia’s WTO commitments.

Costs and benefits to consumers

There would be no additional costs to consumers.

The benefits to consumers would be the availability on the Australian market of nightwear which is as safe as, if not safer than, anywhere else in the world and more useful labels and information on which to make informed choices. Another possible benefit would be an increased choice of goods on the market.

Costs and benefits to industry

Industry has advised that there would be no costs involved with an updated mandatory standard as compared to the status quo. Nightwear is already required to be labelled, so industry would not incur any additional labelling costs.

The benefits are access to clear, specific requirements which offer the opportunity to reduce management and administrative effort to ensure compliance, a higher level of confidence in compliance, to avoid the cost and inconvenience of product recalls and to avoid litigation. An additional benefit would be the opportunity to offer consumers a safer garment with labelling that supports better buying decisions.

Costs and benefits to government

Enforcement costs of an estimated $20,000 per annum (to cover market surveys and legal expenses). This is the same as the status quo so there is no additional cost to government.

The benefits to government are greater ease of enforcement and removal of a possible barrier to trade.

CONSULTATION

Consultations were held with industry, the Ministerial Council on Consumer Affairs (MCCA), the Standing Committee of Officials of Consumer Affairs (SCOCA), the Consumer Products Advisory Committee (CPAC) (these bodies comprise Commonwealth, State, Territory and New Zealand Consumer Affairs/Fair Trading Ministers/officers. Other stakeholders included consumer groups, industry organizations including manufacturers, distributors and retailers, child safety experts such as Kidsafe and the medical and health sector.

All those consulted unanimously supported option 3, an updated mandatory standard based on AS/NZS 1249: 2003.

CONCLUSION AND RECOMMENDED OPTION

Maintaining the existing standard is not considered feasible because the latest version of the standard was developed specifically to improve and clarify some parts of the existing standard that were considered confusing and to provide users with a more workable document.

The option of industry self-regulation is not considered feasible, given the high level of risk to children and the lack of industry self-governance since the majority of products are imported.

Option 3 maintaining explicit government regulation by declaring an updated mandatory standard based on Australian/New Zealand Standard AS/NZS 1249:2003 Children’s nightwear and limited daywear having reduced fire hazard, would improve the level of protection for consumers, make compliance easier for industry and give appropriate recognition to the value of the work contributed to the development of the revised Australian Standard. For these reasons, Option 3 is the recommended option.

IMPLEMENTATION AND REVIEW

The new mandatory standards for Children’s nightwear and limited daywear having reduced fire hazard and paper patterns for children’s nightwear would commence in August 2006 and be subject to review five years later. To assist with market adjustment, it is proposed to run both the old and new standard together for eighteen months, giving suppliers the choice of complying with either standard.

Effectiveness will be assessed through monitoring compliance through the ACCC’s and State/Territory market surveys and recall action.

^{^[1]} Note: Since the original standard was introduced in 1978 consumers have had that certainty in their purchase decision for 27 years.

Commonwealth Numbered Regulations - Explanatory Statements

explanatory Statement