Consumer Protection Bill [B19C-2008]: Departmental briefing & National Radioactive Waste Disposal Institute Bill: Department of Minerals and Energy briefing & adoption

NCOP Economic and Business Development

16 October 2008
Chairperson: Mr J Sibiya (ANC Limpopo)
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Meeting Summary

The Department of Trade and Industry presented the Consumer Protection Bill, with the amendments emanating from the Portfolio Committee on Trade and Industry, to the Committee. A detailed document was provided to Members and the amendments to Clauses 1, 2, 5, 13, 14, 22, 24, 40 and 48, 50, 51, 54 and 56, 58, 61 and 70 to 74, 87, 93, 110, 112, 119, 120, and Schedule 2 were tabled and explained. Members asked about the manner in which this Bill would proceed. It was explained that the proposed amendments had been provided by e-mail to the Provinces and that there had been compliance with the Constitution and the Rules of Parliament. A question was raised as to whether the Departments of Agriculture, and Health, had been consulted and the Department assured Members that although, due to a typographical error, the Department of Agriculture was not reflected as one of the stakeholders consulted, there had been full consultation, and that public submissions to the Portfolio Committee had produced a number of comments on the question of the genetically modified organisms, that the proposals had been canvassed with that Department and that there was full procedural compliance.
It was noted by the Committee that this Bill could most likely be finalised in the current session of Parliament, even if this was only done on 11 November. 

Members then received a briefing on the National Radio Active Waste Disposal Institute Bill from the Department of [Minerals and Energy. The background, both nationally and internationally, was explained, and the interaction with and respective roles of other departments were set out. It was noted that the Bill envisaged the creation and establishment of the National Radioactive Waste Disposal Institute (the Institute), which would be wholly owned by the State, but controlled by its appointed Board of Directors, to be drawn from the various departments. A Chief Executive Officer and Chief Financial Officer with suitable qualifications and experience would be appointed. The Institute’s functions and tasks were described. These included implementing Radioactive Waste Disposal and Acceptance criteria, inspections, issuing of certificate and managing and monitoring the facilities. It was also to investigate ongoing needs, conduct research and maintain a database. It would be licensed by the National Nuclear Regulator, and would be a public entity under the Public Finance Management Act. It would take over the employees currently at the Vaalputs site and would also create further jobs.

Members noted the necessity to ensure that this new Institute maintained proper accounting records, and asked about the remuneration of the Directors. Members then voted in favour of the Motion of Desirability, and then proceeded to a clause by clause consideration of the Bill. Each of the clauses was accepted, with amendments where applicable. The Bill was adopted.

Meeting report

Consumer Protection Bill B19C-2008 (the Bill): Department of Trade and Industry (dti) Briefing
Mr Johan Strydom, Legal Adviser, Department of Trade and Industry, tabled a document containing the amendments agreed to by the Portfolio Committee on Trade and Industry in respect of the Consumer Protection Bill (the Bill). These were now incorporated into the D-version of the Bill, which he had circulated previously. The document containing the amendments was fairly substantial, and some of the amendments were of a technical nature, whilst others were more substantive. He proposed to confine his briefing to the substantive amendments.

He then proceeded to address the substantive amendments as follows:

Clause 1
Mr Strydom noted that the proposed deletion of “Bluetooth’ was to bring the definition within the parameter of the definition of electronic communication, which he submitted covered all references to communication by email and other electronic means of communication, including website and internet connections.

The definition of “service” was now to exclude services provided by the National Credit Act and those regulated under the Financial Advisory and Intermediary Services Act, to avoid duplication.

Clause 2
Mr Strydom submitted that the amendments now incorporated the intention of aligning this Bill with other instances where there might be regulatory authorities. The definition of “regulatory authority” had been broadened to avoid duplication, and to enable departments to apply for exemption from application of the provisions of this Bill, where they were governed by other legislation and regulations that might be more stringent or severe in its application. In order to provide better protection to the consumers the more stringent Act and Regulations should have precedence over the less stringent Act and Regulations. Exclusion of hazardous chemical products was however excluded from the application of Clause 2(9)

Mr Strydom drew Members’ attention to Clause 2(10), saying that item 2 highlighted that this Bill should provide rights to the consumers but these statutory rights were not to detract from the consumers’ rights in terms of the common law.

