A summary of this committee meeting is not yet available.
TRADE AND INDUSTRY PORTFOLIO COMMITTEE AND ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE: JOINT MEETING Chairpersons: Dr R Davies (NA) and Mr M Moosa (NCOP)
23 May 2001
UNFAIR BUSINESS PRACTICES BILL: BRIEFING
TRADE AND INDUSTRY PORTFOLIO COMMITTEE AND ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE: JOINT MEETING
Chairpersons: Dr R Davies (NA) and Mr M Moosa (NCOP)
· Consumer Affairs (Unfair Business Practices) Act 71 of 1988
· Briefing on the Consumer Affairs (Unfair Business Practices) Amendment Bill, 2001 (See Appendix 1)
· The Consumer Affairs Committee: Definitions, Functions - A Brief Overview (See Appendix 2)
· Department of Trade and Industry - 2001 Legislative Programme (See Appendix 3)
In September 2000 the Constitutional Court held that Section 8(5) of the principal Act is unconstitutional. Section 8(5) of the Act empowers the Minister of Trade and Industry to declare that a business is being conducted in an unfair manner and then to shut the business down without prior consultation with the affected party.
The Constitutional Court said that this section violates section 33 of the Constitution (the right to just administrative action).
The Constitutional Court ordered section 8(5) of the Act to be amended within 12 months from the date of the order. The Director of the National Inspectorate of the Department of Trade and Industry (Ms L van Zyl) briefed the parliamentary committees on proposed amendments to the section. Parliament wants to ensure that the rights of businesses are not being sacrificed for the preservation of the consumers’ rights and the desire to speed up the judicial process.
Dr Davies announced that::
- The Minister of Trade and Industry (Alec Erwin) will be coming to speak before a joint meeting. He will speak on the topic of industrial policy.
- The committees’ counterpart members in the Botswanan Parliament will visit Cape Town. On 6 June 2001 they will have a lunch meeting with the Portfolio and Select committees.
The Consumer Affairs (Unfair Business Practices) Amendment Bill
The Bill has not been formally published. This will be completed by the end of the week of 25 May 2001 and it will go into legislation by Wednesday 29 May 2001. The Patents Amendment Bill and the Counterfeit Goods Amendment Bill will also go into legislation at the following week’s meeting.
Ms L van Zyl (Director of the National Inspectorate of the Department of Trade and Industry/DTI) gave an overview of the Unfair Business Practices Act (1988). It was designed to provide for the prohibition or control of certain business practices that either harm the relations between business and consumer, unreasonably prejudices any consumer, deceives any consumer, or unfairly affects any consumer.
The Bill that would amend this Act focuses on limiting the powers of authority involved and ensuring that due process is given to any business in question. Specific measures it would hope to add to the Act include:
- providing for the questioning of an expert witness by a person who has experience in cross-examination
-providing for the Minister of Trade and Industry to approach a magistrate or judge for interim measures.
-To expand the powers of the curator; and
-To repeal certain obsolete provisions
These recommendations follow a court decision in 1998 when Judge Van Dijkhorst found Section 8(5) unconstitutional. The Constitutional Court also found it unconstitutional on 29 September 2000. The Courts say that the Act confers a wide discretion on the Minister, but the provision does not provide guidance as to the exercise of those powers nor does it suggest any administrative procedures to be followed in exercising them. It infringes the right to just administrative action and cannot be justified.
While the Minister should not be able to continue exercising the infringing discretion in the interim, the Court also determined that it would not be in the public interest simply to strike down the provision. As a temporary measure the Court has given directions to ensure the administrative fairness of the exercise of these ministerial powers. The Court only suspended the constitutional invalidity for a period of 12 months to enable Parliament to correct the defects that have resulted in the declaration of invalidity. These are all a part of Clause 2 of the new bill.
Other clauses in the bill provide for the appointment (by the Chairperson) of a person who has experience in cross-examination to perform the questioning (Clause 1), the repealing of Section 10(2)(b) which has become obsolete (Clause 3). There is also provision for the appointment of a curator who will assist the attorneys or advocates on cross-examination (Clause 4).
Mr Bruce (DP) asked what criteria was used in determining the committee members.
Ms van Zyl replied that the committees were appointed in January of 2000 after publication in the Government Gazette. The PC and the SC [portfolio and select committees?] screened the applicants and the committee were chosen by the Minister.
