Toy Story

Bo Ladan, mother of Alexandra, 9, and Nicky, 3, tries not to overreact to the latest "dangerous toy" news. But when she hears that a product could pose safety risks, she acts quickly. She tossed Nicky's Sarge car because of a lead-paint recall and avoided the Thomas the Tank Engine character James for the same reason. And she dumped Nicky's Magna-Man action figure when she found out it was a choking hazard. "We told him it was dangerous," she says. Now she is deciding what to do about the latest scare--toys containing chemicals called phthalates, which make products like plastic rubber ducks soft and flexible but may contribute to hormonal changes in children and reproductive problems. Will Ladan toss everything containing phthalates if she decides they're truly dangerous? "I would," she says.

This week Congress passed the Consumer Product Safety Improvement Act, which bans lead and several phthalates from children's toys. President Bush is expected to sign the bill into law. "It's a very good start," says Bill Walker, vice president of the nonprofit Environmental Working Group. "[But] right now, the system says a chemical is innocent until proven guilty. It would make far more sense to say, 'Let's prove that a product is safe, particularly for children, before we allow it out on the market'." Phthalates are considered hazardous waste and regulated by the Environmental Protection Agency as air and water pollutants, he says. "But they are completely unregulated by the FDA in food, cosmetics and food products."

Carter Keithley, president of the Toy Industry Association, a trade group representing more than 500 companies, concurs that toys should be proved safe prior to coming to market, which is why his organization supports the new legislation. He adds that the Consumer Product Safety Commission, responsible for regulating the safety of children's toys, hadn't seen phthalates as problematic until now.

Nonetheless, the toy industry's image has been taking a beating recently--last year the CPSC recalled 26 million units of toys, up from 5 million in 2006. "You had the lead paint, you had the detachable batteries. Now you have [phthalates] as well," says Daniel Diermeier, professor of regulation and competitive practice at Northwestern University's Kellogg School of Management. "Once you get a string of this type of events, then you get the question of 'Is this industry really capable of protecting the safety of our children?'" Phthalates look like "part of a pattern," he says. "The toy companies really have a credibility problem now, so even if they're right on this specific issue, and I don't know if they are, they have to now worry about customer perception over the safety of their products in general."

Keithley sees a broader systemic problem, arguing in an e-mail that "it is unrealistic to expect the CPSC to be responsible for approving all consumer products prior to marketing." Last year's recalls made it "clear to the toy industry that we needed to strengthen the system for assuring that toys sold in the U.S. conform to toy safety standards."

"Overall, we are very supportive of what Congress has done," he says. "They've worked hard to come out with a solid piece of legislation that enhances toy safety, that provides uniform standards for all toys … It is in all of our interests to be making safe toys." What about phthalates? "We're not toxicologists," he says. "If a study shows there's a problem, we don't want to include it in our toys." Even before the legislation, toymakers were already working to phase out phthalates because of requirements from big-box stores like Wal-Mart, Toys R Us and Target. Hasbro and Mattel have already stopped adding phthalates, says Keithley.