Clause 5
Mr Strydom noted that Clause 5(2)(a) excluded consumers of good supplied at the direction. Although the State itself was excluded from the operation of this Bill, it was not foreseen or intended that the State’s subsidiary organs or bodies should also be excluded from this Bill. A juristic person, with a turnover in excess of a threshold, which would in due course be determined by the Minister, should also be excluded from the protection afforded by this Bill, as it was believed that such juristic persons had the resources with which to conduct litigation around their dissatisfaction with any supplier or product, through the Courts. Large companies were thus expressly excluded from enjoying the benefits of this Bill.

Furthermore, at the instance of Congress of South African Trade Unions (COSATU) any credit agreement under the National Credit Act, any services to be supplied in terms of an employment contract, any collective bargaining agreement in terms of Section 23 of the Constitution and the Labour Relations Act, and any collective agreement in terms of Section 213 of the Labour Relations Act were also excluded from this Bill. This was because it was never the intention to regulate the primary services of trade unions, such as collective bargaining services, but only to regulate any commercial activity that those unions conducted, such as offering of funeral scheme plans or investments.

Clause 13
Clause 13 was intended to cover “bundled goods” and would allow consumers to buy bundled goods separately, at individual prices. Clause 13(1) was to be amended to include the words “or the supplier offers the bundled goods or services separately and at individual prices”.

Clause 14
Clause 14 provided that the beneficial protection of the Bill did apply to juristic persons, no matter what the threshold of their turnover might be. Furthermore it limited notification to the consumer to be in writing, and excluded franchise agreements from its ambit.

Clause 22
Mr Strydom noted that Clause 22 stated that representation and presentation of notices should be in plain and understandable language. However, there was an amendment proposed to limit this to those documents “prescribed in terms of this Act or any other legislation”. It was intended that guidance would be provided to businesses on the manner in which information on such notices must be displayed, and guidelines would be developed and published.

Clause 24
Mr Strydom noted that Clause 24 had been provided in response to a demand that Genetically Modified Organisms (GMOs) should be labeled, to enable the purchaser to make an informed choice whether or not to purchase such goods. He explained that the requirement around GMO was originally included in the Bill, was removed after concerns raised by the Department of Agriculture around the cost of the labeling and the technical expertise required to regulate safety issues. The Department of Trade and Industry (dti) itself had no technical capacity to pronounce on the safety or otherwise of GMOs but could only deal with consumer redress. The technical aspects around safety were covered in the Genetically Modified Organisms Act. After concerns raised during the public hearings, this current version of the wording was included. No substantial cost implications were expected, and the Bill did not prescribe how the labeling must be done.

Clauses 40 and 48
Mr Strydom noted that the word “duress” had been used instead of “pressure” as it was a legally recognised and understood term. There had been substantial discussion on whether to include a “grey list” of clauses that would be regarded as unfair contract terms. He pointed out that this could not be incorporated in the Bill, but could be considered for the regulations. Clause 120 of the Bill now allowed for regulation of unfair contract terms and incorporated some provisions in the grey list.

Clause 50
Clause 50 provided that even where there was no written contract between the parties the supplier of the goods or services was required to make, and maintain, a record of the negotiation between the provider and the subscriber or consumer of any goods and services. The Minister could prescribe categories of transactions that must be done in writing.

Clause 51
Mr Strydom noted that this was an amendment made for operational reasons. There might be cases where the banks should not be prevented from asking for Personal Identification Numbers (PIN) codes when transacting with their clients. They would therefore be excluded from the general prohibition.

Clauses 54 and 56
Mr Strydom said that Clauses 54 and 56 were regarded as material changes and covered the situation where the state of the goods purchased required either a repair or a refund. The consumer was now able to choose the preferred route, and the phrase “at the option of the supplier” had been omitted. The rights provided were in addition to common law rights. It would relate to goods not fit for the purpose for which they were purchased.

