‘But on’ this new mandatory standard… playing it safe with battery laws
On a hot-button issue, suppliers of button batteries or consumer goods powered by them can expect the ACCC to more actively monitor and enforce new mandatory information and safety standards which took effect on 22 June 2022.
Button batteries are small, circular batteries that are often found in TV remotes, watches, and children’s toys. If swallowed, these batteries can serious internal burns which can cause serious injury or death. Indeed, the ACCC has indicated that three children have died, and one child a month is seriously injured, after swallowing such batteries.
To address the inherent choking hazard posed by button batteries for children, and after an 18-month transition period, businesses at all levels of the supply chain must now comply with mandatory safety and information standards to ensure the safety of their button batteries (or consumer goods concerning button batteries). These requirements include ensuring that:
- batteries are not released during reasonably foreseeable use or misuse of the product;
- consumer goods containing these batteries have secure compartments to prevent children accessing the batteries;
- batteries are supplied in child-resistant packaging;
- consumer goods containing button batteries have certain warnings, symbols and emergency advice fixed to their packaging and instructions (or, where the goods are not packaged, warnings must be attached or included with the good to alert consumers of the hazard posed by the button battery included with the product); and
- batteries are tested to comply with certain Australian and international standards.
The new information standards also set out recommendations for businesses to adopt regarding their products and batteries having certain safety warnings, advice and information (Information Standard Recommendations).
Notably, certain exemptions apply including where button batteries are supplied in bulk for professional use (subject to certain criteria) or where the consumer good containing the battery was first supplied to a consumer before 22 June 2022.
A priority for the ACCC
As part of the ACCC’s Compliance and Enforcement Priorities for 2022-23, then Chair Rod Sims announced that one of the ACCC’s Enforcement priorities for 2022-23 is compliance with button battery safety standards.
Powering the message home, in her recent speech, new ACCC chair Gina Cass-Gottlieb also highlighted the central importance of the product safety to consumer protection, saying that “the ACCC Product Safety Priorities are one crucial element of our consumer protection work.” In particular, Ms Cass-Gottlieb noted that “a priority for the ACCC this year is high-risk product safety issues affecting young children” and that “enforcing these safety standards is a vital step towards preventing deaths and injuries to children.”
Penalties for non-compliance
Businesses that do not comply with the mandatory safety standards concerning button batteries may be in breach of the Australian Consumer Law (ACL) and exposed to potential enforcement action by the ACCC.
For corporations, the maximum financial penalty for a breach of the ACL is the greater of:
- 3 times the value of the benefit received
- 10% of annual turnover in the preceding 12 months where the benefit cannot be calculated.
For individuals, the maximum financial penalty for a breach of the ACL is $500,000.
However, businesses who do not comply with the Information Standard Recommendations are not considered to have breached the mandatory standards, and therefore may not exposed to any pecuniary penalty for non-compliance with those recommendations alone. Rather, the purpose of the Information Standard Recommendations is to make recommendations in relation to consumer goods containing a button/coin battery.
In light of the increased regulatory spotlight on these issues and the potential penalties for non-compliance, suppliers of button batteries or related goods should take extra care to carefully comply with the mandatory safety and information standards.
General product safety prohibition?
The introduction of these mandatory safety and information standards for button batteries is a world-first, and a positive step forward in product safety regulation.
In that context, the introduction of a general safety provision in the ACL that prohibits the sale of unsafe goods in Australia is once again a hot-button issue. Indeed, ACCC Chair acknowledged in her recent speech that such a provision may benefit consumers by incentivising “manufacturers to ensure their products are safe…[and] allow us to move away from this reactive model”. Ms Cass-Gottlieb’s predecessor Rod Sims has also previously proposed the introduction of such a provision back in 2019.
Many other OECD countries have general prohibitions against unsafe products. For example, in the UK, in addition to specific regulations for certain kinds of products (such as for electrical equipment), the General Product Safety Regulations 2005 (UK) generally prohibits the sale of all products unless it is safe and enforcement authorities have powers to take appropriate action when this obligation is not met. It remains to be seen whether a similar provision will ultimately be adopted in Australia by Federal or State parliaments.