Mr Bruce also asked if there were illegal business practices (beside pyramid schemes) that were the focus of the original Act.
Ms van Zyl explained that the main schemes involved were pyramid schemes. However, more and more, multiplication schemes were becoming prevalent. Overall, she explained that any opposition to the Bill might be because these measures may be seen as frustrating for justice to be served and for the consumer’s rights to be protected.
A committee member asked if the Bill had gone to the provinces yet.
The panel replied that the Bill will be circulated to the provincial trade and industry commissions later that week. They will have the chance to review it and make suggestions to members of parliament before the vote next week.
Dr Davies (ANC) and Mr Moosa (ANC,Gauteng) expressed concern over Clause 3 (pertaining to Section 8(5)). Both felt that the Minister’s powers may not necessarily need to be restricted if the Minister is entitled to take such measures. They felt that the Bill could possibly make the entire process less accessible to the public and more cumbersome in nature. Mr Moosa reminded the committee that the State has a very high responsibility to protect the rights of the consumer.
Ms van Zyl pointed out that because of elaborate pyramid schemes many consumers become victims of harmful business. She claimed that the committee should not need to wait for complaints to act on behalf of the public. They can take the initiative by scanning advertisements and being aware of certain business’ relationships with the public sector.
Mr Moosa asked if there was any public education over the new developments in consumer affairs and consumer rights protection.
Ms van Zyl replied that there is not. However (with the co-operation of the provinces) they will be able to launch an education campaign in the near future.
Mr Moosa adjourned the meeting but said that they would reconvene in one week with the input of their provinces’ consumer courts. He advised NCOP members to be aware of how this new legislation will affect their provinces’ courts and consumer legislation.
BRIEFING ON THE CONSUMER AFFAIRS (UNFAIR BUSINESS PRACTICES) AMENDMENT BILL, 2001 FOR THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY
The purpose of the Bill is to introduce certain amendments to the Consumer Affairs (Unfair Business Practices) Act, 71 of 1988 (the Act) so as to:
- provide for the questioning of an expert witness by a person who has experience in cross-examination;
- to provide for the Minister of Trade and Industry (the Minister) to approach a magistrate or judge for interim measures;
- to expand the powers of the curator; and
- to repeal certain obsolete provisions.
The amendments will assist the chairperson and the committee to comply properly with the functions and duties imposed by the Act and will enable the Minister, prior to any investigation or report by the Committee to apply to a magistrate or judge for an order that the unfair business practice be prohibited pending the final outcome of an investigation by the Committee and the decision by the Minister to prohibit such practice. Apart from the fact that this amendment is necessary so as to conform with a Constitutional Court judgement, its insertion is important to ensure that the objects of the principle Act and its application are not frustrated.
The Bill was circulated to more than 70 organisations, including universities, business chambers, enforcement authorities, consumer organisations and provincial government departments. The majority of the organisations supported the proposed amendments and also made constructive proposals which have been accommodated in the Bill. Comments received from the Law Review Project raised concerns about the constitutionality of the Act. The Law Review Project is of the opinion that the definition of an unfair business practice is tainted and the method to determine the unfair business practice is compromised. They argue that the tainted definition undermines the rule of law; the compromised method to determine the definition undermines the doctrine of the separation of powers. However, the constitutionality of the Act was previously challenged in Court and upheld.
The comments received from the Law Review Project deal firstly with the person to be appointed to cross-examine a person deemed to be an "authority on a subject". Their view is that it is traditionally the task of a cross-examiner to discredit the evidence of a witness. The amendment thus allows for a structural bias against the person under investigation and the legislature fails, in their view, to uphold the doctrine of the separation of power.
Regarding the amendment whereby the curator will be entitled to make us of the assistance of an attorney or advocate, it is the Law Review Project's view that a curator should focus all attention in favour of the clients, debtors and creditors, of the person under curatorship, and the curator should not be required to focus on the business person. They state that the curator should be analogous to a judicial manager. They asked the question, if a person's affairs are to be managed by a curator, why is it not on the evenhanded basis of a judicial manager?
