The National Consumer Commission (NCC) briefed the Committee on its Strategic and Annual Performance Plan for 2018/19.
The NCC provided the Committee with a breakdown of its planned APP targets for 2018/19 across its Programmes ie Programme 1: To promote Consumer Protection and Consumer Safety, Programme 2: To promote reform of consumer policy and compliance with consumer protection legislation and lastly Programme 3: To promote public awareness on consumer protection matters.
On the financials of the NCC the Committee was informed that to a large extent the budget of the NCC was constrained. Of the total budget only 22% was for operational expenses to achieve its core functions and objectives. On expenses 75% of the budget was for recurring expenses and the remaining 25% was for projects. The total budget for 2018/19 was R57.653m.
The NCC was asked to address the issue of Edgars levying extra charges on customers and about persons paying life insurance policies through them. Members also asked for an update on the Ford Kuga issue. The NCC was asked whether it together with the National Credit Regulator (NCR) was looking at banks giving out vast amounts of loans to consumers. Whose responsibility was it to deal with the issue of loans? Given the NCC had an accumulated surplus of R9.8m, members asked what happens to the funds. A normal government department would have had to return the funds to National Treasury. Members asked how the NCC marketed itself to consumers. Members observed that consumers out there did not know how to access the NCC. Members were concerned about high data costs in SA. SA’s data costs was one of the highest in the world. Members felt that data needed to be accessible to all as it was an important means for people to empower themselves. The cost of data had to come down. The NCC was asked to shed light on the time share hearings matter and was asked whether it had won the case. Members also asked when the Department of Health was to take the listeriosis matter forward. Was Enterprise responsible for the breakout? The NCC was asked whether it had subject matter experts in its employ. Members felt it important to obtain expert advice as each time a matter was lost in court the taxpayer had to bear the cost. The NCC needed to have watertight cases before it went to court. Members raised concerns that in rural areas many shops sold goods that were inferior in quality compared to goods sold in urban areas. The NCC was asked whether it checked on the quality of consumables sold in rural areas and the good held health risks to those who consumed them. In most instances it was kids who consumed cheap snacks. People in rural areas did not where to complain to. Given its restrained budget the NCC was asked how it protected consumers in the space of technological advancement. The NCC was asked how SA could beneficiate and participate in the technological space. The Chairperson on consumer protection in rural areas stated that cooperation from the National House of Traditional Leaders (NHTL) and the South African Local Government Association (SALGA) was needed. Members suggested that the NCC at least once a week/month send someone to listen to the complaints of people. The Chairperson in closing said that the Committee needed to find creative ways other than Committee meetings to hold the Department of Trade and Industry (DTI) and its entities accountable.
Briefing by National Consumer Commission (NCC) on its Strategic & Annual Performance Plan
Ms Thezi Mabuza, Acting Commissioner,NCC, explained that the Commission was established in terms of section 85 of the Consumer Protection Act (CPA) No.68 of 2008. The NCC was responsible to enforce and carry out the functions assigned to it in terms of the CPA. Thereafter, he provided the Committee with a breakdown of its planned APP targets for 2018/19 across its Programmes:
Programme 1: To promote Consumer Protection and Consumer Safety
On the percentage of complaints referred or issued with non-referrals in a predefined time period the target for 2018/19 was to have 95% of complaints referred or issued with non-referrals within an average of 20 days. On the number of investigations conducted and reports with recommendations produced, the planned target was set at twelve.
Programme 2: To promote reform of consumer policy and compliance with consumer protection legislation
The planned target for 2018/19 was to identify two Acts that affected the welfare of consumers which were inconsistent with the purposes of the CPA and to develop proposals for reform of practices and to have reports produced. There was also the intention to have 90% of registered requests for explanatory notes and/or non-binding opinions provided within an average of ten days.
Programme 3: To promote public awareness on consumer protection matters
For 2018/19 the planned targets was to have 24 consumer awareness and twelve business compliance initiatives conducted. The idea was to also have four external newsletters published and distributed to stakeholders.
Mr Anton van Der Merwe, Acting Chief Financial, Officer, NCC, said that to a large extent the budget of the NCC was constrained. Only 22% of the total budget was for operational expenses to achieve its core functions and objectives. On expenses 75% of the budget was for recurring expenses and the remaining 25% was for projects. The total budget for 2018/19 was R57.653m.
The Chairperson noted with appreciation the relationship that the NCC had with the Tribunal. The Committee was well aware of the fact that there were challenges to contend with.
