[Federal Register Volume 76, Number 196 (Tuesday, October 11, 2011)][Notices][Pages 62850-62856]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26067]


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 DEPARTMENT OF LABOR

Occupational Safety and Health Administration

[Docket No. OSHA-2009-0026]


Curtis-Straus LLC; Application for Renewal of Recognition

AGENCY: Occupational Safety and Health Administration (OSHA), Labor.

ACTION: Notice.

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SUMMARY: This notice announces the application of Curtis-Straus LLC for
renewal of its recognition as a Nationally Recognized Testing
Laboratory (NRTL) and presents the Agency's preliminary finding to deny
this application for renewal of NRTL recognition.

DATES: Submit information or comments, or a request to extend the
comment period, on or before November 10, 2011. All submissions must
bear a postmark or provide other evidence of the submission date.

ADDRESSES: Submit comments by any of the following methods:
    Electronically: Submit comments electronically at http://www.regulations.gov,
which is the Federal eRulemaking Portal. Follow the instructions
online for making electronic submissions.
    Fax: If submissions, including attachments, are no longer than 10
pages, commenters may fax submissions to the OSHA Docket Office at
(202) 693-1648.
    Mail, hand delivery, express mail, or messenger or courier service:
Submit one copy of the comments to the OSHA Docket Office, Docket 
No. OSHA-2009-0026, U.S. Department of Labor, Room N-2625, 200 
Constitution Avenue NW., Washington, DC 20210. The Docket Office 
accepts deliveries (hand, express mail, and messenger and courier 
service) during the Department of Labor's and Docket Office's normal 
business hours, 8:15 a.m.-4:45 p.m., E.T.
    Instructions: All submissions must include the Agency name and the OSHA docket 
number (i.e., OSHA-2009-0026). OSHA will place all submissions, including any 
personal information provided, in the public docket without revision, and will make 
these submissions available online at http://www.regulations.gov.
    Docket: To read or download submissions or other material in the
docket (e.g., exhibits listed below), go to http://www.regulations.gov
or the OSHA Docket Office at the address above. The http://www.regulations.gov index
lists all documents in the docket; however, some information
(e.g., copyrighted material) is not publicly available to read or download
through the Web site. All submissions, including copyrighted material,
are available for inspection and copying at the OSHA Docket Office.
    Extension of comment period: Submit requests for an extension of
the comment period on or before November 10, 2011 to the Office of
Technical Programs and Coordination Activities, NRTL Program,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW., Room N-3655, Washington, DC 20210,
or by fax to (202) 693-1644.

FOR FURTHER INFORMATION CONTACT: Bernard Pasquet, Acting Director,
Office of Technical Programs and Coordination Activities, NRTL Program,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW., Room N-3655, Washington, DC 20210;
telephone: (202) 693-2110. For information about the NRTL Program, go
to http://www.osha.gov, and select "N" in the site index.

SUPPLEMENTARY INFORMATION:

I. Notice of Application for Renewal of Recognition

    The Occupational Safety and Health Administration (OSHA) is
providing notice that Curtis-Straus LLC (CSL) applied for renewal of
its recognition as a Nationally Recognized Testing Laboratory (NRTL).
(See Ex. 2--CSL renewal application dated 06/04/2004.) \1\ OSHA
recognition of an NRTL signifies that the organization meets the legal
requirements specified in 29 CFR 1910.7. Recognition is an
acknowledgment by OSHA that the organization can perform independent
safety testing and certification of the specific products covered
within its scope of recognition, and is not a delegation or grant of
government authority. As a result of recognition, employers may use
products approved by the NRTL to meet OSHA standards that require
product testing and certification.
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    \1\ A number of documents, or information within documents,
described in this Federal Register notice are the applicant's
internal, detailed procedures, or contain other confidential
business or trade-secret information. These documents and
information, designated by an "NA" at the end of, or within, the
sentence or paragraph describing them, are not available to the
public.
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    The Agency processes applications by an NRTL for initial
recognition, or for an expansion or renewal of this recognition,
following requirements in Appendix A to 29 CFR 1910.7. This appendix
requires that the Agency publish two notices in the Federal Register in
processing an application. In the first notice, OSHA announces the
application and provides its preliminary finding. In the second notice,
the Agency provides its final decision on the application. These
notices set forth the NRTL's scope of recognition or modifications of
that scope. OSHA maintains an informational Web page for each NRTL that
details its scope of recognition. Interested parties may access these
pages from OSHA's Web site at http://www.osha.gov/dts/otpca/nrtl/index.html.
Each NRTL's scope of recognition has three elements: (1)
The type of products the NRTL may test, with each type specified by its
applicable test standard; (2) the recognized site(s) that has/have the
technical capability to perform the product testing and certification
activities for test standards within the NRTL's scope; and (3) the
supplemental program(s) that the NRTL may use, each of which allows the
NRTL to rely on other parties to perform activities necessary for
product testing and certification.