Regarding the amendment of section 8 of the Act, the separation of powers again seems to be the main point of contention. The Act empowers the Minister and the Consumer Affairs Committee to perform various functions. This is normal for statutory law, and their functions fall to be categorised as administrative or executive. But the Act also requires the Minister and the Committee to establish the existence of an unfair business practice. When the Minister and the Committee give content to the definition of an unfair business practice they act as law-makers not as functionaries. It is the view of the Law Review Project that the entire Act is unconstitutional. With the amendment of section 8, the Minister deflects responsibility to the judiciary and the Court must now determine the content of the definition of an unfair business practice. The duty to determine the content of the unfair business practice is thus now with the Court, instead of with the legislature. Neither is, according to the Law Review Project, desirable in terms of the separation of powers.
It is also the Law Review Project's view that the definition of an unfair business practice is too vague and wide ranging to be valid. Judge Van Dijkhorst, however, found the core definition of "harmful business practice" not vague. "Harmful business practice" was amended to unfair business practice with the inclusion of "unfairly affecting any consumer". The Law Review Project is of the view that the judgement is thus rendered moot and it can at best only be persuasive.
Section 5(1)(b) of the Act is amended to allow the chairperson to appoint a person who has experience in cross-examination to question a person in order to make it easier for the committee to make a finding on the credibility of that person's evidence. The provision is specifically intended to be used if a person, deemed to be an "authority on a subject", has to be cross-examined.
The existing section 8(5) of the Act empowers the Minister, on the recommendation of the Consumer Affairs Committee (the Committee), to stay or prevent any unfair business practice under investigation and to attach money or property related to an investigation pending the finalisation of the investigation. In 1998 Judge Van Dijkhorst found section 8(5) unconstitutional, pending affirmation thereof by the Constitutional Court. The Constitutional Court on 29 September 2000 also found section 8(5) of the Act to be unconstitutional. The reason given by the Court for the invalidity of the provision is that while it confers a wide discretion on the Minister, the provision does not provide guidance as to the exercise of those powers nor does it suggest any administrative procedures to be followed in exercising them. The Court found that the provision infringes the right to just administrative action and cannot be justified. The Court, however, also determined that it would not be in the public interest simply to strike down the provision but the Minister should not be able to continue exercising the infringing discretion in the interim. Accordingly, as a temporary measure, the Court has given directions to ensure the administrative fairness of the exercise of these ministerial powers. The Court only suspended the constitutional invalidity for a period of 12 months to enable Parliament to correct the defects that have resulted in the declaration of invalidity.
Accordingly, it is proposed that section 8 of the Act be amended by the substitution for subsections (3), (5), (6) and (7) of the following:
(a) Where prior to any investigation or report by the committee, the Minister has reason to suspect that an unfair business practice exists or may come into existence, the Minister may apply to a magistrate or a judge for an interdict to suspend the unfair business practice pending the final outcome of an investigation by the committee and the decision by him or her to prohibit such practice.
This provision will enable the Minister to act very quickly, even before the committee has commenced with an application. It is our considered opinion that since it is not only the Minister's decision, but that a legal process will be followed to prohibit a practice "temporarily", the provision is constitutionally sound.
(b) The magistrate or judge issuing such an order will have the power to issue such orders as he or she may deem appropriate in order to protect the interests of consumers. The magistrate or judge will thus also have the authority to appoint a curator and to authorize him or her to take possession of the business in question and/or assets thereof. This provision will hopefully limit consumers' loss when they have been treated unfairly.
(c) If the magistrate or judge has appointed a curator -
(a) the magistrate or judge may appoint the curator to do, subject to its directions, any one or more of the following on behalf of the business against whom the court order has been made, namely -
(i) to perform any particular act in respect of any of or all the assets of the business, whether corporeal or incorporeal;
(ii) to take care of the said assets;
(iii) to administer the said assets; and
(iv) to carry on with the business with due regard to any law which may be applicable to the business; and
(b) the magistrate or judge may order the business against whom the court order has been made to surrender any assets into the custody of that curator.
(d) Any magistrate or judge who made an order
(i) may at any time-
(aa) vary or rescind the order; or
(bb) vary the terms of the appointment of the curator concerned or discharge that curator;
(ii) shall rescind the order and discharge the curator concerned if the relevant court order is rescinded;
(iii) may make such order relating to the fees of the curator -
(aa) from the confiscated proceeds if a confiscation order is made; or
(bb) by the State if no confiscation order is made.
(e) Any person affected by an order may at any time apply -
(i) for the variation or rescission of the order; or
(ii) for the variation of the terms of the appointment of the curator concerned or for the discharge of that curator.