The Chairperson asked the Commission how far it was in dealing with the Edgars issue where extra charges were levied on customers. He had also heard about someone that was paying a life insurance policy through Edgars. He also asked for a synopsis of the Ford Kuga issue.
The Chairperson commented that banks refused to give their customers financial advice. Instead, banks advised persons to obtain financial advice from special accountants. However banks had long queues for persons taking loans from them. He asked whether the NCC was working with the National Credit Regulator (NCR) on the bank issue. Whose responsibility was it? The NCC had stated that it did not really fall within the legislative requirements of a government department. He pointed out that the NCC had an accumulated surplus of R9.8m. Normally a government department would have to return unused funds.
Ms Mabuza, on the Edgars and bank issues raised, said that there was legislation on financial services that took issues away from the Ombudsman. There was a consumer protection regulation forum that the NCC was part of. There was also an e-commerce forum that looked at debit order issues. There were interactions taking place behind the scenes to deal with complaints. The NCC did engage on issues. On Edcon, the NCC had engaged the NCR because the matter was beyond its scope. She was aware of a High Court decision about persons applying for loans but it was also beyond the NCC’s scope. The best that the NCC could do was to educate people not to incur debt. On the Ford Kuga matter there was the issue of product recalls which was ongoing. The NCC had identified an element of prohibited conduct as well. The NCC had conducted investigations which had been finalised in April 2018. The NCC had given Ford an opportunity to make an input in response to its findings. Ford wished to drag the matter out until the end of July 2018. The NCC responded that it was unacceptable and that it would be referring the matter to the Tribunal. Once at the Tribunal Ford could respond as it wished. The NCC was aware that taking on Ford would require serious senior counsel. Ford had already settled a similar matter in Australia.
Mr van Der Merwe responded that the NCC’s accounting system was an accrual system. The NCC had rollovers.
Mr W Faber (DA, Northern Cape) asked how the NCC marketed itself to consumers. Consumers did not know how to access the NCC. He did not see any NCC advertisements. He was concerned about high data costs in SA. At one stage Vodacom had said something about it. SA had one of the highest data costs in the world. Data was an important resource which people could use to empower themselves. The cost of data had to come down. The NCC was asked whether it had won the case on the time share hearings. He also asked when the Department of Health was going to take the listeriosis matter forward. Who was responsible for the breakout? Was it Enterprise? He also asked whether the NCC had subject matter experts. He was concerned about taxpayers having to bear the costs when cases were lost. He stated that the NCC needed to have watertight cases when they went to court.
Ms Mabuza, on the time share enquiry, said that the NCC had withdrawn the matter from court. There were lacunas in legislation. The NCC chose to go the enquiry route. The NCC had won the matter in the Supreme Court of Appeal after it was taken to court. On the substance of the matter the NCC was done with its report on the provinces. The report was to be presented to the Minister of Trade and Industry.
Ms Mabuza stated that the manner in which the NCC was established meant that it did not have all the expertise. The NCC looked for standards in other regulations. On the listeriosis issue when it came to food security SA made comparisons with the rest of the world. Most countries had a separate regulator on food safety. SA lacked standards on how food should be handled in manufacturing plants. The NCC depended on the Department of Health and on the Department of Agriculture. On illnesses, the National Institute For Communicable Diseases (NICD) normally did the testing. The NCC was part of a team which included Departments of Health, Agriculture etc.
Mr Narain Kuljeeth, Company Secretary ,NCC, responded that the NCC could not regulate the cost of data itself. He agreed that SA’s data costs were one of the highest. Egypt had reduced its data costs by two thirds. It was forced upon service providers. The Consumer Protection Act did allow the NCC to intervene on prepaid data consumers getting value for money. Data had to be used up and could not expire within three years. The NCC, on contract customers, felt that the network should credit the customer with data that had not been used at the end of a contract. The only thing that networks agreed to was for the rollover of data. In time to come the matter would be tested at the Tribunal. The Competition Commission was looking at the matter. The NCC was working with the Competition Commission on it.
Mr Kuljeeth commented that experts came with a cost. He confirmed that the NCC did use counsel. Sometimes one did not need senior counsel.
Ms M Dikgale (ANC, Limpopo) pointed out that if the NCC was unable to investigate each and every consumer complaint it was not living up to its vision. On matters like the listeriosis outbreak, the NCC should encourage consumers to continue to complain to prevent such outbreaks from recurring.
Ms Dikgale asked how the Commission increased its level of awareness especially in rural areas. She was concerned that in rural areas there were many shops that sold snacks to kids that were bad for them. In shops like Pick n Pay reputable bread brands like Sasko was sold. However, in rural areas cheap loaves of bread was sold that held no nutritional value. The point was that the quality of goods sold at shops in rural areas was low.
