Manipulating the Market

May 3rd, 2015

We received a voicemail message several weeks ago, it was in broken english, barely intelligible, and requesting a call back.  Apparently CSA was up to something overseas.  While RestoreCSA is always resourceful, we didn’t have anyone in-house who spoke the language.  So we contracted, and its a good thing that we did.

It turns out that our foreign caller had some experience with CSA’s standards committees.  Through interpretation, we were extensively regaled, but given the particulars of this case and for confidentiality purposes we will very subtly be using pseudonyms for the balance of this article.

So, Michael Jackson made a widget.  It was a lovely widget, this widget.  It was cheaper than anything on the market and was demonstrably safer than anything on the market.  Indeed, Michael’s widget had run the engineering gauntlet and, as a safety device, had been demonstrated in a long series of mandated, independent testing to be objectively safer than the competition.

In fact, the competition’s widget had never been run through any engineering gauntlet.  The competition’s widget was an old design and its introduction predated most of the currently mandated testing.  This old design is the status-quo widget, and the manufacturers of said widget were on the CSA committee that decided new product certification.

Well, Michael paid a fortune to have his widget tested to CSA’s satisfaction but, however satisfactory it was proven to be, the CSA committee wouldn’t certify the widget for use in the market.  It took years of effort and expense, the expenditure of nearly a life’s savings and a relocation to the US, but no matter how many times his widget passed its tests, the CSA committee of his competitors wouldn’t certify his widget.

While we were pondering Michael’s story we heard from another caller, this time from Canada and he had a very similar story.  Larry Mullen’s story is uniquely interesting, because Larry’s on the CSA’s Canadian Electrical Code Committee.  Larry’s an insider.

Several years ago, Larry paid a lot of money to develop a new safety device which, like our foreigner’s widget, was thoroughly tested and verified to applicable Code standards.  Larry had prototypes built, at great expense, held demonstrations of the device at conventions, at great expense, and was preparing to produce these devices in great quantity, and at great expense, for launch during 2015.

Then Larry got a call from another Code committee member, a rather senior one, named Aynsley Dunbar.  Larry was told that the CSA’s technical committee that determines which CSA standard to test to, had made their decision and it wasn’t very friendly to Larry’s product.  Rather than testing Larry’s product to the CSA standard most applicable to that product, the CSA committee decided to place Larry’s product within a standard that was only partially applicable.  In other words, Larry’s product was likely to fail its testing not because of any deficiency in the product, but because of manipulation of the CSA standards and testing process.  Why would the technical committee manipulate the process?  Well, Larry’s competitors run that committee.

The CSA’s technical committees, intended for public safety, were instead being used by paying CSA members for the purpose of artificially protecting their market position.  That’s bad enough, but it gets worse.

Aynsley Dunbar called Larry again, this time telling him that the Code committee that Larry was a member of had been meeting privately.  Though Larry was a committee member, he wasn’t invited to these private meetings.  Actually, he wasn’t even told about them.  The purpose of these private meetings was to change the relevant legislation to specifically prohibit Larry’s new device.  And who made these meetings happen?  Why, Larry’s competitors on the committee of course, the same competitors who’d previously manipulated the standards rules in their own favour.

In hindsight, Larry now knows that the CSA was changing the legislation at the same time that he was fulfilling his CSA responsibilities to comply with that legislation.  In other words, his own CSA committee was milking his money while using government authority to sabotage his business.

Foreign Michael understands this, it’s his experience too, and it’s all facilitated by CSA’s decision to monetize the legislative process.  Companies on committee understand that their payments to CSA are for influence, they’re paying for something, they’re not donating their money to CSA out of a sense of civic responsibility.  Instead, they purchase their influence on committee to protect their interests by preventing competing products from entering the market and by using their knowledge of coming changes to legislation to prepare their own products for those changes before any of their competitors know that any changes are coming.

In one case, a company headed by Joan Jett had an entirely new line of heavy duty products ready for market exactly when new Code rules for heavy duty applications were released.  So, was the legislation manipulated for their financial interest?  Was it actually created for their interest?  Or did they merely use insider information for competitive advantage by developing new products in the knowledge of coming changes to legislation?

Michael and Larry and Joan, and even Aynsley, are working through some interesting problems.  Unfortunately, they’re familiar problems.

Years ago, the CSA was an honourable Agency.  It wasn’t compromised by its commercial interests or sullied by the sales of influence.  Canada needs an honest standards Agency, we need a CSA restored to the rule of law, to its Government mandate, and to the honest services in standards that once made it a respectable, household name.