Section 10(2)(b) of the Act has become obsolete and has to be repealed. In terms of the said section, the committee shall report to the Minister on the result of an investigation done in terms of section 8(1)(c) to recommend whether any price increase, reduction or discount or method of fixing prices in relation to any commodity is justified in the public interest. However, section 8(1)(c) that empowered the Minister to request the Price Controller to fix prices have been repealed in the Harmful Business Practices Amendment Act 33 of 1993 making section 10(2)(b) of the Act obsolete. It should have been repealed in 1993 Amendment Act.
This clause provides that a curator will be entitled to the assistance of an attorney or advocate when he or she cross-examines a person summonsed. This provision will enable a curator to comply properly with the functions and duties imposed on him or her by the Act.
LANA VAN ZYL / 21 MAY 2001
THE CONSUMER AFFAIRS COMMITTEE: DEFINITIONS, FUNCTIONS - A BRIEF OVERVIEW
LANA VAN ZYL, DIRECTOR: NATIONAL INSPECTORATE,
DEPARTMENT OF TRADE AND INDUSTRY
1. Introduction and definitions
The former Business Practices Committee administered the Harmful Business Practices Act, 71 of 1988. During May 1999 several amendments were made to the Harmful Business Practices Act and from 14 May 1999 the amended act, called the Consumer Affairs (Unfair Business Practices) Act, 71 of 1988 (the Act), is administered by the Consumer Affairs Committee, a statutory body in the Department of Trade and Industry.
References in this article to either the Committee or the Act should be seen in its historical perspective. A reference to the Committee and/or the Act before 14 May 1999 would refer to the Business Practices Committee and the Harmful Business Practices Act. Other references to these two terms would refer to respectively the Consumer Affairs Committee and the Consumer Affairs (Unfair Business Practices) Act, 71 of 1988. Fortunately few section numbers were changed by the amendments. A reference to, for example section 4(1)(c) of the act, would refer to both the former and the amended version. The purpose of the act is to provide for the prohibition or control of unfair business practices.
The members of the Committee are: Adv R M Nzimande (Chairperson), Prof T A Woker (Vice-chairperson), Ms O S Davids, Dr B C Dumisa, Ms C Duval, Ms J K Mabotja, Mr R S Mokua and Mr D Solomon. The composition of the Committee represents knowledge and experience in consumer advocacy, economics, industry, commerce and law.
1.1 Unfair business practices
The definition of an unfair business practice is extremely wide. It is any business practice, which, directly or indirectly, has or is likely to have the effect of harming the relations between businesses and consumers, unreasonably prejudicing any consumer, deceiving any consumer or unfairly affecting any consumer. The underlining of the four words is my own. The passage "... or unfairly affecting any consumer" is an addition to the former definition of a harmful business practice, now called an unfair business practice. Sporadic allegations were and are made that the definition of a harmful business practice, now called an unfair business practice, is "void for vagueness" and simply unconstitutional. During the investigation by the Committee into the business practices of Omega Trust Power Marketing CC and Others()
Omega sought an interdict against the Minister of Trade and Industry (the Minister) because of the allegedly "unconstitutionalilty" of the Act. His Honourable J van Dijkhorst’s comments on the definition of a harmful business practice were:
"Items (a) and (c) of the definition of 'harmful business practice' are clearly and practically applicable. Item (b) is more problematic. If it had read merely ‘to prejudice any consumer’ it would undoubtedly have been clearer, but then existing established practices such as puffing and the excessive marking up of merchandise would not have been immune. Is the word "unreasonably" unclear and does it lead to legal uncertainty? The answer is no. The concept of unreasonableness is one that is applied in the courts daily. It is a workable concept and although, considered abstractly, it offers no clarity, in given circumstances it is applicable and useful. Even the Constitution contains similar concepts - compare for instance the concepts of unfair discrimination, equitable basis, fair labour practice, reasonable measures, appropriate care, reasonable and fair administrative action and reasonable limitation of rights in sections 9(2), 15(2), 23(1), 24(b), 25(5), 26(2), 28(1)(b), 33(1) and 36(1). The core definition of the Act, namely that of 'harmful business practice', is therefore not vague".
It is important to note that the legislator did not consider it important to distinguish between unfair business practices that come about by accident and those come about by design. This fact, perhaps, makes it easier for the Committee. Intent need not be proved. The word "business practice" is aslo important, and it would serve some purpose if a closer look is taken at this concept.
