Essay on Consumer Safety: Product Dumping
The product dumping is a serious problem that raises a number of ethical issues, since products banned in the US, for example, may be easily sold in other countries, where quality standards and government regulations are not so strict as they are in the US. In such a situation, companies, which have their products banned in the US by the Consumer Product Safety Commission (CPSC) can still sell their product abroad, in those countries where there are no bans to their products. As a result, companies selling such products pursue maximum profits, although they are fully aware of the fact that they expose customers’ health and probably life to certain risks because of which their products are banned in the US. in such a situation, customers life and health are at stake, on the one hand, and companies’ profits are on the other hand. From the legal standpoint, companies can sell products, which are banned in the US, abroad, but from the ethical standpoint, such policies of companies are questionable and, as a rule, unacceptable because material benefits of companies cannot be more important than safety, i.e. life and health of patients. If companies keep selling products that have already been banned in the US, then they intentionally expose their customers to risks and threats, which have already caused the ban of their products in the US, but the poor regulation and safety requirements allow companies to sell dangerous products abroad.
In such a situation, policies of companies, which have their products banned in the US and having option to sell those products abroad, may view their position from different theoretical perspectives. In this regard, the utilitarian perspective grounded on the principle of utility is likely to be the most popular among companies because this theory allows moral agents to take decisions on the ground of the principle of utility. Therefore, if the decision to sell products is beneficial for the company then the decision is reasonable, especially taking into consideration the fact that the share of customers, who may be hurt somehow by products banned in the US is relatively small. Therefore, the principle of utility works pretty well in such a situation, because the majority of stakeholders benefit from selling products banned in the US: companies gain financial and market in benefits, their employees get jobs, while customers get products, which they use for their specific purposes, as a rule, being unaware of consequences and risks associated with those products. The principle of utility justifies the practice of selling products abroad, even if they are banned in the US.
Alternatively, policies of companies may be viewed from the deontological theoretical perspective. Deontology holds the premise that all actions of moral agents should be viewed in the context of moral rules and norms. Any action of the moral agent is reasonable and morally correct as long as it matches traditional moral norms and principles. In such a context, companies selling products, which are banned in the US, abroad act immorally and violate rights of customers to purchase safe and reliable products. Exposing customers to risks and threats is morally wrong from the deontological perspective. At this point, it is possible to refer to one of the fundamental principles of deontology, the kingdom of ends principle. The kingdom of ends principle implies that all people or moral agents commit virtuous acts that mean acts that are grounded on moral and just principles. In case of sales of products banned in the US abroad, it is possible to trace injustice in relation to customers overseas since companies act unjustly in relation to them selling products which are a priory not safe because they have already been banned by the US CPSC. Instead, companies should be driven by moral concerns and remain virtuous through the respect to the well-being of customers. Therefore, in the ideal society, where the kingdom of ends principle is respected, companies, as moral agents, cannot sell products that are potentially dangerous and are already banned.
At this point, the deontological theory is close to the virtue theory and the right formation of character. The virtue theory holds the premise that all moral agents should be virtuous and respect moral norms and values strictly. Being virtuous is the only right way of life in terms of the virtue theory. At the same time, the development of the virtuous lifestyle and the full devotion of individuals to such virtuous lifestyle are possible only on the condition of the right formation of character. The right formation of character means that individuals learn positive, virtuous models of behavior, moral norms and principles. In such a way, the right formation of character leads to the formation of moral agents, who are virtuous and commit only morally correct acts. For instance, in case of companies, which have their products banned in the US, the application of the virtue theory and the concept of the formation of character means that companies should act in a virtuous way, respecting the principle of justice and, thus, they should extrapolate the ban on all sales of their products, which have been already banned either in the US or in any other country of the world.
At the same time, it is possible to distinguish moral and intellectual virtues which may not coincide. What is meant here is the fact that intellectual virtues imply the prevalence of rationality in actions and decisions of the moral agent, whereas moral virtues imply the prevalence of morality and moral correctness in actions and decisions of the moral agent. Therefore, from the standpoint of intellectual virtues, the decision to sell products that have been banned in the US is not absolutely wrong or not virtuous. Instead, if this decision is driven by rational reasons, then it can be implemented in terms of the virtue theory on the ground of the intellectual virtue because such act will have reasonable justification. For instance, if products are not banned in other countries, then they match safety regulations established in those countries and they are not really dangerous to customers’ health, life, etc. Instead, the US rules may be just too strict and set excessive requirements to safety of products. From the rational standpoint, such a view is reasonable and, therefore, has the intellectual virtue sufficient for the virtue theory to accept such way of actions as correct.
In such a situation, the decision many companies have to make, when they face the ban of their products in the US, is extremely difficult and challenging in ethical terms. In this respect, companies should conduct the detailed analysis of their products and to assess real risks and threats of their products to the safety of customers. At this point, it is worth mentioning the fact that decisions of the CPSC may be the result of trade wars the US directly or indirectly involved in as was the case of trade wars between the US and Europe in the past. As a result, many European companies could not sell their products in the US as well as American companies could not sell their products in Europe. However, such a ban was driven not by the customer safety concerns but by economic interests and concerns of the US. Therefore, such products could be sold in other countries, even if they were banned in the US. Nevertheless, companies should put the safety of customers as their primary concern as the only criterion for taking just decisions. This means that companies should not sell products that are unsafe for their customers.
