ZIMBABWE ZIMBABWE ZIMBABWE ZIMBABWE CONSUMER PROTECTION BILL - - PowerPoint PPT Presentation

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ZIMBABWE ZIMBABWE ZIMBABWE ZIMBABWE CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSUMER PROTECTION BILL CONSULTATIVE MEETING CONSULTATIVE MEETING CONSULTATIVE MEETING CONSULTATIVE MEETING

The South The South The South The South African Experience African Experience African Experience African Experience

Commissioner: Commissioner: Commissioner: Commissioner: Mr Mr Mr Mr Ebrahim Mohamed Ebrahim Mohamed Ebrahim Mohamed Ebrahim Mohamed 18 February 2015 18 February 2015 18 February 2015 18 February 2015

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Contents Contents Contents Contents

• 1. Where we come from
• 2. Policy Review
• 3. Draft Policy Framework
• 4. Consumer Protection Act, Act 68, 2008
• 5. Process provided by the Act
• 6. Protection for consumers
• 7. South African approach to consumer protection
• 8. The National Consumer Commission of South Africa
• 9. Challenges

10.A need to contextualise

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Where we come from Where we come from Where we come from Where we come from

South Africa’s Apartheid past with its discriminatory laws created unacceptably high levels of poverty, illiteracy and other forms of social and economic

• inequality. When democracy dawned on us in 1994, the new government

deemed it necessary to develop and employ innovative means to -

• Fulfil the rights of historically disadvantaged person and to promote their full

participation as consumers.

• Protect the interests of all consumers, ensure accessible, transparent and

efficient redress for consumers who are subjected to abuse or exploitation in the marketplace; and

• To give effect to internationally recognised consumer rights

In addition, we realised that it is desirable to promote an economic environment that supports and strengthens a culture of consumer rights and responsibilities, business innovation and enhanced performance

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Where we come from ‘(continued) Where we come from ‘(continued) Where we come from ‘(continued) Where we come from ‘(continued)

Consumer protection mechanisms prior to promulgation of the Consumer Protection Act in 2008 were outdated and needed an overhaul that would address amongst other things, discriminatory and unfair market practices, proliferation of low-quality and unsafe products, lack of awareness of consumer rights, inadequate consumer protection as well as weak enforcement capacity Furthermore, there were a number of reports which indicated weaknesses in consumer protection in the country. These included:

• An International Legislative Benchmarking Study
• A South African National Consumer Survey
• A Review of Consumer Protection Measures in South Africa; as well as
• DTI Complaints statistics

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Policy Review (The DTI) Policy Review (The DTI) Policy Review (The DTI) Policy Review (The DTI)

• The Department of Trade and Industry of South Africa conducted a study

which found that consumer protection laws were fragmented, outdated and mostly incorporated into legislation that is incidental to consumer protection. As such it found that:

• Laws were premised on principles that were not applicable to values of a

democratic and developing society.

• That the laws resulted in uneven regulation, with heavy regulation in some

industries, and a reliance on self-regulation in others.

• Consumers and small businesses were vulnerable & subject to widespread

abuse.

• There were no general rules of law relating to the consumer’s most basic

rights to information, disclosure, fairness, etc

• The legislative framework did not address the challenges of discriminatory

and unfair market practices

• Redress was limited, and enforcement systems were weak.

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Draft Consumer Policy Framework Draft Consumer Policy Framework Draft Consumer Policy Framework Draft Consumer Policy Framework

• The policy review culminated in the publication of Draft Green Paper on

Consumer Policy Framework in 2004.

• The research indicated, that many countries adopted a rights-based

approach to consumer protection with comprehensive laws that outlined the rights and obligations of consumers upfront.

• The Draft Consumer Policy Framework recommended a comprehensive

Consumer protection legislation with necessary infrastructure to regulate the market for consumer goods and services.

