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The CGCSA is an industry association representing over 11 000 member companies in the retail, wholesale and consumer goods manufacturing sector.
In preparation for the Consumer Protection Act (CPA), which becomes fully effective in October, the CGCSA has drafted an industry code of conduct as called for by the act, which includes the proposal to establish an industry ombud.
The mooted ombud is aimed at being a cos-t and time-effective alternative dispute resolution mechanism, which is provided for in the act.
Speaking at the presentation of the draft code of conduct to the association's members in Johannesburg on Thursday, Mncane Mthunzi, CEO of the CGCSA, said it was in the industry's interests to put self-regulating mechanisms in place as it values the principles enshrined in the consumer act.
Another reason was that government would not have the capacity to deal to deal with the expected volume of complains as more consumers become aware of the act.
Elaborating on the plan, CGCSA's Moshidi Lehlogwane said the idea of an ombud stems from the belief that there has to be a mechanism in which the industry could enforce the code of conduct.
He admitted, however, that at this stage too many questions needed to be dealt with before the structure is put in place. There were funding issues for the proposed ombud, as well as the powers he or she will have.
"We thought it would be necessary to have an enforcement mechanism… The intention of an industry ombudsman is to ensure that complaints are first dealt with at industry level before they are escalated to the commission," said Lehlogwane.
According to the proposal, the ombud will receive, investigate and attempt to resolve complaints between aggrieved consumers and concerned companies. If no resolution is founcd, the complaint will be escalated to the National Consumer Commission.
However, consumers will still have the right to complain directly to the commission.
The CGCSA planned to submit the code of conduct to the minister of trade industry by the end of May. The act calls for the affected industries to develop a code of conduct and send it to the minister of trade and industry, who will then invite public comment before signing it as law. If no code is developed, the minister will do so for that particular industry.
Advocate Neville Melville, author of Consumer Protection Act Made Easy, said it was prudent for the industry to have the ombud as the scope of the National Consumer Commission was too wide.
He said another advantage of the alternative dispute resolution, such as the envisaged ombud, is privacy as matters resolved at that level would be confidential. This would minimise the risk of reputational damages to companies.
- Fin24.com