II. General Background on the Application

A. CSL's Application

    CSL applied to OSHA for its initial recognition in February 1998
when it was a limited liability company chartered in the Commonwealth
of Massachusetts. After processing the application, including
performing the necessary on-site assessments, OSHA announced its
preliminary finding on the application in a notice published in the
Federal Register on December 13, 1999 (64 FR 69552). Following the
requisite comment period, OSHA issued a notice in the Federal Register
on May 8, 2000, announcing its final decision to recognize CSL as an
NRTL (65 FR 26637). In May of 2005, Bureau Veritas Consumer Products
Services, Inc. (BVCPS) acquired CSL; Bureau Veritas Holdings, Inc. owns
BVCPS; Bureau Veritas SA (BVSA) owns Bureau Veritas Holding, Inc., and
Wendel Investissement (Wendel) owns BVSA. Through various
intermediaries, Wendel owns 58% of CSL. As of May 2011, Wendel also
owns approximately 11% of Legrand (see Ex. 10--CSL letter to OSHA dated
08/01/2011), a manufacturer of electrical products based in France.
Legrand has world-wide operations in many other European countries,
Canada, Mexico, various South American countries, and China, as well as
other parts of Asia (see Legrand Group "Facts and Figures,"
http://www.legrandgroup.com/EN/2010-facts-and-figures_12506.html).
    Wendel describes itself as "one of the most prominent listed
investment companies in Europe. Its philosophy is to invest for the
long term, as a majority or principal shareholder, in listed or
unlisted companies with leadership positions, so as to accelerate their
own growth and business development" (http://www.wendel-investissement.com/en/profil-strategie_uk.html).
Wendel subsequently acquired additional manufacturers, such as
Campagnie Deutsche, a manufacturer of industrial and automotive
electrical connectors, some of which may require NRTL certification
prior to use in the workplace. Wendel has the potential to acquire
additional companies that manufacture products that require
NRTL testing and certification.
    On June 4, 2004, CSL submitted its renewal application. On April
27, 2007, OSHA informed CSL by letter that CSL appeared not to meet the
NRTL Program policy on independence under Appendix C of the
NRTL Program Directive (OSHA Instruction CPL 01-00-003-CPL 1-0.3)
due to BVSA's acquisition of CSL (see Ex. 3--OSHA letter to CSL, dated 04/27/2007).
In that letter, OSHA asked CSL to provide clear and convincing evidence
(NRTL Program Directive, Appendix C.V, OSHA Instruction CPL 01-00-003-CPL 1-0.3)
that pressures (i.e., undue influences) do not exist as a result
of its organizational affiliation with Legrand that could compromise
CSL's NRTL testing and certification processes. CSL responded to OSHA on
August 27, 2007, and supplemented this response on January 31, 2008,
(see Ex. 4--CSL letter to OSHA, dated 08/27/2007, and Ex. 5--CSL letter to OSHA,
dated 01/31/2008).
To rebut the presumption of pressures, CSL described the "longstanding
integrity" of BVSA and CSL, and claimed an "attenuated" relationship
existed between CSL and Legrand. It also argued that the Compliance
Committee implemented by CSL, as well as the objectivity of CSL's
testing program, would mitigate any undue influence. A follow-up
response from CSL received by OSHA on January 31, 2008, argued that
"firewalls" existed to assure the independence of CSL's testing and
certification processes (Ex. 5, pp. 1-4). These "firewalls" were
measures or factors that CSL claimed will mitigate or prevent undue
influence on its NRTL activities. CSL's firewalls included a separation
of its board of directors from other Legrand companies, use of
independent auditors, and establishment of the Compliance Committee.
The letter also asserted that the presence of common executives and
board members between Legrand, Wendel, and BVSA does not compromise
CSL's testing and certification because "there is no reason to believe
that [the board members] would seek to cause a complex international
