International Product Recall – The Basics You Need To Know
Increasing globalization of product markets brings tremendous opportunities for product manufacturers. New technologies enable companies to reach consumers in markets all around the world, and rapid geographical expansion is increasingly the order of the day.
These opportunities also bring risks that must be managed. For any consumer product manufacturer, there is an ever-present risk – despite the best planning and investment – that something could go wrong in the design, production or distribution phases that creates an unexpected safety risk to consumers. When that happens, the manufacturer may need to consider implementing an international product recall or some other form of safety action. Sometimes, that action may be required as a mandatory step by government regulators.
Where an international product recall is necessary, if it’s not managed right, it can be complex, costly and damaging to the brand. But with proper advance planning, and an understanding of what’s involved, the risks can be managed. A product recall does not have to be damaging for a brand – experience has shown that if it is well managed, it can enhance consumer confidence.
Here’s what you need to know.
Products need to be safe – it’s the law
In almost every country around the world, laws and regulations are in place to protect consumers from dangerous products. Whilst the details of these laws vary from country to country, it is very common for these laws to impose express obligations on companies to take appropriate steps if it becomes apparent that a marketed product presents unacceptable risks to consumers.
Failure to meet these obligations can attract significant penalties and lead to significant liability exposures. In some cases, criminal sanctions may be in play.
You need to know that your product is safe – and that it will stay that way
In many countries, the law includes express obligations on manufacturers to monitor the safety of their products in the market. Reports from consumers need to be taken seriously, and where potential safety concerns are reported, they need to be suitably investigated.
This can be challenging for companies, especially where information can become available from multiple sources, and where social media is used by consumers to share their experiences. Companies are expected to have appropriate systems in place to be aware of consumer experiences of their product in the market, so they can remain confident that their product is not presenting unanticipated risks.
Make sure you have a PSIP
Consumer product manufacturers need to have a product safety incident plan (PSIP). This can take various forms, but fundamentally, companies need to have in place a structured process to ensure that potential safety issues are escalated for consideration in appropriate ways within the company, and that the company is well prepared to move quickly and decisively to deal with an issue, if necessary, by launching a product recall. The plan should ensure there is clarity as to how critical decisions will be made (including by ensuring undesirable conflicts of interest are avoided in that process), as well as how the implementation phases will be managed and by whom.
There is some helpful guidance on this to be found in the Code of Practice PAS7100, published by the British Standards Institute, with the support of the UK Office for Product Safety and Standards. This Code of Practice is the first of its kind internationally and was updated in 2022, so it is worth a careful review.
You probably need to talk to the government
Increasingly, the laws in countries around the world include express obligations to notify the appropriate government authority in the event that an unacceptable safety risk for consumers is discovered or a product safety incident has occurred in connection with a marketed product. These can have strict – and very tight – time limits, and significant penalties can be imposed if this obligation is not met.
If a product has been marketed to consumers in multiple countries around the world, and it becomes apparent that the product might present unanticipated and unacceptable risks to consumers, there can arise an obligation to report simultaneously to government authorities all around the world.
The content and delivery of these notifications needs to be managed carefully. The notifications are critical to ensuring not only that regulatory obligations are met, but also that the company can stay in control of the situation and look to deliver the best possible results for itself – and consumers – in difficult and time-critical circumstances.
Do a risk assessment straight away
A risk assessment is a critical step when trying to assess if an unexpected risk requires a recall or other corrective action. This step has become even more important for products marketed in Europe, because the European Commission has published a formal risk assessment methodology that it expects will be used routinely when considering risks associated with marketed consumer products. After Brexit, the UK also published its own formal risk assessment methodology, which differs slightly from the European Union version.
Companies may be unfamiliar with how to go about doing this when faced with a potential time-critical safety emergency. External expert support may be needed, and the key is to move quickly.
Data is your friend
Companies that are best able to manage unexpected safety issues are those that have the best information available at the earliest opportunity. In a product safety crisis, lack of certainty or lack of information always leads to precautionary measures and can easily result in a need for costly and damaging steps that subsequently prove to have been unnecessary.
Don’t underestimate the importance of getting information quickly. It makes a big difference to the ultimate outcome.
If you need help, get help
Companies always do a product recall better the second time around. Hopefully, however, companies won’t be faced with a second recall – one is disruptive enough!
For companies faced with a product recall for the first time (or for the first time in a number of years), external expert support is inevitably going to be needed.
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