Mr Kuljeeth conceded that it was true that the NCC could not investigate each and every matter. What the NCC tried to do was to get consumers and producers to resolve their issues. If not resolvable it would escalate to provinces thereafter to the Ombudsman and finally to the NCC. There were simply too many matters for the NCC to deal with. The NCC also looked at what trends emerged. Matters were captured on a database to check if there was a trend.
Ms B Mathevula (EFF, Limpopo) said that in her area cheap snacks were sold to kids as well. She asked the NCC whether it checked on the quality of these types of snacks and edibles. Did the consumption of these snacks hold health risks? People in rural areas had no idea where to report complaints to.
Ms Mabuza said that legislation now covered small vendors and the goods they sold. Requirements for the handling of food fell beyond the scope of the NCC. There were issues of Sudan Red still being in certain food stuffs which the NCC had raised with the Department of Health. The NCC could have the appropriate organisation test to check on what was contained in the snacks sold in rural areas. The NCC did have environmental health practitioners from municipalities. The NCC did check on the sell by dates of ready to eat foods. Inspectors would remove expired foods and dispose of it. Given the NCC’s limited resources it tried to cover all provinces at different time intervals. There were also provincial authorities on consumer protection.
Mr Kuljeeth, on school kids consuming cheap snacks, stated that if it was found after testing that it contained harmful products then the NCC could report it.
The Chairperson noted that the Fourth Industrial Revolution was imminent. It was the era of intra-Africa trade. Samsung had a manufacturing plant in Kwa-Zulu Natal Province. There was also a television manufacturing plant in the Western Cape Province. The Minister of Trade and Industry had opened a factory in East London as well. With its restricted budget, how did the NCC protect consumers in the space of technological advancement? How well was South African companies’ doing? He asked how SA could beneficiate and participate in the technological space.
Ms Mabuza, on intra-Africa trade, said that the spirit of the CPA required goods supplied to consumers to be safe and of good quality. SA was now geared on investment. Samsung and similar companies had to comply with standards of production of (lcd) liquid crystal display screens. This did fall within the scope of the NCC. The NCC had investigated complaints about televisions that were not full high definition as they had claimed to be and also looked at sub quality step ladders.
Mr Kuljeeth, on intra-Africa trade, said that SA had strong consumer protection law. He noted that the problem was always within Africa itself. SA had through the Southern African Development Community (SADC) channels asked other African countries to adopt strong consumer protection laws. Suppliers from other continents looked to dump goods in Africa. The vast majority of SADC countries had imitated SA’s consumer protection legislation. The one thing that was concerning was online shopping. The NCC worked with the Independent Communications Authority of SA (ICASA) on it. Online trading had increased ten to twenty fold.
The Chairperson said that members had authority to tell the NCR what matters needed to be prioritised. He noted that on Ebola in the Democratic Republic of Congo (DRC) SA was well positioned to deal with it. He added that the cooperation of the National House of Traditional Leaders (NHTL) was needed in rural areas on consumer protection. The South African Local Government Association (SALGA) should also come on board to assist with human capacity at municipal level.
Ms Mabuza stated that the NCC appreciated the Committee’s guidance on SALGA and the NHTL. She added that the CPA stipulated that the NCC had concurrency with provinces. There were consumer affairs offices in provinces to deal with complaints. Provinces checked whether there were common issues raised amongst them. Sometimes matters became systemic. The first point of call was the supplier in order to resolve the matter. There was also the Ombudsman for a particular sector. The issue was that most consumers did not wish to go through a protracted process. Consumers simply wished to get a refund. The NCC clubbed complaints together. Due to the concurrency issue the NCC might not be able to deal with all complaints.
Ms Dikgale stated that she had heard that the NCC had 80 000 complaints. Why did the NCC allow the number to get so huge? She emphasised that complaints should be dealt with. She pointed out that it was difficult for people in rural areas to travel to town to lodge a complaint. Why could the NCC not deploy someone once a week/month to rural areas to listen to people’s complaints.
The Chairperson in looking at the NCC’s previous year’s performance report said that the NCC seemed to be doing well. He felt it important other than having Committee meetings that the Committee needed to find creative ways in which to hold the Department of Trade and Industry (DTI) and its entities accountable. The NCC was asked to provide members with the newsletters that it published.
Minutes dated 16 May 2018 was adopted unamended. Minutes dated 30 May 2018 was adopted as amended.
The meeting was adjourned.
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