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The The The The Consumer Protection Act, Act 68 of Consumer Protection Act, Act 68 of Consumer Protection Act, Act 68 of Consumer Protection Act, Act 68 of 2008 2008 2008 2008 – – – – (Purpose) (Purpose) (Purpose) (Purpose)

The main purpose of the CPA remains true to the vision set out in the policy framework which is to promote and advance the social and economic welfare of consumers in South Africa by:

• Establishing a legal framework for the achievement of a consumer market

that is fair, accessible, efficient, sustainable and responsible

• Reducing and ameliorating any disadvantages experienced by vulnerable

consumers in accessing goods or services

• Promoting fair business practices & protecting consumers from improper

conduct

• Improving consumer awareness and encouraging choice
• Promoting consumer confidence and empowerment
• Providing a consistent, accessible and efficient system of consensual

resolution of disputes; and

• Providing for an accessible, consistent, harmonised, effective and efficient

system of redress for consumers.

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Process provided by the Act Process provided by the Act Process provided by the Act Process provided by the Act

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Scope of the Scope of the Scope of the Scope of the Act Act Act Act

• The CPA applies to all transactions in the ordinary course of business that

involves the promotion of goods and services, except those exempted by the Minister

• Includes franchise transactions or agreements
• The CPA applies to goods or services promoted by or through the State, but

not to transactions provided to the state

• Business to Business transactions if the threshold requirements are met
• Intended to provide a general default regime of consumer protection.
• In case of a conflict between CPA and any other law protecting consumers,

the laws are to be enforced concurrently, as far as possible, and beyond that, the law that provides the greater degree of protection for consumers is to prevail.

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Protection Protection Protection Protection for Consumers for Consumers for Consumers for Consumers

The CPA codifies a number of fundamental consumer rights The right to equal access to the consumer market

• Expands on and is conceptually linked to both the Bill of Rights and the

Promotion of Equality and Prevention of Unfair Discrimination Act,

• It protects communities, districts, market segments or populations from

being unfairly discriminated against with regards to access to goods or services of different quality or pricing.

• General prohibition against unfair discrimination (as defined in the

Constitution) when transacting.

• Recognises long-standing and widely accepted commercial practices that

allow differential treatment of consumers of a particular sex, age or gender if the conduct is reasonable.

• The equality court has exclusive jurisdiction to adjudicate contraventions of

this part

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Protection Protection Protection Protection for for for for Consumers ‘( Consumers ‘( Consumers ‘( Consumers ‘(continued) continued) continued) continued)

Right to privacy

• Includes the right to accept, refuse or block any approach for the purpose of

direct marketing- opt out register

• Minister may prescribe certain days, dates and times during which it is

prohibited to contact consumers for purposes of direct marketing. Consumer’s right to choose

• Aimed at assisting consumers to select goods or services on the basis of

having examined the goods and compared prices.

• Suppliers are generally prohibited from bundling goods or services
• Includes the right to cancel a fixed-term agreement, limits the rights of

suppliers to impose cancellation charges, and sets out rules governing the expiry of such agreements.

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Protection Protection Protection Protection for for for for Consumers ‘( Consumers ‘( Consumers ‘( Consumers ‘(continued) continued) continued) continued)

Right to disclosure and information

• Aims to ensure that consumers understand the terms and conditions of the

transactions or agreements they enter into and are able to make informed choices about the products and services they consume compulsory to display prices; Trade descriptions must not be misleading, etc Right to fair and responsible marketing

• To restrain or correct the worst abuses in the area of the marketing of goods
• r services the CPA introduces or re-enacts a number of provisions to

address standards for fair and responsible marketing and provides a general prohibition against marketing that is misleading, fraudulent or deceptive.

• Prohibits bait marketing, negative options and referral selling.

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Protection Protection Protection Protection for for for for Consumers ‘( Consumers ‘( Consumers ‘( Consumers ‘(continued) continued) continued) continued)

Right to honest and fair dealing

• Prohibits unconscionable conduct, force, coercion, undue influence,

pressure or harassment, unfair tactics or conduct.