conspiracy to compromise CSL" (Ex. 5, p. 2).
    OSHA responded to CSL on August 14, 2008 (see Ex. 6--OSHA letter to
CSL, dated 08/14/2008), and reiterated the following concerns about
CSL's independence: (1) The substantial relationship \2\ that arises
from Wendel's common ownership of both Legrand, a manufacturer, and
CSL, an NRTL; (2) the common executives and board members shared
between BVSA, CSL, Wendel, and Legrand; (3) how CSL will monitor
Wendel's future acquisitions; (4) how CSL can warrant to OSHA that it
would not test or certify either Legrand's or its competitor's
products; (5) how CSL will comply with the requirements of the
International Federation of Inspection Agencies (IFIA) \3\ that
auditors be independent of the testing organization; and (6) how CSL
will ensure the personnel performing the audits have the necessary
qualifications.
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    \2\ The definition of "substantial relationship" includes when
a major owner of a supplier of products requiring NRTL certification
has an ownership interest in excess of two percent in an NRTL (see
NRTL Program Policies, Procedures, and Guidelines--CPL 01-00-003-CPL
1-0.3 (NRTL Program Directive), Appendix C.V(C)).
    \3\ The IFIA is a trade association that represents companies
involved in international testing, inspection, and certification
services. It requires members to adhere to a compliance code that
includes independent auditing by IFIA for compliance with IFIA
standards (see "About Us" IFIA, http://www.ifia-federation.org/content/about-us).
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    On February 20, 2009, CSL responded by letter (see Ex. 7--CSL
letter to OSHA, dated 02/20/2009) describing its efforts to: (1)
Monitor Wendel's acquisitions; (2) perform enhanced certification
procedures on products manufactured by subsidiaries and other companies
organizationally affiliated with Wendel; and (3) use both external and
internal audits to ensure that CSL maintains its independence. CSL
asserted that it would accomplish these efforts through extensive
procedures it has in place to identify public Wendel subsidiaries, its
conflict management procedures that require additional witnessing and
review of test data on products produced by Wendel subsidiaries, audits
by internal compliance officers, and IFIA membership. It also informed
OSHA that it was changing its executive leadership and augmenting its
board of directors with additional independent directors to dilute the
potential for undue influence upon the board. However, the mutual board
members shared between BVSA, Legrand, and Wendel would remain on the
board. OSHA fully considered CSL's efforts to rebut the presumption of
undue influence. However, on January 19, 2010, the Agency responded
with a negative finding of renewal (see Ex. 8--OSHA negative finding of
renewal, dated 01/19/2010). OSHA based its decision, in part, on
concerns that OSHA would not be able to effectively monitor CSL's
efforts, even if CSL made good-faith efforts, because of the extent and
complexity of Wendel and Legrand's operations. OSHA does not have the
resources or expertise to monitor all of Wendel's and Legrand's
acquisitions, products, and operations.
    In response to the negative finding of renewal, CSL submitted a
revised application on October 18, 2010 (see Ex. 9--CSL revised renewal
application, dated 10/18/2010). The revised application reiterated its
commitment to objective testing, the procedures of the CSL Compliance
Committee, and requirements of the external audits. CSL also proposed a
temporary limitation, in which CSL would limit its testing and
certification to existing customers and products. On August 1, 2011,
CSL notified OSHA that Wendel reduced its ownership of Legrand from 32%
to 11.1% (Ex. 10). However, as described below, the revised application
and reduction in ownership fail to address the fundamental violation of
the NRTL independence requirement.

