Consumer Protection Bill [B19-2008]

1. Consumer Protection Bill [B19-2008] Submission by BUSA September 2008

2. BUSA (1) Confederation of business associations Overarching submission and detailed sectoral submissions Recognise the need for improved regulation of consumer protection Detailed engagement in Nedlac Further engagement with Department

3. BUSA (2) Many concerns addressed Number of concerns still remain; highlights Unintended consequences Duplication Institutional structures Procedures Regulations Transitional provisions Commitment to working with government on implementation

4. Unintended consequences Consider unintended consequences flowing from National Credit Act Onerous requirements for business particularly SMMEs – increased cost to consumer 2004 research on compliance costs estimated at R79 billion or 6.5% of GDP Risk of lower investment

5. Unintended consequences (2) Section 48: interpretation of contracts in an unbalanced way in favour of consumers will deter businesses Sections 79-81: onerous provisions for business names

6. Duplication More than fifteen acts dealing with consumer issues Appreciates the aim “unite” fragmented legislation and address gaps Should not be achieved through compromising other mandates and duplication Redress: can be achieved through this Bill where no sectoral provision exists

7. Duplication Section 2: Concurrent application of laws Evaluation of provisions Requirements not immediately clear Eliminate duplication as far as possible Manage concurrent jurisdiction effectively as instances arise National Credit Act issues should be addressed here

8. Duplication Section 5 State excluded from application of provisions Exemptions at request of another regulator Common understanding of “regulator” Extremely onerous Provision should be made to clarify concurrent jurisdiction Technical provisions must be left to other regulator

9. Duplication Section 22: Guidelines will be required to clarify requirements May not achieve objectives May be more appropriate methods Costs of redoing documentation can be high Enforcement extremely onerous

10. Duplication Section 53 Definition of hazardous goods not harmonized Sale of hazardous goods to consumers regulated in other legislation Numerous examples of concurrent jurisdiction

11. Concurrent jurisdiction Challenge not adequately addressed Revise relevant sections in line with Competition Amendment Bill

12. Institutional structures Lack of clarity on access to appropriate forum for relief Details of some institutions not clear Concurrent jurisdiction between province and national likely to present challenges Forum shopping possible Alternative dispute mechanisms enforced by High Court Time limits must be introduced Conciliation should be encouraged Sector codes where compliance should be used for redress

13. Institutional structures (2) No requirement that consumer must approach supplier first Insufficient provision for alternative dispute resolution Recognition of alternative dispute resolution mechanisms which exist in financial sector

14. Compliance notices Protection from repeated investigations where no contravention is found Provision for response to allegations Proper service of notices Clarification of respondents Clarification of intention in respect of “regulated entity”

15. Vicarious liability If employer is to be held liable with employee test must be as follows: act committed during scope and course of employment Act directed or authorised by employer Revision to clarify proposed

16. Proof of facts Use of evidence arising from an investigation in terms of the commission or tribunal is subject to a different standard of proof than in a criminal court and can thus not be used as evidence as contemplated. Same concerns as in the Competition Amendment Bill. Revise accordingly.

17. Regulations Impossible to evaluate impact without regulations Provision for mandatory publication for public comment in a general sense Regulations could have significant implications for specific sectors Provision exists for consultation with consumer groups Provision for consultation with affected sectors should be included

18. Public consultation Government agreed on intensive consultation on regulations and implementation Regulations must be consulted with affected sectors Guidelines and codes must be published for comment

19. Transitional provisions Schedule 2; section 8(1): if a law is repealed it ceases to exist Cannot thus continue to investigate or prosecute in terms of a repealed law.

20. Drafting proposals “unconscionable” Section 2(9): publication of guidelines Section 5(2): clarify state as consumer Section 12: delete Section 22: publication of guidelines Section 53: definition of hazard Section 93: publication of codes

21. Drafting proposals (2) Section 97: revise in line with Competition Amendment Bill Section 100: clarify respondent and provide for response Serving of notice Section 113: relationship to employer Section 119(2): Revise in line with Competition Amendment Bill Section 120(2): consultation with industry associations

22. Conclusions Supports the need to strengthen consumer protection Significant legal challenges and burdens must be addressed before finalisation Nedlac agreements not fully addressed Regulations must be published simultaneously as agreed in Nedlac Implementation technically challenging BUSA and affiliates committed to co-operation