• A supplier is prohibited from making false, misleading or deceptive

representations

• Deals with fraudulent schemes and offers, pyramid and related schemes.
• Aim to ensure fairness in auctions
• Deals with overselling & overbooking

Right to fair, just and reasonable terms and conditions

• Currently contracts are regulated in terms of the common law – CPA aims

to codify and improve on the common law by addressing unfair contract terms and provide consumers with remedies in the event of breach

• Deals with terms and conditions that seek to limit the supplier’s liability

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Protection Protection Protection Protection for for for for Consumers ‘( Consumers ‘( Consumers ‘( Consumers ‘(continued) continued) continued) continued)

Right to fair value, good quality and safety

• Aims to promote the safety of consumers and to establish a regime of

product liability, irrespective of negligence on the part of anyone in the supply chain

• Provides for a general right for consumers to receive goods that are of good

quality and free from defects

• Consumers have a right to receive goods that are reasonably suitable for

the purpose for which they are intended, of good quality, in good working

• rder, free of defects, and useable and durable for a reasonable period of

time.

• Creates a framework for industry codes to be developed, establishing

schemes of product safety monitoring and, if needed, product recall.

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Protection Protection Protection Protection for for for for Consumers ‘( Consumers ‘( Consumers ‘( Consumers ‘(continued) continued) continued) continued)

• Suppliers accountable to consumers for any money or other property

belonging to the consumer, including advance payments

• Aims to make redress accessible
• Recognises the role of civil society in consumer protection by providing for

the support of any juristic person or association of persons that meet the set criteria as consumer protection groups.

• Promotes consumer activism
• Recognises that consumer protection is a matter that falls under the

functional area of concurrent jurisdiction between provincial and national government

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The South African approach to consumer protection The South African approach to consumer protection The South African approach to consumer protection The South African approach to consumer protection

NCC Provincial Consumer Authorities Accredited Ombud Schemes Other regulatory bodies Voluntary Ombud Schemes

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The NCC The NCC The NCC The NCC

• Establishes a National Consumer Commission (NCC) as an organ of state

reporting to the Minister- the DTI

• NCC is the primary administrative regulator under the Act responsible for

carrying out education, research, investigation of complaints and enforcing the CPA.

• The Tribunal established under the National Credit Act will conduct hearings
• n complaints and adjudicate certain disputes and complaints relative to

prohibited conduct

• Encourages parties to seek resolution of their disputes through conciliation

and mediation or settlement in provincial consumer courts, ombuds or other such agencies.

• The decisions of the Tribunal can be appealed against or reviewed by the

High Court.

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NCC challenges NCC challenges NCC challenges NCC challenges

• Consumers were expecting quick and rapid redress on their complaints, and

expectations of stakeholders were very high.

• Consumers expected NCC to resolve disputes with suppliers and order

refund, replacement or repair whereas the CPA only allows the NCC to promote the resolution of complaints

• As a new entity processes were untested – trial and error approach
• A zealous approach adopted by NCC which resulted in challenges on

procedure and to some degree on merit

• Rights of respondents were breached to some extent contrary to the just

administrative legislation that regulators are required to abide by

• Organisational challenges (lack of relevant skills as consumer protection

has not been historically a career in South Africa as opposed to certain

• ther jurisdictions
• Budgetary constraints, in that, only 50% of approved structure could be

filled and a significant part of the allocated budget goes towards administrative expenses

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A need to A need to A need to A need to contextualise contextualise contextualise contextualise

• In drafting consumer protection legislation it is vital for government to

examine its own situation as was done in South Africa. (local surveys, domestic constitution and legislative framework, international protocols, regional protocols and international benchmarking including the United Nations Conference on Trade and Development)

• The devil is usually in the detail, thus sufficient focus must be placed on

drafting regulations.

• The South African legislation and the Zimbabwean draft legislation are
• prescriptive. Consideration should be given to the inclusion of enabling

clauses in order to avoid continuous amendments as and when business models change (eg. The enabling provision relating to deceptive conduct in the Federal Trade Commission legislation).

• It must be understood that the South African CPA has gone through an

arduous and extensive consultative process with all stakeholders, national and international before it was reduced to its current form. Therefore it is recommended that Zimbabwe commence with a little more than what is contained in its draft legislation.

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Thank Thank Thank Thank you you you you