1.2 Business practice
Business practices include any agreement, accord, arrangement, understanding or undertaking, whether legally enforceable or not, between two or more persons: any scheme, practice or method of trading, including any method of marketing or distribution; any advertising, type of advertising or any other manner of soliciting business; any act or omission on the part of any person, whether acting independently or in concert with any other person; and any situation arising out of the activities of any person or class or group of persons, but does not include a practice regulated by competition law.
A practice is also defined as "... (the) way of doing something that is common or habitual; something done regularly". It is thus not within the ambit of the Act for the Committee to undertake investigations into behaviour by a business that could be regarded as a bona fide administrative mistake or another isolated event. At times, unfortunately, isolated events could become a practice!
The legislator explicitly restrained the Committee to look into "... a practice regulated by competition law". The Committee thus cannot get involved in a competition dispute between two or more businesses, although such a dispute could unfairly influence consumers.
The definition of unfair business practices contains four references to the word "consumer’. The raison d'être of the Committee, and the Act for that matter, is thus the interest of the consumer and specifically the consumer who is or is likely to be faced by an unfair business practice. Consumer means any natural person to whom any commodity is offered, supplied or made available or from whom any investment is solicited or who supplies or makes available any investment; any other person who the Minister with the concurrence of the Committee declares to be a consumer by notice in the Gazette; and any person who is a consumer for the purposes of this Act in terms of any other law. The Minister had, as yet, not availed himself of the power to declare any other person to be a consumer in terms of the Act.
1.4 Business, commodity and investment
A business, in terms of the Act, means any business, undertaking or person who offers, supplies, or makes available any commodity, solicits or receives any investment or to whom any investment is supplied or made available. Commodity means any property, whether corporeal or incorporeal and whether movable or immovable, and also any make or brand of any commodity and any service, whether personal, professional or otherwise, including any storage, transportation, insurance or banking service, but does not include service in terms of a contract of employment (own underlining). Investment means any money, property or any other facility intended for utilisation in connection with any venture or scheme for acquisition of gain or purported to be so intended.
The definitions of business, commodity and investment show that few businesses and their business practices, except for contracts of employment, can escape the attention of the Committee in its pursuit to ensure the discontinuance of unfair business practices.
2. The enabling nature of the Act
The Act is an enabling act and not prescriptive. It prohibits nothing, although its message to businesses is clear - do not to get involved with unfair business practices. The main body of the Act is devoted to various administrative procedures to be followed, the investigative powers of its investigating officers, the types of investigations the Committee could undertake and the powers of the Minister.
2.1 Investigations in terms of the Act
In the pursuance of its objective, the Act confers wide investigative powers on the Committee. The Committee could undertake two broad types of investigations, namely particular and general investigations.
2.1.1 Particular investigations
The Act provides for two types of particular investigations into the business practices of individual entities or businesses, namely "informal" section 4(1)(c) investigations or "formal" section 8(1)(a) investigations.
The usual procedure when the Committee receives a complaint from a consumer, is to undertake a section 4(1)(c) investigation. This type of investigation enables the Committee to make such preliminary investigation as it may consider necessary into, or confer with any interested party in connection with, any unfair business practice which allegedly exists or may come into existence. It affords the persons or entity complained about the opportunity to respond to the allegations made against them or it. Notices of section 4(1)(c) investigations are not published in the Government Gazette, as opposed to formal section 8(1)(a) investigations. The Minister is not empowered to make any decisions about the discontinuance of a particular unfair business practice on the strength of a section 4(1)(c) investigation. He may do so in terms of a section 8(1)(a) investigation.
Should the investigating officers of the Committee, in the course of an investigation, find that an unfair business practice exists or may come into existence, it will inform the Committee accordingly. The Committee could then resolve that an effort be made to ensure the discontinuance of the unfair business practice in terms of section 9 of the Act (see 4. Negotiations). Should this avenue also fail to ensure the discontinuance of the unfair business practice, the Committee must inevitably consider undertaking a formal section 8(1)(a) investigation.
Notice of a formal investigation in terms of the section 8(1)(a) of the Act is published in the Government Gazette and the Chairman of the Committee also issues a press statement about such an intended investigation. Should the Committee, after an investigation, find that an unfair business practice exists, it recommends corrective action by the Minister to ensure the discontinuance of the unfair business practice. The powers of the Minister are set out in section 12 of the Act.
