OVERVIEW OF THE CONSUMER POLICY FRAMEWORK Parliamentary Information Session 08 October 2004

OBJECTIVE OF THE PRESENTATION To provide and overview of the policy and law review process; To inform you about the Draft Green Paper on the Consumer Policy Framework; The obtain your inputs on the policy document

Various initiatives between –resulted in a number of “research” documents; –Documents were not holistic in approach; Process reinitiated towards end of 2002 –change in focus towards repositioning consumer protection; –drive competitiveness through building consumer confidence and business excellence; –recognises the need for a comprehensive framework of statutes, policies and related government authorities, that is consistent and coherent; Project Manager appointed in April 2003 Background to the Policy

Research & Processes: –Reviewed legislations and mechanisms pertaining to consumer protection; Standards Act, Consumer Affairs Act; Meat Safety Act, Genetically Modified Organisms Act, Foodstuffs, Cosmetics and Disinfectants Act etc. –Initiated a National Consumer Survey Survey of the current environment; What issues should government address; –Conducted an International Legislative Benchmarking study; –29 April 2004 workshoped draft policy document with provincial counterparts; –7-8 May 2004 hosted an international and local experts review team Background to the Policy

Research & Processes: –June-August 2004 conducted focus group workshops with selected stakeholders; –August- September 2004, submitted draft policy to Cabinet for approval to consult broadly Background to the Policy

5 pillars of strategy: –Establishing consumer rights; –Making markets work for consumers; –Improving access to redress; –Developing and promoting consumer advocacy & activism –Promoting improved service levels and accountability in public and private sectors Core Policy Issues

Will repeal: –National Consumer Affairs (Unfair Business Practices) Act; –Sale and Service Matters’ Act; –Alienation of Land Act; –Trade Practices Act Will result in amendments to sector laws Overarching new consumer law

Practices to be Prohibited: –Misleading advertising and selling practices; bait advertising,referral selling,pyramid selling, third line forcing, inertia selling etc –Unfair terms in consumer contracts; Exclusion of liability, binding the consumer when the co.is at fault, restriction of consumer rights & remedies, unilateral variation of terms etc –Abuse of private and personal information; –Product safety and liability; Explicit recognition of a right to product safety in law; Overarching role of SABS; Liability on manufacturers & other parties Establishing consumer rights

Competitive issues & minimum mandatory requirements: –Product quality; Give consumers assurance that what is provided is fair and of an acceptable standard –Guarantees, Warranties and Aftercare; Where offered, must be honored –Disclosure and labeling; Product labeling and description of products &services; Price transparency; Country of origin; Terms and conditions pertaining to transaction –Rights in relation to essential services Establishing consumer rights

Concurrent provincial laws –No need for immediate change; –Eventually harminisation with national framework; –Policy level: MINMEC –Enforcement: national laws, regional laws and international mechanisms Concurrency with other regulators –Extend consumer protection to sectors; –Establish coordinating mechanisms at enforcement level Concurrency with provincial & Sector law

Proposed regulatory framework New national regulator and tribunal –Champion for consumer protection – proactive identification and prosecution of consumer abuses and contraventions; –deal primarily with national businesses, systemic problems and cross border issues; –cross-cutting responsibility for education; –provides single entry point for consumers (referrals and monitoring) Improving access to redress

Provincial consumer affairs & courts : –deal primarily with individual complaints against local/provincial businesses Sector regulators –Deal with consumer complaints and education in sectors SABS –Must deal with product safety issues; harmonization and co-ordination Improving access to redress

Other Mechanisms Service NGOs, target rural areas –Legal advice, counseling and mediation –MPCCc provincially –Government Supported Services (accreditation and monitoring) Alternative Dispute Resolution mechanisms: –Business complaints handling; –Statutory mechanisms; –Industry voluntary mechanisms; Improving access to redress

Vision for consumer movement: –Service NGOs Product testing, product alerts, information dissemination etc. –Advocacy NGOs Research; Market monitoring; Policy inputs; Representation [class action] Government (and business) support –Funding & capacity-building programme –Specific powers in law –Recognition Developing the consumer voice

Private sector (voluntary measures) Corporate citizenship; Customer responsiveness; Effective complaints handling systems; Government support: –Standards (largely voluntary) –Current incentives –International and local best practices (guidelines, practice notes) –Recognition (business awards) Public sector Extend Batho Pele to local government (mandatory) Extend consumer protection to utility regulators; Foster coordination with Chapter 09 Institutions Equivalent application of consumer law in the public sector Promoting service excellence

THANK YOU QUESTIONS & CLARIFICATIONS