Consumer Protection Bill: negotiating mandates

NCOP Economic and Business Development

25 June 2008
Chairperson: Mr J Sibiya (ANC, Limpopo)
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Meeting Summary

The Department of Trade and Industry presented its response to the provincial submissions and the negotiating mandates that had been received from the provinces on the Consumer Protection Bill. The Department noted that the most controversial aspect of the submissions on the Bill was that every sector of the economy was requesting to be exempted up front from the legislation. This was undesirable because there was a mechanism in the Bill through which sectors could be granted an exemption at a later stage. The process involved the Department being satisfied that consumer protection issues were dealt with adequately in that sector. All the negotiating mandates proposed various amendments to the Bill and simultaneously indicated their support for the legislation.

The Committee requested the Department to provide a written response to both the submissions and the negotiating mandates for the following session. This was because the Department had seen only two of the nine negotiating mandates in advance and could not be expected to provide a considered response. .   The Committee was dissatisfied that the parliamentary and state law advisors could not assist the Committee because they were not provided in advance with copies of all the submissions and negotiating mandates.

Meeting report

Opening Remarks by the Chairperson
The Chairperson reminded Members that the Department would respond to the submissions made by the interested parties on the Bill.

Summary of Submissions on the Consumer Protection Bill
Mr Fungai Sibanda, Chief Director: Regulatory Policy and Legislation, Department of Trade and Industry (DTI), indicated that the Department was prepared to give its initial response to most of the public submissions made on the Bill. In addition, he mentioned that the Department’s preliminary remarks would include a review of the two negotiating mandates it had received. To begin with, he addressed the inputs made regarding the definition of certain terms in the Bill.

Mr Sibanda noted the concern that the definition of “court” did not encompass all the different types of courts. In reply to this, he contended that it was not necessary to define the various courts because the Bill dealt with specific types of institutions, whose roles and responsibilities were outlined.

Fixed Term Agreement
Mr Sibanda observed the two issues that were highlighted regarding the definition of this term. Firstly, it was suggested that that the term needed to be defined in the Bill. Secondly, some sought clarity about whether a fixed term agreement included an employment agreement. In respect of the first issue, Mr Sibanda pointed out that section 14(3) of the Bill provided the Minister of Trade and Industry with the authority to prescribe the period for which contracts should be fixed. Consequently, it was not deemed fit to define the term up front because such details would be contained in the regulations. As regards the latter matter, Mr Sibanda clarified that the Bill was concerned with the relationship between buyers and sellers, and as a result, it was not envisaged that employment contracts would be covered in the Bill.

Mr Sibiya interrupted proceedings and remarked that it would be useful and less time-consuming if the Department provided the Committee with a document that highlighted their responses to all the submissions. In light of this, he advised the Department to deal with the controversial issues rather than those matters that could be easily explained.

Mr W Douglas (ACDP, Western Cape) supported the proposal.

Mr Sibanda gave an assurance that the Department would prepare and distribute a detailed response document to the Committee. Thereafter, he indicated that the Department was confronted with a particular problem where every sector of the economy requested to be exempted from the legislation. This was undesirable because there was a mechanism in the Bill through which sectors could be granted an exemption at a later stage. The process involved the Department being satisfied that consumer protection issues were dealt with adequately in that sector.

Furthermore, he explained that where there was adequate protection for consumers in a particular sector. The Department had no intention to “reinvent the wheel” and allowed sector specific laws to apply. However, where the Department was not convinced that consumer protection issues were dealt with satisfactorily, it proposed that the Bill be applied. However, certain sectors had already been identified and granted exemption up front. These were: the financial services sector, the short term and long term insurance sectors and financial intermediaries.

Ms Nomfundo Maseti, Director: Consumer and Competition Law and Policy, DTI, indicated that the Department had analysed a number of the sectors to determine whether their specific legislation covered consumer protection matters sufficiently. The assessment discovered that this was largely not the case and that in many cases, consumer protection matters were dealt with by accident and not as the primary aim. She pointed out that the airline industry as well as the medical industry did not qualify for an exemption because the relevant legislation did not provide sufficient protection for consumers.

Mr Sibiya requested the parliamentary legal advisor to make a contribution to the debate.

Ms K Beje, Parliamentary Legal Advisor, remarked that she was unable to comment on any of the issues at this stage until she had the opportunity to read all the submissions and apply her mind to these. She complained that she was placed at a disadvantage when compared to the Department, because they were able to attend the hearings in all the provinces. In addition, when a Bill was introduced in the National Assembly (NA), parliamentary legal advisors were involved from the beginning and followed the Bill until it reached the NCOP stage. Conversely, when the Bill was introduced in the National Council of Provinces (NCOP), parliamentary legal advisors were not involved in the preliminary stage. As a result, she made an appeal to the Committee to rectify this and ensure that parliamentary advisors were involved from the beginning with whatever legislation that was first introduced into the NCOP.

Mr Sibiya thanked the parliamentary legal advisor for explaining the problems that impeded her functioning. He suggested that the Committee not proceed with the discussion any further until all the administrative issues were resolved. Also, he asked the State Law Advisor (SLA) if she was in a similar position to that of the parliamentary legal advisor.

Ms Desiree Swartz, SLA, Office of the Chief State Law Advisor, indicated that she would also not be able to comment on the Bill because she was standing in for someone and had only received a synopsis of the submissions that morning.

