Product Liability and China

If my dog was killed because he ate pet food from China that had toxic chemicals in it, because of poor quality control or lack of production oversight, I would be extremely upset.  If I brushed my teeth tomorrow morning and my teeth began to glow green, because chemicals typically found in antifreeze, made their way into the toothpaste manufacturing line in a chinese factory, I’d look funny.  But I’d also be pretty concerned and possibly very sick (nobody’s teeth have actually been reported to glow green).

The media is going nuts with all of the product liability issues being raised with Chinese imports.  The Wall Street Journal recently published the article Made in China: Sued in the USA.   See the article for just a sampling of the recent spats arising from these issues.

The media coverage is both a good and a bad thing.  It’s bad, because a number of protectionists in Congress and other industries are using it to voice and push an anti-China agenda in addition to using China as a scapegoat for a number of America’s economic woes.

For more on this, take a look at a recent Economist article published in May, entitled America’s Fear of China, the main points of which can be read here.  The article makes some great points in terms of what might be valid and invalid in terms of America’s agenda with China.

Detractors aside, the media coverage of these issues is a good thing because American consumers, and particularly retailers, need to become more aware of where their goods are coming from and in what conditions they are being produced–not in a hysterical and frenzied fashion as some might like us to behave.  But we need to raise awareness of these issues and investigate them more thoroughly.

Having personally visited at least 75 factories in China in the last year, I can tell you that factories in China come as varied as food retailers in the United States.  You’ve got Mom-n-Pop stores, farmers markets, vending machines, regional grocery chains, roach coaches, national grocery chains, and more.  Their setups, services, products, sizes, operations, management styles, locations, and customers come in every variation under the sun.  So do factories in China.

Consider the following as an example of the complexity of working with the right Chinese suppliers.  Two factories may exist in the city of Chanzhou, China.  They both are exactly the same–same number of workers, size of factories, types of machines, and products produced.  Let’s say they both produce shirts and jackets–garments.  Factory A has a very professional-looking website, someone who speaks decent English with customers, and has purchased a counterfeit ISO 9001 certification to validate their quality systems with customers even though their quality systems are not up to par with U.S. standards.  In addition, Factory A does not have a sewing needle detection machine or needle tracking program in place.

A needle detection machine, featured in the picture, is used by passing garment pieces over it to determine if any needles or pieces of needles are stuck in the garment.  A needle tracking program provides that every worker must sign in and sign out needles.  If a needle is broken during use, it must be taken back to the needle-person and exchanged for a new one.

Factory B does not have a website in English.  They do have staff that speaks an intermediate level of English.  They do not present any international certifications, but they have been working successfully with foreign customers for over 7 years.  They have and use their needle detection system as well as a needle tracking program.  A U.S. company emails both factories looking for a supplier.  They choose Factory A because Factory A displays the trappings of a good organization and they believe that such a factory would have good quality and safety control.  They purchase 10,000 kids jackets, for ages 3 to 5 years, from the factory and sell them in the U.S. market .  Eleven of the jackets sold contain sharp needle points.  Nine of them don’t cause any harm.  One of them pierces a 3 year-old’s neck and the child gets an infection.  Another needle gets stuck under the skin of a little boy’s arm and both require hospital attention.  The angry parents find Lawyer X, who agrees to help them go after the US company for its negligence and make them pay dearly for the harm done to these children.

Before the media blitz and all of the recent stories about Chinese product liability, my own little hypothetical story here may have seemed a little dramatic and far-fetched.  Now, not so much.  It doesn’t take much to strike up a conversation with a Chinese vendor these days and send them money to make your product.  Spare yourself from becoming a cautionary tale of Chinese product liability in the WallStreet Journal–do your homework and keep on top of quality.  Investigate what safety standards your product must live up to.  Understand how your products will be inspected: according to what criteria and when.  And, for backup protection, carry a product liability insurance policy.  This goes for suppliers in China or any low-cost country for that matter.  As one client cleverly put it to me in an email, just because Paris Hilton got all the publicity for going to jail, doesn’t mean that she’s the only Hollywood, teenie-starlet out there bending the rules.