Clause 59
Mr Strydom noted that the wording had been slightly amended, and subclauses (2) had been added to align with the Waste Management Bill.

Clause 61
Clause 61 had been amended by the deletion of Clause 61(1), to include liability for damage caused by GMO products. In addition the original subclauses 61(5)(c)(ii) was also deleted, as it was impossible for suppliers to know the extent of the harm that could result from the goods.

Clauses 61 and 70 to 74
Mr Strydom noted that there had been some confusion as to which forum the consumers should go to for enforcement of their rights. The Bill in fact provided alternative avenues and now this clause had been revised to make it clear as to which avenues the consumer should pursue. This in turn had led to the need to revise clause 70, to confine it to Alternative Dispute Resolution (ADR) processes. 

He explained, by way of a diagram the various options available. He said that there was now provision for the determinations in terms of ADRs to be made an order of Court and also to determine the quantum of damages suffered by the complaining consumer. The fact that the Tribunal could hear consent order applications and confirm and amend them was far less expensive for the consumer.

Clause 87
Mr Strydom explained that the amendment to Clause 87 expanded the pool of persons capable of being appointed as commissioners, by providing for the appointment of deputy commissioners. It was by reason of an oversight that this had not been included from the outset. The Parliamentary Committee should be consulted before such appointment was made.

Clause 93
Mr Strydom noted that Clause 93 provided that any envisaged codes of conduct be published for public comment prior to the promulgation.

Clause 110
This made provision for new statutory offences where anyone knowingly altered or defaced a product label, with concomitant penalties.

Clause 112
Mr Strydom indicated his earlier remarks on alignment of the Bill and the National Credit Act to empower the Tribunal to impose fines for prohibited or required conduct, and noted also that the Bill must be aligned with Section 49 of the Electronic Communications and Transactions Act, which made reference to a Consumer Affairs Committee.

Clause 119
Clause 119 had been altered so as not to alter the burden of proof unconstitutionally.

Clause 120
Clause 120 contained provisions regarding unconscionable actions and powers were now given to the Minister to determine what constituted unconscionable conduct.

Schedule 2
Mr Strydom noted that, with regard to Schedule 2, the Short term and Long Term insurance industries were excluded from the Consumer Protection Bill for 18 months, because both such industries had Ombuds who were seized with powers to determine complaints in terms of products sold under their respective legislation.

 Mrs J Terblanche (DA, North West) raised a question regarding the procedural treatment of this Bill and enquired as to whether it conformed to the Constitution and Parliamentary rules.

The Chairperson noted that the Provinces had been advised of the proposed amendments by e-mails, and that this complied with Section 76 of the Constitution and the Parliamentary Rules.

Ms Terblanche reserved the right to reply later.

Ms Terblanche further asked whether the Departments of Agriculture and Health had been consulted about this Bill and the effects that it might have upon such Departments.

Mr Z Kolweni (ANC, North West) stated that the Committee should accept the Legal Adviser’s assurances that everything necessary had been done.

Ms M Thembe (ANC, Mpumalanga) observed that this was a Section 76 Bill and required to be treated accordingly.

Another Member agreed and said that it was not correct to try to rectify any deficiencies through “patchwork” and that the effect must be determined.

The Chairperson noted that there seemed to be two issues raised. He suggested that the discussions on the methodology of the approach to the Bill should stand over for discussion later.  

Members Terblanche, Thembe, and Kolweni expressed reservations about the status of this Bill.

A Parliamentary Legal Adviser and a State Law Adviser expressed their opinions that all was in order with the Bill.

Mr Strydom noted that the State Law Adviser Mr Theo Hercules was presently attending to some research on the exact position.

Members noted that the NCOP was due to discuss this Bill on 23 October, but it could stand over until 11 November. It was agreed that at the moment the questions should be left in abeyance.
After a short adjournment the Secretary of the Committee advised that although a further meeting was diarised for 23 October 2008, there was also a meeting on 11 November 2008. There was every likelihood that this Bill could be passed formally and completely by the end of this session of parliament.