Mr D Mkono (ANC, Eastern Cape) believed that the Committee was not being taken seriously and stated that it did not augur well for the NCOP House to be in a situation where a law, that was supposed to be addressing fundamental issues, was treated in such a fashion.

Mr D Gamede (ANC, KwaZulu-Natal) endorsed the views expressed by Mr Mkono.

Ms M Themba (ANC, Mpumalanga) expressed disappointment that the Committee could not be assisted by the legal experts. She believed that this situation underlined the fact that the NCOP was not taken seriously.

Mr Mkono voiced concern that the Committee was spending time on procedural matters instead of the substantive content of the Bill.

Mr Johan Strydom, Senior Legal Advisor, DTI, commented that most of the initial submissions were based on policy and practical considerations surrounding the Bill, which did not require a lawyer to be involved from the outset. He said that it would be unfair to imply that the Department did not respect the Committee because the entity always regarded its engagement with the Committee seriously.

Mr Sibiya directed the Committee to proceed with the second item on the agenda.

Consideration of Negotiating Mandates: Consumer Protection Bill
Eastern Cape
Mr Mkono stated that the Bill had been referred to the Portfolio Committee on Economic Affairs, Environment and Tourism for consideration. It was recommended that the consideration of exemptions should be subject to public hearings with affected consumers and applicants. The province agreed with the Bill in principle subject to the assessment of the proposed amendments.

Free State
The Free State delegate described the consultation process undertaken and announced all the inputs received on the Bill. The relevant committee mandated the delegate to vote in favour of the Bill.

The representative from Gauteng summarised the process followed by the Gauteng Legislature’s Economic Affairs Portfolio Committee in formulating its negotiating mandate. They provisionally supported the Bill in principle and the detail of the Bill. However, several amendments were suggested.

Mr M Sithebe (ANC, Kwazulu-Natal) reported that the Provincial Standing Committee on National Council of Provinces Matters deliberated on the Bill after conducting public hearings. They voted in favour of the Bill provided that that their comments and amendments were considered and consolidated in the Bill.

Mr Sibiya recited the findings of the Limpopo Legislature’s Portfolio Committee on Economic Development, Environment and Tourism on the Bill. They supported that Bill and authorised him to vote in favour of the Bill.

Ms Temba mentioned that the Bill was referred to the Portfolio Committee on Agriculture and Land; Economic Development and Planning. The Committee held public hearings and deliberated on the Bill. The Committee conferred onto the permanent delegate the authority and mandate to vote in favour of the Bill.

Northern Cape Province
Ms B Ntembe (ID, Northern Cape) outlined the process taken by the Portfolio Committee on Economic and Tourism regarding the Bill. She listed the inputs received from the different areas and highlighted the Committee’s support for the Bill.

North West Province
Mr Kolweni briefed the Committee on the public consultations, recommendations and resolutions taken by the Portfolio Committee on Economic and Tourism on the Bill. The Committee supported the Bill but underlined that DTI should postpone its implementation because provincial departments did not have the budgets for this in the current financial year.

Western Cape
Mr Dudley tabled the Portfolio Committee on Economic and Tourism’s mandate on the Bill. The Committee endorsed the Bill despite the several concerns raised during the public hearings.


The Chairperson asked if the Department had received copies of all the negotiating mandates in advance.

Mr Sibanda said that the Department had received advance copies of negotiating mandates from only two provinces, namely Gauteng and North-West. All other mandates were received that morning.

The Chairperson recognised that it would be unfair to expect the Department to make a wholesome comment on all the negotiating mandates because they only received the bulk of them that morning. Therefore, he proposed that the Department provide general comments and tackle the remaining issues more thoroughly when parliament reconvened for the next session.

Mr Douglas agreed with this proposal.

Mr Kolweni warned that the Committee needed to apply its mind soberly and consciously to all the issues because the Bill had attracted a lot of attention from the public.

Mr Sibanda stated that he would address several issues, especially those emanating from the Gauteng and North-West negotiating mandates. The first issue related to concurrent jurisdiction. The Department recognised that consumer protection was an area of concurrent jurisdiction between national and provincial government. The Bill did not intend to take away that concurrent status. Instead section 83 and 84 laid down a framework of cooperation between national government and provinces in terms of performing their functions with respect to implementing the Bill. Provinces currently had offices of consumer protection and it was expected that these would continue in the future, although their functions would be clearly spelled out and delineated.

Secondly, he noted that North West province was concerned about the financial implications of the Bill. The concern was unwarranted because provinces were not expected to budget for the Bill in the current year because the legislation would only be applicable 18 months after promulgation. As a result, provinces were expected to plan accordingly for this in the intervening period.

In respect of the concern raised by Gauteng, Mr Sibanda confirmed that the Department had reached an agreement with the Department of Agriculture that labelling of Genetically Modified Organism foodstuff would be excluded from the Bill. Finally, he maintained the Department did not exclude business to business transaction (in its entirety) from the Bill because it wanted to achieve a deliberate policy consideration. He reasoned that small businesses and franchise agreements were in a similar disadvantaged position to that of consumers and should also be protected.

Mr Sipho Tleane, Director: Legal Support and Prosecutions, DTI, mentioned that the Bill introduced the concept of strict liability in the legislation. This was done because the current common law provisions were deemed inadequate.

The Chairperson thanked the Department, and wished Members well for the upcoming break.

The meeting was adjourned.


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