PRESENTATION ON CONSUMER PROTECTION BILL

NATIONAL ECONOMIC DEVELOPMENT AND LABOUR

COUNCIL

(NEDLAC)

3 SEPTEMBER 2008

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!"

“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.

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

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.

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;

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;

Process Flow

Historically the policy making process in SA assumed the

following process flow:

• Green Paper

• White Paper

• Draft Bill

• Bill

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.

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.

OUTCOME OF PROCESS

Agreements

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

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.

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

Definitions

Attention needed to be given to some definitions.

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.

DuplicationSome 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

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

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

Compliance costs

Language provisions not universally applicable

Treatment of recall

Opt out approach to be adopted

Codification of common law

•These issues needed further work

Fair Labour Practices

Bill should not limit the scope of Government to drive fair labour practices

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.

Outcome of process

Disagreements

Intentions of the regulator

Business did not believe that SMMEs should be included in the definition of consumers

Institutions

Labour proposed representatives from Business and Labour on the Tribunal

Not supported by Government and Business

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

Conclusions

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