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Luncheon presentation by Thami Bolani, Chairman, National Consumer Forum to the Swisscham SA Chapter

23 February 2010

Thank you Mr President for the kind introduction

Ladies and Gentlemen

Introduction

2010 is going to be a memorable year for many in our country. SA hosts the FIFA World Cup in June and July, and three months later the Consumer Protection Act will come into force - signalling the beginning of a new era for consumer protection in the country and transforming the way we conduct business. This far-reaching legislation ensures that our country follows some developed countries and the United Nations guidelines for consumer protection.
This year is also the 50th anniversary of Consumers International, a global federation of over 220 consumer groups from 115 countries. All this starting from a small meeting in the Hague in March 1960 initiated by five non-profit consumer organisations - from the US, the UK, the Netherlands, Belgium and Australia - where they formed the International Organisation of Consumers Unions.
These two highlights come together to give South Africa another reason to be proud: CI opens a full office in Johannesburg this year, making us the base from which global support for consumer rights can be channelled to consumer groups across the rest of Africa.

Why did we need a Consumer Protection Act?

Perhaps the main reason was that, as a modern economy, we had not substantially reviewed our consumer laws since 1988, and we were starting to lag behind other international jurisprudences.
Regulation was uneven and fragmented across different sectors of the economy.
As more citizens were able to enter the formal economy, we saw more exploitation - and the mechanisms for consumers to seek redress for this were weak.
We also began to realise just how poor - as a nation - was our awareness of consumer rights and responsibilities; people were entering the market as consumers with little idea of the basic rules of the game - of the obligations within a transaction, for instance; or their right to demand information or minimum levels of service.

What are consumer rights in terms of the Act?

The Bill of Rights in our constitution enshrines the rights of all citizens, including consumer rights. They are:

Right to equality in the consumer market and protection against discriminatory marketing practices;
Right to privacy;
Right to choose;
Right to disclosure of information;
Right to fair and responsible marketing;
Right to fair and honest dealing;
Right to fair, just and reasonable terms and conditions;
Right to fair value, good quality and safety; and
Right to accountability by suppliers.

Consumer rights as a tool against poverty

Consumer rights are not just about getting 800 grams of bread when you pay for 800 grams, or resting assured that your warranty will be respected when your new car breaks down.

Consumer rights are also about access to basic services such as clean water, healthcare, education and decent housing.

The new Act acknowledges the reality of our country, such as poverty, illiteracy, and geographic marginalisation. Our history places a particular burden on consumers facing issues like these, and the Act refers to the need to "fulfil the rights of historically disadvantaged persons and to promote their full participation as consumers".

It is precisely for this reason that the NCF has chosen to focus much of its work on marginalised and economically depressed areas. Last week, with the support of two large South African corporations - Nestle and Metropolitan - we launched the first of what we hope will be a national network of Access to Knowledge (or A2K) centres.

The UK's Consumer Minister, Kevin Brennan, expressed our view well when he said: "Knowledgeable, confident consumers are much more likely to get a fair deal and get the right result when things go wrong."

And so knowledge is the game we want to be in - to empower consumers with knowledge. Rather than us trying to extricate a consumer from a tangled problem, let us rather give them the tools to avoid the problem in the first place - or at least to fight their own battles if it comes to that.

The A2K centre will train, advise, and research - particularly in the fields of financial literacy, computer literacy and internet access; these are the tools on which modern consumers can build their own capabilities and improve the quality of their lives.

When the deputy minister of trade and industry, Ms Bongi Ntuli, officially opened our A2K centre, she emphasised an interesting aspect of the new Act: it treats government agencies in the same way as businesses. They are both providers of services and products.

So, she said, municipalities must be held to account by consumers in the same way that any commercial service provider must. These were her words: "We want to see more consumers being prepared to say 'No' to sub-standard products and services - whether these come from business or from government."

What about the consumer voice?

This brings me to another new and exciting part of the Act. It says that government is now expected to promote the growth of the consumer movement in the country - and should support groups that contribute to consumer education and work in the interests of consumers.

The deputy minister also made special reference to this aspect, and for good reason: pro-active consumers are vital to keep the economy strong and competitive. She put it like this: "Consumers must play their role in helping service providers to raise their standards."

A stronger civil society will also make individual consumers more confident, and this will improve the quality of our systems of redress. This will lead to more companies establishing their own dispute resolution mechanisms, opening the way for better working relationships with consumer bodies.

Stronger organisation will mean better input by consumer bodies on government policy, legislation and regulations. And class actions also become a possibility.

And growth in consumer NGOs will also lead to more jobs; even the NCF, pulling itself up by its own bootstraps, has created employment opportunities for at least ten people since the beginning of last year. And when the roll-out of A2K centres start, we might employ no less than 50 people before year end.

The greatest opportunity

Ladies and Gentlemen:

Your lawyers will already be working with your companies to understand the details, the risks and the responsibilities that the Consumer Protection Act introduces to our modern business environment. I have not tried to compete with them this afternoon. Rather, I have tried to highlight mainly one aspect: the Act's recognition of the need for consumer empowerment through knowledge.

And this, in my view, is the greatest opportunity offered to us by this new law: to bring new urgency - and energy - to consumers' burning need to know more about how the economic world really works.

We urge you to make use of this opportunity with us. Just as government is spurring us on to make the marketplace a more inclusive and responsive environment, so business and civil society need to be joining hands in grassroots initiatives that touch consumers where they are - and give them the knowledge to change their lives.

I thank you.

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