N Melville

It is a type of "decentred regulation“ The Theory Self-regulation entails the regulation or governing of an industry by the role players in that industry. It is a type of "decentred regulation“ DP Strachan “An evaluation of the self-regulation of promotional competitions in South Africa”

The Theory Self-regulation can take on many forms, but broadly one can distinguish between voluntary self-regulation and self-regulation that is backed up by legislation.

The Theory It could be regarded as "co-regulation", which was developed by an industry in order to avoid government regulation, but could also be created as a result of government's pressure on or directive to an industry.

The Theory Benefits of voluntary self-regulation Flexibility Cost effectiveness Benchmarking of best practice Naude et al: Commentary on the Consumer Protection Act

The Theory Benefits of voluntary self-regulation Self-regulation can deal with questions of complex subjective judgment, such as ‘fairness’ better than the law UK National Consumer Council Models of Self-regulation

The Theory Weaknesses Strong tendency to anti-competitive behaviour, Lack of public confidence The risk that the participants do not take the requirements seriously Confusion created by a plethora of codes

The Theory Weaknesses Real and perceived doubts about the ability of of trade bodies to both: Represent the interests of their members & Aspire to a public interest role, particularly where the self-regulator is responsible for enforcement or is involved in adjudicating disputes between consumers and traders. 

The Practice: A tale of 2 Codes Banking Code 2004 Former Public Protector Selby Baqwa “I can say with my hand on my heart [the Banking Code/ Ombudsman] is functioning credibly, as banks and the public respect [it]” (Gail Cameron, Authentic African Leadership, p.167)

The Practice: A tale of 2 Codes Banking Code 2004: REASONS SUCCESS 35 Banks Strong coercion from regulator (Reserve Bank) & trade association; binding determinations Demarcation of Prudential (Reserve Bank) & Market Conduct Also: Du Toit Reflections on the South African Code of Banking Practice TSAR 2014 3 568

The Practice: A tale of 2 Codes Banking Code 2004: WEAKNESSES Drafted and maintained by the Banks Applied only to members of the Banking Association South Africa Imposed obligations on consumers None of the provisions legally binding in court; or may be used to influence the interpretation of the legal relationship between bank and consumer or give rise to a trade custom or tacit contract

The Practice: A tale of 2 Codes Consumer Goods Code 2015 S 82(2) The Commission acting on its own initiative, or in response to a proposal from persons conducting business within a particular industry, may recommend a proposed industry code to the Minister

The Practice: A tale of 2 Codes Consumer Goods Code 2015 AFTER (a) publishing it for public comment; (b) considering any public submissions; (c) consulting with— (i) persons conducting business within the relevant industry; and (ii) relevant accredited consumer protection groups

The Practice: A tale of 2 Codes Consumer Goods Code applies to: All suppliers in the consumer goods and services industry Supply Chain that provide, market and/or offers to supply Goods and Services to Consumers

The Practice: A tale of 2 Codes Consumer Goods Code Failure to comply with Code amounts to a contravention of section 82(8) of the Consumer Protection Act Performance of Code to be monitored by NCC Power to amend/ repeal

The Practice: A tale of 2 Codes Consumer Goods Code: Weaknesses Preaching to the converted/ catch 22 Coverage of industry Nielsen research: 134,000 small and independent retailers; 4,500 supermarkets & 2,758 convenience stores CGSO < 1000 participants (but big chains) [EARLY DAYS]

The Practice: A tale of 2 Codes Consumer Goods Code: Weaknesses $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

The Practice: A tale of 2 Codes Consumer Goods Code: Weaknesses Enforcement No cases before NCC or Tribunal re failure to comply with consumer codes; Focus of regulator (NCC): “Identify endemic, harmful business practices for investigation/ prosecution”

The Practice: A tale of 2 Codes Consumer Goods Code: Weaknesses Lack of binding power CGSO may not make binding determinations If concludes that there is no reasonable probability of the parties resolving dispute through the process provided for terminate the process by notice to the parties party who referred the matter may file complaint with the Commission

DANGER

DANGER If the government determines that there is wide scale non-compliance with the legislation, there is every likelihood of it intervening with draconian regulation, with major cost and other implications for the Industry, as is happening in the financial industry with the Twin Peaks initiative.

ADVICE ACCC Research Codes of conduct tend to be more effective when the self-regulatory body: • has widespread support of industry • comprises representatives of the key stakeholders, including consumers, consumer associations, the government and other community groups • operates an effective system of complaints handling.

He who knows when he can fight and when he cannot, will be victorious. ADVICE He who knows when he can fight and when he cannot, will be victorious. Sun Tzu The Art of War