The Committee prides itself that it resolves the overwhelming number of complaints by consultation and negotiation. It has a proven track record of being a non-confrontational regulatory body. Since its inception in 1988, at which time it obviously received thousands of complaints, the Committee found it necessary to undertake only 68 section 8(1)(a) investigations. Some observers would regard this small number of section 8(1)(a) investigations as evidence of a "reluctant" Committee. The Committee has no hesitation, whatsoever, in undertaking section 8(1)(a) investigations if it is convinced that it is the only way to ensure the eventual discontinuance of a particular unfair business practice. A number of years ago, a spokesman for a particular entity told officials of the Committee, obviously on a informal basis, that they paid between R4 and R5 million in legal fees in unsuccessfully preventing an investigation by the Committee into their business practices.
The focal point of a section 8(1)(a) investigation in terms of the Act is any unfair business practice that exists or may come into existence and which involves a particular individual(s) or business entity(ies). The subsequent order of the Minister will be applicable to the particular individual(s) or business entity(ies). The order of the Minister is published in the Government Gazette. An infringement of an order by the Minister, published in the Government Gazette, is a criminal offence, punishable by a fine of R200 000 or five years imprisonment or both the fine and the imprisonment.
2.1.2 General investigations
The focus of a section 8(1)(b) investigation is any business practice in general which is commonly applied for the purposes of or in connection with the creation or maintenance of unfair business practices. The subsequent orders of the Minister are applicable to all individuals and entities involved with those particular business practices. Since 1988 the Committee undertook 11 section 8(1)(b) investigations and a further two of these investigations are at present being undertaken. An order of the Minister resulting from a section 8(1)(b) investigation is also published in the Government Gazette. Infringements of such orders also constitute criminal offences subject to the same penalties as set out under section 2.1.1.
In terms of section 9 of the Act, when the Committee has decided to undertake an investigation in terms of section 4(1)(c) or section 8(1)(a), it may at any time thereafter negotiate with any person or body with a view to making an arrangement which in the opinion of the Committee will ensure the discontinuance of a unfair business practice which exists or may come into existence and which is the subject to the investigation, either wholly or to such extent as, in the opinion of the Committee, it is not justified in the public interest. If the Committee has made such an arrangement, it reports the matter to the Minister.
It was said earlier that the legislator did not consider it important to distinguish between unfair business practices that come about by accident and those come about by design. The Committee often finds that business are involved in unfair business practices that appears to come about by accident. This applies particularly to the text in advertisements. In such cases it is usually relatively easy to convince the advertiser that the text of the advertisement must me amended.
2.3 The powers of the Minister after investigation by the Committee
If the Minister, after consideration of a report by the Committee in relation to an investigation in terms of section 8(1)(a), is of the opinion that a unfair business practice exists or may come into existence, the Minister has far-reaching powers to ensure the discontinuance of the unfair business practice. The self-explanatory powers of the Minister are set out in section 12 of the Act. The Minister may, for example, by notice in the Government Gazette:
(a) declare the unfair business practice to be unlawful, and direct any person who in his opinion is concerned in the unfair business practice to take such action, including steps for the dissolution of any body (own underlining), as he may consider necessary to ensure the discontinuance or prevention of the unfair business practice,
(b) direct any person who is or was a party to an agreement, arrangement or understanding, or uses or has used any advertising or type of advertising, or applies or has applied a scheme, practice or method of trading, including any method of marketing or distribution, or commits or has committed an act, or brings or has brought about a situation, or has or had any interest in a business or type of business or derives or derived any income from a business or type of business, which in his opinion is connected with unfair business practice and which may be specified in the notice -
(i) to terminate or to cease to be a party to that agreement, arrangement or understanding;
(ii) to refrain from using that advertising or type of advertising;
(iii) to refrain from applying that scheme, practice or method of trading;
(iv) to cease to commit that act or to bring about that situation;
(v) to cease to have any interest in that business or type of business or to derive any income therefrom;
(vi) to refrain from at any time
(aa) becoming a party to any agreement, arrangement or understanding;
(bb) using any type of advertising;
(cc) applying any scheme, practice or method of trading; or
(dd) committing any act or bringing about any situation, of a nature specified in the notice and which in the opinion of the Minister is likely to be applied for the purposes of or in connection with the creation or maintenance of any unfair business practice;
(vii) to refrain from at any time obtaining any interest in or deriving any income from a business or type of business specified in the notice.
