OVERVIEW OF THE CONSUMER POLICY FRAMEWORK

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

2. 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

3. Background to the Policy • Various initiatives between 2000-2001 • 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

4. 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

5. 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

6. Core Policy Issues • 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

7. Overarching new consumer law • 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

8. Establishing consumer rights • 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

9. 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

10. Concurrency with provincial & Sector law • 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

11. Improving access to redress 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)

12. 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

13. 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;

14. Developing the consumer voice • 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

15. Promoting service excellence 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

16. THANK YOUQUESTIONS & CLARIFICATIONS