B. The NRTL Independence Policy

    OSHA requires NRTLs and applicants to be "completely independent"
of the manufacturers of the equipment the NRTLs are testing (see 29 CFR
1910.7(b)(3)). This independence requirement is fundamental to the
third-party testing and certification system. Early in the NRTL
Program, OSHA extended the practices that two NRTLs--Underwriters
Laboratories (UL) and Factory Mutual Research Corporation (FMRC)--
instituted in their testing and certification programs. These practices
included having no affiliations with (i.e., being independent of) the
manufacturers of the equipment they certified. Therefore, independence
is the cornerstone of the NRTL Program, the purpose of which is to
ensure that the organizations testing and certifying specified products
as safe have no affiliation with the manufacturers of the products or
with employers that use the products in the workplace.
    The NRTL Program Directive that was in effect when CSL applied for
NRTL recognition stated that, to meet the independence requirement,
NRTLs and applicants "must be free from commercial, financial and
other pressures that could compromise the results of its testing and
certification processes" (see NRTL Program Policies, Procedures, and
Guidelines--CPL 01-00-003--CPL 1-0.3 (NRTL Program Directive), Appendix
C.V). The Directive makes it clear that NRTLs and applicants must avoid
these pressures from manufacturers of equipment.
    Under its independence policy, OSHA presumes that "pressures"
exist if there is a substantial relationship between the NRTL or
applicant and a manufacturer "of products that must be certified which
could compromise the objectivity and impartiality in determining the
results of its testing and certification processes." Substantial, for
purposes of the policy, "means of such a nature and extent as to exert
undue influence on the testing and certification processes."
    In some limited situations, the policy allows OSHA to prescribe
"conditions" on NRTLs or applicants for initial or continued
recognition, even when the Agency determines that pressures exist. Such
conditions, however, "must be consistent with the policy," in that
they must effectively eliminate the pressures stemming from the
substantial relationship. The Directive also provides examples of
options OSHA may consider when imposing conditions: (1) Restricting the
suppliers for whom the NRTL or applicant may test and certify products;
or (2) restricting the type of products the NRTL or applicant may test
and certify.
    Whether imposing conditions on an NRTL or applicant is appropriate
is a judgment made by the Agency on a case-by-case basis. OSHA has
discretion whether to impose conditions in a particular case. The
independence policy does not require OSHA to impose conditions; it only
allows OSHA to impose conditions. When organizations cannot effectively
eliminate pressures stemming from a substantial relationship, then OSHA
cannot impose conditions "consistent with the policy." Accordingly,
OSHA can impose conditions only in those rare instances when the
substantial relationships cause "minimal" pressures.
    In analyzing these situations, OSHA must carefully examine the
ownership situation; the types of products at issue; the scope and
magnitude of the NRTL's or applicant's operations; the scope and
magnitude of the operations of the manufacturers making, and the
employers using, the products; and other factors. OSHA also must
consider the degree to which it can monitor the NRTL or applicant's
compliance with any imposed conditions, which is a particularly
important factor. OSHA typically audits NRTLs once a year to ensure
they continue to meet the NRTL requirements, including the independence
requirement, and to maintain the quality of their testing and
certification operations. If imposing conditions on an NRTL or
applicant would be difficult or impossible for OSHA to audit
effectively, imposing conditions on the NRTL or applicant would not be
appropriate.
    OSHA believes its policy on NRTL independence is a straightforward
approach for judging an NRTL's or applicant's compliance with the
Agency's independence requirement under 29 CFR 1910.7. OSHA cannot
perform in-depth analyses of an NRTL's or applicant's ownership or
financial relationship and interests. Therefore, the NRTL or applicant
has the burden of showing it is independent, and that any relationship
with a manufacturer or employer involves no, or only minor, pressures.

III. General Finding of Non-Independence

A. CSL Has a "Substantial Relationship" With Legrand

    Wendel Investissement (Wendel) owns, at least in part, both CSL and
Legrand (a manufacturer). Wendel owns 58% of CSL and 11% of Legrand
through various intermediaries. Legrand is a manufacturer of various
products, many of which require NRTL certification if used in the
workplace. Under the NRTL independence policy, this relationship
constitutes a "substantial relationship," in which a major owner of a
supplier of products requiring NRTL certification has an ownership
interest in excess of two percent in CSL, an NRTL. Because of this
substantial relationship, OSHA presumes that pressures exist on CSL
that could compromise the results of its testing and certification
processes and that CSL, therefore, is not independent.

