Consumer act 'probably delayed'

Johannesburg - It looks increasingly unlikely that the Consumer Protection Act (CPA) will come into effect in October, as prescribed by legislation.

The CPA, which was signed into law on April 24 2009 by then President Kgalema Motlanthe, is due to come into effect on October 24 this year.

But all indications suggest Minister of Trade and Industry Rob Davies will extend the date of implementation by another six months.

"The primary hold-up in relation to the implementation of the Consumer Protection Act is that many sections require detailed regulations to give guidance to the interpretation and implementation of the act," said Rosalind Lake, an associate at law firm Deneys Reitz Inc.

The minister has discretion to extend the implementation date of the act by  six months.

The DTI has indicated it will publish the regulations for public comment at the end of August, making September the month for taking those comments.

However, Lake said one month is not sufficient for public comment given the act's vast scope. "Even if all comments are received in time, there is scant time for changes or incorporating comments into the regulations ahead of the scheduled implementation date and for businesses to adapt their business practices accordingly."

In addition, the national consumer commission, which will enforce the law, appears a long way away from being ready to take on its first complaint, said Lake. It is yet to appoint a commissioner and deputy commissioner.

Businesses are eager to find out the financial threshold that will exempt them from certain sections of the act.  

Ombud funding poser

The Consumer Goods Council of South Africa (CGCSA), which is working on plans to set up an industry ombud as an alternative dispute resolution as provided in the act, is also hamstrung to proceed with its plans until the regulations have been issued.   

The CGCSA is an association of companies in the retail, wholesale and manufacturing of consumer goods, representing over 11 000 members.

It is widely anticipated that consumer complaints will rise sharply once the national consumer commission starts operating.

Speaking at the body's annual general meeting last week, CGCSA CEO Mncane Mthunzi said: "The act places new onerous obligations and prohibitions (on companies), with penalties for non-compliance, and this will create challenges if not properly managed."

The CGCSA has developed an industry code, which envisages the establishment of a retail industry ombud as an alternative dispute resolution mechanism to the national consumer commission.     

The envisaged retail industry ombudsman will need R15m a year in running costs once established. However, the organisation is yet to establish how the ombud will be funded.  

"It is the government's responsibility to police (the implementation of) its own pieces of legislation," said Mthunzi. "But we've said we want to partner and assist our government."

To that effect, Mthunzi said the CGCSA has proposed that the ombud be jointly funded by government and the industry.  

 - Fin24.com