Consumer Protection Bill: Department of Trade & Industry response to Negotiating Mandates

NCOP Economic and Business Development

30 July 2008
Chairperson: Mr J Sibiya (ANC, Limpopo).
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Meeting Summary

The Department of Trade and Industry briefed the Committee on its responses to the Negotiating Mandates of the Consumer Protection Bill. The presentation did not go deep into legal and policy issues. The submissions from the provinces were set out in detail and comments were provided on each. In many cases it appeared that the concerns were addressed elsewhere in this Bill, in other legislation, or did not fall within the purview of the Department, being covered by other bodies.

Members of the NCOP raised concerns for cases in which consumers are paying for cancellation fees. There was also a question as to who is going to monitor the inspectors. Consumer protection was also cited as an issue of concurrent responsibility between the national and provincial governments. It was unanimously understood that the issue of contradictory prices in stores is a problem to consumers. The DTI expressed confidence that the Bill is going to be effectively implemented even at the local government level. It was also indicated that there is a system of checks and balances in place to monitor the DTI inspectors

Meeting report


Consumer Protection Bill (the Bill) : Department of Trade and Industry (dti) responses to negotiating mandates
Mr Fungai Sibanda, Chief Director: Policy and Legislation, dti, gave the Department’s responses to the Negotiating Mandates on the Consumer Protection Bill.  He noted that he would not, at this stage, go very deeply into the policy and legal issues.

The detailed presentation set out in detail what submissions had been made by each of the provinces, and summarised the view of the Department, and the actions that had already been taken (see attached presentation). Detailed answers were being provided to a number of the queries. It was notable that in many cases adequate provision had already been made in the Bill to cater for the queries, or they were covered by other legislation or, for instance in respect of insurance matters, deliberately left out of this Bill because of the system of insurance ombuds that already existed. 

The submissions of Gauteng, Northern Cape, Limpopo, Free State and Kwa Zulu Natal, Western Cape, Mpumulanga and Eastern Cape were summarised in this form. It was noted that in relation to a question raised by Kwa Zulu Natal that the Implementation costs would  be passed to consumers, but the benefits of implementation would in the long run far outweigh any negative impacts of the costs of implementation.

It was conceded that there were some problems in relation to some of the definitions and these would be amended, in consultation with the State Law Advisers. Mpumulanga’s submissions that the regional offices be closer to the rural areas were accepted.

Mr D Gamede (ANC, Kwazulu Natal) asked about the issue of warranties, noting that  there were instances in which there were different warranties for the same product.  He also indicated that if there were delays or cancellations, for instance in flights, no sanctions would be effected against the owner or operator of the businesses, yet the consumers would be penalised. 

Mr Sibanda answered that the Bill should not be contradictory, but that the same products should have the same warranties, and that the dti would look further at this issue. In respect of the comments on cancellation or delays, he indicated that delays on the part of the customers or consumers also caused loss.

Mr D Mkono (ANC, Eastern Cape) commented on the issue of warranty by saying that businesses were operating in a competitive environment and people could not expect the same warranty.

Ms B Ntembe (ID, Northern Cape) asked who was going to monitor the inspectors.

The Acting Chairperson asked the legal advisors for their opinion.

Ms Koleka Beje, Parliamentary Legal Advisor, remarked that section 74(2) contained a provision for submissions. She indicated that the Department had stated that the consent may include an award of damages, but this was not always the case. There was nothing wrong with amending pieces of legislation to enhance consumer protection and there was also nothing wrong with statutes that provided for strict liability. Consumer protection was a concurrent matter between the national and provincial governments, but this had certain complications because municipalities would need to be capacitated to implement this Bill. The Bill provided also for the Minister to allow some written agreements, but a contract did not necessarily have to be written.

Mr Theo Hercules, State Law Adviser, Office of the Chief State Law Adviser, commented on the issue of unconscionable conduct by indicating that Clause 14 of the Bill gave some explanation as to its meaning.

The Acting Chairperson asked the members of parliament to add their views on the matter.

Mr W Douglas (ACDP, Western Cape) stressed that there were many unacceptable happenings in the market especially regarding the health issues. He indicated that relevant legislation was needed to protect the consumers.

Mr Gamede asked as when the contracts were going to be categorised.  He noted that provision was made that contracts be in simplified or plain language. He asked if this meant “simple” from the businesses’ or consumers’ viewpoint. He furthermore pointed out that the Department was  indirectly represented at local government level through institutions such as Small Enterprise Development Agency (SEDA) and suggested that it use this platform.

The Acting Chairperson indicated that the dti was wanting to revise the Bill after two years of implementation, but asked what had happened to consumers in these two years.  He noted that on a recent visit to a Diskom outlet he had discovered that prices indicated on the products differed from the price at point of sale. He appealed to the dti to look into these issues.

A representative of the Department commented on the issues of contradictory prices by indicating that if the issue did not amount to prejudice to consumers there was no need for the issue to be included in the bill.

Mr Sibanda then indicated that the language as contained in the Bill was correct and apologised for the errors.

Mr Sipho Tleane, Director: Legal Support and Prosecutions, dti, commented on the issues of concurrent responsibilities by indicating that provinces could legislate for themselves, in line with the national norms and standards. He also remarked that it was not true that the provinces would have difficulties in implementing the Bill. To substantiate his argument he gave an example of the Western Cape province, whose regional offices were working well. The Minister already had powers, under section 83, to intervene at local level.  He also indicated that dti were anticipating that at some stage all these processes would work.

Mr Sibanda said that in respect of monitoring, there was a system of checks and balances in place and there were also performance contracts for the inspectors, who had to report on what they were doing. There was also the matter that there should be some trust placed in the employees.  He also highlighted the fact that the Financial Services Act did cover consumers, as a piece of post-1994 legislation that involved issues of equality.

Mr Gamede said that sometimes members of parliament passed laws that were not realistic. Most consumers were affected by the local government areas, but local government were placed under tremendous pressure and did not have powers to deal with complaints, which were referred to the provincial and national government.

Mr Sibanda responded that the provincial government was located in a certain town, and the national government in Pretoria. The Department was concerned about easy access. Whoever was running the office should make no difference to the consumer as long as the matter was properly dealt with.

The Chairperson asked all the provinces to have their final negotiating mandates ready by 2 August.

Ms Ntembe indicated that the NCOP had a mandate to oversee and ensure that the law was implemented. She thanked also thanked all the participants.    

The meeting was adjourned.


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