B. CSL Failed To Rebut the Presumption of Pressures

    CSL attempted to rebut the presumption of pressures. In various
letters to the Agency, CSL explained why it believes it is not subject
to pressures from Wendel or Legrand that could compromise the results
of its testing and certification processes. CSL stated that its
relationship to Legrand is highly attenuated and that its decision
making is independent of both Wendel and Legrand (Ex. 9, p. 3). To
rebut the presumption of pressures, CSL also proposed that it renew
temporarily only product certifications for existing customers not
associated with Wendel (Ex. 9 pp. 1, 10). Finally, CSL claimed that it
took a variety of steps to ensure that it will not test or certify any
products made by Legrand (Ex. 9, pp. 10-12). The Agency carefully
considered this information, and finds that CSL did not adequately
rebut the presumption of pressures, as discussed below.
1. CSL's Independence From Legrand and Wendel
    To rebut the presumption of pressure, CSL contended that "the
relationship of Legrand or other Wendel holdings is highly attenuated"
(Ex. 9, p. 3) and, as such, does not result in undue pressure on CSL.
CSL argues that Wendel is a long-term investor that does not manage
CSL's day-to-day operations. CSL also noted that Wendel does not exert
control over CSL, therefore assuring CSL's independence from Wendel and
Legrand.
    CSL's assertion that Wendel does not manage, or exert control over,
CSL does not address the fundamental issue regarding the control that a
parent company has over a subsidiary (e.g., a majority-owned
subsidiary). According to the Securities and Exchange Commission, the
term "control" in this context means the "possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise" (see 17 CFR 230.405).
The parent company of a majority-owned subsidiary, in this case CSL,
has ultimate control over the subsidiary, even though the parent
company may delegate some of that control to the subsidiary. A parent
company can exert control by changing a subsidiary's policies and
leadership, and even by selling the subsidiary. Therefore, because
Wendel has the power to dictate and influence CSL's actions, CSL does
not have decision-making independence.
    Although CSL claims an "attenuated" connection to Wendel, CSL did
not provide any assurances that Wendel will refrain from exerting
control over CSL, or pressuring CSL through Bureau Veritas. To the
contrary, Wendel has a corporate policy that encourages exerting
control over Bureau Veritas and CSL. Wendel's Web site states that its
"policy is to be the key or controlling shareholder in its listed or
unlisted investments on a long-term and hands-on basis. It expresses
this commitment by actively participating in these companies' strategic
decisions, based on the principle of direct, constructive and
transparent give-and-take with their managers"
(http://www.wendel-investissement.com/en/charte-de-lactionnaire_83.html).
Furthermore, although CSL notified OSHA that Wendel reduced its percentage ownership
of Legrand from 32% to 11% in 2011 (Ex. 10), CSL did not provide any
assurance that this reduction in ownership eliminated Wendel's control
over CSL. Furthermore, Wendel can increase its ownership interest in
CSL at any time. Although OSHA could impose a condition to limit such
an increase in ownership, the fundamental issue of Wendel's control
over CSL would remain.
2. CSL's Organizational Relationship to Wendel and Legrand
    CSL also claims that, because no member of its Board of Managers
has "significant ties" to any of BVSA's parent companies, there is
little opportunity for these companies to exert pressures on CSL (Ex. 9, p.
18). OSHA finds that the current organizational relationship between
CSL and Wendel via BVSA does not rebut the presumption of pressures.
When Wendel first purchased CSL, BVSA and CSL shared two key executives
(Mr. Piedelievre, who was a member of BVSA's management board, as well
as CSL's chairman, and Mr. Tardan, who also was on BVSA's management
board and is CSL's treasurer). To date, Wendel and BVSA share one board
member. According to the Web site of Wendel and BVSA, Ernest-Antoine
Seilli[egrave]re is the Chairman of Wendel's Supervisory Board, as well
as a member of BVSA's Board of Directors
(see http://www.wendel-investissement.com/en/members_32.html).
    Furthermore, CSL asserted that individuals affiliated with Wendel
and Legrand are no longer members of its Board of Managers (see Ex. 7).
However, based on the information CSL provided, several BVSA-affiliated
members remain on CSL's board: John Beisheim is Vice President of
Acquisitions and Risk Management at BVCPS and Oliver Butler is a Senior
Vice President of BVCPS (Ex. 7, p. 2). BVCPS is a subsidiary of BVSA,
which is a subsidiary of Wendel. This arrangement perpetuates a direct
line of communication and influence between Wendel and CSL by way of
BVSA and senior officers at BVCPS. CSL provided no information to OSHA
regarding the removal of members of its board who also were members of
Legrand's, Wendel's, and BVSA's boards. These associations make Wendel
privy to the BVSA's Board of Director's deliberations on behalf of CSL.
Because of the close linkages, the potential remains for Wendel to
influence CSL's testing and certification operations. Furthermore,
since Wendel benefits from Legrand's success as a manufacturer of NRTL-
certified products, the presumption is that pressures from Wendel could
compromise CSL's testing and certification processes with regard to