Ms Zodwa Ntuli, Deputy Director General, Department of Trade and Industry then assured the Members that the Department of Agriculture had been approached for input on the Bill and this had been received. The dti had considered the input of the Department of Agriculture, but for some unknown reason the name of the Department of Agriculture was mistakenly omitted from the list of those who had made input.

Ms Terblanche asked that the Department of Trade and Industry confirm that there had been interdepartmental discussion between it and the Department of Agriculture.

Ms Ntuli gave the assurance that there had indeed been discussion with the both the Departments of Agriculture (DOA) and Health, and that it was merely by reason of a typographical error that the DOA was omitted from the list.  She further placed on record that this Bill had been in the Committee stage for the past three months, that over 500 submissions from civil society had been received and considered, and that of these submissions at least 60 % had been associated one way and another with the question of GMOs

Members agreed that although this was a Section 76 Bill, there should be adequate time for it to be passed, even if it was required to proceed to mediation, in this session of parliament.

National Radio Active Waste Disposal Institute Bill [B41B-2008]: Department of Minerals and Energy Briefing
The Chairperson noted that the National Radio Active Waste Disposal Institute Bill [B41B-2008] was a new bill for this Committee, and that Members would receive a briefing from the Department of Minerals and Energy (DME)

Tseliso Maqubela, Chief Director: Nuclear Energy, DME, gave an outline of the Bill, providing its background, internationally and nationally and the interaction of the Department of Environmental Affairs and Tourism (DEAT), Department of Water Affairs and Forestry (DWAF), Department of Health (DOH) and  the National Nuclear Regulator (NNR), and their respective roles, which were combined in the Bill.

He then outlined the creation and establishment of the National Radioactive Waste Disposal Institute (the Institute), which would be wholly owned by the State, but controlled by its appointed Board of Directors who would come from the DME/ DEAT/DWAF/DOH departments, plus five other Directors with suitable qualifications and experience. The suitably qualified and experienced Chief Executive Officer and Chief Financial Officer were also included. The Institute was tasked with designing and implementing Radioactive Waste Acceptance and Disposal criteria, assessing and inspecting the acceptability of waste for disposal, issuing of disposal certificates and managing and monitoring closed disposal facilities. It would also have to investigate the need for any new disposal facilities, define and conduct research and development aimed at long term radioactive waste management, and maintain a national radioactive waste database. The Institute would be licensed by the National Nuclear Regulator. This Institute would be a Schedule 3 Public Entity in terms of the Public Finance Management Act (PFMA) and would receive money appropriated by parliament, be allowed to accumulate surplus funds and also would be paid for services rendered to waste generators (cost recovery). All employees at Vaalputs
Radioactive Waste Disposal Facility (Vaalputs) would be transferred to the Institute, which was envisaged to be a job creator rather than a diminisher of the employee roll at Vaalputs.

Mr Kolweni welcomed the Bill and expressed the opinion that its provisions were urgently needed.

Ms Terblanche asked when this legislation would be proceeding to the National Assembly. She expressed a concern that this Institution would be required to be audited by the Auditor General, yet it might be yet another instance of an financial entity being lax in the production of its annual statements. If so, then the Auditor General would be constrained to comment adversely on its financial status. However, if the Auditor General were allowed to move in timeously at the first signs of trouble, and compel provision of quarterly, monthly, or even weekly reports, then there could be more stringent control.

A Member called for amplification on the remuneration of the Directors.

Mr Maqubela advised her that they would not be salaried, but would receive an allowance for attending meetings.

The Chairperson noted that the Motion of Desirability must be put to the meeting. This was duly read out, and was proposed and seconded. Members then accepted the Motion of Desirability.

Members proceeded to consider the clauses of the Bill. Clauses 7, 9, 17, 21 and 30 were accepted with amendments, and clause 31 with no amendment. The remainder of the clauses were accepted as worded.

Members voted unanimously to accept the Bill.

The meeting was adjourned

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