The Minister may also, if money was accepted from consumers and he deems it necessary to limit or prevent financial losses by those consumers, appoint a curator, with the concurrence of a special court, in order to realize the assets of the person involved in an unfair business practice and to distribute them between the consumers concerned and to take control or and manage the whole or any part of the business of such a person.
3. Contact details
Contact details should anyone wish to lodge a complaint with the Consumer Affairs Committee are:
Consumer Affairs Committee
Private Bag X 84
FAX: (012) 320 0579
TEL: (012) 310 9562
(012) 310 9578
(012) 310 9571
(012) 310 9636
LANA VAN ZYL
21 MAY 2001
DEPARTMENT OF TRADE AND INDUSTRY - 2001 :
(Status as on 23 May 2001)
CCES : Cabinet Committee for Economic Sector
PC/NA : Portfolio Committee on Trade and Industry (National Assembly)
SC/NCOP : Select Committee : National Council of Provinces
SLA : State law advisers
1. Companies Amendment Bill
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification. Prioritised for passage during second quarter.
10 Jan 2001
6 Feb 2001
Introduced on 22 May 2001. To serve before PC/NA on 23 May 2001.
To serve before Cabinet for principle approval
16 Jan 2001
6 Feb 2001
Approved with amendments by PC/NA on 16 May 2001. To be read in NA on 24 May 2001.
National Small Business Amendment Bill
DG is considering certain issues of policy
Industrial Development Amendment Bill
31 Jan 2001
22 Feb 2001
Submitted to SLA for review and certification. Prioritised for passage during second quarter
8. Copyright Amendment Bill
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification
9. Performers’ Protection Amendment Bill
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification
10. Counterfeit Goods Amendment Bill
10 Jan 2001
6 Feb 2001
Introduced on 21 May 2001. To serve before PC/NA on 30 May 2001.
11. Trade Practices Amendment Bill
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification
12. Patents Amendment Bill
10 Jan 2001
6 Feb 2001
Introduced on 7 May 2001. To serve before PC/NA on 30 May 2001.
13. Merchandise Marks Amendment Bill
10 Jan 2001
6 Feb 2001
Submitted to SLA for review and certification
Trade Metrology Amendment Bill
Cabinet memo to be submitted to DG
15. National Supplies Procurement Bill of Repeal
Cabinet memo to be submitted to DG
16. Liquor Bill
Redrafting of Bill is currently taking place. Anticipated date of submission to Cabinet is 30 May 2001.
Kindly refer to Annexure A for a brief synopsis on the objects of the respective bills.
PREPARED BY PARLIAMENTARY OFFICE
DEPARTMENT OF TRADE & INDUSTRY
LEGISLATIVE PROGRAMME FOR 2001
1. COMPANIES AMENDMENT BILL
2. CLOSE CORPORATIONS AMENDMENT BILL
Amendments to the aforesaid Acts are necessary in order to keep abreast with trends in electronic or automated registration of companies and close corporations. At present the aforesaid Acts do not make any provision for the electronic lodgement of registration documents thus inhibiting potential economic activity in South Africa. The South African Companies Registration Office is currently in the process of introducing the necessary automation process to accommodate electronic lodgement of documents. It is envisaged that the process will be fully operational by April 2001, hence the need to effect the necessary amendments to the legislation in this regard.
3. CONSUMER AFFAIRS (UNFAIR BUSINESS PRACTICES) AMENDMENT BILL
Section 8(5) of the principal Act was held to be unconstitutional by the Constitutional Court in September 2000 on the basis that it violates section 33 of the Constitution. In brief, the aforesaid section empowers the Minister of Trade and Industry to declare that a business is being conducted in an unfair manner and accordingly to shut same down without prior consultation with the affected party. The Constitutional Court ordered that the offending section be amended within 12 months from the date of the order.
4. INTERNATIONAL TRADE ADMINISTRATION BILL
The re-emergence of South Africa in the global economy and current trends in world trade norms have necessitated that the Board on Tariffs and Trade Act be substituted in order to reflect the changes that have taken place since the enactment of this Act.
In order to effectively implement our commitment, inter alia, to job creation and foreign investment in the country, it is necessary that the functions and focus of the Board on Tariffs and Trade be revised in order for our broader economic objectives to be met.