these Legrand products. In summary, the modifications CSL made to its
Board of Managers provided little organizational separation between CSL
and Wendel and, therefore, do not adequately rebut the presumption of
pressures.
3. Missing Information Regarding Ownership and Subsidiaries
    OSHA has concerns regarding entities that own intermediary
companies between Legrand and Wendel, the companies these
intermediaries own, and the business lines of these companies. The
organizational chart provided by CSL on January 31, 2008 (Ex. 5; Ex.
1), fails to show the part owners of a number of these intermediaries.
CSL also provided no information on the new intermediate owner of BVSA.
Also missing is the name of intermediate companies owned by Wendel's
subsidiaries. OSHA requested this information on August 14, 2008, but
CSL repeatedly failed to provide the information required to address
OSHA's concerns.
4. Temporary Limitation to Certifications
    In its revised application, submitted October 18, 2010 (see Ex. 9),
CSL requested that OSHA renew CSL's recognition by imposing a
limitation that would restrict CSL to "only renew existing NRTL
product certifications for existing customers * * * until the matter of
ownership of [CSL] is resolved to OSHA's satisfaction." CSL argued
that this limitation would eliminate the presumption of pressure or
other concerns regarding Wendel's ownership of CSL or the content of
Wendel's holdings. CSL claimed that this approach would address OSHA's
concerns regarding undue pressure because none of its existing
customers had affiliations with Wendel. This limitation does not
address OSHA's concerns adequately. The Agency must examine carefully
the ownership situation; the types of products at issue; the scope and
magnitude of the NRTL's and applicant's operations; the scope and
magnitude of the operations of manufacturers making, and the employers
using, the products; and other factors. OSHA also must consider the
degree to which it can monitor NRTL compliance with such a condition.
    As proposed by CSL, the limitation would be temporary and,
therefore, would not resolve the ultimate independence issue. CSL would
remain organizationally affiliated with Wendel, a situation in which
Wendel could exert undue pressure on CSL. For instance, CSL's current
NRTL certifications include testing for the standard UL 60950, which
covers products made by Legrand. Under CSL's proposal, Wendel could
still exert pressure on CSL to reject similar products made by
Legrand's competitors.
    Furthermore, CSL claimed that the proposed condition is a "self
regulating" limitation that OSHA could audit easily. However, Wendel's
operations are so vast that OSHA seriously doubts that CSL could
effectively enforce the proposed condition. In this regard, Legrand is
a world-wide enterprise with operations and affiliates in the U.S.,
Europe, Canada, Mexico, South America, China, and other Asian
countries. One of these affiliates, Bticino, has operations in 60
countries. Wendel's 2007 annual report states that Legrand acquired 15
suppliers or manufacturers during the preceding three years, and the
2008 annual report describes Legrand as having a 19% market share of
products and systems for electrical installations, and offering nearly
170,000 products. Moreover, CSL reports that it currently has 203
outstanding certifications distributed among 78 customers. Accordingly,
it is infeasible for either OSHA or CSL to monitor every merger and
acquisition of CSL's customers to ensure that none of these
transactions involve a Wendel subsidiary. This infeasibility, along
with the temporary status of this proposed condition, makes it an
unacceptable option to resolve CSL's independence issue.
5. Corporate-Compliance Program
    CSL established a compliance program that includes participation in
various ethics programs, as well as formation of a Compliance Committee
of CSL's Board consisting of independent managers to "assure that
there are no pressures to distort its NRTL testing and certifications"
(Ex. 9, p. 10). CSL also noted that Bureau Veritas is a member of the
IFIA, which CSL claimed "assure[s] independence with respect to * * *
certifications" as a part of the IFIA's ethical requirements (Ex. 9,
p. 12). The ethical programs include both internal and external audits.
Furthermore, CSL claimed that its conflict-management procedures
require that it test and certify all products "independently of all of
its clients. It does not design or manufacture products that it tests
or certifies" (Ex. 9, p. 10). However, implementation of this
compliance program does not rebut the presumption of pressures.
    First, OSHA does not allow an NRTL to "self certify" its
independence. Second, CSL's policy does not address the fundamental
ownership conflict (i.e., that Wendel still can assert control over
CSL's operations). Regardless of the ethical and auditing programs in
place, Wendel can revise CSL's policies and operations, including its
corporate-compliance program. A corporate-compliance program will not
mitigate this relationship and the control that Wendel can assert on
CSL. Furthermore, as noted above, Wendel's operations are so vast that
OSHA believes that CSL cannot self regulate its independence effectively
through a corporate-compliance program. Moreover, OSHA does not have
the resources to audit the effectiveness of such a program because the
vast scope of Wendel's and Legrand's operations, including intermediary
owners of Wendel and Legrand and the subsidiary companies of these
intermediary owners.