Thus, the safety of products is extremely important and companies, as moral agents, should act responsibly. Even though some ethical theories justify sales of products banned in the US to customers in other countries of the world, even if such products are dangerous for customers’ safety, health and life. In this regard, the possible solution of the ethical dilemma companies, which have their products in the US, have is the assessment of the safety of their products and justification of the safety of those products. What is meant here is the fact that companies should justify and prove that their products are still safe enough to be sold to customers without any risk to their safety.
Consumer product safety act
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Consumer Product Safety Act
The Consumer Product Safety Act states that any company that receives numerous complaints about a products defects must report these claims to the CPSA. According to the CPSA reporting responsibilities belong to manufacturers, importers, distributors and retailers of consumer products. Each is required to notify the Commission if it obtains information which reasonably supports the conclusion that a product fails to comply with a consumer product safety standard or banning regulation. Also if the product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury, or death to the consumer.
The Commission's interpretative regulation explains the company's obligations and those of the Commission.. This requires manufacturers of a consumer product to report to the Commission if a particular model of a consumer product is the subject of three civil actions that have been filed in Federal or State court, each suit alleges the involvement of that model in death or serious injury to the body. Then at least three of the actions will result in a final settlement involving the manufacturer; or in a judgment for the plaintiff within any one of the two year periods specified. The first two year period began to run on January 1, 1991 and ends on December 31, 1992. The second two year period starts on January 1, 1993; the third, on January 1, 1995; and so forth. Manufacturers must file a report within 30 days after the settlement or judgment in the third civil action to which the reporting requirement applies.
Why is the reporting required? The intent of Congress was to encourage widespread reporting of potential product hazards. Congress sought not only to have the Commission uncover substantial product hazards, but also to identify risks of injury which the Commission could attempt to prevent through its own efforts, such as information and education programs, safety labeling, and adoption of product safety standards. Although CPSC relies on sources other than company reports to identify substantial product hazards, reporting by companies is invaluable because firms often learn of product safety problems long before the Commission does. For this reason, any company involved in the manufacture, importation, distribution or sale of consumer products should develop a system of reviewing and maintaining consumer complaints, inquiries, product liability suits and comments on the products they handle.
If a firm reports to the Commission it does not necessarily mean there is a substantial product hazard.
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Product Consumer Safety Consumer Products Civil Action Manufacturers Commission Complaints Defect Reporting
The CPSC simply requires firms to report whenever a product fails to comply with a consumer product safety rule, fails to comply with a voluntary standard upon which the Commission has relied, contains a defect that could create a substantial product hazard, or creates an unreasonable risk of serious injury or death. Thus, a product does not need to actually create a substantial product hazard to fit the reporting requirement.
It is the Commission's view that a firm should take the first step of notifying the Commission when the information available to the company reasonably indicates that a report is required. It is in the company's interest to assign the responsibility of reporting to someone in executive authority. The individual's knowledge of the product and the reporting requirements are valid reasons for assigning the responsibility.
A company is considered to have knowledge of product safety information when such information is received by an employee or official of the firm who may reasonably be expected to be capable of appreciating the significance of that information. Under ordinary circumstances, five days is the maximum reasonable time for that information to reach the chief executive officer or other official assigned responsibility for complying with the reporting requirements. Weekends and holidays are not counted. The Commission will evaluate whether or when a firm should have reported.
This evaluation will be based, in part, on what a reasonable person, acting under the circumstances, knows about the hazard brought on by the product. “A firm shall be deemed to know what it would have known if it had exercised due care ascertaining the accuracy of complaints or other representation.” If the company is uncertain whether the information is reportable, the firm may elect to spend a reasonable time investigating the matter, but no evaluation should exceed ten days unless the firm can demonstrate that a longer timetable for the investigation is reasonable. If a firm elects to conduct an investigation to decide whether it has reportable information, the Commission must approve it. At the end of ten days, “the firm has received and considered all information which would have been available to it had a reasonable, expeditious, and diligent investigation been undertaken.” (Public)
Failure to report with the above requirement is a prohibited act of the CPSA which states: It shall be unlawful for any person to fail to furnish information required. Any person who commits a prohibited act is subject to civil penalties of the CPSA, including fines up to $1.25 million for a related series of violations, and criminal penalties, which includes fines up to $500,000 or imprisonment no more than one year, or both.
Public Law. “Consumer Product Safety Act.” Oct. 27, 1972. http://www.herc.org/library/cpsa.pdf#search='consumer%20product%20safety%20act%201976'.
Illinois Department of Public Health. “Toy Recalls.” Children’s Product Safety. May 16, 2001: http://www.idph.state.il.us/childsafety/toys.htm
“The US Consumer Product Safety Act and its implementation by the Consumer Product Safety Commission.” http://www.iue.it/LAW/WP-Texts/Joerges91/chap24.htm
“The Story Of The Laws Behind The Labels.” April 06, 1999: http://vm.cfsan.fda.gov/~lrd/histor1b.html.