5. EXPORT CREDIT AND FOREIGN INVESTMENT REINSURANCE AMENDMENT BILL
In terms of the provisions of the Export Credit and Foreign Investment Reinsurance Act, the Credit Guarantee Insurance Corporation Ltd (CGIC) has enjoyed exclusive privileges to provide insurance for export transactions on behalf of the Government since the enactment of the Act in 1957. The Minister of Trade and Industry has terminated the aforesaid arrangement with the CGIC with effect from 1 July 2001. The proposed amendment intends to create a dedicated Export Credit Agency that conforms with international best practice in respect of the provision for re-insurance for export transactions, investments and loans or similar facilities connected with such transactions.
6. NATIONAL SMALL BUSINESS AMENDMENT BILL
The National Small Business Council (NSBC) was liquidated in 1998. It is, therefore, necessary that all references to the NSBC in the National Small Business Act be deleted and that a provision providing for alternative means for achieving the aims of the NSBC be inserted in the Act. Additional smaller amendments to the Act are also necessary to refine and clarify the role of Ntsika vis-a-vis the Department of Trade of Industry.
7. INDUSTRIAL DEVELOPMENT AMENDMENT BILL
Cabinet has recently extended the mandate of the Industrial Development Corporation to expand its operations into Africa in light of the finalisation of the SADC Trade Protocol. There is therefore a need to amend the Industrial Development Act in 2001 in order to enable the IDC to legitimately carry out its extended mandate.
8. COPYRIGHT AMENDMENT BILL
9. PERFORMERS= PROTECTION AMENDMENT BILL
Amendments are required to the Copyright Act and Performers= Protection Act in order to create protective rights for copyright owners and performers whose rights are not presently protected by law. At present copyright owners, like composers, musicians, and performing artists are not entitled to royalties, whenever broadcasters broadcast their performances. To facilitate an improved empowerment of the South African musicians, it is important that an amendment to the aforementioned Acts be effected during 2001.
10. COUNTERFEIT GOODS AMENDMENT BILL
The implementation and effectiveness of the Counterfeit Goods Act are presently being impeded by anomalous provisions in the Act in respect of the rights of search and seizure of the South African Police Service, the South African Revenue Service and inspectors of the Department of Trade & Industry.
An amendment to the Act is necessary in order to clarify and confer the aforementioned rights on the law enforcement agencies of South Africa in order for the Act to be implemented effectively and expeditiously.
As counterfeiting activities and piracy of Trademarks and Copyright are rife within the country and the region, it is respectfully proposed that the Act be amended.
11. TRADE PRACTICES AMENDMENT BILL
The provisions of the Trade Practices Act have not kept abreast of the latest trends in undesirable marketing practices, which are being practised in the market place. Since neither the common law nor any other legislation provides for sanctions against such undesirable behaviour, it is necessary to create an offence in respect of these practices in the Trade Practices Act.
12. PATENTS AMENDMENT BILL
Since the enactment of the Right of Appearance in Courts Act in 1995, both attorneys and advocates are permitted to appear in the High Courts of South Africa. The Patents Act has, however, inadvertently failed to make provision for the appearance of attorneys before the Patents Commissioner, which is inconsistent with the provisions of the Right of Appearance in Courts Act. It is, therefore, necessary to address the aforesaid anomalous provision by amending the Patents Act accordingly.
13. MERCHANDISE MARKS AMENDMENT BILL
The amendments are aimed at prohibiting the unauthorised use of national flags, and state emblems of other countries in terms of South Africa=s international obligations in respect of the Paris Convention. The proposed amendments are intended to create consistency in respect of the provisions of the Trademarks Act and Counterfeit Goods Act so as to avoid any loopholes that may be in existence in this regard.
14. TRADE METROLOGY AMENDMENT
Amendments to the principal Act are required to streamline requirements for the accuracy of measurement standards to allow for a higher order of calibration so as to meet international standards. The bill furthermore aims to reduce the administrative burden pertaining to the control of the repair of certain specified instruments by accredited companies.
15. NATIONAL SUPPLIES PROCUREMENT BILL OF REPEAL
The principal Act facilitated the stockpiling of so called strategic materials during the period of isolation. Given the current political and economical environment, it’s provisions have become obsolete.
16. LIQUOR BILL
To maintain economic unity and essential national standards in the liquor trade and industry; to regulate the manufacture, distribution and sale of liquor on a uniform basis; to facilitate the entry and empowerment of new entrants into the liquor trade; and to address and reduce the economic and social costs of excessive alcohol consumption; and to provide for matters connected therewith.
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