C. OSHA Cannot Impose Conditions on CSL

    As described above, OSHA's independence policy permits OSHA to
impose conditions only when minimal pressures exist, and the conditions
are consistent with the NRTL independence requirement. The extent to
which OSHA may impose conditions on a manufacturer-owned NRTL depends
in part on the ownership arrangement, the scope of the NRTL's
recognition, and the scope of the products manufactured.
    In this case, Wendel owns a substantial share of CSL and a
manufacturer, rather than a small minority interest in either
organization, which would severely limit the pressure it could exert on
the NRTL. Furthermore, Wendel owns and operates an enormous variety of
companies. Wendel could own companies that produce numerous types of
products that require NRTL certification. In such cases, OSHA cannot
impose conditions on CSL that are consistent with the fundamental
requirement that NRTLs be independent of "any manufacturers or vendors
of equipment or material being tested for [equipment requirements]"
(see 29 CFR 1910.7(b)(3)). In this regard, OSHA must consider whether
it can reasonably monitor an NRTL's compliance with the conditions.
OSHA cannot monitor reliably the various CSL and Wendel ownership
relationships and affiliations with the numerous subsidiaries of
Wendel. As noted earlier, the Agency's policy on independence must
provide a straightforward, practical approach to determining whether an
organization meets the requirement for independence. Accordingly, OSHA
is not requiring its staff to analyze actual or potential business
activities that could cause actual or potential conflicts and
pressures. When these activities are extensive, which is the case for
the world-wide operations of Legrand, this information is far beyond
OSHA's auditing capabilities under the NRTL Program. In summary, OSHA
cannot reasonably determine with its existing resources the extent to
which Wendel-affiliated companies contribute to the sale and
manufacture of products submitted to CSL for NRTL testing and
certification.

D. OSHA Has a Consistent Position on Conditions

    CSL contended that OSHA permitted other NRTLs in positions similar
to CSL's to adopt conditions that rebut the presumption of pressures
(Ex. 9, p. 6). In particular, CSL argued that OSHA permitted such
conditions in the cases of Intertek Testing Services NA, Inc.
(Intertek), National Technical Systems, Inc. (NTS), and Wyle
Laboratories, Inc. (Wyle), and that those cases indicate that OSHA also
should apply conditions in CSL's case (Ex. 9, pp. 7-9). OSHA disagrees
with this argument because CSL's case differs from these other cases.
As mentioned above, OSHA applies conditions only in circumstances in
which minimal pressures exist, and OSHA can reasonably determine and
monitor the effectiveness of the conditions, and the conditions are
consistent with OSHA's independence requirement.
    In the Intertek case, Intertek's parent acquired, and merged into
Intertek's overall laboratory operations, a small manufacturer of
laboratory test equipment, Compliance Design. Consequently, Intertek
lost its independence because its parent company owned a manufacturer
of equipment that needed NRTL approval. OSHA, however, imposed a
condition on Intertek's recognition that effectively eliminated the
pressures stemming from Intertek's relationship with Compliance Design
(66 FR 29178). This condition included a no-testing policy for
Compliance Design and for any other manufacturer affiliated with
Intertek. Although OSHA received no information showing that Intertek
or its parent owned any other manufacturing interest, the Agency
imposed the broader condition as a precaution. OSHA could impose this
condition because, unlike CSL's situation, Compliance Design was a
small company that produced just one type of product; therefore,
Intertek could enforce the no-testing policy. Because of Compliance
Design's limited operations, OSHA could monitor effectively Intertek's
compliance with the independence policy. As noted earlier, CSL's
situation is much different than Intertek's because Wendel's and
Legrand's operations involve multiple products manufactured and sold by
numerous and various subsidiaries, making it impossible for OSHA to
impose conditions on CSL's recognition that would mitigate all of the
pressures and that OSHA could monitor reasonably and effectively.
    OSHA also imposed a condition on Wyle (59 FR 37509). When OSHA
granted Wyle NRTL recognition, Wyle was part of an organization with a
division that manufactured and distributed electronic enclosure
cabinets. As with Intertek, the condition imposed on Wyle required that
Wyle not test or certify any equipment that used electronic enclosures
manufactured by the affiliated division. Unlike CSL's situation, this
condition was easy for Wyle and OSHA to monitor because the only
product at issue was electrical enclosure cabinets.
    Lastly, OSHA imposed conditions on NTS (63 FR 68306). NTS was a
public company that "could conceivably perform the design and
engineering services * * * for manufacturers or vendors of the products
covered within the scope of the test standards for which OSHA has
recognized NTS" (63 FR 68306). Because NTS is a public company, OSHA
had a concern that manufacturers or vendors could acquire ownership of
NTS. Accordingly, OSHA imposed a condition on NTS that restricted it
from testing and certifying products for a client to which it sells
design or similar services. OSHA also required NTS to provide OSHA an
opportunity to review NTS's NRTL Quality Manual, Quality Assurance
Procedures, and other procedures within 30 days of certifying its first
products under the NRTL Program (63 FR 68306, 68309). OSHA imposed
these conditions only as a preemptive measure because there was no
evidence in the record that any manufacturers or vendors owned NTS, or
that NTS was providing design and engineering services to manufacturers
or vendors. However, this is not the case for CSL, in which a
manufacturer's direct ownership interest and the potential for indirect
affiliation with numerous other manufacturers and vendors, results in a
presumption of pressure that violates the NRTL independence policy.
    Thus, OSHA's determination regarding the imposition of conditions
on CSL's NRTL recognition is consistent with the Agency's previous
actions on this issue. Although OSHA provided CSL with several
opportunities to rebut the presumption of pressures, CSL did not meet
its burden of demonstrating by clear and convincing evidence that
pressures do not, and will not, exist that could compromise the results
of its testing and certification process.

