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Johannesburg - Uncertainty about the implementation date and other aspects of a new consumer protection law are likely to have "serious financial implications" for businesses, law firm Webber Wentzel said on Thursday.
Webber Wentzel partner Robby Coelho said fundamental changes to the rights and powers of consumers are expected once the Consumer Protection Act (CPA) 2008 is in place. This was initially set for October 24 2010.
Coelho urged the department of trade and industry (DTI) to "seriously and urgently" consider extending the effective date of the implementation of the CPA.
"The compliance requirements contained within the act are onerous. Delays by the DTI in issuing important regulations will cost business, especially given that it is less than two months away from coming into effect," Coelho said.
The DTI had said it would issue the regulations by the end of August, for public comment during September. But on Wednesday, DTI chief director for policy and regulations Nomfundo Maseti said the regulations would most probably be published in mid-September.
She said the DTI was "still busy doing the final touch-ups" before releasing the regulations for public comment.
"We thought 18 months would be sufficient, but due to unforeseeable circumstances we haven't been able to finalise the regulations," Maseti said.
Businesses will need to make significant changes to prepare for the implementation of the CPA, many of which could have serious financial implications, Coelho said.
Key regulations still unpublished
"In order to comply, companies will need to devise new sales and marketing, pricing, refunds and accounting policies and procedures; conduct extensive staff training; review and reconsider all contracts and product labelling; and purchase or upgrade information technology systems - a considerable financial investment," he said.
Of particular concern is the fact that the CPA required Trade and Industry Minister Rob Davies to publish an important threshold on April 24 2010.
The threshold determines which companies are to be treated as consumers under the act for various transactions.
The act also provides that if the minister changes the threshold, six months' notice is to be given, as suppliers need time to prepare.
"We are less than two months away with no threshold published. This is causing major problems for suppliers in preparing for the CPA - how do you prepare when you don't even know which of your customers and transactions will be subject to the CPA? It is a very real problem," Coelho said.
Other important regulations have also not been published, he said.
"Even if the threshold and other regulations are published now, this does not leave enough time for businesses to prepare properly before October 24 2010."
While the act does not allow the minister to extend the date for this particular reason, it appears that the necessary administrative structures are not in place and an extension of the effective date is allowed for that reason, Coelho said.
"For example, the minister only this week published advertisements in the Government Gazette for the appointment of a commissioner and deputy commissioner of the National Consumer Commission.
"Without any clear guidance from the DTI on the regulations or the possible extension of the general effective date, business has to prepare on the basis of often contradictory rumours," he said.
- Fin24.com
Webber Wentzel partner Robby Coelho said fundamental changes to the rights and powers of consumers are expected once the Consumer Protection Act (CPA) 2008 is in place. This was initially set for October 24 2010.
Coelho urged the department of trade and industry (DTI) to "seriously and urgently" consider extending the effective date of the implementation of the CPA.
"The compliance requirements contained within the act are onerous. Delays by the DTI in issuing important regulations will cost business, especially given that it is less than two months away from coming into effect," Coelho said.
The DTI had said it would issue the regulations by the end of August, for public comment during September. But on Wednesday, DTI chief director for policy and regulations Nomfundo Maseti said the regulations would most probably be published in mid-September.
She said the DTI was "still busy doing the final touch-ups" before releasing the regulations for public comment.
"We thought 18 months would be sufficient, but due to unforeseeable circumstances we haven't been able to finalise the regulations," Maseti said.
Businesses will need to make significant changes to prepare for the implementation of the CPA, many of which could have serious financial implications, Coelho said.
Key regulations still unpublished
"In order to comply, companies will need to devise new sales and marketing, pricing, refunds and accounting policies and procedures; conduct extensive staff training; review and reconsider all contracts and product labelling; and purchase or upgrade information technology systems - a considerable financial investment," he said.
Of particular concern is the fact that the CPA required Trade and Industry Minister Rob Davies to publish an important threshold on April 24 2010.
The threshold determines which companies are to be treated as consumers under the act for various transactions.
The act also provides that if the minister changes the threshold, six months' notice is to be given, as suppliers need time to prepare.
"We are less than two months away with no threshold published. This is causing major problems for suppliers in preparing for the CPA - how do you prepare when you don't even know which of your customers and transactions will be subject to the CPA? It is a very real problem," Coelho said.
Other important regulations have also not been published, he said.
"Even if the threshold and other regulations are published now, this does not leave enough time for businesses to prepare properly before October 24 2010."
While the act does not allow the minister to extend the date for this particular reason, it appears that the necessary administrative structures are not in place and an extension of the effective date is allowed for that reason, Coelho said.
"For example, the minister only this week published advertisements in the Government Gazette for the appointment of a commissioner and deputy commissioner of the National Consumer Commission.
"Without any clear guidance from the DTI on the regulations or the possible extension of the general effective date, business has to prepare on the basis of often contradictory rumours," he said.
- Fin24.com
