1. PRESENTATION ON CONSUMER PROTECTION BILL NATIONAL ECONOMIC DEVELOPMENT AND LABOUR COUNCIL (NEDLAC) 3 SEPTEMBER 2008

2. INTRODUCTION 53 years ago the African National Congress and its allies the South African Indian Congress, the South African Congress of Democrats and the Coloured People's Congress at the Congress of the people in 1955 resolved that "The People Shall Govern!"African National CongressSouth African Indian Congress “With the formation of Nedlac in 1995, success could not be assumed but there was hope that it could weave the fabric of democracy’ President Nelson Mandela, Nedlac Annual Summit, 1998. “One of the most important features of our system of governance is to ensure consultation and dialogue, in order to build not only a shared national vision, but also in actual practice to attain unity of purpose and action.” President Mbeki at the Growth and Development Summit in June 2003.

3. Nedlac has acted as an important yardstick to measure the extent to which policies could find resonance with the needs of the citizens Therefore it follows that where social partners find absolute consensus or sufficient consensus on the policy thrust, ownership of such policies is co-shared This arguably makes implementation much easier and most of all prevent unnecessary legal challenges and squabbles. This certainly results in the real transformation vs compliance without conviction

4. Inherent in social dialogue is that it takes time for it to produce meaningful consensus that ultimately leads to real partnership. It would therefore be correct to assume that if government tables a policy that does not solicit broader consensus among the key social partners, that should be taken very seriously by the legislators. This should also inform legislators of the potential implementation difficulties that the policy would likely to suffer if signed off; A policy that lacks broader support would amount to a major detour from the concept of the people shall govern.

5. NTRODUCTION Since its formation, Nedlac has: Created a forum in which the social partners have been able to work on their relationship and build some level of trust; Been an important instrument to strengthen democratic governance and transparency in the decision-making process; Provided the space for the evolution of a new approach to policymaking and changes to legislation, thereby contributing towards better and more democratic policies that enjoy wide acceptance;

6. INTRODUCTION Since its formation, Nedlac has: Given birth to a range of tripartite bodies and thereby promoted the concept of social dialogue; Created a central forum where greater consensus has been achieved amongst key stakeholders on a diverse range of policy issues;

7. Process Flow Historically the policy making process in SA assumed the following process flow: Green Paper White Paper Draft Bill Bill

8. PROCESS Government tabled the Green paper on the Consumer Policy Framework in September 2004. Constituencies submitted comprehensive comments on the Policy Framework. In general it was agreed that the Consumer protection policy was necessary however, it should be done in manner that does not limit the scope of Government to drive Industrial development, trade, investment policy and employment. Nedlac produced a report on the Policy framework Engagements and submitted same to the Minister.

9. PROCESS In 2006, Government tabled the Consumer Protection Draft Bill for consideration by Nedlac. Nedlac did not follow a line by line approach in its consideration of the Bill, But evaluated the Bill against the agreements reached in the Green/white paper stages of policy.

10. OUTCOME OF PROCESS Agreements

11. OUTCOME OF PROCESS Business and Labour did not agree that sufficient attention had been paid to implications for employment and industrial development Government stated that Bill aimed to minimise cost of compliance All constituencies agreed that the objectives of the Bill are supported

12. Scope Constituencies noted that there was no intention to cover membership fees of trade unions or employer organisations Appropriate wording to be prepared in this regard.

13. Intentions SMMEs included as consumer No duplication requirements in other legislation “user” in workplace not covered Government would identify areas of conflict and duplication and would exclude specific sectors All regulations to be published simultaneously with the effective date of the Act. Intense consultation on regulations

14. Definitions Attention needed to be given to some definitions.

15. Institutions Agreed that they should be easy to access and promote clear standards for consumer protection. Separate consumer commissions but tribunal : National Credit Act Tribunal. Agreed a set of principles to apply to institutions.

16. Duplication Some sectors are already regulated If sectoral regulation covered minimum standard required such legislation should take precedence Where voluntary codes meet the standard, the Commission should provide recognition Noted the proposed handling of potential conflict

17. Duplication General principle: The Bill will not deal with matters already regulated Agreed that specific areas on environmental standards, hazardous products, food handling or medicines will be removed

18. Compliance costs Agreed that the following would be addressed: –Individual trust accounts –Written agreements –Written sales records –Penalties on overselling and overbooking not to be double –Cooling off period –Promotional competitions

19. Compliance costs Language provisions not universally applicable Treatment of recall Opt out approach to be adopted

20. Codification of common law These issues needed further work

21. Fair Labour Practices Bill should not limit the scope of Government to drive fair labour practices

22. Criminal sanctions Criminal sanctions may not be adequate in all cases. Challenge of moving some regulations that currently attract criminal sanction to a different regime. Further work required.

23. Outcome of process Disagreements

24. Intentions of the regulator Business did not believe that SMMEs should be included in the definition of consumers

25. Institutions Labour proposed representatives from Business and Labour on the Tribunal Not supported by Government and Business

26. Additional issues raised by Labour Provision for rules of origin to be extended to all sectors not included Provisions for minimum labeling on specific ethical standards dealing with labour, community or environmental interests not included Amendments to anti discrimination provisions Minimum disclosure of information on costs incurred by workers for equipment

27. Conclusions The Nedlac report is tabled for consideration by the Committee when finalising the Bill.