IV. Request for Renewal of Recognition

    CSL seeks renewal of its recognition for the one site that OSHA
previously recognized. CSL also is requesting that OSHA renew its
recognition to use the following five test standards for testing and certification of
products: UL 544 Electric Medical and Dental Equipment; UL 60601-1
Medical Electrical Equipment, Part 1: General Requirements for Safety;
UL 60950 Information Technology Equipment; UL 61010A-1 Electrical
Equipment for Laboratory Use, Part 1: General Requirements; and UL
61010B-1 Electrical Measuring and Test Equipment, Part 1: General
Requirements.\4\
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    \4\ Each of these standards is an "appropriate test standard"
within the meaning of 29 CFR 1910.7(c). The designations and titles
of these test standards were current when OSHA prepared this notice.
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V. Preliminary Finding

    Following a thorough review of the application file and other
pertinent information, and for the reasons stated above, OSHA
determined that CSL does not meet all of the requirements for renewal
of its NRTL recognition. The NRTL Program staff, therefore, recommends
preliminarily that the Assistant Secretary deny CSL's application for
renewal of its NRTL recognition.
		OSHA welcomes public comment as to whether CSL meets the 
requirements of 29 CFR 1910.7 for renewal of its recognition as an 
NRTL. Comments should consist of pertinent written documents and 
exhibits. Commenters needing more time to comment must submit a request 
in writing, stating the reasons for the request. OSHA must receive the 
written request for an extension by the due date for comments (see 
DATES above). OSHA will limit any extension to 30 days unless the 
requester justifies a longer period. OSHA may deny a request for an 
extension if the requester does not adequately justify it. To obtain or 
review copies of the publicly available information in CSL's 
application and other pertinent documents (including exhibits), and all 
submitted comments, contact the Docket Office, Room N-2625, 
Occupational Safety and Health Administration, U.S. Department of 
Labor, at the address listed above under ADDRESSES; these materials 
also are available online at http://www.regulations.gov under Docket 
No. OSHA-2009-0026.
    The NRTL Program staff will review all comments submitted to the
docket in a timely manner, and, after addressing the issues raised by
the comments, will recommend whether to grant the renewal of NRTL
recognition to CSL. The Assistant Secretary will make the final
decision on granting NRTL recognition, and, in making this decision,
may undertake other proceedings prescribed in Appendix A to 29 CFR
1910.7. OSHA will publish a public notice of this final decision in the
Federal Register.

Authority and Signature

    David Michaels, PhD, MPH, Assistant Secretary of Labor for
Occupational Safety and Health, 200 Constitution Avenue, NW.,
Washington, DC 20210, authorized the preparation of this notice.
Accordingly, the Agency is issuing this notice pursuant to Sections
6(b) and 8(g) of the Occupational Safety and Health Act of 1970 (29
U.S.C. 655 and 657), Secretary of Labor's Order No. 4-2010 (75 FR
55355), and 29 CFR 1911.

    Signed at Washington, DC on October 4, 2011.
David Michaels,
Assistant Secretary of Labor for Occupational Safety and Health.
[FR Doc. 2011-26067 Filed 10-7-11; 8:45 am]
BILLING CODE 4510-26-P